BiggerPockets Real Estate Podcast

BiggerPockets Podcast 052: Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy

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On today’s episode of the BiggerPockets Podcast, we talk with one of the most influential voices in the real estate investing world today – Ken McElroy.

Ken, the author of The ABC’s of Real Estate Investing and several other influential books, shares his story of getting started with nothing and building up a real estate investment company with thousands of units and hundreds of employees. Ken has a lot of great advice and knowledge for people at all stages of their investing careers, and shares it in a fun, entertaining manner.

On today’s show we’re going to talk a lot about getting started, raising capital, and investing in large apartment complexes for big wins. Don’t miss a second of this exciting show!

Read the transcript for episode 52 with Ken McElroy here.

Listen to The Show on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

In This Show, We Cover:

  • Getting started with no money – through property management
  • BiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AMWhy should someone invest in multifamily properties?
  • Using other people’s money to invest in real estate
  • Investing at a distance vs. investing locally
  • Determining the best locations and markets to invest in real estate
  • Cash flow vs. appreciation: which is best?
  • Ken’s newest $9 million dollar project 
  • Why Ken loves bad landlords
  • How to find amazing apartment complex deals
  • Raising millions of dollars in 20 minutes
  • How to find a great property manager?
  • Should someone start with Apartment Complex Investing?
  • The worst mistake you can make as a real estate investing

Links from the Show

Books Mentioned in the Show

Tweetable Topics

The faster you fail, the smarter you get. (Tweet This!)
“You don’t need to be an expert at everything.”(Tweet This!)
There’s a lot more money out there than deals. (Tweet This!)
The best deals are generated from face to face relationships. (Tweet This!)
The entire goal of my company is to replace myself. (Tweet This!)

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Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investors and other real estate professionals, who chat about failures, successes, motivations, and lessons learned.

