BiggerPockets Real Estate Podcast

BiggerPockets Podcast 333: A Guide to Getting Started in Commercial Real Estate (+ Laundromats?!) With Ken Wimberly

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Commercial real estate like you’ve never heard it before!  On today’s episode, Brandon and David sit down with Ken Wimberly, the owner of a Keller Williams commercial brokerage and a commercial investor himself.

Ken shares some incredible tips on how to get into owning commercial property, including how to find quality tenants, how to structure the lease, and how to protect yourself from a changing market. He also provides great advice on building relationships and identifying who NOT to partner with.

Ken goes on to talk about how he went from working in a pizza restaurant to cashing his first check for 50K as a broker—with absolutely no training program! He shares some incredible advice for opening a laundromat, making huge returns, and successfully investing in other people’s deals, too.

If you’ve ever been interested in how to do big deals without big headaches, this episode is for you!

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

This is the BiggerPockets Podcast show 333.

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Ken: My $5000 that I had invested into that deal I sold for a $147,000 because we created value.

You’re listening the BiggerPockets 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.

Brandon: What’s going on everyone? This is Brandon Turner, host of the BiggerPockets Podcast here with the man in plaid, Mr. David Greene. What’s up buddy?

David: Not much man. It’s going good. I was just watching that video that you edited for me while I was there in Hawaii and you. We had a little surprise ending. It’s pretty cool.

Brandon: That was kind of cool and we’re not going to tell anybody what the surprise ending was. We’re going to make them go watch the video. What was the video called? It was like I forget the exact name, but it’s five.

David: Five Tips for Financing a Property. Yes.

Brandon: They have renting. It was five tips for renting out your home I think that one was. With the special ending, something like that. Anyway, check it out biggerpockets.com/YouTube or YouTube.com/BiggerPockets. Either way you’ll end up on the YouTube page and watch the video David Greene put out. We had a fun ending, but anyway, no it was fun. I got to play director for a day. I’m not usually playing the director so you know.

David: You’re really good at it. You’re like that actor that says you know what now I want to go behind the camera and I want to show how deep and diverse my talent level really is.

Brandon: Yes, me behind the camera was like jumping up and down like come on David. Woo. It was fun. Anyway.

David: Mooning me with your white butt to make me laugh.

Brandon: Yes, I think we did do that didn’t we? That’s not the surprise ending though so don’t worry about that. Anyway, today show, let’s talk about today’s show. Today’s show is all about well it’s about a lot of stuff.

David: Yes.

Brandon: Specifically, we talked with a friend of ours named Ken. Ken is a commercial real estate broker and commercial real estate investor. Now, if you’re thinking well I’m not into commercial. Listen to this anyway. The advice he has is just so good for anybody, whether it’s residential or commercial. He talks about how you know why he got started with rentals, but then really that he quickly scaled past his rental properties into something like commercial properties like you know a number of different types there, but we talk about shopping malls. In fact, he’s getting the laundromats, which you guys are going to be blown away at the discussion of laundromats. I know that sounds like weird, but like listen to the kind of cash and cash returns he’s expecting in that business. Very cool stuff. We talk a lot about why you know certain types of commercial real estate are very dangerous right now and why some of them are actually like completely recession proof. In fact, it might be one of the best things you can do at this point of the market. If you’re struggling finding deals, this might be a really interesting niche for you to dig into so definitely listen for all of that and of course, listen later. He’s got a cool kind of a side project called Legacy of Love.

He’s going to talk about that later. If you have kids, you cannot afford to miss that section. It’s very very cool. Anyway, before we get into that show, enough of talking about the show. Let’s hear today’s Quick Tip. Like that. I changed it up a little bit so you know it was coming. All right so today’s quick tip. Here’s the deal. We’re talking a little bit about commercial properties today so I thought it would be a cool quick tip to mention, we actually have like recommendations or a directory you could call it of commercial lenders on BiggerPockets. If you go to BiggerPockets.com/loans, you can look for different companies that will actually help you scale into commercial properties. Like we support anything five units and up, commercial, retail, anything over about $500 grand. Some companies like stack source, branch equity, CBRE and other. If you are thinking about going that route, you want to get preapproved. You want to learn more, you want to come up with these companies. Definitely check it out, BiggerPockets.com/loans for some options to make your next commercial investment happen so check it out and that is today’s Quick Tip.

David: Quick Tip.

Brandon: All right, and now let’s hear from today’s show sponsor.

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All right, and with that I think that’s all we got so last thing I’ll say before we get into the show is actually, I’m going to say two things. One, if you have not yes left a rating and/or review for the BiggerPockets Podcast over in iTunes or Stitcher or Google Play, wherever you listen to your thing. Could you do that for us? That helps us a lot. Also, if you’re listening do the BiggerPockets Business Podcast. That’s our newest show we just launched. Will you do me a favor and go leave a review for that one as well. They could definitely use some reviews over there since we have like 8,000 on this show. I mean, we like them too, but you know they’re just starting out so go help our buddies J and Carol Scott. Give them some good ratings and reviews and if you’re not listening to that show that you definitely should be. It is fantastic. Really really good. I’m especially looking forward to the one coming up this week so check it out and with that, let’s get to today’s show with Ken Wimberly.

All right Ken, welcome to the BiggerPockets podcast man. Good to have you here.

Ken: Hey, thanks so much for having me. Appreciate it.

Brandon: Yes, so today we’re talking about your real estate journey and I know you’ve done some I don’t want to call it complex, but stuff that I have not got into. You’ve definitely, you know pushed into the commercial space. You got a lot of knowledge there, but also you got some cool like family, parenthood stories I want to dig in on. I know little bit about you and your story, but every time I people are always like do know Ken? Like you’re one of those people like do know Ken, you should really talk to Ken so here I am. Talking to Ken today so this should be good.

Ken: Love it, honored, I’m looking. Yes, I’ve been looking forward to this. We had a brief connect in Go Abundance.

Brandon: Yes.

Ken: In back and so I’ve been excited for this conversation.

Brandon: Well, awesome dude. All right, well we’ll start at the very beginning so kind of. Can you walk us through like in a minute or two like your story up until real estate. Like how did you get from where you are like where you started, where you, up until your first real estate deal. How you kind of got into the idea real estate.

Ken: You bet. I’ll go back to age 12.

Brandon: Okay. We’ll be here long time.

Ken: At 12 years. Yes, let’s go with. Expecting a time machine.

Brandon: That’s good.

Ken: Well really so at age 12, I watched the movie Taps. Tom Cruise’s first movie and me and a buddy of mine watched that and we actually went to our parents and said hey, can we go to military school. Like that looked cool. We want to go to military school and six months later I was living in military school in Missouri. You know hundreds of miles away from my home and I went to a private boarding military school for four years and.

Brandon: Oh.

Ken: Bring that up because I think that helps set a little bit of foundation in my life as far as some discipline, leadership, whipping kind of stuff. This is a whole other journey and story on that, but I think when I look at some of the habits I have in my life today I can look back to that time in military school. I graduated military school as valedictorian at 16 years old so I was I skipped a year because as great as military school was, I wanted to get out.

Brandon: Yes.

Ken: I was like hey, I want to go see some girls and go to college. Went to Texas A&M my first semester in college I made a 1.2. I went from top of my class is a class of 50, but still I was number one out of the 50. To 1.2 in college and then anyway. Made it through college, ended up with a TCU, Texas Christian University in Fort Worth and starting real estate, studied finance with the real estate emphasis. However, in the middle of my real estate career, America went to war in Gulf War I and I remember sitting on a buddy of mine’s couch, watching the bombs fly and literally, and the next day I went down to the Navy recruiting office and I signed up for the Navy.

Brandon: Wow.

Ken: That was basically my junior year of college. I went and signed up for the Navy and so I left college for a few years and went to boot camp, was air crew, stationed in Misawa, Japan and I was a cryptologist. I did Morse code flew around the world listening new on Morse Code. I got out of the Navy and went back to TCU, finish my degree in finance real estate, but didn’t go into real estate at that time. I had interned at a insurance and investment firm so I was doing basically estate planning life insurance.

Brandon: Uh oh that sounds thrilling.

Ken: I actually was working for the partners that were doing estate planning life insurance, but.

Brandon: Even better.

Ken: I was a numbers junkie is so I was building these financial modeling spreadsheets, which you know insurance would you know fund, pay all your taxes and take care of everything and I did that for a couple of years and then got an entrepreneurial bug. I had worked in college as a pizza delivery driver and I loved the pizza. I loved the concept and I said you know what. Actually my buddy of mine from the Navy and I decided we were going to open up a pizza restaurant.

We struck a deal with the owners of that concept. It was just a small family owned concept. Struck a deal with them, did a licensing agreement and we opened up a pizza restaurant in April of 2000. We ran that for and like the people that were running the existing business were like, “Oh man these guys are running it so horribly.” Cash management process that’s so many systems that they just didn’t have so our plan was to come open five, put systems in place and then create a franchise model and actually franchise the entire concept. That was our.

Brandon: Okay.

Ken: Plan. Somehow, the best laid plans don’t always work out and within 18 months of us opening, we ended up shutting the doors and as I dissected that venture, I look at all the mistakes we had made and oddly enough, the biggest mistake we made in that whole thing was a real estate mistake.

Brandon: Really.

Ken: Back then I knew nothing about real estate back then and I didn’t know about the difference frankly between commercial real estate or residential real estate. I didn’t know there was a different broker of commercial real estate versus like I hired my the residential realtor that repped me on my house to help me go find commercial space.

Brandon: Oh funny.

Ken: To his credit, he said, “I’m not maybe the best qualified, but I’ll do what I can.” We ended up taking double the space we needed, which led to more labor than we needed. Which led to more equipment than we needed, more electricity, more everything that we needed because of a space requirement and you know up while our business increased, month over month, over month over month. It started off so much slower than we had anticipated and our debt just kept amassing during that time and all that extra overhead and space we had ended up being the anchor around our net that caused us to shut the doors and that was a tough thing.

I remember as we were contemplating you know shutting the business down. We had employees that were working for us and they’re relying on us saying it was. We had poured all of our life savings into this business and just hours and hours and hours you know the restaurant business of work we had put into it and we’re sitting there contemplating shutting it down. I remember turning on the TV’s when we came into work one day. It was September 11th 2001 and turn on the TV’s and the twin towers were on fire and you know it made me realize that what we thought were just these insurmountable obstacles and problems were just minuscule compared to the real problems in the world.

