Andrew:
That is the BiggerPockets Podcast present, 8:45 each week. It’s our purpose to convey you the tales, the how-tos, the data so as to make good choices in right this moment’s present actual property market. We hope that by listening to BiggerPockets, you’ll be able to develop your information base sooner than Taylor Swift’s checking account. Now, in case you’re questioning, the place are David and the place is Rob? Nicely, right this moment is substitute trainer day. Should you grew up and went to highschool or center college or elementary college within the eighties and nineties, right this moment 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 on the cart with a VCR. So we’ve received 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 individuals on the market listening proper now questioning what a VCR is.

Andrew:
I’m simply going to personal it. I can’t disguise 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 transferring 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 might 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 a lot better, I might need to take one thing just 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 the whole lot, man, that sounds superior.

Andrew:
Wow. Nicely, nobody’s right here to hearken to us right this moment. We’ve received 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 progress 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’ll be able to simply hop instantly into the deep finish the place the sharks are as properly, 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 in a position to construct an exceptional profession for himself by getting instantly 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 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 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 right this moment’s story.

Andrew:
All proper, thanks Matt. So KC, welcome to the present, my buddy. 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 personal yard. At present personal 121 models throughout 20 properties. We’re going to dive into that a bit bit extra. Principally multifamily. You bought the 4 models, the eight plexes, the ten plexes, 28 plex, 33 plex. I’m unsure once you stopped utilizing the phrase plex, however they simply maintain getting greater. You even have some lengthy and short-term leases, single household properties. Your portfolio presently valued at 12 million, and crucial piece of that’s it’s a couple of $6 million fairness place. It’s not simply in regards to the worth of the belongings, it’s how a lot fairness you may have in them. And you’re a proud father of three youngsters and also you handle the true property portfolio together with your spouse, who’s additionally named Kaisey, however spelled otherwise. In order that’s fairly the background and many good information to extract from that.

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

Matt:
Yeah, for the following episode. I believe most profitable males can say that they’ve received a really, excellent, phenomenal girl 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 whats up from us from the viewers at BiggerPockets. Fast, simply, observe, you’ve chosen an exceptional market. Lexington, Kentucky, is one among my favourite markets within the US as properly. DeRosa, my firm, is closely invested in Lexington as properly. 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 significant 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 believed was doable. 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 world wide, which has at all times been a purpose of mine, I simply at all times 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 evening I’d come house, 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 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 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 at all times 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 complete outlook on how I method enterprise, how I method actual property, even my circle of relatives life, however sitting there with my companion in life and checking off this bucket listing that I believed may not ever be doable, simply actually set the tone for the following few years of my investing profession.

Andrew:
Yeah, it feels 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 after 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 couple of life-changing journey that not solely modified his life but in addition 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 received you began on this now 12 million greenback investing journey?

KC:
Nicely, it was again in 2012 and I used to be really making an attempt to determine how you can present my girlfriend on the time that I used to be critical and I used to be like, what a greater method to present her I’m critical apart from purchase a apartment proper down the road from her dad and mom’ home? I figured if issues didn’t work out together with her, then it was nonetheless going to be a great funding. So I did the 20% down simply because that’s what someone had informed me, mentioned, “Hey, once 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 apartment, only a city house.

Matt:
Now, was that the home hack, you rented out a few bedrooms, huge shout out to Craig Curelop’s guide on home hacking, on dwelling in a property and having tenants enable you to pay your personal 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 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 100% 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 time after which half of the pay would come on the finish of the yr. So that you get this verify, substantial verify in case you do properly, and also you don’t need to simply blow it on dumb stuff, so I mentioned, properly, let’s get a variety of this again out of my checking account so I don’t spend it within the unsuitable locations and put it right into a home. And so it was a $200,000 apartment. I put 45% or 45,000 down.

Andrew:
And KC, I’m sorry in case 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 generally, Andrew, to search out. Yeah.

Andrew:
Yeah. Nicely, and that’s additionally a great level is a variety of us, I do know I noticed it this manner after 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 whilst 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 amazing 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 apartment after which be speaking to Matt and Andrew years later about my 12 million greenback portfolio, however you took step one after which the following step confirmed up and all that.
So from there, you went on to purchase principally small multifamily, proper? Like one or two a yr, you proceed to fund them by gross sales earnings out of your job, after which, I suppose, feels like shopping for in direction of the top of the yr once you received your bonus. So let’s return to the 2016 turning level. We perceive Kaisey performed a giant function in that change. May you elaborate a bit extra on that?

