In this episode, Kenny reflects on his recent Mother's Day celebrations before diving into a detailed analysis of his latest real estate deals. He shares insights into his decision-making process, deal structures, and the financial outcomes of three specific projects: 'Beverly Road', 'Broad Vista', and a 12-month seller-financing fix and flip. Kenny offers practical advice for aspiring real estate investors and highlights the importance of understanding the nuances of both residential flips and rental properties. He also discusses the benefits of group investing for those wanting to invest without the hands-on responsibilities of being a landlord.
00:00 Introduction and Mother's Day Reflections
01:18 Deal Analysis Overview
03:52 First Deal: Beverly Road
08:10 Second Deal: Broad Vista
17:09 Third Deal: Fix and Flip with Seller Financing
19:47 Conclusion and Final Thoughts
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey, we're back.
Um, we celebrated Mother's Dayon Sunday.
I hope all you invested fathersout there.
Made your wife feel special.
Every year there's a little bitof a debate that happens in my
mind on Mother's Day.
do we go all out for our wiveson this or do we go all out for
(00:20):
our moms?
Bible talks about, leaving yourfamily to cleave to your wife
and become one flesh with her.
So I've gotta think the biblicalanswer here is go all out with
your wife.
And, one of the traditions thatwe have carried out for the last
maybe year or two has beenwhenever there is a celebration
(00:43):
of mom.
Or, Christmas Mother's Daybirthday for my wife.
I take the kids and we go toDollar Tree, which that in
itself was an experience.
we find some good things, wemeet some cool people, and, we
get some, some things for mom,my wife.
So we did that this time and gotthe balloons.
(01:06):
the kids are just running aroundthe aisles as I'm.
Trying to find a gift bag for mywife or something or another.
we made it and we celebrated andshe was really happy.
Today's episode's gonna be DealAnalysis.
This gets a little trickier asyou buy bigger things.
So we're gonna start reallysimple today, and we're gonna
(01:29):
talk about what numbers I runwhen regards to is this a good
deal or not?
And I'm gonna be sharingprobably the last two or three
deals that I have completed.
To keep it fresh.
I could show you my best dealsto make, my numbers look good
and feel like, all my deals arelike this, but it's probably
(01:51):
gonna be best for everybody, inthe listening world to see,
Okay, what are some recent dealsKenny has done?
what made him buy those what wasthe criteria for those?
And, I'm just feeling a littlemore comfortable sharing, and
coaching, those that areinterested in my experiences
(02:11):
with real estate investing.
I'm not gonna share things thatI don't know about.
I guess that's the key.
So this hopefully gives you all,some guidance and some comfort
in, what is Kenny talking about?
Has he ever actually done a dealthat we can see and know that
when he talks about real estate,he's done it.
he's actually experienced ithimself.
(02:33):
So I'm in a deal right now.
So this one's actually notcompleted yet, but we're getting
really close to the end.
so what I'm gonna do is I'mgonna share with you how I found
the deal, how I structured thedeal.
And the numbers that I usedgoing into the deal to, to
determine if this was a goodmove for me or not.
and for anyone listening, thegoal of this episode is, to
(02:58):
kinda get in my head a littlebit more and to know, okay, if
you are trying to go down thatroad of being the active
investor, here's some thingsthat might help.
I'm trying to actually detersome of you guys from saying,
okay, everything Kenny saidsounds great.
I think I could do that, but Idon't really wanna do that, or,
that sounds like a little toomuch work for what I wanna do.
(03:19):
And I would say, great, becausethere's ways to make money in
real estate without having to bethe flipper or the landlord.
that is called group investingand there is a link on the show
notes that says Schedule a callwith Kenny.
Schedule a call with me andlet's just have a 20 minute
conversation about what thatlooks like for you.
(03:40):
I can send you over some pitchdecks or some things that have
been, that are rather live orold of deals that I've been a
part of, and you can see, whatthat looks like in regards to
returns and how everythingworks.
All right, so the first deal,this one's on Beverly Road, so
we're gonna call it Beverly.
this deal was found through awholesaler.