Brandon: Yes.

Ken: Well, we’ve made the decision. We shut it down. We filed actually 10% in personal bankruptcy. It was a real low point in my life. Now I felt like I let my partner down, my wife down, my whole world down right there and you know we had to totally climbed out and rebuild. I stayed in the restaurant business for another year because that’s what I knew at the time. I went to work as a GM of this regional chain in DFW and enjoyed the work, but I was working probably 70 to 80 hours a week. I was commuting 50 miles each way. Sometimes, twice a day and you know because when you’re the GM and someone doesn’t show up. Guess whose job is.

Brandon: Yes. Yes.

Ken: It’s yours and so you know I started to do the math. I was making like 50 grand a year at the time. I’m like I’m making about minimum wage with this and I’m miserable and at the time we were eight months pregnant with my first child. I decided something had to change because there’s no way I was going to just be an absentee father when I had a baby on the way.

Brandon: Yes.

Ken: That’s when I actually got into the real estate business. This was October 2002. I got into the real estate business and I you know. I looked in between residential and commercial, both end all of the brokerage side of the business.

Brandon: Yes.

Ken: You know I’m a finance guy. I’m a numbers guy. I’m not a paint and carpet and fancy anything like that and so I really leaned towards that commercial real estate side of my family was in the development business. They developed single-family lots for homebuilders back then and I got an introduction to a commercial broker and you know I went to interview with them. He said, “Well Ken, we’re not like the big shops.” He said, “We’re a family owned place. We don’t have a formal training program. We don’t have a draw. We don’t have as salary. You probably won’t make any money for at least a year and you’re going to need to bring your own computer, but we got a desk and a phone for you.” I said, “Well that sounds good.

Sign me up.” I literally made that was his sales pitch to me and I jumped into commercial real estate world at that time and it was you know 15 hour days, first one in, last one to leave. Just grinding, studying, and he didn’t have full enough tray of programs. My training was I sat across from him and I listened to every single conversation we had. After every conversation, I would ask what did this mean? What did that mean? Who were you talking to? How does that work? He was so patient with me and he just sat there and answered all my questions and I slowly started learning. I just started grinding. I didn’t know what product type I was going to focus in, but I was just trying to do everything and you know eventually there was a developer that was in our office and land developer and I went to him. Today, he’s still a great friend and client today. I said, look I’m a relatively intelligent guy. I was like I know how to you know run analysis in the numbers. I know how to do research. I know how to do some stuff, but I don’t know exactly what I’m doing. If you will tell me what you need, I will be your guy. I will go make it happen and he said, “All right Ken.” He kind of, he laid it out what he was looking for and his company was looking for. He became my very first client and said today we made friends and, but Tom the broker I work for. He had told me it was going to take me you know at least a year to make any money. He was pretty true. It was 11 months before I made my first commission check. It was $1,837.

Brandon: Oh wow.

Ken: 11 months into the job.

Brandon: Wow.

Ken: That was a real grind to get to that point. However, the next month I made my first $20,000 commission check. Right because the work I had been putting in, the grinding, and the pipeline that I had started to build, started to pay off and the subs what year I made over a $100 grand. Then every year since, I’ve made more and more money and had been able to scale my knowledge of team in the brokerage business.

Brandon: Okay wow. Okay so that is your story to get into the real estate world, which is interesting that you got the degree in real estate finance or finance with you know real estate.

Ken: Yes.

Brandon: Went kind of that side route with the pizza thing.

Ken: Yes, right.

Brandon: Which a lot of people do. They get into. They get into something that intrigues them or that they think is like oh well I like pizza or I like restaurants. I think that would be fun to own one so they go that route.

Ken: Yes.

Brandon: Interesting. I mean we can do a whole show. I’m sure just on like. Space issues like I’m sure you could talk forever on that now.

Ken: Guaranteed.

Ken: That you’ve been doing this.

Brandon: I want to move on to the next kind of phase of your you know who became a broker, a commercial broker. Can you first describe, for those who are not familiar with the difference between commercial real estate brokers and residential. Explain kind of what the difference is and then we’ll walk into actual like investing here in a minute.

Ken: Sure, well there I mean the residential brokerage is everything you think in-home, any homes from small little starter homes to fancy multimillion dollar homes, but a home that you have lived in. In fact, up to you know a duplex, triplex, quadplex. That’s single-family. You get beyond that and you’re getting into the commercial world so anything from apartments and multifamily is considered in the commercial real estate world. Shopping centers, office buildings, land, churches, self storage facility. Everything that’s not in a home or house there is in the commercial real estate world and it’s a broad asset class and so in our world we need to, if you’re in a major market, you need to specialize in picking asset class there.

Brandon: All right. All right, okay so you became a broker, became more and more successful at doing that.

Ken: Yes.

Brandon: Let’s walk through like when you started actually putting your own money into real estate deals like if you started buying something for yourself. Did you like what does that look like? Maybe even go to the like what does your investing look like today personally? Do you invest in other people’s deals? I know there’s some of that in there. I’m curious of that and then we’ll walk backwards into some details.

Ken: Well as I started getting successful in the brokerage business. I mean real estate as an industry is a brokerage is an industry, is a phenomenal way to create cash flow and some good cash flow.

Brandon: Yes.

Ken: However, that cash flow it is not wealth. Right, wealth is what we do with that cash flow to invest in long-term assets. How it started produce decent cash flow and had some excess money and more importantly, I was seeing deals out there right. I was out there in the business and seeing deals. I started looking maybe and of course I was watching people put together deals because I’d represent them. That will. I could, I should start doing some of this on my own. Now I had owned a couple of single-family rentals prior to being in the real estate business. Actually since read Rich Dad, Poor Dad like everyone and that kind of got me thinking and so we had bought a couple same family rentals. I don’t know if you’ve ever had this experience, but I was managing myself and there was always a sob story. It always a challenge and always an issue and so I found that experience to be kind of miserable.

Brandon: Oh man, my landlording has been easy easy. I mean I’ve never had a single okay. I thought so.

Ken: Yes.

Brandon: Yes, been there.

Ken: I was in and I didn’t scale big enough and take enough assets to actually hire a property manager or I didn’t budget for the hiring a property manager initially so.

Brandon: Yes.

Ken: That side was a little bit of pain in the rear to me and I also didn’t have probably the drive or the wire, the intelligence that I have now to look at the bigger picture. However, so as I’m into commercial real estate. Once I can start putting together some of these deals and I’ll tell you an interesting story here. I haven’t thought about this in a long time.

Brandon: Yes.

Ken: The first deal I tried to put together okay, it didn’t work, but a buddy of mine and I, we saw this ideal corner piece of real estate. Like this is great dirt. We knew it was going to be a hit. I was right at across the street from a major hospital that had just got announced. It was a four-way lit, hard-core to the intersection in 10 acres of dirt. Like this is going to be great. We can put pad sites up on the in. We could put a Walgreens, we could put a restaurant. We could put a storage facility back there that they all kinds of stuff. Things we do so we went and put that dirt under contract and so we made an offer on it. We got it accepted. We put our risk money, put it in title, cut me under contract. We had 60 or 90 days to go evaluate it and do our homework. We went to my cousin and actually said, “Hey, how would you like to be the financial partner, the equity partner in this deal with us?”

Because we had the vision, we had the concept. We had the hustle. We did not have the money. We went to my cousin and said, “Hey how’d you like to back us in this deal?” He said, “Yes that would be great.” Said, “I’ll back you at it.” You know, we keep going through so we start looking for potential tenants. We start doing our homework and figuring out who we would potentially bring to this. Land deals are, they’re a long lifecycle, but this is going to be a great deal. Well you know we get to a week before the expiration of our due diligence and then my cousin comes and says, “Hey, I haven’t been able to raise the money for that deal so I’m going to be out.”

Brandon: Oh man.

Ken: I said, “What do you mean raise the money? You said you were the money.” He said, “This was your deal and you were in and you were the money.” He goes, “Oh, no I was going to try to raise it.” I couldn’t do it so went out and we made a big mistake. We had assigned the contract to my cousin at the time when he had agreed to come and come be our partner and he actually put some additional earnest money up and he said, “We are partner.”

Lesson learned the right there. Never assign your contracts so, but he came. He came to us and it’s literally a week before, a week before the due diligence expires and he said, “Well you can go try to hustle it into someone else and at least make a commission on it.” I’m like that was not what we signed up for. Interestingly enough, I went to a guy that I did not know. Who was a big player in the commercial real estate world, well known. You know went and sat in his office and I pitched the deal to him and said, “Hey, here’s the deal.” I laid out our vision. I laid out our plan and he said, “Okay, I like it.” I said, “But the due diligence expires in a week and it’s got to close 10 days after that. Right so he’s got like two weeks of time here. He picked up the phone and his secretary says, “Hey how much money do we have in X, Y, Z account?” She said something to him. He’s like, “Okay, we’ll close it in two weeks.”

Brandon: Wow.

Ken: He closed the deal in two weeks. I got paid a  $50,000 commission on the deal so it was, it wasn’t all for naught. I made a nice commission on it. I did not get any equity in the deal. He executed exactly our plan. There’s now a Walgreens there. There’s a, yes a couple of restaurants and there’s a Divita Dialysis. It was validation that for a couple of young hustlers we had a good idea. We just didn’t quite execute right there.

Brandon: Yes.

Ken: That was my first foray into starting to put deals together.

Brandon: I love that story and a couple of things I want to point out in there. In the book that Josh Dorkin and I wrote recently, how to invest in real estate. I tell. We talk about this concept called a deal Delta and I like to put names the things so I put a name to it, the deal Delta. Basically is this. To put together any real estate deal and you just perfectly described it. You really need like three things. You need knowledge. You have to know what you’re doing. You need hustle, somebody actually do the work and then you need the money. You know to be able to pull it off right?

Ken: Yes.

Brandon: If you have those three things, you should be able to pull off any real estate deal. You should be able to do real estate and where people get stuck all of the time when they’re trying to get into it, whether it’s residential or commercial. It doesn’t matter is they only have maybe one or two of those. They don’t have all three and I always tell people, just pick two. Like if you don’t have the money, yes you had the knowledge and you had the hustle and so you went and found the money. I just love it. It’s a perfect example of that.