Matt:
Simply to elaborate, Kaisey’s your spouse, so that you married somebody together with your identical title for goodness, I can’t consider what that should be like in your world when individuals 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 otherwise, appropriate?

KC:
Yeah. I imply, initials are KC after which the opposite one’s Kaisey so you’ll be able to pronounce it otherwise, however it’s laborious. 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 just had about… I simply need to let you know how transferring that was, by the way in which, about you realizing that you just wished to tour the world, so you probably did it. And so now it’s like, properly, 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 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 2021 is the place I made a giant push. It’s a kind of emotions you’ll be able to’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 suppose, is one of the best ways to place it. Like overcoming the concern of doing one thing that I might 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’ll be able to take it with a giant journey that you just most likely ought to save the cash on as an alternative. I can’t put a quantitative worth on that have.
It was transferring for me on the time, and oftentimes after I inform a narrative, I can’t even get by 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 discovered 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 received 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 received to get higher at promoting. I received to get higher at gross sales. So I actually began learning 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 determine how you can do it.”

Andrew:
That is smart. 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 progress after that after 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 wrestle with in numerous levels. What, perhaps, limiting perception did she enable 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 guide, the guide on property administration, I believe Brandon Turner’s guide 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 truthfully what occurred. I used to be working my job and I simply would get calls about individuals not having 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 suppose not. They’ll get to it. They’re at all times good for it. I’m simply making an attempt to assist them.” And she or he’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 try this.”
She had the mother mentality the place it’s a must to form 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 excellent.” I believe I had 12 or 15 models. And so she learn the entire guide 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’ve got programs in place, you’ll be able to actually generate profits from being a landlord. I’d at all times 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 received concerned, earlier than Kaisey received concerned, I used to be simply hoping that it was working. So long as I had more cash in my account getting into than going out, I figured I used to be doing okay. And so, as soon as she took over, we actually received 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 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 might be a studying expertise. Somebody informed 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 an alternative of failing and falling backwards. Hopefully I’m failing ahead.

Matt:
Nicely, to start with, it’s very robust 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 attempt. You don’t attempt to be a great 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 together with your partner. It’s one thing Liz and I did within the very starting once we first received began in actual property and I commend Kaisey, your spouse, for seeing there was a niche in your corporation and her being keen to step into it as a partner to say, “Okay, that is perhaps one among 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 guide and learn to turn into 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 keen to try this.
And I additionally simply need each husband and spouse combo listening proper now to pay attention to the way in which an efficient husband and spouse can work as a group and having one another’s again.

KC:
I can’t let you know what number of occasions different traders or people who need to spend money on actual property are like, “I’d do it if my spouse was on board,” Or, “It will be a lot simpler if my spouse would help. 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 generally is a resolution.”

Andrew:
It’s humorous, individuals at all times 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’d not be right here speaking to you if I didn’t do, and it form of looks as if all three of us did that so I don’t know if there’s a theme there. Possibly there needs to be a BiggerPockets courting app developing quickly to assist traders trying to get into the enterprise, discover like-minded companions.
All proper, so Kaisey helped you understand that you possibly can 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 properly, which, that’s only a observe, 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 keen to candidly let you know like, “Hey, you possibly can be doing this higher,” Is extremely useful. However I need to ask, you have been dwelling in Utah on the time, appropriate? 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 carried out with this, you’ll determine how you 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 adore it, however we have been really dwelling 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 he or she mentioned… I believe that one of many final straws was, we needed to ship an HVAC firm over to an condominium that was complaining of no warmth. So the final straw with dwelling 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 and so they known 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 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 properly. See, Andrew, I can say Lexington. Yeah, there it’s. Possibly it’s a must to personal there to have the ability to say it. Possibly that’s what the time period is as a result of as soon as you purchase in Lexington, you’ll have the ability to say the title, proper? You’ve moved your spouse and now household out to Lexington, Kentucky, you achieved some consistency, proper? Now she’s operating the property administration aspect of the enterprise. How did the gross sales aspect of your corporation go so you’ll be able to generate some revenue 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 need to do that however at actual property.” My spouse was actually taking on 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 get rid of any variables. Something that I might management, I wished to manage 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 may be as constant as doable.
So I’d sometimes promote one to a few a day the place over the course of a complete summer time is a extremely huge summer time, however you might need one other man promoting 5 – 6 or seven in a day, however that’s as a result of they have been actually using the waves the place I used to be simply making an attempt 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 may get a variety of issues abruptly. All of the air conditionings exit on the identical time, all of the plumbing issues on the identical time, and so you’ll be able to actually discuss your self out of doing extra stuff in case you go off emotion. I simply tried to get rid of as a lot emotion as doable.

