BiggerPockets Real Estate Podcast - 493: How COVID Changed Real Estate Forever (+How it Didn’t!) with Ken McElroy

Episode Date: August 8, 2021

It’s rare to find someone with the experience, knowledge, and downright friendliness of Ken McElroy, which is why we’re having him back on the show! This time, Ken breaks down some of the fundamental truths of real estate investing and how it can help you, as an investor, make more money, reach financial freedom, and live the life you were born to live. Ken has been in the real estate game for decades, starting as a property manager in college, becoming a landlord with a sizable portfolio, then meeting Robert Kiyosaki and working on books, education, and systems with some of the biggest names in real estate. Ken has been through multiple market cycles, dozens of policy changes from the government, and made lots of money on many different types of deals. He has a unique experience that gives him a leg up on much of the new competition. You’ll hear Ken’s thoughts on the “affordability crisis” we may be facing in the coming years, how short-term rentalsare changing the landscape of month-to-month rentals, and how an inexperienced investor can get started with “good debt”. Make no mistake, the lessons Ken talks through in this episode took decades to learn, but you can get them all in just over an hour! In This Episode We Cover: How COVID did (and didn’t) affect the market for real estate investors Leveraging “good debt” so you can build your real estate empire When prices of labor, lumber, and new construction will flatten What the future of the real estate market will look like, and how landlords can benefit Working with the system (government, tax codes, etc.) as opposed to working against it Why great deals will always get funded (especially in today’s market!) And So Much More! Links from the Show BiggerPockets Forums BiggerPockets Calculators BiggerPockets Youtube Channel OpenDoor Capital Brandon and David’s Books Real Estate Rookie Bootcamp BiggerPockets Podcast 052: Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy Airbnb Get Ken McElroy's free e-book for BiggerPockets listeners Click here to check the full show notes: https://www.biggerpockets.com/show493 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 493. If you can find those places and find those markets that are emerging and be ahead of that and use this model, you can do very well financially. It's a little different than the long-term 12-month, let's say lease, but there's a whole market coming, I believe, especially on the single-family side. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com.

Your home for real estate investing online. What's going on in morning? It's Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. What's up, man? How you doing? I'm doing great. California is beautiful right now. The housing market has been so ridiculously.

hot. It's been very challenging to put buyers in contract, which it always stings because you know every time somebody buys a house that if they hold it long enough, especially in a market like this, it's not ridiculous to say that house will make them a millionaire at some point. And so when you can't help people get that goal, it bugs me. But it's cooled off a little bit. So we had a really good week. We put like 10 people in contract last week. So now I'm like a flower that just got water again. I'm all excited. There you go. That's cool, man. Well, I do have a question for you. It's actually pretty serious question. How do you feel about golf? Yeah, this is funny. Okay, so Brandon and I had a conversation after this podcast. I just want to bring this up and see if anybody else is on the same

page as me. The concept of golf, what you are trying to accomplish is insane. You're talking about taking a ball that's this big, like a couple, like an inch or something in diameter. Like the size of a golf ball. Yeah, the size of a golf ball. That's great. I'm putting it into a hole that is like half the size of a shoe or less than that. It's insane. Over 400 yards. of space. Like just if someone said, hey, this is what we're going to do and you didn't know anything about golf, you'd say that's impossible. That can't happen. And yet there's people out there doing 18 holes of this ridiculously impossible task over and over and over. That's, yeah, but let me, let me give you an analogy here, because I know you're not a big analogy, guys. Let me give you one.

I'm a brand new investor. I got no money. I don't know what I'm doing. I just heard that real estate's a good idea. And 15 years later, I just crossed $100 million in real estate owned. How's that happen? That's an impossible. But you know what's not impossible is hitting the ball a little bit. And the first swing, the thing falls off the T and moves like, you know, six inches. And you feel like an idiot and you put it back on there again. Then you hit it a little further. Then you get it 10 feet.

Then you get 10 feet further. And then 50 feet or yards, whatever. I don't know. I don't do yards. And then eventually, if you just keep hitting it toward that hole and you just keep going, eventually it falls in the cup. And that, my friend, is a secret to any success. Thank you.

That was good, right? That was a good analogy, right? So if someone's having a hard time with real set investing, go play golf. It will see it very easy after that. Or you'll never do anything else your entire life. Well, that's what we're saying. In order to get good at golf because it's so ridiculously hard. You might have effort people have to put in that.

We would have probably cured cancer seven times over if there was just no sport of golf. This might be true. All right. So with that said, let's get to today's quick tip. All right. Today's quick tip is, you know, before I get to the quick tip, let me say this. Today we're interviewing a genius of a man. his name is Kenny McElroy or Ken McElroy.

You've probably heard of them before because he's been on our show before, back on episode number. Ken McElroy is also one of the advisors and partners with Robert Kiyosaki in the Rich Dad Company. So he really specializes my understanding is a lot of Robert's real estate investments. Ken is the person who's actually making the decision analyzing the properties and directing the resources. So he has a ton of experience buying a lot of property. All right. He was on episode number 52 of the Bigger Pockets podcast, a long, long, long time. like OG right.

Yeah. And Ken is one of the smartest people ever. So today we talk about a lot of stuff, including whether or not you should go into debt and good debt, bad debt, that kind of conversation, whether you're new or your experience. We talk about a lot about the economy. Like what's happened? What's inflation doing?

Does Ken think the real estate market's going to crash soon or do we have some hope? And what's the data that helps support that? It's a really fun conversation. Now, the reason this is tied into the quick tip today is because we talk a lot about debt and about some of the ways that you can use debt to get wealthy. So here's my tip for you. Buy a property for your kid. If you have a kid under five years old, buy a property, put it on a 15 year mortgage. It could literally break even have to make money. It could literally break even every month. Buy it, put it on a 15 year mortgage. In 15 years, it's paid off to nothing.

You now have a property worth probably a quarter million dollars that you owe nothing on it. Your tenants paid it off. So that's what I've done with my kids. I bought my first one for for Rosie, like four or five years ago. And while there's getting one right now, we're in process of closing on it. In fact, by the time this interview airs, we should have closed on it. And so this basically works because you're using debt to your advantage. You're not paying the mortgage. Your tenants are paying the mortgage, right? It comes out of the cash flow. And so like, you're not doing anything and you're probably just getting paid off. And plus it's going up in values. That's a quick tip today is if you've got young kids, buy a property form, put it on a 15 year

mortgage, pay it off and their college education is completely paid for. There you go. No exaggeration. This is like the financial success starter. pack for your kids, your starter kid. They're good. They should pay for their college, pay for their first car, and pay for the down payment of their own first home so that they can go repeat the cycle and have some left over. And more importantly, is it shows a real world picture of the power of assets and versus liabilities and the power of passive income, the power of wealth, the power of real estate

in a way that you could never just tell them or make them read a book. You're showing them over the course of 15 years what it can do. So there's your quick tip for today. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims.

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Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes, 10% below market value, and the best markets across the country, without making real estate your second job?

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Go to mine.co slash show me to see how mine performs and get a month of management for free. Because if you're going to hire a property manager, hire one that manages your investment like an investment. All right. And I think that's about it. Again, today's show is phenomenal with Ken McElroy. I love this guy.