Ken: You’re exactly right. Most deals I do today. In fact, almost all the deals I do today. I don’t bring all three and often times like I’ve got a development partner that I’ll bring into most of my deal because his construction knowledge is so much higher than mine and I love having him on the sponsor side of our deals. He and I will go sponsor deals together. We’ll go raise the capital and both of us have lots of Access to capital so we’ll typically go raise the capital.

He’s got a better construction knowledge than I have. I probably have more of a relationship capital then he has that I can bring to deals and yes, we’ll go do that. Today, I am invested in office buildings and at least office buildings. I’ve got a couple of single commit office buildings that just kind of pay rent every month, which is great. We just bought a 50,000 square-foot shopping center last year and this is a great deal. We found one in a small market. I actually have a real estate franchise in the small-market in Texas and we found a 50,000 square-foot shopping center for sale at $22 a square foot, which is really cheap out here in our market.

Brandon: Yes.

Ken: At 22 square-foot. We bought it at an eight cap on actuals with about 20% vacancy so we got. We got we put together a great deal. Same thing. We went and raised a capital for it. We put a little bit of our own money into it. Went and raised the capital. Yes, we’re actually now launching our very first laundromat facility into that building. It’s under construction. We’ll be open in like two weeks so now we’re going to own the real estate. We have a separate business that owns a tenant. That’s in the real estate. There will be a cash flow operational business.

Brandon: That’s cool. Yes, the laundromat thing you and I talk briefly about that. I think that’s a fascinating model. Can we deviate here for a second and talk about laundromats for a second. I know you’re just getting into it, but why laundromats like? Why did you have to do that?

Ken: The laundromat was a fluke okay so, but the laundromat came. This is the beauty. It came from a real estate deal. Okay so in that same town. The town is Abilene, Texas right? It’s about 125,000 people in this smaller town in West Texas. In that town I have another friend of mine or a client of mine who’s become a friend and he calls me up, he says, “Ken how would you like to invest in the shopping center with me?” Because his daughter is going to a college out in that town and I am the local real estate franchising town and so he says, “How would you like to invest in the shopping centers?” “Tell me more. I’m interested.”

He was under contract for a shopping center. He wanted me to come in and be his partner. I said, “Well let’s go find.” I had some vacancy. Said, “Well let’s go look and see if we can find some tenants during your due diligence period.” I was at a real estate conference, looking for a potential tenants for this you know, B minus, C plus shopping center and I came across a laundromat group. I pitched the shopping center to him. I said, “Well send it to—send me the details.” Sent him the details. He got back and he said, “This is like a perfect laundromat location.” He said, “Well okay what would you need as a laundromat?” “Actually, we need a 10 year lease with four or five year options.” I’m like, “Perfect. Sign here, press hard.” You know I’m ready to get you to get it all in. I like this is a no-brainer because I pitched out a lease rate higher than any of our other tenants and they’re like no problem.

Brandon: Yes.

Ken: Perfect and I thought this is going to be a homerun. Well, come to find out the people I was talking to were not laundromat operators. They were actually equipment vendors that were looking for operators and so that got me. They didn’t have an operator in Abilene and I said, “Can you find one?” They said, “Well we’re looking, but we don’t have one right now so were not a player.” I talked to that particular guy that asked me to be his partner and he said, “Look I’m covered up. I have no interest in getting in that business.” I went to another good friend and client of mine. Said, “Hey man have you ever thought about this as a cash flowing business?” Says, “Let’s investigate it and we started investigating it.” We kind of looked at each other and said, “Look, you and me are two are cut from the same cloth.

We’re both big picture deal guys. We love putting stuff together. We are not operators.” Neither one of us are operators. Like we got to get that third component and so we went to a third partner of ours that I had been wanting to get in business with for a long time. It was just an operational master and approached him. Said, “Hey would you like to explore this with us.” The three of us started looking into it and it was an attractive business model. Right, it’s a cash flow business model. It’s a recession proof industry. Frankly, if anything their business kind of the laundromat gets a little bit better in bad times because people have even less money to afford repairs and being able to buy new washers and dryers and so recession proof industry. It’s these days like what were doing it’s all card base systems and no more coins and collecting coins. It’s all card based systems and we’re using this as a vehicle because we’re oh. You know we’re all capitalists, but we’re also all altruistic people. The three of us, that’s why we’re good partners together. We want to do more with our lives and with our businesses with our laundromat it’s a laundromat with a mission we call it. To improve the lives of our customers in the communities in which we work. We’re doing.

Brandon: How did you do? Yes, how did you that?

Ken: We’ve got a kids play area in all of our laundromats. Much like a little Chick-Fil-A type kids play area and we’ve got reading areas around the play areas where we’ve got bookshelves and the kids can sit and read. We’ve got TVs up on the walls that are showing families friendly or positive programming only. No daytime TV. No Sally Jesse Raphael you know junk up on TV that’s just mind numbing stuff. No news actually up on the TV. It’s positive programming that we’re showing. We’re bringing in like the score program to come and teach people about. Not all the time. Let’s say once a month. We’ll bring in the score program to host small business workshops. Teach people about how to start their small business. At tax time, we’sll bring in the score program.

Brandon: Score.

Ken: To come help folks with taxes. We’ll bring in tutors to help people reading English, which maybe some of the only English reading they’re getting right there. We’re since we figure if we can genuinely help two families a year per store and our tenants they’ll open 105 to 100 stores. If we can help a couple of people a year with every store we’re going to make our little dent in the world.

David: Again if somebody wants to open their own laundromat, what do they need to get started?

Ken: Capital wise or so.

David: Well like how much capital? What kind of knowledge base do they need? What are the steps somebody has to go through if they want to open one?

Ken: You know, within a year I think okay I’ll give you our example. Within a year, we studied the industry heavily for about a year. We went to conferences. We talked to other operators. We looked at the industry averages and started so what we’ve found to do that kind of stores that we want to do, which are 4,000 the 6,000 square-foot locations. Our first 6,200 square feet. It’s going to take about 1 million to 1.3 million to open each location. That is both from an equipment and a utility expense and a build out standpoint. All things and a little bit of working capital in there as well. It’s estimated about one, a million and 1.3. You can all day long finance 70% of that. Okay so you’ve got to bring the remaining 30%. There are the equipment manufacturers themselves will finance. These laundromats where there are lenders, specific to this kind of things. The SPA will finance them. You can do an SPA loan for a 90-10 on there.

Brandon: Wow.

Ken: As well.

Brandon: Can you and then I’m assuming you’re going to lease like one of your own properties? You’re going to lease like to begin with. Is that right or are you renting an actual place from somebody else?

Ken: Oh, that’s exactly. That’s part of our that’s the beauty of our strategy right? Now we’ve got this 5 to 7,000 square-foot tenants so we will go buy, our strategy is to go buy shopping centers with vacancy.

Brandon: Yes.

Ken: No, we’ve got to back filter. Well while we’re in the due diligence of the shopping center, we will underwrite the relocation as a laundromat.

Brandon: Yes.

Ken: If it’s a great laundromat location then that is just extra points we add to that shopping center right there. Then we’ve got a built in five to 7,000 square-foot tenant that comes in. Not only that, we have other tenants that are natural co-tenants for the laundromat. Like in this` shopping center that we have right now, we’ve got a buddy’s home furnishing and easy pawn and a CSL plasma. All of those, you know we all hit the same target in the graphic right there. We’ve got relationships with these existing tenants that will bring our other shopping centers as well.

Brandon: Well, so that brings up a good question then or I hope it’s a good question. The question I have in my mind is like a lot of people are worried about shopping centers because I mean look what happens to malls around the country now. They’re all—a lot of them are dying right so. Here you are actually getting in like you know, building your portfolio of things that a lot of people are scared of. I mean why do you feel confident about those shopping centers and they’re not going to go the way you know as Amazon becomes more and more a dominant player.

Ken: There are certain things that people are going to always go shop for. Right, why is Dollar General doing so well and expanding at 900 to a thousand stores a year right now?

Brandon: Yes.

Ken: Those are some of those things that folks will go in and shop for. Even you know I’m a grocery shopper. I like to go into the grocery store and shop in the grocery store. I mean 3 to 4 times a week because I don’t like doing huge trip. I’ve got a local neighborhood grocery store. Groceries got a little bit of a I mean there’s a lot of stuff happening in the grocery, but in so the pawn pawn industry. People are going to go in to the pawn stores.

Brandon: Yes.

Ken: The plasma industry. You’ve got to be in there, getting a needle stuck in your arm.

Brandon: Yes.

Ken: But the plasma. In Buddy’s Home Furnishing Store. That’s a rent to own kind of deal you’re going to be in there seeing this. Those kind of tenants that we’re going after.

Brandon: Yes.

Ken: Are perfect shopping center tenants right there.

Brandon: Yes, yes that. We did an episode. I can’t remember who the guest was. It was probably a year ago now here on the podcast. Mentioned something similar is like these little strip malls. Like we’re not talking about buying a shopping mall with JCPenney in it and Macy’s falling apart here. We’re talking about like the small thing with the hair salon. People are always going to need their hair done.

Ken: Yes.

Brandon: They’re always going to need their nails done.

Ken: They’re going to get their nails, yes.

Brandon: Yes, people like to go get ice cream after a movie you know things like that. Like I am fascinated by that model because again I think they’re such sound logic in there. I mean obviously some industries will change over time, but some things are just going to always be around.

Ken: If you buy it right, if you’re not buying. My concern as you buy something with a tenant that is a risky tenant and you’ve overpaid for it because it’s on a long-term lease and they signed an over market rent and then you’re in trouble. In my brokerage business, I advise people against that all the time. I’m like look you got to really think through all the metrics when you’re investing in this so. From our investment standpoint we like you know B and C shopping centers that have vacancy in it that we can buy at a discount. We’re buying them right on a pound—you know, price per square foot basis.

David: Back to your laundromat. How much can somebody expect to make if they buy a laundromat in the area that you’re operating?

Ken: If we kind of looked through we expect that this will return between two and $400-$200,000 getting up to maybe $450,000 at this one location on an annual basis.

David: Wow.

Ken: Okay, and that profit or that’s.

David: That’s profit.

Ken: Profit. That says profit on that.

David: In it for a million, you had to put 20% down or 30% down you’re in for $300,000. There’s a good chance you can make all of your money back the first year.