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

KC:
House safety. So door to door. So it wasn’t essentially the most glamorous job, nevertheless it was door to door for 5 months out of the yr.

Matt:
There’s an outdated adage, in case you serve the lots, you’ll eat with the lessons. House safety is one thing everyone wants, it’s not a whole bunch 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 properly at it.

KC:
Yeah. It was a house automation too, so you’ll be able to form of do it in some very nice neighborhoods. It’s not simply safety, nevertheless it was actually neat. You could possibly do the whole lot out of your smartphone.

Andrew:
And KC, it feels like, not surprisingly, you may have one of many traits that we frequently see in profitable actual property traders 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 could possibly be software program, I imply it could possibly 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 a giant 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 just a few smaller models. As soon as we received greater, we converted to Buildium and it actually helped form of maintain issues organized so that you don’t, one, neglect upkeep requests, two, you may have documentation of the whole lot so you’ll be able to really present you’re doing all of your job, lease assortment, individuals 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 the whole lot from posting an condominium for lease to accepting, doing background checks, the whole lot proper there in your smartphone. The mother and pop landlords again within the eighties, nineties, I don’t understand how they did it. I’d’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 informed us the technique of how quite than going out and having a giant day like everybody else and promoting 5 or seven programs 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 yr. 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.” Individuals 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 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 once 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 may have the very best RMR and you’ve got the bottom cancellation charge since you simply good 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 known as the Kevin Massie Award simply because I led each single class that yr and it was actually a cool expertise, nevertheless it wasn’t one thing I anticipated, I simply wished to do the very best I might at every.

Andrew:
So then now, that’s an actual stage up. You didn’t simply win the award, you have 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, really, I might focus and obtain, proper? Focus and obtain. Too many occasions we get distracted by all of the issues that might go unsuitable as an alternative of simply doing it.

Andrew:
So do you keep up a correspondence with the individuals 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 should 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 moving into actually proudly owning the property administration aspect of the enterprise, you actually mastering the gross sales course of a lot that they title an award after you. Unimaginable. Going ahead right here, you’ve then determined, by all these iterations, to actually double down your actual property portfolio and begin taking down bigger offers. So discuss us by that. Discuss us by that, what that seemed like, felt like as you determined to actually scale up into bigger and bigger condominium buildings.

KC:
So yeah, so I’d at all times get notifications of the whole lot, and I didn’t actually have a realtor that was sending me stuff, I simply received notified on LoopNet, it’s a business property website that simply posts normally greater issues. I don’t even know why, at one level I subscribed to get notifications there and I noticed two small condominium buildings, 30 models, mainly 30 models every, received posted. And so I used to be like, heck, let’s simply name the itemizing agent and experiment a bit 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 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, in case 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 in case 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 this stuff with no… You didn’t have a yr of preparation, you have been identical to, “Hey, let’s simply see what occurs.” One of many, I believe, the largest and commonest challenges individuals have after 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 received to name a business dealer. What do I say? What if I say the unsuitable 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 a few 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 severely as a beginner?