He is amazing and you're going to love him as well. So stay tuned for the whole interview with him. And if you have not yet left a rating or review for the show on iTunes or Stitcher or Google Play, wherever you're listening to this, Spotify, please do so. All right. Without further ado, I think it's time to get into a very awesome fun and deep conversation with the Ken McElroy. All right, Ken, welcome back to the Bigger Pockets podcast, man.

Always an honor. Great to have you here. Great. Thanks, guys. As always, I love your show. and can't wait to chat about what's happening. Well, thanks, man. Well, for those who maybe didn't listen to your last episode,

don't know much about your story. And I talked a little about that you in the introduction. But once you give a quick, you know, who are you? And how'd you get into real estate? Sure. Yeah, so haphazardly, really. I was managing a property out of university and trying to, you know, pay rent. And I was making a little bit of money.

But I immersed myself in property management as I was trying to finish up school. And that really gave me kind of the platform for understanding the, you know, how, how deals work. Because in property management, you know, your entire job is to obviously manage your property well and produce cash flow and send the owner's checks. And if you don't, you get fired. So, you know, so that was how I started. And then really, I, one day, Brent, I was like, you know, I'm on the wrong side of the desk here. You know, whether the owner was coming in and I was like, man, how do I own these? things. And that kind of started my journey. I got my real estate license, started getting educated.

And I started buying small deals. And just like everybody, I didn't know how I didn't have any money. My parents certainly didn't have any money. And luckily, I was on a wrestling scholarship in college, and that's how I got there. But other than that, I probably wouldn't have gone. And I just started realizing the power of cash flow, I started buying small deals. And then I started buying bigger deals. We started buying 100, 200 unit deals 20 years ago. And, obviously syndicating because you run out of money. And then I ran into Kiyosaki. You know, he was, honestly, he was just somebody I was raising capital on. And he had just launched Rich Dead Port Ed. So this is a while back. And we became friends. And then he's like, you've got to teach what you're doing.

And so I started doing that. I started writing the books. But I've been a hardcore real estate investor and manager. You know, we have a 250 people working for us. All we do full time is apartments. We have self-storage office and that. And, you know, I just love this business. It's just provided the greatest amount of freedom that I can ever imagine. Yeah. Yeah, yeah.

I mean, I've said it before. I'll say it again, it's like, you know, the ABCs of real estate investing in the advanced guide. Like those changed my life. I read those books. I was like, I'm going to buy multifamily. And then I started buying multifamily. I don't know, I'm at 2,000 units, something like that right now.

It's just, and I'll start it with reading that, I'm reading your book. So, yeah, you're inspiring a lot of people about, like, multifamily can get you out of a job, it can get you out of a, like, that life that you, that's like prescribed for us, right? Like, work to your 70 and then, you know, maybe then you can retire the richest guy in the graveyard.

It's like, I don't, I want to do more than that, right? And that's what your book really taught me. Thank you. I appreciate that. You know, I, I didn't know how to write a book. Robert's like, you just need to do it. So I did. And, you know, and then what became my why really is I started don't, I still do. I donate all that my proceeds for my books and all that stuff to charity.

We have a full-time director of philanthropy now at our company. Wow. All she does is give away money. And so that's been great. So it's been a great venue for me to be able to educate and talk about war stories and the stuff that, you know, I've been through in the last 25 years. you know, buying and selling apartments and commercial. And it's actually been a blessing the whole thing. That's cool, man.

Well, why don't, there's a few things I want to cover today, specifically some of the, like, the fundamental rules that have guided your career. Like the thing, I mean, like, you're not the guy that came in. Like, even like David and I, like, we kind of got in heavy at the last cycle. And we've only really been through, you know, a cycle or now a cycle and a half. But, like, you've been around for long enough to see things come and go. And so you see a big picture. So I want to cover two things today specifically.

one, I want to know your thoughts on where we're at in the market. What's the world doing? The eviction moratorium, what COVID did, where the economy's headed. I want to get your thoughts on that. And then I want to go into some of the rules, like those, yeah, the fundamental rules or the fundamental truths that you believe in when it comes to like multi-family specifically. So maybe we can start with the first piece there. Sure.

I'm like, where the hell are we going? I know. I know. It's, well, it's interesting to me. I really, really believe that we're. heading into a pretty heavy problem around affordability. And not just from the inflation that we're seeing, you know, that's kind of recent. But, you know, we always were under delivering new construction and supply for years.

And, you know, if you go back to the National Multi-Housing Council, which I'm a member of, or the National Department Association, which I'm also a member of, you know, they projected that we were thousands and thousands of unions. units off of what we needed to deliver. And so what's happened is we have three projects under construction right now. You know, we're getting hammered on construction costs. And so, you know, and so are the single family guys. So, you know, lumber is lumber, right?

So it doesn't really matter where it goes. And so I think, so I really believe, you know, if people, if we're going to continue to build, one, we're undersupplied, but two, the cost of construction. has to move into a higher mortgage payment, a higher rent payment, and all those kinds of things to make sense. So I think we're going to, we're heading into some serious affordability issues, you know, and then now you're layering on the inflation piece. And so I think we're going to see, you know,

we're going to have some disruption, certainly with the forbearance and the eviction moratorium and all that, of course. But on the rent side and the eviction side, I really don't see much disruption from a landlord's standpoint. And I think we're going to start to see some real squeezes on the single family side more than anything. So would it be what, I guess would it be right in saying you don't predict or do you, I don't know, predicts the wrong word, but you anticipate any kind of decline in prices for real estate investors? Like, are we worried about another 2008 happening? No, no. I don't, I think 2008 was very different. I went through that, you know, there were a bunch of things happening at that time. So everybody wants to compare it. And I get that because that's kind of the last, you know, the last thing that happened. But, but I think this is more like what went on in the 70s when we started to see, you know, higher interest rates and potentially higher, well, higher inflation and those kinds of things. And certainly, you know, I don't know, you probably don't remember, but I was a kid.

people were lining up for gas shortages and all those kinds of things. So I think it's caught probably a little bit more like that. And in 08, as you know, what happened was the market popped and then people owed a lot more on their mortgages and their homes. And certainly we're not going to see that because we just saw this big run in pricing. And so even if people are really behind and they can't pay their mortgages or whatever, I believe that a lot of them are going to have enough equity in there to cover. I do think we're going to see a lot of listings hit the market. And I was actually looking at the sporting that there's a bunch of markets that are in trouble.