(04:01):
Wholesalers are kinda like offmarket realtors.
They're not realtors and theydon't have a certification of
any kind.
They simply call someone thatwants to sell their house, or
send them letters, direct mail,and they're able to get the
house under contract tonegotiate a purchase price for
the seller.
(04:22):
And typically they tell theseller, Hey, I'm gonna assign
this.
This, house to an investor andthey're gonna buy it from me and
I'm gonna, make a finder's feefor it.
And that's how they do theirbusiness.
So I got this from a wholesaler.
This is a guy I've known for,probably six years.
(04:42):
He actually started the sametime I did.
And we've just, we swappedcontact information at a local
real estate investor associationmeetup.
And, he's awesome.
we got the purchase price for 147 and the closing costs on this
one are$3,500 and I estimated a50 K repair.
(05:04):
I'm also gonna have about$10,000in holding costs and I'm gonna
have to close a second time,another$3,500.
And then there's gonna berealtor fees with this'cause I'm
gonna sell it, with a realtor.
That's gonna be about 12 and ahalf.
A thousand dollars.
So I'm all in at 2 26, 500 onthis deal.
(05:24):
And the a RV after repair valueI'm figuring is anywhere between
the two 50 to 2 75 range.
So that's quite a spreadactually.
So on the low end, I'd be makinga 10% return.
And on the high end, A 20%return.
So it's difference between 3000or$47,000.
(05:47):
So the reason why I took thisdeal, because my criteria for
flips is 20%.
If I run my numbers andeverything looks conservative,
20% is the number I.
I would say is my minimum.
However, on this deal, I haven'thad a flip in a while.
this one is really close to myhouse, about a 10 minute drive.
(06:10):
And I had a lender recentlyapproach me and say, Hey, I
don't really wanna do a fiveyear hold with you three year
hold.
I wanna do a 12 month hold, ashort term hold.
More or less, some money cameavailable from an estate.
Her uncle had died and the moneywould just be sitting there for
the next 12 months anyway, andshe's able to lend on this with
(06:30):
this.
So she funded the whole purchaseprice and rehab everything I
just said.
She has funded.
so she has given a,$210,000loan, more or less.
That obviously covers all of myexpenses that would be coming
outta my own pocket.
So she does make her, intereston this and her terms were a 12%
interest only payment with a onepercentage.
(06:54):
point is what they call it.
Basically at the end of thedeal, she'd get one percentage
of 1% of the total that shelended And I am fixing this with
a crew that I've worked with forprobably four years now.
met this guy through FacebookMarketplace, needed some
electrical work done, and thensince then I've just kept adding
to what he's done and he's beenphenomenal.
he can do everything.
(07:16):
he's a one man show, but hebrings, helpers as needed, and
he's been great to doing aproject just like this.
So I got this about two monthsago.
So from the time it waspurchased to now, we just got
the countertops put in.
We finished the interiorpainting, and right now we're
just wrapping up like,electrical, like new fixtures
(07:38):
and he's finishing the bathroom.
So ending a project is alwaysgonna take longer than you
think.
Always there, especially on ajob like this, a$50,000 rehab.
we've just done almosteverything to it.
If you're following me onInstagram, I've posted a few
videos of what this is.
This is the Beverly House, and,yeah, I'm excited to put this on
the market, hopefully the nexttwo weeks or less and see what
(08:02):
it sells for.
So that is my deal analysis onBeverly.
Let's do one more.
Okay.
this one's gonna be broad vista.
So this was a house that, a malecourier actually approached me.
She's a friend of mine, and shesaid, Hey, this house, it's been
empty for a year.
(08:22):
I think someone died.
and the house has just beenempty.
You may wanna try to figure outhow to contact the owner.
So this was not a wholesale,this was me going direct to
seller, which is always the bestway to buy a house in regards to
money.
Sometimes it can be a huge painin the buns, in regards to
managing a relationship andfollow ups, and time and offer
(08:43):
and person changes their mind.
And it can be messy.
but this one, it was the brotherI think Of the homeowner who had
passed and I wanted to do one 40and he wanted, I think 180.