KC:
So I’m a giant believer in, if we search in the precise locations, issues will work themselves out. If we’re really 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 out, looking for one thing to stage up and to get extra critical about actual property, and so after 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 need to come see it, and I believe it’s a great 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 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 docs 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 just a few models, taking some photos and movies and I went house and I used to be like, “Oh, that’d be superior to purchase that. I’d should promote just a few issues to have $800,000.” And I informed him that, and he was like, “Nicely, you understand, name the financial institution, name the lender. They really did one thing distinctive for me after I purchased it the place they took much less down.” And I used to be like, “Okay, I’ll name them. It’s at all times good to make new contacts in the true property world.”
And so I known as the lender and he was like, “Nicely, we’d think about 10%.” However I don’t assume they might’ve thought-about 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 provided 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 need to spotlight there for everyone. Primary is, that’s one other impediment is, “Ah, how do I do that with out a monitor report?” Nicely, KC, you didn’t have a monitor report for a 30 unit property, however you had a monitor report in actual property, you had a monitor report in one thing. And so monitor report may 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 carried out to this point.” Second is, you’ve talked about pretend it until you make it, and that’s a extremely widespread factor that you just hear these days, nevertheless it’s vital that you just… What you’re doing shouldn’t be faking it, proper? What you simply informed us is that you just have been clear with that dealer. You informed 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 method to do pretend it until you make it.
It’s not mendacity to individuals, it’s not presenting your self as somebody completely different than you’re, it’s simply taking the motion as in case you had already made it and being clear about it. I don’t know if that is true, you’ll be able to debunk me proper now, KC, if you need, however I’m keen to wager that one of many causes that man wished to promote to you and work with you is as a result of he most likely felt like he might 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 completely satisfied to say, “You already know what? This man’s working laborious and he’s doing a great job. I need to assist him.” So I’m keen to wager that a part of the rationale you bought that deal is as a result of who you’re 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 after 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 presents on it and he mentioned, “I believed you once you mentioned you’ll have the ability 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 might 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 really convincing your self you can get it carried out, 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 understanding 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 sort of like a tour of the world, however you mentioned, “You already know what? I’m going to go in and determine this out.” And I do consider that a variety 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 unexpectedly, 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 that confidence you had by telling your self that I can determine this out, you probably did. And I believe a variety of occasions individuals assume that actions over time result in confidence, nevertheless it’s the opposite method round. They only determine to be assured about one thing and the actions it’s worthwhile to take will routinely turn into extra logical and comply with behind it. So kudos to you, man. So now what? You’ve received this 30 one thing unit below possession, inform us a bit bit in regards to the deal now that you just personal it, even with a bit bit larger debt on it at 90% mortgage, it looks as if 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 might elevate them fairly good with out doing a ton of labor. That they had managed it fairly properly, however I did see some holes the place we might enhance on administration, and so we simply ran with that. I informed my spouse and he or she 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 are price… I heard a narrative as soon as the place it mentioned no one will get embarrassed after they do a bench press and so they fail on quantity 10 or 11 or 12. Normally 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 variety of occasions 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 unsuitable 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 wanted to give attention to, and so it was the very best factor that might have occurred to us. We really ended up, from that very same lender, ended up refinancing nearly $2 million price 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 %, however they have been on the brink of expire in three years and I used to be like, “Nicely, let’s go forward and refinance and take the whole lot to this financial institution.” We took the whole lot 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 very best landlord we are able to, to supply a great, clear, secure place for individuals to stay and care for our… We wish to have a communication with our tenants, we wish to have, not finest buddies with all of them, however we wish to respect them. We get all of them Christmas items, little issues like that. Not Christmas items which are actually ornate, however we make a take care of 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 individuals know you consider them and that they’re not only a quantity. It goes a good distance in case you do determine to handle your personal 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 revenue out of your portfolio that you just did what a variety of people which are 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 give up… Yeah.
You might be so humble, brother, and I really like that about you, however you give up your job. I used to be teeing you up that you just have been in a position to give up your day job that allowed you to spend time with household, actually personal your calendar, personal your time and the whole lot like that, and that’s one thing that lots of people are aiming to have the ability to do by actual property investing. However not like a variety of people that simply speak about doing it, you’ll be able to assume a bit 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 lots for the previous couple of years the place everybody must dash to the place you’ll be able to retire. And I’ve seen a variety of buddies attempt to try this and so they’ve carried out 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 great service, and so I caught on so long as I might, most likely longer than I wanted to, till it was uncomfortable the place I didn’t need to be missing at the true property. I slowly phased out. It wasn’t like, “Oh, I hit it, I’m carried out, peace.” I stayed on most likely 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, be certain we’re in a great spot. 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 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 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 have now 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’ve got our scheduled upkeep, which is pest management, garden, snow removing, all that primary stuff, however yeah. When you handle it your self, we might 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 do this eternally. There could be a time the place it’s like, hey, we’re tapped out, we are able to’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 believe that’s a continuing debate, third celebration versus self-management, and I believe your state of affairs is among the conditions the place self-management completely makes essentially the most sense, the place you may have all of your properties in a market that you just stay in and that you understand and you’ve got easy accessibility to, and it’s actually laborious to search out good property administration for stuff below 100 models. So it sounds such as you’re establishing rather well. So final primary query earlier than we wrap up. We’ve received the KC and Kaisey dynamic duo, what’s your actual property profession trying like for the following 5 years? Are you guys carried out 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’ve got three youngsters, we need to have extra youngsters, in order that was form of a purpose, to get to the place we might spend extra time with them. However relating to actual property, with rents going up, we hope to maintain growing that. We did lock in all of our business 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’d 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 buddies of mine that they’ve been eager to get into actual property now, so it’s extra of a purpose now to get as many individuals concerned as I can. I’ve by no means carried out a companion take care of anybody. And to not say I gained’t, however I form of need to assist extra people who I do know take pleasure in a number of the identical advantages that actual property’s introduced me.