You know, there's Atlanta, areas of Atlanta, San Antonio, you know, some areas of Dallas, as an example, that are seriously delinquent. So you're going to have some markets that are going to have a lot of forbearances. is going to end and you're going to see this kind of onslaught of supply. What will be interesting is to see whether or not it gets covered quickly by the head of mayhem, you know, so it's hard to know. Yeah, I feel like, and David, I want to throw this at you too as being a pretty heavy agent and an expensive market. But I just feel like there's so much demand right now when you're still getting 30 offers

on every house that's out there and 40 tenants applying to rent any of my properties. Like, I still feel like they'll be able to absorb that when it does hit. but no no David what do you think I really like that we're bringing this up Brandon and I we feel a lot of pressure because people look up to us with what do I do what what should I expect I think Ken I see a lot of the videos you put out you clearly are in the same boat because the videos that you put out are are an indication of the questions you're being asked and so as people are listening that's what they're asking is what's going to happen and I notice one of the things that comes up a lot is this idea like can you just

mentioned the foreclosure moratorium ending and there should be a wave of people that fell behind in their properties. And that immediately makes us think of 2010 when we had the same problem. And we had too much supply and not enough demand at the time people had lost their job. So no one was really looking to buy a house. We still had sort of enough supply for the people there was. So throwing all these foreclosures in the market immediately created oversupply prices dropped investors if we were bold, cleaned up at that time. But now we haven't really built many houses since then first off. That's the thing a lot of people don't realize if we're talking about single family homes. I think at least what I've noticed is the multifamily space has really

done a better job of keeping up with demand. If you lived in Austin, Seattle, San Francisco, you saw condo high rises going up everywhere. But single family homes have it. So the population grew, the supply of real estate did not. That happened for a long time. And we didn't really think about it until all of a sudden, why is just rent so expensive? Why is it so hard to get a property. And one thing to consider is as these people that are behind in their mortgages, when it comes due, they probably have a lot of equity and could just sell it. That's the first thing. It doesn't automatically mean it's going into foreclosure. And like Brandon mentioned, there's such a shortage of supply. And this is also market specific. It's not everywhere. But I think

in most big cities in the country, if we had an onslaught of listings that hit the market, it would sort of be like your buckets overflowing with water and it's spilling into the sand. It would just get sucked up right away because there's 10, 12 offers on every halfway decent house. So if we doubled our inventory, you just have five to six offers on every house. There's still so much demand. And my fear when people hear this is they say, I'm going to wait to buy. They could buy right now. They're in a position where it makes sense for them to do it. And they hear that and they get a little bit greedy and they think, okay, I'm just going to wait for that to happen. And then they, like, it's a flash in the.

pan, it's gone. It never happens and then they missed out. I'm curious, Ken, what from your angle, what your perspective is on that. Well, so it's a great question, David. I think a lot of, I think a mistake a lot of people make is that they, they broad brush real estate as if the whole market, the whole U.S. is kind of the same market. So I'm actually closing on a single family home in Scottsdale tomorrow. Nice. And Scottstale is arguably on fire. And I had to buy. I offered over lists and I'm actually, it's a long story as to why I'm doing that, but I ended up, it's going to be a rental and it's going to be a cash flowing rental. And so I personally still think there's a lot of markets that have a lot of run rate.

And, you know, like Phoenix, like Scottsdale, is very affordable still as compared to some of the other markets. So like you think about this, I'm paying 500 grand for, for a home. home in Scottsdale, which is cheap, in my opinion, and, you know, based on what the rents. And so it all boils down to math. And I think that there are, there are areas that are 600, 700, 800, with the same rent. And there are areas that are 300, 400, let's say, you know, with less rent. So, but it just has to do with the math around the cash flow. And as you guys know, because you guys are cash flow guys, I always solved.

to the cash flow. And so if I don't ever want to be in a situation where I'm feeding something, you know, and trying to time the market. So for me, if it cash flows, then we always are considering it. I think a further complication in understanding, because your point really, I should say first, is exactly right. It's what it's worth to you. How does the math work out to you is a much smarter way to look at it than, well, what does it compare to everything else, which is what people get stuck into. What I've noticed is, and Scott Still is a perfect microcosm of this example, is short-term rentals have introduced a completely different system of generating cash flow.

They are less passive. They're not passive investing when you do that, but they are going to be more profitable in most cases if they're run well. Now, if you can buy a property in an area like Scottsdale that will cash flow more as a short-term rental than it would as a traditional rental, someone can pay more for that same property and still make more money. They can pay $100,000 more than what it's worth, the ARV compared to comparables, and it's still an amazing buy for them. So what happens is that pushes up the ARV of all the other property in Scottsdale.

Before we had the short-term rental sort of information put into the algorithm, you bought a house because you wanted to live in it, so you just looked at the comparables. Or you bought it because it was going to cash flow, which meant you were probably somewhere around the 1% rule and you were in very specific markets and the rent that it could generate determine its worth. But it was one or the other. The short-term rental thing just kind of screwed everything up as far as the way that we look at it. But Brandon and I say, there's like governments are stepping in right now that have shut down those things. Like Atlanta, I know is having a big push against Airbnb right now. And Hawaii shut it down almost entirely. And a lot of other cities are doing that.

Because, yeah, they see the same thing. It changed the game in a weird way that made it unaffordable for most people who just work a normal job. That's the concern is if you're a regular person who just wants to live in a house and you're competing with someone, they can generate $10,000 in gross income on this property, you can't pay as much as what they can pay. The rules change for how we evaluate real estate. And I think to a larger degree, with the amount of stimulus that the government has created, the rules have changed as far as what is a dollar worth. What am I doing with my money? And this is just, it's on my mind all the time is if I'm stuck playing football the way that the rules were set up 10 years ago and I'm trying to draft a really good

running back and really good blockers for that running back, I'm going to lose to the team that has adjusted and they're drafting a really good quarterback and a line to get him time and wide receivers to throw the ball to. And can you watch sort of rules change over the years? And so I just wanted to get your take on because I love the points you're making. Are we on the right path with the way that we're perceiving this? I believe you are. I listen, as you guys know, I'm still buying. You guys are still buying. We're all buying. And now there are definitely markets that you don't want to buy in. And there are markets that you do want to buy in it. And, you know, so when I look at just going back to the Scottsdale example, you know,

if you take that same place and drop it in Seattle or you drop it in L.A. You drop it in Chicago or you drop it, you know, in some of the other markets, that is very, very cheap. And so, you know, when I look at where people are going and certainly Arizona is one of those places and to your point, Brandon, we got all kinds of people moving there. We got all kinds of demand on both the buying side and the rental side. So for me, it all makes sense. And to your point, David, you know, I think, you know, there's three factors going on.

If you're a homeowner and you're trying to buy a home, you know, you're not in this, in the same, you're not dealing with the same set of circumstances as somebody like me who's going to rent it. and or someone like that is going to put an Airbnb or a short-term program around it. And I've been doing short-term for years, way before Airbnb. I had almost 200 of them in Scottsdale, and we were renting to the San Francisco Giants and the Cleveland Indians for spring training and those kinds of things. And so we've always been doing that. And now, of course, it's all through Airbnb and through some of the other services.

it's gotten way more professional and much, much better. But I listened to the CEO of Airbnb the other day, and he said that Airbnb is no longer just a short-term thing. And what he was saying was, and I think this is true, I think what's going to happen for a lot of people is they're exiting and they're selling, but now they're actually using Airbnb as more of a lifestyle. And they're actually going places and not actually owning them. So they'll stay three months, four months somewhere and just do that.