Ken: Within so we expected for, you know we assumed if you finance 30% of it right there year one, after taking that debt service okay, year one you’re going to be the 30% to 35% cash on cash return. You’d go up to 40%-45% cash on cash within a couple year. That’s a solid investment right? Now, we haven’t opened yet. Right, I could be totally wrong.

Brandon: Yes.

Ken: We’re getting.

Brandon: Yes, we’ll, we’ll.

Ken: However, we.

Brandon: Take it with a grain of salt.

Ken: Talk consultants. We’ve talked to other laundromat operators and we’ve talked with a lot of people.

Brandon: Here’s what I find interesting or fascinating or amazing about your story here is like contrast this new business. I mean this almost like this could be an episode of the BiggerPockets Business Podcast too because this is, but it’s all it’s all real estate. It’s all related so.

Ken: Yes.

Brandon: But like contrast the first deal, the pizza place you did, which was like hey. It would be fun to buy a pizza place. You went and did it. Versus like—this time it’s like we studied the market for a year. We went to conferences on it. We talked to a bunch of operators. Like the difference that I see between then and now just shows your growth as an investor, as a business owner, as a you know. As a you know businessperson. Like I just think that’s fascinating.

Ken: Well and it’s also you know really important to have the right partners in your business and I’ve got the right partners in this. Both these guys are growth minded.

Brandon: Yes.

Ken: Both of these guys are conservative, yet we all have a certain. I mean to be an investor, you’ve got to have a certain risk tolerance out there.

Brandon: Yes.

Ken: We’ve all. We’ve all done a great deal of homework and we each bring different strengths table. That right there is a big big help and we have a week.  We’ve got a weekly partner call. I mean every week we’re on the phone for an hour talking about every single detail that we’ve got going on on this. That’s been going on for months now.

David: Ken, you had mentioned earlier that you are someone who brings relationship capital to a deal and that kind of implies that you’re really good at meeting people, knowing the right people, connecting people and you said just now well when we do a deal, you want to get everybody with a different strength can you share a little bit for somebody who hears that and says, “Man, that’s what I want to do. I want to go meet people.” What are some things you look for in a potential partner? What are some of the expectations that you set? What are some of the things that you see that you say that would be a problem later? I want to avoid that kind of person, a red flag.

Ken: Yes, great question so to think through in potential partners. Number one is a growth mindset. With all my partners, I want something that’s open minded and realize that no matter how smart we are or they are, they’ve got a growth mindset and they are looking to learn more and to get better. For me, that’s important. Integrity, the integrity is the foundation so we say, “What would I avoid?” If I know anything about someone being a non-person that does not have integrity, they’re out from the get-go. If I look and see how they treat other people or talk to other people and they talk down or disdain other people, they’re not for me.

We’re looking for the right personnel that is partners, but they need to have, each partner that comes to the table, they need to have a certain skill set. Like my one partner is really really good at construction management in the development side of things. He sees. You can look at a set of plans and you can look at a construction site and see things that I would never see. I would never see and that is so valuable to me and then our operating partner. I mean this guy is just detailed to the nth degree. I witnessed that detail because he ran he ran like all of KW, Keller Williams Membership Divisions at one point and so he was running like six different membership divisions. He was in charge of the commercial company that I was on his executive board and I’d watched him lead this company for years. It was like that is a guy I want to be in business with. He had an impeccable track record. I’m looking for certain skill sets and it depends on the challenge we’re facing. What skill sets do we need? It depends on what challenges we’re facing ahead. Yes.

David: Where do you feel like you picked up the ability to see that in people?

Ken: Yes, that’s a great question and I think time, me spending time getting to know other people. Okay, I’ll tell you some of it came, getting out of my comfort zone. I go to a lot of conferences where I have to meet other people and some are small conferences. They’re like 50 or a hundred people. In fact that’s where I met this one partner that’s so good at the construction management. We were at a small probably 75 people there. It’s a real estate exchange conference that we were at and ended up you know, he had commented on a property I had. We ended up going to lunch together. I do not like meeting new people. My first go abundance meeting that I went to was like Tahoe 2015. I knew a couple of people. I don’t like meeting new people and it makes me uncomfortable right and.

Brandon: Ah.

Ken: It, you know once I get to know him it’s phenomenal. I love it. It’s just I’m uncomfortable meeting new people. I might be a little uncomfortable in my own skin, but I do it. I put myself out there and I do it and so I think the answer to that question is I’ve just put myself in that situation some time and had so many times and had the opportunity to meet so many people and I’m also more of a listener than a talker. I will just listen a lot in my just observing how people react and what they say. How they’re—what their mannerisms are. I guess give me a little bit of insight since I’m not talking over them. It gives me some time to observe who they are.

David: There’s an irony to this because nobody likes to get outside of their comfort zone of course, but there are some people that don’t mind those group settings. They actually love them. They get juiced up. These really extroverted people that they get in that big crowd and they’re like oh my God there’s these new people and they’re that like. It’s a dog in a room full of new people. It’s all this stuff to smell right. They just, their tail’s wagging. They’re loving the whole thing. Brandon and I tend to be more like you were—we really hate that to be honest. Like I’m going in there clenching my fists like this is going to be horrible. I would rather be in several like fights to the death in an arena than have to go to a place where I don’t know someone and make conversation. I can’t stand it, but because we don’t like it you tend to notice things that people that are having a great time just don’t. If I know, man I really don’t like meeting people and I’m listening to this person talking. I’m paying a lot more attention to that person to find out well are they are threat or not? Is this a good person are not? Why am I so uncomfortable here? Sometimes you bond with the other guy in the group that also doesn’t like new people. I think that’s really when Brandon and I became best friends was at a Vancouver go abundance trip and we.

Brandon: Yes.

David: We just hung out with each other the whole time because we didn’t, we don’t know everybody right. You don’t know if you could trust him. You don’t know if they’re full of it. I think a lot of people struggle with that, but what happens is your tenant is up and on its scanning so hard that you’re seeing deeper into people than the ones who are just having a good time and it’s always a party and you end up picking up these traits that you developed almost as like a survival tool because you need it to live in that environment. That’s what I want to encourage people about. I have found so many times the thing that I thought was why weakness can become a strength if you put it in the right position.

You mentioned earlier that you started at a commercial brokerage and I wanted to ask you. Why did you pick that from a pizza chain? Like that’s a huge jump. You did a lot of things that we always say. Oh you worked for a year and you didn’t make any money yet. You mentored from somebody. We hear that, those stuff constantly, but one thing that was very unique that you said was I sat across from the guy and I listened to what he said and how he said it. I didn’t just say, “Well who’s going to train me? Who’s going to be my mentor right?” I need someone to train me this thing. You made it your responsibility and you were smart enough to recognize it’s not just knowing how to run the numbers or the metrics, it’s how you talk to the person. How do you convey yourself as a trustworthy person who is representing them, not just a salesperson?

How do you handle the emotional spikes your client’s going through because as we know in sales if you can do that, you can get a deal closed. Man, if you can’t control your client’s fears, they’re backing out of the deal and they’re not going to accomplish their goals. I feel like that ties into what you were saying with I don’t like meeting new people so I better learn how to do it smoothly and now look where you’re at. You’ve got these abilities that most people will or opportunities most people will never have.

Ken: It’s come around and I love that observation there. It’s so true. When I mentor people these days or I talk to people. One of the most important skills I tell people that they need is communication skills. Someone’s coming out of college and going into college. Like go get the communication degree. Learn how to truly communicate with folks and, but yes how did I choose or get in from the pizza business into real estate. Real estate was something I wanted to do out of college. I interviewed at a couple of commercial real estate firms out of college and my emotional intelligence has grown so vastly since back then. I mean I had no skills. I mean no great people skills. No communication skills back then.

I didn’t have follow-up skills. I’d look at my own kids right now, be come on man get it together. I’d really focus on it, but I didn’t have that back then and so I interviewed at a couple places. I did get callbacks. I didn’t really follow up and I was just like oh I guess it’s not for me. I stopped where I was. It was something that I wanted to do from way back then. Why? I didn’t know. It seemed like just an industry that appealed to me. Right, and I had and that was before Rich Dad, Poor Dad. It’s just an industry that seemed to appeal to me and I knew that I would want to one day invest in that kind of stuff so I figured if I can get into it, learn it, that would be great. It just you know it took a side track for a number of years.

David: Well I think a lot of us can relate to that because we just know we love real estate. All of our listeners love real estate. There’s this allure to it that I mean to this day those words real estate will make me stop what I’m doing and pay attention. If I see them.

Brandon: Yes, yes.

David: On the TV, on the news, or I see an article that says, “Real estate. I just immediately think I have to read that.

Ken: Yes.

David: I think there’s a lot of people that are the same way. What you get is you’ve got like this elusive financial freedom and you’ve got all these people that are hearing the word real estate orbiting around it and we’re like how do I get in there? Where’s the door? Then we interview someone like you and that’s what you’re sharing is like this is the road that I took to get in there. That’s what’s so fascinating so you’ve told us, you started at a pizza chain. You were working yourself to the bone. You took a huge gamble on yourself. I’m assuming you set yourself up to where you had enough money that you could go 11 months without making a check. Really 12 because $1,800 isn’t really money.

Ken: Yes.

David: Can you tell us from that entry point what your portfolio looks like now? What are the different real estate holdings that you have and what businesses do you own?

Ken: Sure so today it’s I own a commercial real estate brokerage team. Okay they’re being at least advisors. We sell triple net investment properties. We were at buyers and sellers that tripled their investment properties. I’ve got at Keller Williams franchise in Abilene, Texas. I’ve got the laundromat. We’re launching laundry love, opening up for active businesses and then we have, I have a separate company that’s just an investment company we use.

It’s really just a separate LLC that we use as an investing LLC and then our last company that we just launched is Legacy of Love, parent to child journaling program that we launched. Those are active businesses. Then an income producing properties it’s single tenant office properties, a couple of those. Some oil and gas holdings. We had some family landholdings that we made investments in almost 20 years ago that a bunch of our family members went in and made some investments 20 years ago. It’s interesting. I mentioned earlier that the land business is a long-term play and.

Brandon: Yes.

Ken: That land that we invested in 20 years ago is just now finally being developed and it’s being developed into something magnificent. It was a thousand acres of land being developed in this magnificent mixed use property, but also out of that I’ll say because we ended up with some oil and gas holdings out of that.