And we've landed on one 60.
So that was the purchase price.
I put about$25,000 into this,this house.
(09:04):
So with the closing costs, Andholding costs.
This is a cool one.
So after I fixed it up, I didwhat's called a refinance on it,
and this was three and a halfyears ago.
for those familiar with the RRRacronym, BRRR, it stands for
buy, renovate, rent, refinance,and repeat.
(09:27):
And the goal there is if you canbuy it low enough.
You're able to get your moneyback out from the cash out
refinance, so that you basicallyhave purchased a house at no
dollars.
you've broken even, but thehouse is still yours and there's
still typically 20% or higher ofequity in the house that is
yours, but it's not somethingyou can spend because it is
(09:49):
equity in the home.
that's how I did this house and.
By buying it at one 60 andputting, I think at that time it
was about$20,000 into it.
it appraised for, I believe 2 65and I was able to get, yeah,
pretty much every dollar out ofit that I had put into it and,
put a renter in there.
And the house has been somewhaton autopilot ever since.
(10:12):
minimal updates and repairsneeded.
And the first tenant I had, wassomeone from OUTTA state.
he claimed that there was bugseverywhere and was gonna sue me
if I didn't, give him hisdeposit back of$1,700 or less.
And, I did give it back to himand he disappeared.
(10:34):
hey, every now and then, you getsomeone like that and let that
be a deterrent for those that.
Wanna be a landlord to know thatthere are some crazies out there
and there's also some crazylandlords.
So don't think every crazy is atenant.
There are some, slumlords orlandlords that don't keep things
updated, don't communicate well.
expectations are off.
(10:55):
They don't have good contracts,they don't have good screening,
system, It is definitely atwo-way street on it being a
good connection between landlordand tenant.
but after renting this out, aguy came in there, worked for an
HVAC company and looked at itfor about five minutes, said
he'd take it, has faithfullypaid early every month,
(11:18):
communicates very well, andOddly enough, kept it in great
shape and said, Hey, we brokethe, the microwave door handle,
so, uh, just keep the deposit.
we appreciate you letting us behere.
So it was like a$1,700 depositthat he said, just go ahead and
keep.
So I did, and he has been outfor about a month or two, and I
(11:40):
decided, Hey, instead of gettinganother renter in here, I think
just given my financialsituation.
With cash flow and the babycoming and just different bills
here and there, we're gonna goahead and sell it and just see
what I need to do to put it onthe market.
Then with the realtor, he said Iwould do nothing to it, sell it
as is and just lower yourpurchase price.
I thought the kitchen was alittle outdated.
(12:02):
It had like wallpaper um.
oh, and, cracked tile on thekitchen floor.
So I spent about$5,000 updatingthe kitchen and just doing odds
and ends, new light fixtures,little bit of painting here and
there on the ceiling.
painting the exteriorfoundation, just like little
things.
So we're gonna list this in thenext probably two weeks, and
(12:22):
we're gonna list this for 2 75.
Might even go a little higher,but if we get 2 75 on this, With
the realtor fees and everythingelse, we're coming out at a 40%
return.
Which is like$80,000.
So to me, that's a really gooddeal.
(12:44):
pretty minimal work put intothis property.
Bought this back in 2021.
That first tenant was rough withthe bug thing.
but then put a great tenant inthere and then just let it sit
and then at the very end put$5,000 in updates and then we're
gonna list it.
We will see if that sells for 275.
even if it goes for two 50,which again is, pretty big drop.
(13:06):
But the market is cooler than itwas, so it may not be too far
off.
that's a 28% return oninvestment at,$54,000.
And this is something that'scool.
I want you guys to catch thisreturn on investment.
ROI.
What did I do to put in thismoney?
(13:28):
the way I calculate ROI is I putin what I, what I spent over,
what I got back.
But if you think about it, Ididn't really spend 1 95.
I purchased this one through aprivate money lender.
And then when I did a refinanceon it, I paid everyone back.
(13:51):
So I really only borrowed myrisk was borrowing that money
for six to nine months hopingthat it appraised at the amount
that I needed it to.