And I think that this is here to stay. I think that behavior is here to stay, especially with this work from home model. You know, that reminds me, I'm launching this kind of side business going to test it out. But for the exact same reasons you're just saying there, there's like a shift in the culture of people right now. And so I launched, well, it's kind of officially launched, but it's going to be called Month in Maui. It started with Month in Maui. And we're going to buy a bunch of vacation rentals here. But the idea is different than Airbnb in that I'm like, people don't want to just come for a week.

I mean, people are still coming for a week. But there's a certain type of traveler now that can come for an extended period of time. So we're like, and car rentals are hard and all those things. So we're like, we're literally like you get the condo or the house. You get a car rental. You get a bunch of activities. You get kind of white glove service for that type of traveler who's thinking differently. And like I want to expand that thing to like cities all across the world.

There's month in Maui, month in London, month in, you know, Cabo, whatever. because it's just a different type of traveler. And then if I can do that, I can get outside the Airbnb, you know, like thing. If I can build my own brand around it. So that's one side thing I'm doing right now just because I see that shift in the way that people are traveling, the way that people can work anywhere now. A lot of people can work, you know, from a distance. So why live in Ohio for the winter when you could go live in Maui for the winter

and work on your tech job there? I think that's something here to stay. So I was originally going to probably buy something on the B. in like Newport or Manhattan or whatever. And what I ended up doing is I'm renting something there in August and September. And it's expensive. I'm not going to lie on a daily rate. But when I'm done, it's done.

And I'm, you know, and I don't own it. I don't have the property tax issues. I don't have all the stuff that's going on on the home ownership side. So it, you know, there's a lot of guys like us that are, you know what? I'm just going to go take down something really nice. and I'm going to stay there and, you know, call it a day. And I do believe that's here to stay. Yeah, if you look at the way people rent cars, less people are going to car rental places,

more people are using Turo. Uber took a lot of people who used to want to own a car and now they don't have to, especially if you live in a dense population. That's what I mean by the rules of the game change. People don't want to go through the hassle of having to own a car and take care of the maintenance and pay the insurance and then not use it when they travel. I think COVID really jump started this movement. And if you think about Airbnb, it's sort of combining Turo with Uber with Yelp.

I can look and I can see what am I getting when I go to this place. And I can see the reviews of what's there. And so what I think you're right, Ken, that it's here to stay. And one thing that I think about is more and more properties because we're probably not able to keep up with the demand for supply. We're just, they're going to stay scarce for a while now. will be used in this way. The highest and best use of that property is this Airbnb model. So for investors, that means passive investing will get harder and harder. You're going to have to manage

the property in this way. And for renters, it's going to get harder and harder to find properties that you can just rent paying by the month and staying in for a long time like people have gotten away with because more and more properties are going to go towards this short term rental purpose. So I'm encouraging people, that's one more reason you want to buy a house. You don't want to leave your destiny in the hands of the market as it's changing. Yeah, I agree. You know, I for years had second and third homes, guys. And when you really start to take a look at the burn range, you know, and, and all that. And I was staying Emma for two, three months at a time, kind of met, bouncing around. And I've changed my whole model to just my big primary home that I have. I'm

actually building one. And now we're just going to just, move around and kind of go where we want to go and don't kind of have that commitment and see if we like the area. And I have a number of friends doing the exact same thing all over the country. To your point, Brandon, I think this is a new market. It's, and you know, you start, kind of started with that inspirato model, which, you know, I'm a member of. And, and, you know, take, we would take down these big houses and, and, you know, bring a bunch of friends and have a great time and then lock and leave and go home and you know that's it right and then somebody else and so to your point if you can find those places and find those markets that are emerging and be ahead of that

and use this model you can do very well financially it's it's a little different than the long-term 12-month let's say lease but there's a whole market coming I believe on especially on the single family side yeah well two more two more things that that we've seen affecting, like rules that have changed a little bit, the game is the cost of, you know, we mentioned earlier, lumber is going through going crazy. And it's come down a little bit, but it's going crazy. And then the cost of labor is going up. It's harder to find people that want to work anymore for $8, $9 an hour. And those things are obviously going to affect home prices as well. I'm wondering, what do you see with that? Is this a temporary blip we're

seen? Is it supply and demand? Is this inflation hitting us? Is this hyperinflation? How do you view these rising costs? So it's a good question. So we have a property under construction right now, 330 units, and our lumber package was one million higher than our budget. That's lumber only. And now that was two months ago. It's since come down. And so I think some of them are supply chain issues, appliances, concrete, OSB, lumber, those kinds of things. And we're starting to see some, you know, those kind of moderate a little bit, but they're certainly higher to your point. there's a lot of reasons for that, Brandon. Some of it had to do with some of the trade issues, like between Canada and the U.S. and Mexico or, you know, and obviously COVID and the pandemic

and all those kinds of things. And so, but then the other piece was during the pandemic, everybody started doing remodels. And so if you owned hardware stores or anything like that, you killed it. And, you know, everybody was adding on to their homes and putting decks in and all those kinds of things. So you kind of had this run in addition to that kind of a supply issue. So I think that that is going to iron itself out. But I do think we're going to have some permanent inflation on a number of those items. But I don't think it's going to be quite what you see in the media. But at the end of the day, as you guys know, if you're trying to buy a home and I have a bunch of friends that are doing home building, and the homes are 30, 40, 50,000 more.

And so they're not even giving people prices. And I think what I think the issue they're going to have is at some point, they're going to be priced out affordably. Because as you guys know, we can't really lower rates much more than they are. And especially they use inflation or they use interest rates to tamper inflation. So that could be the tipping point potential. With lumber this expensive, it really makes you wonder how much wood could a woodchuck if a woodchuck could check wood. Not so much.

All right. So we're talking about some of the rules that have changed. The Airbnb, the labor and lumber shortages and increases in those prices, those are rules that have really changed the game over the last few years. I want to shift now and talk about some of the rules that don't change. change. Some of the things that work in, that at least in your opinion, can have worked in any market regardless as you've built up this massive multifamily business. What have you seen that just, this just works? Well, I, as you guys are, same with me. I, there's, there will always be,

if you pay attention to the homeownership versus the rental piece, you know, if you go anywhere abroad, like, you know, let's call Europe, let's say, or Asia, there's a very, very, very, very high percentage of the population that is always rented. In the U.S., we've always pushed homeownership. Nothing wrong with that, but that's been what we've done. And so I think that we're heading into more of a renter nation. And I think this could be a 10 to 15 year run that we're going to see, you know, because of affordability. And so to your point, the one thing that I think, if you're going to get into this business, I think there's going to be an ample supply, at renters, just like there is all around the world.

Yeah. And I think that if you're a good landlord and you understand how that whole whole thing works, this could be a very, very, very good run. And then take advantage of this inflation by hedging the, you know, with these fixed rate interest rates, if you can't. So, you know, we just, we just closed on a deal in Houston two weeks ago. And, you know, we're at 3%. And so when inflation comes out around.

I'm like, man, this is great. You know, we're basically borrowing. It's free, you know, based on inflation. So if you can use other people's money through debt or even equity and kind of hedge inflation, I think those are one of the things, Brandon, that you will always see. Now, there's, you know, nobody's really seen inflation this generation at least, but I've been through it. And anytime you can get that fixed, that's why.