We got oil and gas holdings. We’ve got. I’m invested in this, some other people’s deal. I’ve got a friend of mine that has a not a REET, but it’s a private fund that is for commercial real estate assets. He actually has two funds. One is for cash flow and the other is for appreciation. I’m invested in his appreciation fund right now because I was invested in another find he did and it turned out incredibly well. Went back into his next fund right there. I’m invested into a mixed use development that the guy that I did that first deal with in or that didn’t work out in that I ended up just having—getting the commission on. That guy and I.

Brandon: Yes.

Ken: Invested in a project together. He developed a mixed use project. In fact, that’s where I’m sitting is in the office in that mixed-use project right there. We’re invested in a residential REET and in the shopping center that I mentioned and then we just put a little money in my cousin’s developing some class A multifamily and we’ve got some funds in that as well.

Brandon: Nice, so you’re spread out pretty wide. I want to talk about this. I don’t think that’s a bad thing, but it’s something that you know a lot of people when they’re getting started with real estate, they’re just getting into the game. They’re like I want to do this. I want to do this. I want to do this. I want to do this. Like how do you balance being diversified with focus. Like how do you look at those two things.

Ken: Yes, well everything I’m doing personally, it’s in the shopping center business. Right it’s if it’s me personally, we’re doing. The reason I have the office buildings is because they house the businesses that I own. Right so.

Brandon: Yes.

Ken: Personally, right now when we’re anything I’m buying right now personally is we’re looking at shopping centers for future laundromats. All the other stuff I’m invested in other people’s deals.

Brandon: Cool.

Ken: Pat Highman made a comment a few years ago that really stuck with me. This was a lot of this happened just in the last probably five years and Highman made a comment and said, “I own a small percentage of a lot of deals and they all add up.”

Brandon: Yes.

Ken: Ding, ding, ding, ding, ding because I’ve been trying to just put together my own deals there. You know, I should be putting a little bit of money into other people’s deals here and.

Brandon: Yes.

Ken: It just hadn’t hit me at that point. Honestly until he made that comment and so. From there, I started you know putting a little money here and there into other folks deals and some of them have really paid off quite nicely.

Hey, I hope you enjoyed today’s show, but before we go any further I did want to bring in one of today’s show sponsors. Stay tuned and we’ll be back to the interview in just a moment.

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I’m curious about as an investor, somebody who puts money into other people’s deals. A lot of people listening to the show right now are looking to raise money from people like you potentially right. They want to go and put together that deal. I’m curious what makes an investment attractive to you? To a guy like you who you’ve got some income. You’ve got some good businesses running in different ways so you got some maybe some money to put into a deal. Like how can somebody stand out to you or to putting that you particular, but that’s a person like you and to make you want to go into a deal with them?

Ken: You know, for me as much as anything it’s the person putting together the deal right. Do I believe in the person? Do they have a track record? Look, we all started off at some point with no track records so we’ve all got to do our first deal there.

Brandon: Yes.

Ken: I would put money into someone with their first deal if I believed in that first deal. Now I’m not going to deduct the farm on them on their first deal, but I would put money into someone’s deal if I really believed in that person, in the project they’re working on. The other though for me is it’s got to be an asset class that I believe in. Right and something that I understand and I believe in. If they’re going into esoteric asset class that I do understand, no thanks. The biggest deal I’ve ever lost, ever lost we invested money into life settlements. Okay, you know what life settlements are. It’s where people are betting on.

Brandon: I don’t even know.

Ken: You’re buying insurance policies on people that are terminally ill. Okay, it’s the life settlement.

Brandon: Wow.

Ken: Means this and there’s a whole industry out there because some of these people. It was in theory a very viable industry. You know people are terminally ill. They said they had a $10 million insurance policy. Like they’ve got less than a year or two to live and they said, “Look I can cash out on this policy today and sell it for three or $4 million.” Right and I’ve had the money today. Someone else has the insurance policy and they created an entire industry out of this. Well, we invested. This is a family holdings we did and we invested $80,000 into this company or into some policies that this company was promoting and later the guy that ran that was indicted and sent to prison and they had.

Brandon: Oh wow.

Ken: They had falsified underwriting reports and it was just a big mess and we lost a massive amount of money on that deal. I did understand it. Right I mean I understood it in theory.

Brandon: Yes.

Ken: I didn’t understand in the nuts and bolts and so if I can’t understand it, the nuts and bolts are not. That was a great lesson right where they say you learn from the losers right there. That was a great lesson to me and avoid those things that seem too good to be true. Walk away.

David: Yes.

Brandon: There’s a whole lesson on that in Richest Man in Babylon.

David: That’s what I was just about to say.

Brandon: We’re together too.

David: One of my, the best piece of advice in that book is don’t invest in something that you don’t understand. That simple. Maybe a great deal. Numbers might look on paper. The people might be super influential. If you just hold true to that, that sounds great. I hope you guys make a whole bunch of money. I don’t get how this thing works. That’s not my deal. In fact, I’ve rarely ever heard about somebody who lost money on a deal that wasn’t breaking that rule or at least one of the rules in that book. I see that all the time.

Ken: There’s all kinds of asset classes that are out there right then people try to get me to look at or invest in and I just. Like the crypto world, I don’t understand that. There’s no way I understand that so.

David: Same thing as me or cannabis, that’s another one that’s coming up all the time.

Brandon: Yes.

David: Everybody is jumping into it I’m like hey that’s really that’s really cool. Ben Kinney said something I really liked when we interviewed him. He said, “I only want to do stuff that would leave the legacy I want to be remembered for. I don’t want to be remembered as a drug dealer or a pot buyer so I’m just not going to do it.” Right? He didn’t say it’s bad. You shouldn’t do it. It’s a bad business. Just he didn’t, that didn’t align with how he wanted to remembered. It was very simple. Not my deal. I feel like a lot of the time knowing what to eliminate is a better tool than just knowing how to find a deal. Having a criteria that you can say “No, no, no.” Makes it a lot simple.

Brandon: Yes.

Ken: Saying no is an important thing.

Brandon: It’s very important so let’s get a couple specifics also. It’s not often that we get a commercial real estate broker here on the show. I wanted to ask you a couple of those questions about the industry, about people who want to get into commercial real estate. Maybe they own some residential and they’re like I don’t know. I want to buy something commercial. I want to buy that shopping center.

I guess the first question I have all—I’ll fire a couple of them at you, but first of all, how do you find a good commercial broker? I mean is it like? It’s different than residential. How do I find somebody who’s actually, I want to go buy for example. Me personally, like I want to get heavily into mobile home parks over the next three years. I got a goal of a thousand units in three years. I got to find some mobile home park brokers right? I mean somebody that can deal with that or I want to buy a shopping center. How do I do it?

Ken: Well you made the right move. I already introduced you the guy on the mobile home parks right there so.

Brandon: That you did. Yes.

Ken: Use your network number one, use your network to get introduced to people. The other because right nothing’s better than a, not just a warm introduction, but a validation. When someone says, this guy is it. Right, he’s done it. I’ve seen it. He’s valid. Using your network as, if you don’t have that there are industry associations, commercial real estate industry associations like in Dallas, there’s more Texas commercial association of realtors. I’ve met some great clients okay so exactly just that. I met a great client at one of those little coffee and networking events.

Go to some of the little industry or local realtor association, commercial realtor association, trade groups right there. Then CCIM is a phenomenal trade group within the commercial real estate world that is professional brokers didn’t really understand underwriting of things. CCIM and SIOR are a couple of designations and if you look for brokers that have that.

Brandon: Okay.

Ken: At least they’re going to understand the underwriting and frankly, both of those designations have a pretty big portfolio of experience required for you to become a member so a couple things to look for.

Brandon: Okay, yes, that makes sense. I like the network part of that too is yes, I did. You introduced me to.

Ken: Buddy.

Brandon: To mobile home, yes Buddy and you gave me a couple people to connect with because like you’re just anyway. Use your network.

Ken: That’s what David said earlier. Right in our relationship connection. That’s and I enjoyed that right.

Brandon: Yes. There it is.

Ken: He helped someone with a connection. I love that. Right so he said, “Ooh you meet so and so.” That gives me energy, but just going up and meeting people in a random room does not give me energy.

Brandon: There you go.

David: Right, so I love that because we tell people all the time relationships is where it’s at and then a lot of people they understand the concept, but they don’t always know how to actually go about doing it. Finding the broker is like finding a fisherman that will bring you fish. That’s how big people get deals is they’re not just doing a direct mail campaign looking for the fish themselves. They found someone who already has that network established, a bunch of nets out there and they go get the fish from that person. What about when you want to pick a market? What are things that somebody should look for in an area where they want to be invest in multifamily?

Ken: Right, for me it’s the market that you’re already in. Okay there’s, unless there’s just some compelling reason why your market is terrible. There is nothing going in it. I’d say it’s the market that you drive that you know and you pass every single day and start with that market. Think of everything you drive by and see on a daily basis right there or that you can go and inspect on a daily basis. Now I’ve invested I mentioned in Abilene, a west Texas market, but I’m out there all the time. We’ve got a franchise out there. I unless I’m in someone else’s deal that’s in another market, I’m looking to my local market to invest.

David: Okay so let’s say I’ve just hired you to be my coach and I want you to help me find commercial property. Can you give me the steps that you’re going to put me through? Hey David, do this. Learn this part then move on to here, then move on to here and kind of give us an overview of what somebody needs to do if they want to be a multifamily investor.

Ken: Yes, if I would tell someone first, I’d put them through a couple of courses that we can send them to online and have them learn just the basics of industry right there, but if you want to invest. Let’s say first let’s pick an asset class whether it’s shopping centers or a multifamily or office buildings or whatever or stealth storage buildings or mobile home parks, whatever it is. First pick the asset class. Next, let’s identify everything in your city.

Let’s say you live in Cleveland. All right, so let’s identify every property in a five mile radius from where you live right there that is in that asset class. Then we’re going to look up the ownership and the details of all that. Then we’re going to start contacting the owners and start and get to know the owners of each one of those. Not welcoming to the steps of how to they can go about that, but it’s I heard and we’re just studying these podcasts recently and these. What he said is exactly, go to the tax roles. You can get the basic data from the tax rolls. Then you can go Google the address or the name.

Brandon: Yes.

Ken: Start getting the phone number or email address. You know, start contacting these people and they can introductions of yourself and learning about their property and their asset. In addition to that, you can set some Google alerts related to your asset class and you’ll get emails every single day related to your asset class and you start learning immense amount just by reading two or three articles a day.