It did.
actually exceeded what I thoughtit would appraise for, and I
paid everyone back, and now I am$0 outta pocket.
So at this point, they wouldcall that infinite returns, so
like$0 making money every year.
(14:14):
Yeah, so that's what's reallycool about real estate is you
want your money working for youin different places, but it
doesn't have to be your money.
And then even when you pay backpeople, it's like still your
property, but it's no money.
It's your time and energy that'skinda what you're spending.
in that way I do love rentals,but I think what hurts in my
(14:36):
situation as a 37-year-old withthree kids is.
When you get your rent everymonth, you're only making about
200 maybe ish dollars, incashflow, which is a fine
number.
that's not nothing, but it's notnecessarily gonna pay your bills
to pay everything.
(14:57):
You have to have like maybe 20or 30 of those to actually see
something move in the bankaccount and, Yeah.
And then when something breaksor there's a leak or the tenant
doesn't pay you, or it's allthat profit that you thought you
were making goes away.
so you really realize the moneythrough these rentals when you
sell.
(15:18):
at least that's in my situation.
making$55,000 from selling theproperty, okay.
That.
That's a pretty big deal.
that's pretty cool.
making$200 a month, that's cooluntil you, have to repair an
HVAC or roof or something.
And, that number grows obviouslyeach year through appreciation
and the mortgage being boughtdown.
(15:39):
I'm a hybrid between wanting tofix and flip and buy rentals.
my mindset has shifteddramatically on buying more
rentals.
To buying more multifamily,apartments.
And even in that world, I don'twant to manage the leasing and
repairs and maintenance andtaxing all the things that you
(16:00):
know are required in that.
I want to be able to investmoney or other people's money
through building a fund and growmy wealth that way.
And as a, as a limited partnerto anyone listening out there
that likes the idea of makingmoney without being a landlord.
let's talk, let's look at whatthose returns are.
(16:21):
I just gave you, 28% return.
If I spent all my own money andmanage this whole deal, I'd be
making a 28% return on that lastdeal.
If it sold at$250,000, thereturns on these.
Apartment complexes that I have,range between, I would say 20%
(16:42):
on the low end to 35% on thehigh end.
the last two deals I've put outare targeting a 28% annual
average return, which means ifyou invest a hundred thousand
dollars, you would make$28,000 ayear over each year that this
deal.
was in operation, which most ofthese deals are five years, so
(17:05):
you're making that much moneyevery year.
So pretty cool stuff.
let's see here.
this next one is gonna be, a fixand flip.
So this one was cool because,for those that are familiar with
seller financing.
Real estate doesn't always haveto be, these large amounts of
checks, put out in thebeginning.
It can be negotiating.
they've called it, subject towhere you can buy a property or
(17:28):
assume someone's mortgagewithout having to, buy the whole
thing outright in the beginning.
So this was a 12 month sellerfinancing play where the seller
agreed to, For me to buy thehouse at$95,000.
we've put in about estimating$120,000 of work here.
So pretty big rehab.
(17:48):
We're about 70 K into this, sowe're not even done yet.
with closing costs at 2,600,holding costs 12,000, and then
second, closing costs and taxes,another's 7,500, realtor fees at
a 5%.
which is 17,500.
I'm all in at 2 59 on this deal.
(18:11):
And I'm pretty sure when thishits the market, we're gonna
sell it for between three 50 ormore, which returns at 34% ROI
or$90,000 in cash.
So this is about a 12 monthplay.
This one's actually crawling.
It's going pretty slow.
I was thinking it'd be done insix months, and I think we're at
month like 10.
(18:32):
Right now.
So I think it will be close to12 months that we get this done.
and this one's different inregards to the rehab.
you use a one man show to do a$120,000, rehab.
It might be while I decided towork with a project manager who
basically manages all the work.
electricians, tile cabinetry.
(18:54):
plumbing, et cetera, et cetera,et cetera.
And, I just pay him in draws.
Unfortunately, this specificcrew has taken a very long time.
There's been gaps.
We had a permit setback where Idid not apply for certain
permits, and a neighbor calledand, that's been a frustration
actually.