I think that you should get into debt right now if it's covered by cash flow. You know, don't just do it, you know, based on a capital gain strategy because that could bite you in the butt. But if you can get debt covered, I think in 10 years you're going to look back and go, I'm so glad I did that. I'm going to pay back this debt for, you know, with these cheaper dollars. And that has never changed and that won't change. And you just got to sit back and kind of watch the policies.

That's a good point. It's also one of the hardest components to real estate investing. I was just talking about this to my team yesterday. Even me who believes in real estate, owns real estate, loves real estate, makes my living from real estate, it's always hard to focus on buying the next property when there's all these other stuff going around because in year one, it's not a life-changing event. It's 10 years down the road where you're like, oh, I'm so glad I did that. And anything in life that you don't see a big result for 5 to 10 years is just harder to do,

but it's that much more important. You're so right, Ken. And I'm always reminding myself, if 10 years of rent projections, what is this going to look like? Does that get me excited so I can keep my focus on what matters? Yeah, I mean,

especially when the renter pays to your mortgage, right? Yeah, yeah. I mean, like, why would you not do that? You know, the stuff that we're buying, and I know you guys look at this. So, you know, it costs us, because we're builders too. It costs us about 200 plus per unit

to build something right now on the apartment site, roughly. Well, okay, so yesterday I was on an investment committee call. We're always going over six to ten deals a week. And we're looking at stuff that's priced at 140, 150 a door. That was built 10 years ago, 12 years ago. And I'm like, buy it. You know, because we're buying it so much less than you can build it.

If you scraped it and had to build it today, it would be significantly more. And as long as you're covering it with rent and you're putting good debt on it and you're not, you know, trying to play the capital gain strategy, then I think there's massive, there's stuff that's so underpriced still today. Yeah. If you look at the cost to replace it and that's the way I'm looking right now is if we can buy something at, let's say, 60, 70 percent of what it would cost to replace it. and, you know, after renovation, then, then I still think that those are good opportunities. Yeah, we just picked up a property in Houston. It's a 500 plus unit thing. We got for 108 a unit.

And like half of them are more than half are already completely remodeled and the things like, I'm like, you can't build this thing for that. I mean, they just put $40 million of work into it over the last like half a decade just to get it up to where it's at right now. I'm like, 108, you can't build anywhere close to that right now. So that's what I said, Brad. And so I said to my acquisition guys, I go, okay, if that building that we're buying is in Phoenix, what would it cost to build?

And they were like, well, it's 75,000 more per unit. Well, I'm like, okay, next, you know, like, let's go. Yeah. And then you take other people's money through debt, match it up. And, you know, the tenants pay off your mortgage. It's the greatest model. but you guys are teaching and, you know, what I've been trying to teach people, it's the greatest model. You can make your investors a tremendous amount of money. You can make yourself a tremendous

amount of money. And it's a win-win for everyone. Yeah, I call it in the multifamily millionaire book. I call it the multifamily millionaire model. But it's basically just the exact what you taught in ABCs of real estate investing. It's this idea of like, yeah, when you buy these properties, over time, they go up in value. When you force them, you know, you force them up because you improve them, you get higher rents. At the same time, the mortgage is getting paid off. At the same time, your investors are the ones to plan the down payment. And everything just, and then you get the tax benefits and the right-offs and the cost tags and all that stuff. It just, it's like a win, win, win, win, across the board for everyone. Uh, which is, you know, it's exciting stuff.

I love this stuff. It is the greatest. We had a, I bought a property in Mesa, Arizona. And at the time, like six years, seven years ago, our acquisition guy was $34 million. I was like, man, I don't know. You know, this thing's tight. So my acquisition guy actually left and started working for another group. And we're still super close. And so he sent an offer for the same property for 87 million. So for 53 million more that we paid while he was my acquisition guy.

And my partner and I are like, nope, you know, we're going to hold it because it's cash flowing. even though we have all this equity. And the point behind that is, you know, we're cash flow guys. You know, we could sell it. We have all this cash. And we have the same problem that he has trying to find a home for it. And so if you have a strategy of passive income long term and tax benefits, to your point, Brandon, it is the best because you're getting lots of money in passive income.

You're not paying tax legally because of the depreciation that you have. have. And it's a win. It's a win-win. And all you just use that little refinance model, you know, which is exactly what we're doing after Charlie called. I said, let's see, let's say if we can scoop 10 or 20 million out of this deal tax-free because it's a cash-out refi and just move it to the next deal. Yeah, that's so good. If you want a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, Chile, and higher guest turnover, having the right coverage is more important than ever. Steadily offers

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So I want to take it to more those who are. we're listening to that are brand new, but related to what we're talking about here, when you mentioned debt, kind of that rule about if you can get your mortgage covered and then some, like, it just makes sense, right? But how does that work for the guy who's just getting started that's nervous about, they've heard Dave Ramsey, they've heard all the, you know, Susie Orban, don't go into debt, get out of debt, get out of debt. Like, what do you say to those people who are saying, well, I don't know, I don't know if I should use debt. That sounds dangerous. That sounds risky to buy their first or second, third property.

Yeah, I actually do agree with some of Dave Ramsey for the right person. And so if you're just a hardworking person and you're working for the man and, you know, maybe paying off your home completely and not having that kind of worry and stress, I get that. You know, that's not our audience, in my opinion. You know, if you're trying to make this a business, then then really that is your friend. It really is good debt, by the way, as you know, as you guys know, the difference between good debt and bad debt. So good debt is covered by cash flow. And so I'm a massive fan of using debt. And we've done it for years, tenants pay it off for you. If you can fix debt.

And before, as you guys know, we had inflation around two-ish, I guess, over the years. And so we were getting debt at four or five percent, you know, six, seven, eight years ago. Now it's closer into the three to four range, let's say, in some cases, to three. But now that inflation's gone higher than that, then really if you're sitting on cash, you're in trouble because your spending power on the money that you have in savings is actually hurting you because it's going down right now by, you know, on the average, I guess, of let's say, four plus percent a year. So in 10 years, theoretically, you know, that same money would buy you for.

40% less stuff. So that's what I mean about debt. And so I look at real estate assets. It doesn't necessarily have to be multifamily. You know, I buy billboards and, you know, commercial office and self-stores or all that kind of stuff, but all using debt. And then I'm letting the forces of the, you know, the policymakers, whatever they do is fine with me. Because I'm just kind of, I'm just adjusting based on whatever. they're doing next. And so when when this administration is throwing everybody money, it's actually

coming to us. It's going to the person and then it's coming to us and rent. And then we're using it to pay off the mortgage. And so, you know, and we're going to start to see more and more, more that I really believe that we're going to hit the affordability issue. And I think the government's going to step up for the renter and for the landlord. And there's going to be all kinds of opportunities for us. Because The one thing people need, and to your point of what hasn't changed, is housing. It's always going to stay in the private sector. The tax laws are all set up for us, and they will always be. And we're always going to have this massive tax benefits.