Brandon: That’s a good tip.

Ken: Related to your asset class.

Brandon: Yes. That’s a great tip. Sorry, I didn’t mean to cut you off. I just thought man that’s such a good tip.

Ken: Yes.

Brandon: The Google.

Ken: Look.

Brandon: Google alerts for your asset class. I’m going to totally do that today.

Ken: I’ve done that for several things I wanted to learn about and I get these Google.

Brandon: Yes.

Ken: Alerts and eventually it was just too much email so I turned them off.

Brandon: Yes.

Ken: When I wanted to learn about something, it’s a great way to do it. You should also by the way a side note put your own name into Google alert and that way if it ever comes up after.

Brandon: Yes.

Ken: You get a note.

Brandon: There’s a famous skateboarder named Brandon Turner. Then there’s me so.

Ken: You might not want to do that.

Brandon: I might well yes.

David: What is a Google alert?

Ken: What’s a Google alert?

Brandon: Yes.

Ken: You can go onto your Google account settings and go into. I forget where you go, but you can go. You can Google Google alerts. It’s in your settings and you can type in any subject that you want to be notified about and you can either get a daily or a weekly email from Google and it will have the different headlines of anytime that name or phrase or whatever popped up in.

David: Like the top log articles, the top things that somebody wrote.

Ken: Yes.

David: People could do this for BiggerPockets and see all the new videos that come out and all the blog posts.

Ken: Everyone, everyone should go set a Google alert for BiggerPockets right now.

Brandon: There might be a few too many emails.

Ken: There’s your Quick Tip.

David: That’s a great idea actually.

Brandon: There is a great tip. All right, so you so just to recap real quick. You know if somebody wanted to get to your spot or you know and get started, you were helping them they should get the education. They really got to like learn what they’re doing here.

Ken: Yes.

Brandon: They got to network. They got to start getting the Google alerts. What else can you throw at them?

Ken: Learn about the properties that are in your market right there.

Brandon: Oh yes, the asset yes.

Ken: Start okay. Then when we’re calling them. Oh hey, set up coffee or lunches with the owners of these asset class and just get to know them. Start talking to them. Get known as the local real estate investor that’s out there. Hey, I’m looking to invest in this kind of stuff right here. What can you tell me about what you’ve learned? It is amazing how generous people are with their time and what they’ll share with you and what you can learn from others.

Brandon: Yes. That’s neat. All right, that’s really really good and again this is fantastic and actually you know David and I have been talking lately about introducing maybe a new segment to the show, which we haven’t officially done yet, but maybe it will come.

Basically, like I want to like ask people how like how break down like a five-step process to get to where you are today. That’s pretty much what you just did. You’re like, “Hey if you want to—if you want to invest in commercial deals like I do, do these things.” The funny thing is most people won’t go out and do them. They’re just going to be like yes that’s good advice. They’re not going to go out and do that. I would encourage anybody listening like don’t just take what he said as like oh yes, that’s a good idea, but like how can you actually put all that stuff into practice like starting today?

Ken: Well and the other thing is so once you start learning then you’re going to learn how to underwrite the properties right? I know you guys have tools to help people underwrite different things and there’s tools if you take so CCIM, the industry group I mentioned.

Brandon: Yes.

Ken: Has some great tools that you can use and there’s other subscription service tools that you can use, but you’ve got to figure out how to underwrite properties and say set a goal. Underwrite two properties a week. Right? If you sat there and said all right.

Brandon: Yes.

Ken: This is my commitment. I’m going to underwrite two properties a week and I’m just going to look at. Even if you have no way to complete a transaction today because you come across a homerun guess what? You’re going to figure out a way to complete the transaction.

Brandon: Yes. That is fantastic advice. That’s another one of those moments where people need to hit that rewind button on the podcast app like two times and like listen to that again because this applies to everybody. You’re trying to get into industrial, commercial, residential, it doesn’t matter. Set a goal, how many deals you’re going to analyze and start doing it. This is like we interviewed the author of the book, Four Disciplines of Execution, Chris McChesney recently and that was his big thing.

It’s like get some lead measures. Like what is your lead measure? Things that you can act on and do so I love that you said that. Now, before we move on. We got to do the deal deep dive and we’re going to go into the Famous Four and Fire Round, but I want to know more about this Legacy of Love thing. I’ve heard that you use the word once today and I’ve heard a little bit about it, but where did this come from? What is it? Kind of walk us through that.

Ken: Sure, Legacy of Love is it was a passion project is what it was. I’m most important in my life. I am father of three children and husband of an amazing wife. I mean that’s. If I’m not doing those things right then nothing else matters and when my children were very small. In fact my daughter was one and my son was still in the womb I made a commitment to start journaling to each one of them. Just to slow down, not let the moments pass and capture some little moments and it was a cool little exercise at first it was just how cute they were and the little stuff they’re doing and as time went on the entries became quite deep and involved.

I would write about their growth and their involvement in my own personal struggles in our family. I wrote and journaled through the 2008-2009 financial crisis and what that did and what that took to get through during that time actually ended up getting divorced from my older kids mom and I wrote and journaled about those things. It’s just a very private process that I was going through and the intent all along I was going to just do this. Never tell anyone about it and give it to each of my kids at their high school graduation. There’s going to be 18 years of their life through my eyes. However, over the years I’ve shared this concept with lots and lots especially dads and then I’d search it with moms and just parents in general.

Brandon: Yes.

Ken: I’m like hey here’s something you got to think about if you’ve got kids just saving some moments for them and everyone—always like holy cow. That is a phenomenal idea and I’m I love—a lot of parents are taking action on that and then other folks will start calling me and say, “Ken you need to do something with that idea.” It just planted the seed in my head. I actually, you know fellow Go Abundance member, Daniel Ramsey in Vietnam had told me, he said, “Ken that is the most amazing idea I’ve heard and if you don’t do anything to that I’m going to take my foot and just kick your ass you know personally I’m that because that’s just a phenomenal idea.” It really the more encouragement I got to start thinking I’m going to develop something with it. The final straw was I went to a private mastermind through Go Abundance with Jeff Hoffman, the founder Priceline.com.

Brandon: Yes.

Ken: I had an opportunity to sit down private with Jeff and tell him about the idea and what I’ve been doing for my kids and the concept of bringing that to market and Jeff is like that’s a great idea. You need to move on it and take action and so I did. I spent the last 18 months and we’ve created a cross-platform program me and you can use it on the web, on your phone, on your tablet. It all syncs together like an Evernote or a Onenote type process and a place, it’s very private unlike a social network. This is a very private thing that you can insert photos, videos, text, voice note, voicemail so you can save like when a little kid leaves you that sweet little voicemail. I remember my son he left this sweetest little voicemail now I keep them forever and they’re gone. I don’t know where they are. You know eventually the iPhone updates.

Brandon: Yes.

Ken: Or whatever, but now we’ve got a place where parents can save all that stuff and then pass down for future generations and so this was anyways it was a passion project for years that’s now become something that I think it will be very big. Our goal is to grow this thing to 10 million subscribers so and today we’ve got like 200.

Brandon: That’s cool. Yes.

Ken: We start in here and go to $10 million.

Brandon: Okay so I mean I know this is a real estate show, but there are a lot of parents that are listening to the show right now. If somebody wants to check it out where do they go?

Ken: LegacyOfLove.App. That’s .app.

Brandon: Okay.

Ken: LegacyOfLove.app. We’re on the iPhone or the iOS in the Android stores. You can download the apps there. It’s a free download. It’s a free program. It’s a Freemium model so we have some Premium subscriptions and you know what if any of your listeners actually want a premium subscription, we’ll add a discount code pockets. Yes, we’ll add a discount code of pockets and we’ll 20% discount off of any of our Premium stuff if they want it.

Brandon: That’s awesome dude. Thanks.

Ken: Yes, you know happy.

Brandon: That’s very cool.

Ken: Happy to.

Brandon: Yes, I love that because I mean my parents did something somewhat similar and then we’ll move on after this, but like they didn’t journal every day, but when we were real young. I mean like under two years old my parents wrote a letter to us. Each of the kids, we had four kids in my family and it was like. It was like I don’t know I think mine was 12 pages long. It took about a year to write it and it was like their hopes and dreams for us. What they were seeing already kind of traits. Just really really cool and then they gave it to each of us on our 12th birthday and we got to travel anywhere in the world we wanted to go on our 12th birthday as a family vacation then when we would go there we open the letter. I did mine. I opened it at Sea World in San Diego. That was my favorite. Like that was like where I wanted to go. Anyway, it was this just yes. It was such a cool thing.

Ken: Beautiful story.

Brandon: Thanks, yes. It was such a great just thing you know. So I don’t know. I love that like that time invested now that it takes a long time maybe to do stuff like that like the Legacy of Love. Over the years, but man it pays off in memories long term.

Ken: Well, the really cool thing so when I did it I thought how much time is this going to take me to do something like this? I just a commit. I’ll do one entry a month. Right because that was reasonable to do one entry a month.

Brandon: Yes.

Ken: Per kid, but now 15 years later, there’s hundreds and hundreds of entries and I go through them and I look at the evolution of our lives and it is a. It means as much to me as it ever will to them to go back and look through these things. Yes.

Brandon: That’s cool.

Ken: Yes.

Brandon: That’s awesome Ken. Well all right so we got to move this show along. This has been fantastic, but I want to head to the next segment of the show and dive deep into one of your deals so it is time for the Deal Deep Dive.

Hey, it’s Brandon. I want to take a quick break from this podcast episode to invite you to this week’s upcoming webinar how to really invest in rental properties the smart way, S-M-A-R-T. That is an acronym and you will find out what it stands for if you come to this webinar. I’m going to be basically going through the things like how to identify the best type of rental property to buy, the four step daily process that only top investors are using and that you can use as well even if you want just one deal. I’m going to show you how to run the numbers on a rental property in under five minutes. We’ll even do a real-life deal analysis. It’s going to be breaking it down using the acronym smart, S-M-A-R-T. I hope you can attend. It’s going to be awesome. Don’t waste years of your life and tens of thousands of dollars trying to figure out how to do it. Just come to the online class and see exactly how to get started the smart way. Go to BiggerPockets.com/SmartWebinar. Again, BiggerPockets.com/SmartWebinar. I’ll see you there.