But, those are my last threedeals.
they're all local, so they'reall, within 15, 20 minutes from
(19:16):
me.
some of my flips are fartheraway.
I did one flip that was threehours away.
But that's something that yougotta pick and choose, where am
I gonna go to fix this house?
anyway, that is it for today.
Deal deep dive with Kenny.
that's it.
Thanks for listening today,guys.
Hey, we're back.
Um, we celebrated Mother's Dayon Sunday.
I hope all you invested fathersout there.
Made your wife feel special.
Every year there's a little bitof a debate that happens in my
mind on Mother's Day.
do we go all out for our wiveson this or do we go all out for
(00:20):
our moms?
Bible talks about, leaving yourfamily to cleave to your wife
and become one flesh with her.
So I've gotta think the biblicalanswer here is go all out with
your wife.
And, one of the traditions thatwe have carried out for the last
maybe year or two has beenwhenever there is a celebration
(00:43):
of mom.
Or, Christmas Mother's Daybirthday for my wife.
I take the kids and we go toDollar Tree, which that in
itself was an experience.
we find some good things, wemeet some cool people, and, we
get some, some things for mom,my wife.
So we did that this time and gotthe balloons.
(01:06):
the kids are just running aroundthe aisles as I'm.
Trying to find a gift bag for mywife or something or another.
we made it and we celebrated andshe was really happy.
Today's episode's gonna be DealAnalysis.
This gets a little trickier asyou buy bigger things.
So we're gonna start reallysimple today, and we're gonna
(01:29):
talk about what numbers I runwhen regards to is this a good
deal or not?
And I'm gonna be sharingprobably the last two or three
deals that I have completed.
To keep it fresh.
I could show you my best dealsto make, my numbers look good
and feel like, all my deals arelike this, but it's probably
(01:51):
gonna be best for everybody, inthe listening world to see,
Okay, what are some recent dealsKenny has done?
what made him buy those what wasthe criteria for those?
And, I'm just feeling a littlemore comfortable sharing, and
coaching, those that areinterested in my experiences
(02:11):
with real estate investing.
I'm not gonna share things thatI don't know about.
I guess that's the key.
So this hopefully gives you all,some guidance and some comfort
in, what is Kenny talking about?
Has he ever actually done a dealthat we can see and know that
when he talks about real estate,he's done it.
he's actually experienced ithimself.
(02:33):
So I'm in a deal right now.
So this one's actually notcompleted yet, but we're getting
really close to the end.
so what I'm gonna do is I'mgonna share with you how I found
the deal, how I structured thedeal.
And the numbers that I usedgoing into the deal to, to
determine if this was a goodmove for me or not.
and for anyone listening, thegoal of this episode is, to
(02:58):
kinda get in my head a littlebit more and to know, okay, if
you are trying to go down thatroad of being the active
investor, here's some thingsthat might help.
I'm trying to actually detersome of you guys from saying,
okay, everything Kenny saidsounds great.
I think I could do that, but Idon't really wanna do that, or,
that sounds like a little toomuch work for what I wanna do.
(03:19):
And I would say, great, becausethere's ways to make money in
real estate without having to bethe flipper or the landlord.
that is called group investingand there is a link on the show
notes that says Schedule a callwith Kenny.
Schedule a call with me andlet's just have a 20 minute
conversation about what thatlooks like for you.
(03:40):
I can send you over some pitchdecks or some things that have
been, that are rather live orold of deals that I've been a
part of, and you can see, whatthat looks like in regards to
returns and how everythingworks.
All right, so the first deal,this one's on Beverly Road, so
we're gonna call it Beverly.
this deal was found through awholesaler.
(04:01):
Wholesalers are kinda like offmarket realtors.
They're not realtors and theydon't have a certification of
any kind.
They simply call someone thatwants to sell their house, or
send them letters, direct mail,and they're able to get the
house under contract tonegotiate a purchase price for
the seller.
(04:22):
And typically they tell theseller, Hey, I'm gonna assign
this.
This, house to an investor andthey're gonna buy it from me and
I'm gonna, make a finder's feefor it.