    Gerald Harris
    Replied almost 6 years ago
    Amazing Listen! I am began on single family homes. I think I have shy’d away from Commercial mainly because I did not understand it. As a newer investor I think a good base to start with is finding a duplex or triplex to understand the fundamentals of the business. I think Fear is what stops many of us as newbies from moving forward and investing in that piece of commercial real estate. Taking gradual steps and educating yourself along the way is key.
    Lisa Phillips
    Replied almost 6 years ago
    Sounds like Im your path. Next up, Duplex/Triplex ! 🙂
    Gerald K.
    Replied almost 6 years ago
    Wow! Ken McElroy! What a surprise! Who’s next? Robert Kiyosaki himself? What a great Podcast you guys. Some really great information and advice. I like his point about property management being a very important but often overlooked part of a successful deal – makes total sense. It’s all part of the forced appreciaton equation. And there’s definitely no way you can get that successful without surrounding yourself with a lot of great people. Also like the part about studying the demographics, job growth, (since he needs renters) and getting out there and meeting the top people face to face, looking at deals, getting on their mailing lists, etc. – all good advice, same advice he gives in his books.
    Brad
    Replied almost 6 years ago
    The Mac Daddy….wicked smart.
    Frank R
    Replied almost 6 years ago
    Wow you got Ken on the show. Great show. Frank
    Seth Williams
    Replied almost 6 years ago
    Way cool guys. WAY cool! Ken’s book was one of the first real “game changers” for me when I was starting out as a new investor. I am PUMPED to hear this podcast!
    Joshua Dorkin
    Replied almost 6 years ago
    Don’t miss it, Seth. Ken is a good guy and is candid in this fascinating interview.
    Douglas Dowell
    Replied almost 6 years ago
    EPIC times EPIC to the infinite power. Great show Josh and Brandon. Thank you Ken!
    Joshua Dorkin
    Replied almost 6 years ago
    Hey Douglas — It was definitely a great show! Thanks for listening and please share it . . .
    Douglas Dowell
    Replied almost 6 years ago
    You bet I have and will Josh! Great great stuff that was very sober take on what it takes.
    Douglas Dowell
    Replied almost 6 years ago
    You bet I have and will Josh! Great great stuff that was very sober take on what it takes.
    Lisa Phillips
    Replied almost 6 years ago
    Hey, hey, I read the book and thought it was great! Glad to see him on the show.
    Lisa Phillips
    Replied almost 6 years ago
    Although cheap does not mean that there are no renters. There are many investors doing very well in Cleveland. You just have to analyze all investments individually per submarket.
    Sam Fong
    Replied almost 6 years ago
    No way! Ken McElroy!? I just downloaded this podcase and CAN’T WAIT to listen to it later in the car. I have read Ken’s “ABC of real estate investing.” It is very inspiring and got me interested in looking at commerical properties. I also just order his other book “The Advanced guide to real estate” from Amazon. It is still in the mail and I can’t wait to receive it and start reading that too! Josh, Brandon, you guys are awesome. Keep up the great work. BP Rocks!
    Joshua Dorkin
    Replied almost 6 years ago
    Thanks Sam! Let us know your thoughts once you listen — it’s another great one!
    Adam Greene
    Replied almost 6 years ago
    I was introduced to McElroy from “The Real Book of Real Estate” I then read his ABC books then listened to the Real Estate Guys talking about him.. Now he is a Bigger pockets podcast contributor and I am on the verge of Idol worship :). Seriously though K.M. Thanks for the help, and Bigger Pockets you continue to impress me this site is awesome..
    Joshua Dorkin
    Replied almost 6 years ago
    Thanks Adam!
    Albert
    Replied almost 6 years ago
    This was a great podcast, really enjoyed it. Its good to also know hes a good guy that always is a plus. Lots of good insight.
    Joshua Dorkin
    Replied almost 6 years ago
    Thanks for listening, Albert! I’m glad you enjoyed the show.
    Will Barnard
    Replied almost 6 years ago
    Great podcast guys! Regarding job growth studies for due diligence as to where to buy, I would love for Ken to provide some more details. Example, here in So Cal, we have had some recent job growth, unemployment decline and such, but I would not consider buying apartments here simply due to the low cap rates. In his Dallas example, he found the northern parts of Dallas such as Plano as the place with the job growth. How would he compare that specific job growth to say growth in San Antonio and decide which area to buy (assuming he was an investor just buying one or two).
    Jason
    Replied almost 6 years ago
    I second this suggestion by Will. I too would love to get some more insight on how to determine where to buy.
    Tony
    Replied almost 6 years ago
    Hey guys…. great podcast… I have been trying to download the mp3 and it keeps throwing up a new page with the podcast on it, Here is the link when i click on the “download” button. http://traffic.libsyn.com/bpradio/BP_Podcast_052_-_Buying_Apartment_Complexes_Raising_Millions_and_Building_a_Profitable_Business_with_Ken_McElroy.mp3 So how do i down load to listen to in my car? Tony
    Joshua Dorkin
    Replied almost 6 years ago
    Tony – Try the Podcast app on an iPhone, or Stitcher app for Android.
    Jason
    Replied almost 6 years ago
    I’ll be reviewing ABC of Real Estate this weekend. I had bought the book some time ago and forgot I owned it. I found it on my bookshelf this morning.
    Randy
    Replied almost 6 years ago
    In the interview Ken mentioned the due diligence docs that he used when purchasing a building. His team used in when walking through the 200 plus units. I went to his site and I could not find the forms, do you know where they are located?
    Doug Benson
    Replied almost 6 years ago
    Randy, go to “Resources” in the upper right hand corner of the http://www.kenmcelroy.com site.
    Jonathan Scott
    Replied almost 6 years ago
    Hi Randy, Go on to Ken’s personal website and click on the “Resources” icon (top-left of the page). It will ask you to register, once you’ve done so you will have access to a number of documents, one of which is the due diligence checklist.
    Julius
    Replied almost 6 years ago
    I learned a lot this is one of my favorite podcast
    Carima
    Replied almost 6 years ago
    I’m a senior in college looking to purchase a multi family in New Haven, CT. I found someone who would lend me 65% to value of the house but I have no money to actually put down on it. What should I do? Is there a way for me to get the property for less and still pay closing costs?
    Doug Benson
    Replied almost 6 years ago
    What a great interview. Each of Ken’s replies deserves another session! Thank you Joshua and Brandon for providing this kind of insight into Ken’s world. Ken is a great example and quite honestly is simply further along the same path that is available to all of us. Very inspiring and thank you again.
    Shaun
    Replied almost 6 years ago
    Great job on the interview guys. This was one of the better episodes (and that IS saying a lot!) you’ve had. Ken had so much great information and awesome stories about getting to where he is now. Like many others have said I read the “ABC’s” book a while back and it was a foundational book that really helped propel my interest in investing.
    Joshua Dorkin
    Replied almost 6 years ago
    Thanks Shaun. We’re aiming to bring more high level interviews this coming year . . . keep listening!
    Sharon Tzib
    Replied almost 6 years ago
    Totally amazing podcast guys! I love what a down-to-earth guy he is, who never talks over your head. Definition of keeping it real. He’s got me thinking that my experience/background in property management could be some awful good leverage when I get to Houston and start investing again. Wheels churning…..
    Taylor Jennings
    Replied almost 6 years ago
    Two big aha moments… One where I realized probates are really going to be in full effect within the next 10 years (sorry baby boomers) and secondly when I put together the fact that Ken’s research keeps him in multiunits seeing how the biggest generation is now coming into the workplace (boomer’s kids). The second makes sense since a high percentage of my generation don’t see owning a home as the American dream. Development where I’m at has really increased with luxury apartments…….. Is this a shiny object or something to really be thinking about? Two big turn of events over the next 5-10yrs.
    Jay O.
    Replied almost 6 years ago
    Incredible show, Joshua and Brandon! Love these Podcasts! Loved it! Ken was Awesome! Running out and getting his books asap! Got a lot more confidence now in developing my niche for Multifamily and Apartment Complexes. Thanks again guys. Great big thanks to Ken also for sharing his personal experience in REI and taking out the time to speak with all of us, answering a lot of really important and informative questions. Greatly appreciated. Thanks again Ken. Have an Awesome week guys! Gratefully, Jay
    Joshua Dorkin
    Replied almost 6 years ago
    Awesome, Jay! 😉
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied over 4 years ago
    After hearing some guests recommend his book, The ABC’s of Real Estate Investing, I searched the podcast to see if they had Ken as a guest and I was so happy to see that he was. I started with a duplex that I currently house hack but I own free and clear and now want to buy a small apartment. I’m still reading his book and I’m half way done but can’t wait to finish. Great points and advice in his book. Definitely one of my favorite BP podcast episodes.
    Michelle Cobbs Investor from Copiague, New York
    Replied over 4 years ago
    Another great show, I listened to this twice excellent stuff. Guy!! Thanks Michelle
    Jessie Flo from Woodstock, Illinois
    Replied over 3 years ago
    This was an awesome podcast!! I really enjoyed it and learned a lot. Where can I find the 9pg due diligence list Ken mention. I couldn’t find it on his website. Thanks!
    Skyler Castillo Rental Property Investor from Castle Rock, CO
    Replied 4 months ago
    This was a great podcast and it gets me super excited to start my journey in rental investing. Are there any great resources recommended when analyzing your real estate market for job growth,hot rental areas etc.?