Matt:
There’s a guide on the BiggerPockets library known as Elevating Non-public Capital it’s possible you’ll need to take a look at KC. A couple of individuals have learn it as properly. A brand new launch simply got here out with a foreword by Tempo Morby, KC, so you possibly can verify that out. It’ll train you how you can construction these offers with your pals for win-win conditions. Simply to say, you would possibly need to test it out.

KC:
No, I really 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 beloved your podcast. It actually helped me assume greater.

Matt:
I had these epiphany conversations with myself as properly. 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 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 just needed to stay a much bigger life and also you selected to stay, you wished to stay greater, you wished to have a much bigger factor, and also you determined to comply with that want 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 following 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 among today.

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

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

Matt:
Spoken like a Kentucky landlord. Nicely carried out.

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 individuals, on this case, the right partner that can assist 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 everyone else and I believe there’s lots to be taught from that.
One other one is, you didn’t do a primary deal and give up your job instantly and put your self into a troublesome 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 once you made the large 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 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 with a purpose to construct an actual property portfolio, it’s a must to go elevate cash. You haven’t carried out that. You’ve taken the, I don’t need to say sluggish, as a result of $12 million in 10 or 11 years shouldn’t be sluggish, however you took the sluggish and regular method and constructed it in-house. If you say you may 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 out right here?

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

KC:
So, yeah, no, I agree with you 100%, Matt. It’s an enormous profit to have somebody in your group that has the identical objectives aligned. One factor that I’d most likely suggest and a few recommendation that I like to offer is constructing quietly. I believe a variety of our limiting beliefs come from different people who don’t know or haven’t carried out 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… Individuals knew I used to be in actual property, however they didn’t know to what extent, and I don’t even assume my dad and mom know to what extent I’m concerned in actual property. I informed them I used to be doing a podcast there right this moment and so they have been like, “Oh, what’s that? That’s neat.” So constructing quietly as a result of in case you’re good at one thing, you’ll inform everyone, however in case you’re nice at one thing, they’ll let you know. 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 unsuitable method. And so now after I discuss to individuals 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, needs to realize some huge stuff.

Andrew:
I actually like what you mentioned about constructing quietly. That resonates lots with me, particularly after I evaluate it to what you are likely to see on social media today. Kudos to you, KC. So, for these listeners who resonate together with your story and perhaps wish to get to know you a bit bit extra or discover out extra about you, even in case 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 wish 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 in fact, individuals can textual content me or e mail me, nevertheless it’s KC, M-A-S-S-I [email protected].

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

Matt:
People can comply with me on Instagram on the Matt Faircloth, and most significantly, they will 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 in case 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 can assist you finance offers. Debt and financing is a tough topic today, so we received 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 amazing episode, Andrew. I at all times take pleasure in co-hosting with you. This has been a variety of enjoyable. And if I might have the respect of taking it house 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 very best substitute podcast host ever, the Cushman Award, signing off.