And that's how they do theirbusiness.
So I got this from a wholesaler.
This is a guy I've known for,probably six years.
(04:42):
He actually started the sametime I did.
And we've just, we swappedcontact information at a local
real estate investor associationmeetup.
And, he's awesome.
we got the purchase price for 147 and the closing costs on this
one are$3,500 and I estimated a50 K repair.
(05:04):
I'm also gonna have about$10,000in holding costs and I'm gonna
have to close a second time,another$3,500.
And then there's gonna berealtor fees with this'cause I'm
gonna sell it, with a realtor.
That's gonna be about 12 and ahalf.
A thousand dollars.
So I'm all in at 2 26, 500 onthis deal.
(05:24):
And the a RV after repair valueI'm figuring is anywhere between
the two 50 to 2 75 range.
So that's quite a spreadactually.
So on the low end, I'd be makinga 10% return.
And on the high end, A 20%return.
So it's difference between 3000or$47,000.
(05:47):
So the reason why I took thisdeal, because my criteria for
flips is 20%.
If I run my numbers andeverything looks conservative,
20% is the number I.
I would say is my minimum.
However, on this deal, I haven'thad a flip in a while.
this one is really close to myhouse, about a 10 minute drive.
(06:10):
And I had a lender recentlyapproach me and say, Hey, I
don't really wanna do a fiveyear hold with you three year
hold.
I wanna do a 12 month hold, ashort term hold.
More or less, some money cameavailable from an estate.
Her uncle had died and the moneywould just be sitting there for
the next 12 months anyway, andshe's able to lend on this with
(06:30):
this.
So she funded the whole purchaseprice and rehab everything I
just said.
She has funded.
so she has given a,$210,000loan, more or less.
That obviously covers all of myexpenses that would be coming
outta my own pocket.
So she does make her, intereston this and her terms were a 12%
interest only payment with a onepercentage.
(06:54):
point is what they call it.
Basically at the end of thedeal, she'd get one percentage
of 1% of the total that shelended And I am fixing this with
a crew that I've worked with forprobably four years now.
met this guy through FacebookMarketplace, needed some
electrical work done, and thensince then I've just kept adding
to what he's done and he's beenphenomenal.
he can do everything.
(07:16):
he's a one man show, but hebrings, helpers as needed, and
he's been great to doing aproject just like this.
So I got this about two monthsago.
So from the time it waspurchased to now, we just got
the countertops put in.
We finished the interiorpainting, and right now we're
just wrapping up like,electrical, like new fixtures
(07:38):
and he's finishing the bathroom.
So ending a project is alwaysgonna take longer than you
think.
Always there, especially on ajob like this, a$50,000 rehab.
we've just done almosteverything to it.
If you're following me onInstagram, I've posted a few
videos of what this is.
This is the Beverly House, and,yeah, I'm excited to put this on
the market, hopefully the nexttwo weeks or less and see what
(08:02):
it sells for.
So that is my deal analysis onBeverly.
Let's do one more.
Okay.
this one's gonna be broad vista.
So this was a house that, a malecourier actually approached me.
She's a friend of mine, and shesaid, Hey, this house, it's been
empty for a year.
(08:22):
I think someone died.
and the house has just beenempty.
You may wanna try to figure outhow to contact the owner.
So this was not a wholesale,this was me going direct to
seller, which is always the bestway to buy a house in regards to
money.
Sometimes it can be a huge painin the buns, in regards to
managing a relationship andfollow ups, and time and offer
(08:43):
and person changes their mind.
And it can be messy.
but this one, it was the brotherI think Of the homeowner who had
passed and I wanted to do one 40and he wanted, I think 180.
And we've landed on one 60.
So that was the purchase price.
I put about$25,000 into this,this house.
(09:04):
So with the closing costs, Andholding costs.
This is a cool one.
So after I fixed it up, I didwhat's called a refinance on it,
and this was three and a halfyears ago.
for those familiar with the RRRacronym, BRRR, it stands for
buy, renovate, rent, refinance,and repeat.