I agree. Yeah. And I think part of that is because, I mean, I think a lot of our lawmakers own real estate, but I think the other pieces, they just realize the tax code is not written to give some people a discount because the government likes them right it's in it's designed to incentive in fact i think i haven't heard this first from kiyosaki's uh rich out porta it's like designed to incentivize behavior right like i think david you made the point the other day it's like if you give your kid a dollar if they want make their bed like they're not cheating you by taking that dollar and

making their bed yeah it's not a loophole yeah it's a as much as like it's a it's like it's carefully designed and now obviously there are i'm sure areas of our government where they're like you know helping some guy but most like they want us to invest in real estate. They don't do it because they're nice. They do it because we provide housing for millions and millions of people and jobs. That's right. I mean, it's interesting because you know, Tom Willwright wrote a great book, Tax Free Wealth. And he, you know, in my conversations with him, he said the tax codes every year are literally designed for where the government wants money, period. That could be oil and gas. It could be alternative fuel stuff. It could be whatever it is, a four.

Portable housing. We just saw that with the Opportunities Zone stuff. And so, you know, which was a real estate play if, you know, if you chose to do that. And so they will always be those kinds of things. And there's no way the government's already shown that they're not very good at buying and managing and building housing. I mean, we saw that for, you know, over the years. So I think as long as you pay attention to what the government's basically serving, you can do very, very, very well with these government programs. You made a really good point earlier. I don't want us to gloss over when you said, I just look at what the government's giving me and I go with it. When I was in Tahoe at a go-buttonance event, Robert Kiyosaki came to speak there.

And he made a point where he said something I thought was very profound. He said, I don't get caught up in trying to force. people to see the political landscape the way I do. I don't get mad when liberals say they want to do this thing or conservatives say they want to do this thing. And really that's what most human beings that I come across do is they want to change how someone else thinks to make them think more the way they do. He said, there's heads and there's tails. There's equal sides of a coin. I don't want to pick a side of the coin because then I only see half of it. I want to stand on the edge of that coin where I can look over one side and see what the heads is doing and I can look on the other and see what the tails is

doing. And when I understand the landscape, I make the best decision. And that's why I keep using this example of a rule book, because I notice a lot of people just have anger when it comes to what the government. I'm angry they're printing all this money or I'm angry. They're not printing enough money. I'm angry interest rates aren't high enough. I'm angry. We haven't lowered them more. There's always people that want opposite things. And when you get caught up in the emotion of wanting to change things that you can't control, you don't make good decisions for yourself. It's much better to say, well, they change the rule book in the NFL again. You can't touch wide receivers for the first five yards. That's going to suck. Well, guess we better draft better wide receivers and just

accept maybe we need better pass rushers instead of better cornerbacks or something. And now you change your strategy to fit the way the rules are written instead of trying to change the rules or the government to go the way you want to. And I wanted to highlight that because what you're saying is it's a stress-free, non-toxic, happier, more productive way to sort of look at these decisions that will have a big impact on the way that real estate investing or other investing works. Yeah, it's a, it's a heck of a point, David. I don't care who's in office. I mean, I do. Don't get me wrong. I vote and, you know, I have my beliefs and all that stuff. But it is what it is. And so, you know, as they roll these things out, the PPP or the, you know, the I, the IDLs and the money that they're

thrown at folks, you just have to adjust. You just have to. But the, but the, one thing I can tell you that I believe as a result of all this, this affordability stuff that Brandon was kind of talking about on the labor, you know, prices have gone way up and wages have not. And so, you know, we have a real issue,

I think. I do. I keep talking about this affordability issue. The government is going to step in. They will, just like they did when they introduced Section 8, just like they did when they introduce these tax credits that they give in developers to,

you know, as incentives. I had two weeks ago on my podcast, the director of housing for Arizona, ironically, I knew him, you know, 10 years before that, you know, professionally. And I said, I said, Tom, the one thing that would really help a developer would be to lower the impact fees and the cost, you know, before we actually even break ground. You know, there's massive costs. And I said, if you could reduce the parking requirements, if you could reduce the density issues or increase the density issues, and you can reduce the impact fees, then we can start to build more affordably. But by the time we actually are building, you know, there's a number. You know, you buy the land is X. But then the number before you actually start is Y. And that all goes to the city and the county and the state. And so, you know, people don't realize a lot of times that sometimes the, The cost of not, I'm not talking about lumber. I'm talking about the cost, the city costs can be so absorbent that you actually can't build and therefore it creates these affordability issues.

And I think that the cities are going to start to change some of their policies around affordability, around credits, and they're going to, they're going to offer developers. It's going to piss people off because, but to your point, David, we're under supplied. right now. We have so much demand. And without an equal balance, you're not going to, you're not going to have affordability. And so that's the biggest issue. The biggest issue that these cities are facing right now are homelessness. And the money is going to continue to come. So if you just wrap your head around the fact that they're going to be throwing money at renters, they're going to be throwing money at the unemployed, and they're going to be throwing money at developers, that's actually what's coming for the next 10 years. I agree. I think the development thing is, is fascinating. I think because like,

the way I see cycles working a lot, and maybe I probably learned this from your book, but like, they tend to, there's not enough housing. And so then they're building a whole bunch of housing. And then it's really good for a while. But then builders at some point in the cycle, like because it takes so long to build and to get the permits, then they're kind of left holding the bag once it gets overbuilt. And then the market kind of tends to drop. And again, there's a million reasons that markets might drop. But I don't see that drop happening. So I think developers and I think getting into development is going to be a powerful tool. Yeah, like you said, for the next decade. I think there's going to be a lot of room to go there. The thing that can slow

that down, of course, is if the cost of building just keeps going up, right? So how does that, how do those two play in together? If there's a lot of money in development, but prices just are skyrocketing in terms of what it cost to build, I guess does that just mean rents go up to have to cover that? Like, it's just notably rents are going to have to go up. Yeah, yeah. So again, just kind of going back to that basic math, it's a great question. You know, you got to kind of project, is the market going to be there from the, you know, from the renter side or from the home buyer side later? Because the truth is, guys, as you know, it costs the same. My lumber in Texas or in Arizona, it's the same price. You know, what's different is the land, the rent,

and then the fees and all the stuff that, you know, that come with that. And so, you know, what I'm hopeful is that we'll start to see some governments relax things around zoning as an example. So like something like, you know, like Hawaii right now is they're, you know, they're anti-growth, anti-development generally. And so, but they've always been that way. And that's why they have three generations in, you know, in homes. It might be the only state in the country that's actually seen that. I actually think we might start to see that more where you're going to have. people are going to start to double up and we're going to start to see some, you know, that's probably the next thing that's going to happen is you might have multiple generations

in a home. Yeah, what you see a ton of out here in Hawaii. I mean, a ton of it is the houses that have been, I call it in the, in the book, the multifamily are called monster houses, right, where they just take a house and it's like Frankenstein, they add on a little bedroom here and they shove a little thing out in the yard, they turn the garage into a unit. And so, I mean, all, I would say 90% of every house I've been to in Maui is one of those in some way. My own house, like my own downstairs is a separate unit from the upstairs. They took the staircase out at one point. Then I got an Ohana.