All right, let’s get to the Deal Deep Dive. This is a part of the show where we dive deep into one particular real estate investment that you’ve the guest has done so Ken, we’re going to fire some questions at you about one of your deals. You got something in mind that we can drill you on?

Ken: I do. I have a really interesting deal.

Brandon: All right, all right so let’s go through these. We’ll just fire them—you know I think we have eight questions total so the first question. What kind of property is this?

Ken: Land.

Brandon: Land.

Ken: Yes.

Brandon: All right.

David: How did you find this land?

Ken: I drove by it everyday. It was a piece of property that I drove by every day going back and forth to work. I had seen it. It’s on my radar and it was much like I mentioned earlier where I saw a valuable piece of property I thought hey we could put a deal together on this. It was actually the same partner that I had structured that deal with. They said, “Look, this is a great property for an office development.” It was a 6 acre. It was actually three different tracks of land on a major road that was due to be expanded down you know in the next couple of years. It was going to be expanded and it backed up to the 17th Green and 18th Fairway of a golf course. I was like that would make such a cool little office development. We should go put a deal together on that. That’s how it started. Driving by it every day.

Brandon: All right. Cool so normally I ask how much was it, but first how did you. I don’t even know how did you read? Did you read? Did it go for sale or was it for sale or did you reach out to them?

Ken: It was not for sale and we reached out to them. Is what we did.

Brandon: Okay.

Ken: It was three different property.

Brandon: All right, then how.

Ken: When you kind of reached out and we actually had to do mail by one. We couldn’t get him on the phone, but we eventually got all three property owners to respond to us.

Brandon: Okay, how much was it or were they asking originally. Then we’ll go into the three out of four.

Ken: I think it was total around $600,000 in that one. For the three.

David: How did.

Brandon: Okay.

David: How did you negotiate that price?

Ken: Because we knew. I was come on at that time I was in land business. That’s what I did everyday was I was in the land brokerage business and I knew what land values were worth. One of the guys really, there’s actually four tracks of land we tried to buy, but one lady was just too overpriced. She thought she had the Taj Mahal there and what she had was a little really crappy.

Brandon: Yes.

Ken: Little rental home on there that were gone anyway. She still owns that crappy little rental home right there and there’s a beautiful office development surrounding it.

Brandon: How funny.

Ken: Yes.

Brandon: Okay, how did you fund this deal?

Ken: OPM.

Brandon: Other people’s money.

Ken: Other people’s money so I actually. I had a good friend of mine that ran a really successful window and door installation business. Had a lot of excess cash and he was always looking to invest in deals and so my development partner and I went to him. We said, “Hey here’s the deal we’re putting together. Are you interested?” He said, “Absolutely.” He was our sole equity partner in that deal so my development partner and I each had a total of about $10,000. We made $5,000 each into it and we put in earnest money and the equity partner put in the remaining amount. We had a bank in our earn as well.

Brandon: Yes.

Ken: Our banks were lending on land so we had a bank note on as well. He put all the required equity up.

David: Okay, once you bought it, what did you do with it?

Ken: Well, we took it through actually prior to closing on it while it was. While it was in the feasibility due diligence period we took it through the zoning process at the city. Because it was unzoned land or it was—had a default zoning on it so we took it to the city. We did for part of that we did a land plan on it. Laid out what we thought it should be. Then we took it into the city and took about two months to get through with planning and zoning and then the city council, to get zoning approved and then once we closed on it we just kind of sat on it. Is what we did because this was an interesting timing. This was in oh. Oh so I forget, even forgot this part of the story. Here’s what was going to happen. We were going to start the development on it. We were going to start development on the project. It was going to be a $3 million bank loan to start on our first two buildings is what we were going to do. Here’s the irony of everything. The beautiful wife that I am now married to was my banker at the time way back then.

Brandon: Really?

Ken: Ee were going to fund a $3 million note to go close and build our first two buildings. The week before closing our equity partner came to us. Got to admit this is 2008. The markets are starting to melt down already. Like residential market had already melted. The commercial market was starting to melt down and he was in trouble on a couple other deals and he came to us he said, guys there’s no more money. I’m not going to be able to put any more equity into this deal. We’re not going to be able to pull the trigger and at the time we were devastated. We were like oh no we’re not going to be able to start on this project. In hindsight that was the greatest gift we could have ever received because if we would have started on a $3 million project as the markets were cratering, we would’ve been in big trouble.

Brandon: Yes.

Ken: So.

Brandon: But you own the land at least to that point correct?

Ken: Yes, we own the land.

Brandon: Okay.

Ken: We own the land. It was fully titled and ready to go. Here’s the interesting part of that story. Markets crash and nothing’s really happening. The rest of my world starts crashing just you know all the deals I had going in the brokerage business are all falling apart because they’re all land deals and nothing’s happening to land deals at that point. I was way over extended. At that point in my life had a big old house and you know all the show and it was like an anchor around my neck okay so things were just melting down around me as well. Went to a builder friend that I knew and I went to the builder friend who loved this project. In fact, they were going to be the builder for our office project right there and I said, “Hey you guys.” Because he even approached me. “Hey we want in that deal. We want in that deal.” I went to him, I said, “All right, here’s your opportunity. I am in a place where I need to sell and here’s your opportunity if you want in the deal I’ll sell it to you.” I pulled up my closing statements earlier today. It was interesting. I looked at and years and years. My $5,000 that I had invested into that deal I sold for $147,000.

Brandon: Oh wow.

Ken: Because we created value. We took what was just a couple of janky as best as you even rental homes there. We had leveled them. We took it through zoning. We brought this entire. We entitled the property, brought value to the property. We I took $5,000. It became worth $147,000.

Brandon: That’s so cool. That’s a good good ROI right there.

Ken: Exactly a good R. What it was was a blessing. I needed, I was. It was a blessing that it came at a time where I really needed those funds.

Brandon: Yes, cool. I guess the last question. I’ll just kind of wrap up the like what did you learn from the deal? Overall, what did you learn from this experience?

Ken: I really learned that it’s, you can create something out of nothing. Right, you can create and it’s not out of nothing. With a vision it’s an execution on that vision. Right, we had the vision. My partner and I we knew. We sought. We laid it out. We took it through zoning. The council saw it and we were able to entitle this property. We created true value so you can create value out of a vision if you see things that others don’t and they go take action on seeing things that others don’t. That was a big thing for me. That was our first. We had seen it before right, but we weren’t able to see that vision through. In this case we were. I sold my interest and today that’s actually a beautiful. What we had planned. It got modified slightly, but it’s a beautiful office park today.

Brandon: Very neat. Very neat.

Ken: Yes.

Brandon: All right, well cool. That was the Deal Deep Dive and now before we get out of here. Let’s go over to the world-famous, Fire Round.

It’s time for the Fire Round.

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All right, time for the world famous Fire Round. Of course, these questions come direct out of the BiggerPockets forums. You can visit them at biggerpockets.com/forums any time you should. Ask questions there. There’s a whole, actually this entire commercial real estate forum there and people if they have more questions they can always jump in there. Let’s fire a couple of them here at Ken. Number one, Kevin from Beaverson, Oregon asked. He said, “Hey my grandfather had a long career investing in single-family houses, but he just gave me some advice and said start with commercial property. I’m curious. Is that even possible to just jump right into commercial? I always assume it’s mostly unattainable unless you’re may be an accredited investor. Any tips for starting out directly into commercial?”

Ken: First, sure it’s possible to jump into it and not have to start with single-family. As I kind of mentioned in my own journey I own two small rentals and then got out of that business pretty quick so. It’s possible. Much like I mentioned earlier. It’s pick an asset class in commercial. Commercial is a very broad word and a very broad category so pick a specific asset class within commercial real estate. Study it and start small. Right, there are small shopping centers and there are you know power centers and malls. Start small and start with a small multifamily. Start with a small office building. There’s lots of little stick and brick small office buildings that you could pitch would go buy and lease out to someone so. I think it’s super doable and it’s affordable. Start your local market. Learn it. Pick a niche. Stick with it.

David: Beautiful.

Brandon: All right.

David: All right, next question. This is from Joe Strickley in Santa Barbara. I think triple net leases are some of the best deals out there. I’d be interested in any thoughts or experiences on which tenants are considered the best. To me, the US postal service has to be on that list followed by Dollar General and then Starbucks and banks. What kind of businesses are best for triple net leases and what kind of commercial tenants do you look for in general?

Ken: All of those are interesting tenants. Let’s start with the post office. Right, post office, US government guaranteed great tenant to have. Back as far as a credit standpoint. After like everything the devil is in the detail so read some of your government leases and they have. They can have annual cancellations in the leases right there so if for some reason a particular Department did not get funded for that year, your leases can be canceled so like everything the devil it is in the detail.

I do know people that invest in post office and they love them. They post offices have two different types of leases. One where the landlord pays more of the expenses and one where the tenant pays more of the expenses so. So much is in actual reading the actual leases under there. Dollar General, it’s kind of like the golden child right now. They have great credit. They’re expanding at 900 to a thousand stores a year. They they’re same short sales typically our up here year-over-year on these things. The caution on Dollar General is that I just avoid. A lot of them are really small markets. Like 5,000 people or 1,000 people or. What’s going to happen if Dollar General does vacate at the end of your 10 our 15 years on your lease.

Brandon: Yes.

Ken: What are you going to do with a property and a town of a thousand or 5,000. If you’re in a town of 25,000 or more or 50,000 or more. There’s plenty of alternate uses for that so I think just be careful on the location and the size of the town that’s in there. Starbucks, same with Starbucks. Another goldplated credit right there they are popping up everywhere. Solid business model. Here’s the challenge I find with Starbucks. They’re usually, in great locations. The challenge I find with Starbucks is the rent that they pay on those buildings are so high. Often, it’s you know $40-$50 a square foot in a market that you might be paying $20-$25 a square foot in. If Starbucks goes dark at the end of their lease. Now great news is you can pretty much count on them throughout the term of the lease. If they go dark or relocate, which does happen. You know, watch out and they do relocate on occasion. They were paying $40 in a market that you might release at $20.

Brandon: Yes.

Ken: You just lost half of your value right there in your income. Lots of things to pay attention to with these types of leases. I actually wrote, in fact, we can include it in the show notes. I’ll send you a white paper that I wrote.

Brandon: Oh please.