(09:27):
And the goal there is if you canbuy it low enough.
You're able to get your moneyback out from the cash out
refinance, so that you basicallyhave purchased a house at no
dollars.
you've broken even, but thehouse is still yours and there's
still typically 20% or higher ofequity in the house that is
yours, but it's not somethingyou can spend because it is
(09:49):
equity in the home.
that's how I did this house and.
By buying it at one 60 andputting, I think at that time it
was about$20,000 into it.
it appraised for, I believe 2 65and I was able to get, yeah,
pretty much every dollar out ofit that I had put into it and,
put a renter in there.
And the house has been somewhaton autopilot ever since.
(10:12):
minimal updates and repairsneeded.
And the first tenant I had, wassomeone from OUTTA state.
he claimed that there was bugseverywhere and was gonna sue me
if I didn't, give him hisdeposit back of$1,700 or less.
And, I did give it back to himand he disappeared.
(10:34):
hey, every now and then, you getsomeone like that and let that
be a deterrent for those that.
Wanna be a landlord to know thatthere are some crazies out there
and there's also some crazylandlords.
So don't think every crazy is atenant.
There are some, slumlords orlandlords that don't keep things
updated, don't communicate well.
expectations are off.
(10:55):
They don't have good contracts,they don't have good screening,
system, It is definitely atwo-way street on it being a
good connection between landlordand tenant.
but after renting this out, aguy came in there, worked for an
HVAC company and looked at itfor about five minutes, said
he'd take it, has faithfullypaid early every month,
(11:18):
communicates very well, andOddly enough, kept it in great
shape and said, Hey, we brokethe, the microwave door handle,
so, uh, just keep the deposit.
we appreciate you letting us behere.
So it was like a$1,700 depositthat he said, just go ahead and
keep.
So I did, and he has been outfor about a month or two, and I
(11:40):
decided, Hey, instead of gettinganother renter in here, I think
just given my financialsituation.
With cash flow and the babycoming and just different bills
here and there, we're gonna goahead and sell it and just see
what I need to do to put it onthe market.
Then with the realtor, he said Iwould do nothing to it, sell it
as is and just lower yourpurchase price.
I thought the kitchen was alittle outdated.
(12:02):
It had like wallpaper um.
oh, and, cracked tile on thekitchen floor.
So I spent about$5,000 updatingthe kitchen and just doing odds
and ends, new light fixtures,little bit of painting here and
there on the ceiling.
painting the exteriorfoundation, just like little
things.
So we're gonna list this in thenext probably two weeks, and
(12:22):
we're gonna list this for 2 75.
Might even go a little higher,but if we get 2 75 on this, With
the realtor fees and everythingelse, we're coming out at a 40%
return.
Which is like$80,000.
So to me, that's a really gooddeal.
(12:44):
pretty minimal work put intothis property.
Bought this back in 2021.
That first tenant was rough withthe bug thing.
but then put a great tenant inthere and then just let it sit
and then at the very end put$5,000 in updates and then we're
gonna list it.
We will see if that sells for 275.
even if it goes for two 50,which again is, pretty big drop.
(13:06):
But the market is cooler than itwas, so it may not be too far
off.
that's a 28% return oninvestment at,$54,000.
And this is something that'scool.
I want you guys to catch thisreturn on investment.
ROI.
What did I do to put in thismoney?
(13:28):
the way I calculate ROI is I putin what I, what I spent over,
what I got back.
But if you think about it, Ididn't really spend 1 95.
I purchased this one through aprivate money lender.
And then when I did a refinanceon it, I paid everyone back.
(13:51):
So I really only borrowed myrisk was borrowing that money
for six to nine months hopingthat it appraised at the amount
that I needed it to.
It did.
actually exceeded what I thoughtit would appraise for, and I
paid everyone back, and now I am$0 outta pocket.
So at this point, they wouldcall that infinite returns, so
like$0 making money every year.
(14:14):
Yeah, so that's what's reallycool about real estate is you
want your money working for youin different places, but it
doesn't have to be your money.
And then even when you pay backpeople, it's like still your
property, but it's no money.