It's like an ADU in the back. It's everywhere here because it's the only way people can afford to live because it's just not the affordability is just so hard. So yeah, I see that spreading, especially California has introduced a lot of ADU's laws recently for the ability to build those. I think building ADUs, building those extra units on a property is a super interesting niche. Not something I'm going to get into because I'm too busy with other stuff, but I would love to just build a business that just,

builds ADUs in people's backyards. Because I mean, like, you can build a house for $100,000, a little, you know, two-bederm house. And the thing rents for $1,500 a month. And you don't have to pay for land costs because they already own it for, you know, I think there's a lot of, a lot of opportunity there if the, if the government is, you know, friendly with that, which I think we're going to see more and more of. That's the zoning part. That's exactly what I'm saying.

I really, you know, so you got an acre or two acres somewhere with a home on it. I, you're going to start to see more density, you know, and they're going to have to. They're going to have to make those kind of concessions. And so to your point, David, those, you know, just look at where things are heading. The city's going to have to step up. If they hold the line on things like zoning or parking requirements or impact fees or things like that, then, you know, it doesn't allow you to do exactly what Brandon said. Then you, there's no end in sight.

There's, you know, you're going to have to allow to be able to split up a lot, build more homes on it, maybe build a duplex and provide more housing. You know, one thing that I speculate on, I don't know, is I think what you two said is exactly what we should expect to see. And the reason being, to put it shortly, is it's just too hard and too expensive to build properties fast enough for what we need. What I anticipate, and I'm sort of betting on, is when this becomes an affordability problem, it gets brought up to government, government will do what they always have been doing in

America is they'll say, we need to get involved and fix this. they will increase the Section 8 housing voucher program to apply to more people. So, you know, I don't go build your whole strategy what I'm about to say, but just to try to offer a little bit of wisdom, I'm expecting that the number of people that apply for Section 8 will grow, that the government at some point will say housing is a right, just like food is a right and medicine is a right. Like if you show up an emergency room, we don't turn you down. And we're sort of on a trend of labeling things as rights.

And I'm not taking opinion good or bad on that. I'm just saying that's the way it goes. So I'm expecting housing will become a right. And if you own the real estate, you will have the government paying your rent for you instead of the tenants in a lot of cases. And if you're making decisions just on the way the game is played right now, you're probably not thinking that way. You're going to say no to a lot of deals. If you're thinking the way that I am and I'm looking at 10 years down the road, 20 years down the road, what is the rule book going to look like? You'll make different decisions.

And that's why I love having these conversations because it's hard for me to see it becoming incredibly difficult to live somewhere and the government not intervening to try to make it better. They have to. They really truly have to. One of the things that we were studying years ago as we're figuring out where to buy and what to do was what we call the response times and, you know, to certain city courts. So like we were looking at San Francisco and the response time for a paramedic fireman police person, let's say, well, you know, they have to live 15, 20 minutes outside the city because of affordability. So these are not, these are not new issues. You know, if you're a teacher or, you know, or you're just a service worker and you can't live somewhere, it becomes a problem.

So this is, this is not new. And I think that you're going to start to see more and more and more of those kinds of things come out. I think you're going to start to see, you know, money thrown at developers. You're going to see some easing of the zoning and potentially hopefully, you know, we'll start to see some. some easing on the development cycle because the private sector has to help solve this. And the government is definitely going to throw money at the renter because they don't want homelessness. Yeah, man, so good.

Well, Ken, before we get you out of here, any other final like rules or fundamental truths that have applied in your business? I don't want to leave anything off the table here. Anything else you can throw in there? Yeah. The only thing is I would be very careful of being kind of a pioneer. So, you know, I've tried it before. It doesn't work.

So, you know, like, it's funny, you know, whenever, whenever I see somebody, you know, trying something new or going out into a market and just be very, very careful of that. What you want is you want to stay in tune with it, but not be the pioneer, let somebody else be the pioneer and then kind of come in behind there. And also, the number one thing that I get, and I'm sure you guys get is everybody says, I don't have any money. I don't know how to start. I know for a fact, all three of us here started with no money.

And it's what you see, not what you have. It really truly is. And the one thing I'll just leave you with is Robert Kiyosaki and I were in New York once and we were walking through the Javitt Center at one of these Trump events we were doing. And there was these beautiful models sitting there with these big brochures. and they were sitting, you know, the, you know, the big backdrop. And they were pitching hard. And then we went next to the one next.

And the guy's like, I got this little deal here. And it's kind of a, you know, a small little brochure. We went back and I said, you know, it's interesting because this is the better deal, the one that's not so promoted. And what happens is a lot of the deals that we're talking about here, guys, they happen very quickly and almost without business plans. Now, you have to put business plans around them, but they make sense to everyone. And so the bigger the brochure, the worst the deal. So that's what I would say. Be careful. That's a good advice. You mentioned the money thing real quick. It reminds

of Tony Robbins quote about you don't like, you don't like resources. You like resourcefulness. And I found that truth so many times in my life. And I know you recently spoke. Didn't you speak at Tony Yeah, at his wealth mastery. It was really, you know, just a random email that I got from him. And he asked me to come down to West Palm Beach. And I did that. And it was a blessing. And I loved it.

And, you know, it was all virtual, you know, because it's COVID during COVID. And he had, I don't know, four or five thousand people from 83 countries on there. And but you're right. It's a, it's a mindset, guys. And we're in a fortunate that we can now talk about that. And I think that some people are sitting back on, well, there's no way I can start because I don't have any money. And that seems to be the number one thing. And I get it.

I truly get it. But you don't need money. There's so much money looking for for deals that if you have a deal, it gets funded pretty quickly. Yeah. Yeah, we just, I was all freaked out because we, you know, not freaked out. That's the wrong word. I was nervous because, you know, I've been raising from mobile home parks for a long time. You were freaked out.

Don't lie. We add it. Okay, free, free. Well, like, I just raised like a $20-some million. Now, it's going to sound small to some people and huge to other people. But yeah, I thought I tapped out the well. Like, you raised like $22 million for my mobile home park fund, closed that. And then this huge apartment deal came up in Houston.

And I'm like, oh, man. And then, like, I had to raise like $13 million. We raised $19 million in five days. And it's like, geez. And like, we have a waiting list of 250 people now that are like, no, I didn't get in. Like, I want, you know, I want in on the next one. So there is money out there. there people is what I'm saying is there's money out there because a lot of people are nervous

about the stock market. They're nervous about different things. Their house has gone up in value a million dollars over the last couple years. And like, they've got money. They don't know what to do with it. And so if you can be the person that puts together the deal, you can be the one that finds the deal that manages the systems that you're the hustle, you're the education of the drive. There are people out there willing to invest with you. Andrew Cushman, my friend was buying a place in Fort Walton, Florida. And I told him, I will buy into your deal. And you can tell people I'm doing it. And we had a handshake and that stinker had that thing funded within 24 hours. It was a very like a 50 million dollar place.

And I was like, dude, what happened? He's like, I actually forgot about you. It happened so fast. Like it just filled up so quick. I was like, man, this is like, like they opened the door to the club and they let everybody in and I'm left outside. They're like, oh, we don't have any more room. Not for you.

So yeah, like even he didn't do it on purpose. That's a good friend of mine. And it still happened. So Ken, that's a great. point. You don't need money. You need knowledge. You need skill. You need deal flow. You need to have confidence and know what you're doing. But the money is probably the least important part right now. That's right. That's why you stay on bigger pockets, read everything, watch everything, you know, become a member. I'm telling you guys, it's education. It's education. And it'll open your mind up.

And the money will drop right in. Trust me, people are looking for deals are not looking for money as as much as they are for deals. That's so true. Well, man, thank you so much. We got one last segment of the show we're head over to right now and that is our Famous Four. This is the Famous Four. The part of the show, we ask the same four questions every guest every week. So we're going to throw them at you. Normally we ask people about your favorite real estate related book, but I want to, you know, I want to actually ask you the other question that we ask authors typically. And that is, is there a habit or trait that you're currently working on improving in your own life? Something that you're

trying to improve about your life. Yeah, for me, I have a tough time saying no. So I take on too much. And so for me, I'm always looking at how, you know, how can I have my business working for me so that I'm not working in it. So that's been, it always sucks me back into, you know, so I'm constantly trying to pull out. Yes, that's so. I was just telling someone, I hired a new woman and she's doing amazing. Her name's Karen. And Karen's worked with me for two weeks and she's already like, let's just expand all over the country. And I'm like, oh, you're too much like me, this is going to be a problem. Because it always just, we see the vision. We're like, oh, I could do that. We go take the bite. And we just don't realize how much chewing gets done once

you take it in your mouth. And then you're choking for the next six months to a year on all the work of management that we never think about. The other day I'm sitting there, we were just about to launch BPCon. This is now a few weeks ago now. But we're by the launch the Big Bigger Pockets Conference. And the like three days before, I look at the website. And I was like, oh, man, this this is not good. And I was like, what's going on? Team? And they're like, oh, well, we didn't have any developer or our designer. We couldn't get it done in time. I'm like, oh, geez. All right. So I stayed up to like one in the morning. And I built the web like myself. Like I'm sitting there like multi-millionaire real estate investor guy and I'm building in a website to one in the morning. Because I can't say

no to that. I'm like, I can't let it go. Not good enough. I have the same problem. Yeah. So anyway, the BPConn website. Yeah, go check it out. BPcon,com.com. All right. Next question, David Green. What is your favorite business book? I heard you know a thing or two about business books. Yeah, thanks. Gosh, so I am constantly reading. I think one of the ones that I always kind of going back to is that good to great with Jim Collins. And I know that's a while back.

But I always dust that off. I always, you know, it's interesting. My friend that started Coldstone had Jim Collins speak once. And so he's like, come on down and check him out. So the first thing he said was, you know, how many of you in the room think you're level five leaders and half the room raised their hands? And he said a level five leader would never raise their hand. And you know, so there's like level one, two, three, four five.

And so for me, as I was building my company, I was trying to be what he would call a level four leader, have some humility, have some vision, have some culture. And so I always just really still resonate with that book, even though it's got 15 years old now, I guess. Did you say the Coldstone guy? That's yeah, Doug. Well, no, no, Doug, my friend that started Colston. He's actually our governor actually in Arizona at them. Oh, no way. He was in my EO forum of all things. And he was starting Coldstone at the time. Yep. I worked at Coldstone. That was my one of my very first job, singing for tips and making ice cream. I gained 40 pounds on I bet you too. I gained 40 pounds in one year working at Coldstone Creamery. It was the best job I ever

had. It was all good. All right, David, next question. That level five leader story cracks me up. It reminds me of a story I heard about a church that gave one of its members the most humble award. And they presented them with a button that said, I'm the most humble. And they had to take it away the next day because you wore it. That's great. All right.

Other than listening to my terrible jokes, what are some hobbies of yours, Ken? Well, obviously, I'm going to play golf right after this. And so I do enjoy golf. I'll be on the lake probably tonight. You know, I'm up in Cordillane, Idaho at the moment. And, yeah, so I love being outside, man, hiking. I've done Kilimanjarl twice with my kids. Yeah, yeah.

So I'm a, that's cool. You know, I need something like, you know, like you guys, I need like a goal out there somewhere. And so for me, it's just keeping my body healthy. Because as you guys know, you can make all the money. on, but if you're not healthy, it doesn't really matter. Yeah, don't make your money at Coldstone. Yeah.

When you're young, that's okay. That's okay when you're 20. Yeah, that's all right. All right. Well, my last question of the day. If you were to really boil it down, what would you say separate successful real estate investors from all those who give up or they fail or they just plain never get started? So it's funny.

I think it's a discipline issue. When people talk about real estate investing, I think that they think that there's going to be a package that's going to work perfectly set on their desk and it's going to, you know, everything's going to be just exactly fine. And as you guys know, the real money is made in deals that are completely broken somehow. They're, you know, they're 50% vacant. There's a lot of capital work and, you know, and you're basically solving somebody's problem, usually a bank's or maybe even a seller. And so I think what happens is the people don't know how to persevere. Maybe they don't have the right team. And so my experience has

been that people buy and then they try to time the market and it doesn't work for them potentially or they have a bad management issue because they've made bad choices and they never really look at themselves. They look at, you know, the real estate. And so they're pointing outwards instead of inwards. And if they looked at some of the basic things that you guys teach, then I think, they would have a very, very good experience. And so I think it's discipline and education. Yeah, I love it. I cannot argue with that. Well, Ken, this has been fantastic. Once again, I love chatting with you every time. I feel like I always walk away a little bit smarter. So thank you for gracing us with your presence. Hey, you guys are the best. Thanks again. I very, very much

appreciate it. And by the way, we are giving away an ebook on our, on our, Oh, please. Kenmacore.com slash bigger pockets. And it's the 21 keys to real estate if anybody's interested. Everyone is interested. Everyone should go there right now because that's awesome. Dude, I will load anything from you. I'm going to go there.

Thank you. My pleasure, guys. It's always a great chat with you guys. Let's do this again soon. As the market continues to change, we could go back and refer to our old conversations and see if we were right or not. I actually kind of like that. I remember when COVID first hit the shelter in place happened.

there was just panic and chaos. And I've gone back and listened to some of the stuff I said back then to see how, how accurate was I? Was I on or was I off? Because it's a scary position we're all in. It is. And I'll just say people should go back and listen. That's all I'm going to say.

Go hear what I had to say. All right, Ken, did we ask where people can find out more about you? Yep. Just go to Kenmacor.com. And we got a whole website there with all kinds of stuff that they can learn from. And just know that everything on there. everything we do all goes to our charity. You know, we make our money in real estate.

And I really, really, really like teaching. And that's why I jumped on board with Robert. I spoke to them this morning. And you guys, I love being on these platforms. I think, man, if people can change not only themselves, but their families. And, you know, their family's families, it's the best gift you can give them as education. That's fantastic, man. Appreciate it.

Well, David, why don't you get us out of here? Thank you, Ken. Great job today. My pleasure, David. Good chat with you guys. This is David Green for Brandon the Coldstone Creamer Turner. Signing off. You're listening to Bigger Pockets Radio,

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