It's your time and energy that'skinda what you're spending.
in that way I do love rentals,but I think what hurts in my
(14:36):
situation as a 37-year-old withthree kids is.
When you get your rent everymonth, you're only making about
200 maybe ish dollars, incashflow, which is a fine
number.
that's not nothing, but it's notnecessarily gonna pay your bills
to pay everything.
(14:57):
You have to have like maybe 20or 30 of those to actually see
something move in the bankaccount and, Yeah.
And then when something breaksor there's a leak or the tenant
doesn't pay you, or it's allthat profit that you thought you
were making goes away.
so you really realize the moneythrough these rentals when you
sell.
(15:18):
at least that's in my situation.
making$55,000 from selling theproperty, okay.
That.
That's a pretty big deal.
that's pretty cool.
making$200 a month, that's cooluntil you, have to repair an
HVAC or roof or something.
And, that number grows obviouslyeach year through appreciation
and the mortgage being boughtdown.
(15:39):
I'm a hybrid between wanting tofix and flip and buy rentals.
my mindset has shifteddramatically on buying more
rentals.
To buying more multifamily,apartments.
And even in that world, I don'twant to manage the leasing and
repairs and maintenance andtaxing all the things that you
(16:00):
know are required in that.
I want to be able to investmoney or other people's money
through building a fund and growmy wealth that way.
And as a, as a limited partnerto anyone listening out there
that likes the idea of makingmoney without being a landlord.
let's talk, let's look at whatthose returns are.
(16:21):
I just gave you, 28% return.
If I spent all my own money andmanage this whole deal, I'd be
making a 28% return on that lastdeal.
If it sold at$250,000, thereturns on these.
Apartment complexes that I have,range between, I would say 20%
(16:42):
on the low end to 35% on thehigh end.
the last two deals I've put outare targeting a 28% annual
average return, which means ifyou invest a hundred thousand
dollars, you would make$28,000 ayear over each year that this
deal.
was in operation, which most ofthese deals are five years, so
(17:05):
you're making that much moneyevery year.
So pretty cool stuff.
let's see here.
this next one is gonna be, a fixand flip.
So this one was cool because,for those that are familiar with
seller financing.
Real estate doesn't always haveto be, these large amounts of
checks, put out in thebeginning.
It can be negotiating.
they've called it, subject towhere you can buy a property or
(17:28):
assume someone's mortgagewithout having to, buy the whole
thing outright in the beginning.
So this was a 12 month sellerfinancing play where the seller
agreed to, For me to buy thehouse at$95,000.
we've put in about estimating$120,000 of work here.
So pretty big rehab.
(17:48):
We're about 70 K into this, sowe're not even done yet.
with closing costs at 2,600,holding costs 12,000, and then
second, closing costs and taxes,another's 7,500, realtor fees at
a 5%.
which is 17,500.
I'm all in at 2 59 on this deal.
(18:11):
And I'm pretty sure when thishits the market, we're gonna
sell it for between three 50 ormore, which returns at 34% ROI
or$90,000 in cash.
So this is about a 12 monthplay.
This one's actually crawling.
It's going pretty slow.
I was thinking it'd be done insix months, and I think we're at
month like 10.
(18:32):
Right now.
So I think it will be close to12 months that we get this done.
and this one's different inregards to the rehab.
you use a one man show to do a$120,000, rehab.
It might be while I decided towork with a project manager who
basically manages all the work.
electricians, tile cabinetry.
(18:54):
plumbing, et cetera, et cetera,et cetera.
And, I just pay him in draws.
Unfortunately, this specificcrew has taken a very long time.
There's been gaps.
We had a permit setback where Idid not apply for certain
permits, and a neighbor calledand, that's been a frustration
actually.
But, those are my last threedeals.
they're all local, so they'reall, within 15, 20 minutes from
(19:16):
me.
some of my flips are fartheraway.
I did one flip that was threehours away.
But that's something that yougotta pick and choose, where am
I gonna go to fix this house?
anyway, that is it for today.
Deal deep dive with Kenny.
that's it.
Thanks for listening today,guys.
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