Ken: which had about 10 or 12 metrics I tell people to pay attention to when looking at triple net investments because there’s a lot of things and the rent that the tenant is paying relative to the market rent really affects the value of the property and the amount you’re going to pay for that property.

Brandon: Good to know. Hey, just in case people. We kind of jumped through it without talking about it. In case people aren’t aware, what does it mean triple net lease? What does that mean?

Ken: Sure, triple net. Triple nets refer to taxes, insurance, and maintenance so in a triple net lease typically the tenant is paying their pro out of share or if it’s a single tenant building. The tenant will be paying 100% of the taxes of the insurance and the maintenance. The maintenance I kind of go eh because again the devil’s in the details on the leases. Sometimes there are landlord requirements. People calling them triple net releases, but they’re not true triple net because the landlord may still be required to maintain the parking lot or the structure of the roof of the building. In general, the triple net’s first. The tenant pay the taxes.

Brandon: Yes.

Ken: Insurance and maintenance.

Brandon: Cool, cool, cool. All right and I like that because it definitely reduces some of the variability, variability. Is that the word I’m looking for?

Ken: It does.

Brandon: Anyway.

Ken: When you’re looking it you know basically the base rent is your income.

Brandon: Yes. Yes.

Ken: It makes for easy quick math.

Brandon: Yes, that’s cool. All right, next question. Number three. I’m selling ownership of from Joey. I’m selling ownership in one of my companies for $300 K. With the sale though I’m losing a $40,000 a year salary. If I am just trying to find out, how would you invest the 300 K to try to replace some of that salary? You know I’ve got a couple rental properties right now, but would you you know pay them off? Or would you buy more rentals or something like what would you do with $300 K if you needed to make some income?

Ken: If I am in $300,000 you know for me I’d go buy a shopping center. Honestly I’d buy.

Brandon: Okay.

Ken: It’s the business we’re in. I’d go buy a value add shopping center that had some vacancy. That we could put a couple of tenants in and then increase our NOI and yes if you get $300,000 just think. Get that to a ten cap on there or 10 cash on cash. It’s $30 grand. You get it higher from there. You can almost replace everything.

Brandon: Yes.

Ken: So.

Brandon: All right. Cool.

David: Question number four. Andrew Perkins from Kansas City. My wife and I are 30 years old. I have a four-year-old daughter and a new son on the way. I work full-time, oh and both work full-time plus a little extra. We are both on the same page with the ultimate goal of financial freedom through real estate. However, I find myself obsessively researching networking and other things like that to realize this goal. How do you balance work, family, and investing. Any practical tips and experiences would be appreciated.

Ken: I’d prioritize family first. Okay so I’ll start by saying that I prioritize family first. I also, I wake up early every. I go to bed early and I wake up early. I spend time.

Brandon: Yes, you’re Miracle Morning guy right?

Ken: What’s that?

Brandon: You’re Hal Elrod. You’re a Miracle Morning, Hal Elrod guy right?

Ken: Yes, so that.

Brandon: Like you’ve read, yes.

Ken: Yes, I met Hal at my first Go Abundance conference and I started reading his book on his life out there and that book really shifted. I was already a morning guy, but I was not a purposeful morning guy and then absolutely so now I follow the Miracle Morning process. Which doesn’t take that long to follow that and then get my base start up. I get up at 3:45 in the morning and so to answer your question, I’m up in the morning. My miracle morning barring the exercise because I do the exercise last, but is knocked out by let’s say 4:30 or so. That 4:30 to 6:30 time period, that two hours. There are no obligations on me at all. It’s I’m focused on the things that I need to focus on and sometimes that’s deal analysis. Sometimes specific projects I’m working on. Sometimes it’s a couple of days a week I’ll allocate email time where I’ll jump in there and just get rid of all my emails, but it’s. That’s the me time. If I was looking to get into real estate investing and do some of this. Wake up early, which requires that you go to bed early. If you everyone needs the more and more and more I read people need seven hours of sleep a night. Right so make sure you go to bed at a decent time to get up early, but that time in the morning, there’s no obligations. You don’t have your job obligation or your family or your kids or anything and I think that’s some of the best time. For me, mentally, that’s when I’m at my best is early in the morning.

Brandon: that’s a great tip. Yes, it really really good. All right, well Ken, before we get you out here let’s go to today’s Famous Four. These are the same four questions we ask every guest every week, but before we get to them let’s hear what’s going on this week over on the BiggerPockets Business Podcast with our buddy, J Scott

J: Hey Brandon and David. We have a great BiggerPockets Business podcast episode this week. We’ve got a guy named Roux Hill. He owns a surf coaching resort. Exactly what it sounds like. It’s a place where you can go to learn how to surf and have a great vacation. He’s used technology. He’s used science. He’s used data to build an amazing business that’s a lot different then what you would probably expect from a surfer dude. He’s going to tell as all about how he’s built his business. How he’s built his team and how he’s built his resort so tune in this week on the BiggerPockets Business Podcast. Okay, now everybody get back to your Famous Four.

Brandon: All right, time for our Famous Four. The same four questions again that we ask every guest, every week so Ken, number one do you have a favorite real estate related book?

Ken: Yes, probably the Million.

Brandon: All right, number two. I’m just kidding Ken.

Ken: Yes, Millionaire Real Estate Investor. Right Gary Keller.

Brandon: Okay.

Ken: Jay Papasan.

Brandon: Yes.

Ken: You know, I read Rich Dad, Poor Dad and it was phenomenal and it kind of got me started, but Millionaire Real Estate Investor it got me fascinated with things when I read that and it talked about putting the team together and really starting to understand the different components that you’ve put together and to be able to acts fast once you had deal because it had this team in a group that you had so so. That for me was my favorite real estate related books.

David: All right, next question. Number two, what is your favorite business book?

Ken: Scale by Jeff Hoffman, David Finkel. Incredible book about how to systematize and scale your business.

Brandon: Cool, actually for whatever random reason have two copies of that book. I don’t know why, but I have two copies on my shelf so. Yes.

Ken: Read it.

Brandon: Yes, good stuff. Yes, I have read it. It’s good. It is very very good. Number.

David: You have two copies because that book his scaling itself.

Brandon: It is.

David: It’s replicating.

Brandon: It is scaling itself.

David: Systemize.

Ken: That’s it.

Brandon: Well I think somebody sent me one and I think the other one I bought on Amazon.

David: Probably, I think we got one from Go Abundance I think. That’s probably what it was.

Brandon: Oh maybe that’s what it was. Maybe I got one in.

David: When he came to speak to us they sent it to us. All right, number three what are your hobbies?

Ken: We’re a big ranch family. We love time out on the ranch, fishing, hunting, exploring, hiking, shooting guns. I have a problem I’ve collected probably 28 more guns now so you have to get up the ranch and go shoot out some fire power then.

David: Nice.

Ken: yes, I love travel especially with my family. We usually do one really cool trip every year. We’ve been to Diego Garcia to Costa Rica, to Baja Peninsula in Mexico. Did an epic trip together to Rocky Mountain National Park. The Yellowstone National Park and Grand Teton National Park so love any of that.

Brandon: Wow.

Ken: Kind of travel the family and then other hobby is I love adventure and so I’ve done nine Tough Mudder adventure races and I’ll do.

Brandon: Oh cool.

Ken: My camp here in September. That’s kind of a little thing of mine I like to do.

Brandon: That’s cool. I was just thinking I might sign-up. I might have signed up for one of them triathlon this week. Well Saturday.

Ken: Nice.

Brandon: You know, half Ironman this Saturday. I’m like what do I do after that? Maybe I’ll do a Tough Mudder. I don’t know.

Ken: Come on. Join my team.

Brandon: We’ll see. Yes, yes we’ll see. Number four, Ken what sets apart successful real estate investors from those who give up, fail, or never get started?

Ken: I think a few, I mean there’s a lot of things. I’ll give you three attributes that I think and one is I think that they understand their why. They understand their kind of purpose and why they’re going about real estate investing. I think that’s why I wasn’t a successful real estate investor when I started a long time ago. It was just something that sounded good. Not that I should do, but I didn’t have the purpose behind it and why am I doing it. I think once we all understand our why it helps us to be much much more successful investors. Number two, I think that they’re willing to make a decision and take action. Because so many people there’s analysis paralysis and you’ll think yes, I’ll study deals. I’ll look at deals. I’ll think about deals, but if we don’t take action nothing happens. You’ve got to be one.

Brandon: Yes.

Ken: To take action and as I mentioned earlier, get out of their comfort zone. Start taking that action and then the third would be they’ve got to have a certain tolerance for risk. It doesn’t mean they’re like seeking risk, but every single investment has a certain degree of risk to it. There’s things we can do to mitigate that risk, but if someone is just ultraconservative. They have no tolerance for risk then investing might not be the best gig for them.

Brandon: All right.

David: Awesome.

Brandon: Good answers. All right.

David: All right Ken last question of the day. Tell us where could people find out more about you?

Ken: Well, it even with the email me about any real estate related things. It’s [email protected], N-E-T-L-E-A-S-E.com. Any information on Legacy of Love. It’s [email protected] On Facebook, you can find me. Ken Wimberley. It’s actually my Facebook name is Lord Wimberley. There’s a whole other story there. Our Legacy of Love Facebook page. It’s Legacy of Love App and on LinkedIn it’s Ken Wimberley CCIM.

Brandon: Well dude this has been awesome. Thank you so much for being on the show today. Good luck on the Legacy of Love thing too. I mean like, I mean we talk about of cool stuff today, but I just think that’s such a cool thing so. You know, good luck on that and everybody out there go sign up for it and go check it out because if you’ve got kids they’re going to thank you in 20 years from now.

Ken: Absolutely. Thanks so much, it’s been great hanging out with you guys.

Brandon: All right, talk to you later.

Ken: Appreciate it.

Brandon: All right, that was our show with Ken Wimberly. Awesome dude, awesome stuff he’s got going on. His story is so interesting to me. Just how his arc of doing so many different things to get to where he is today.

David: Yes, he’s got a lot to share and even though he does a lot of different things, there’s a common thread in all of them and that’s why he does well because.

Brandon: Yes.

David: He understands that niche.

Brandon: Yes, very very much so so yes I’m looking forward to see where that goes. I can’t wait just watch you kind of Legacy of Love thing take off because I think people are going to love that so and yes. Good dude so yes commercial real estate definitely interesting thing. I triple net leases man. I would love to get into that some day. I’m holding off for now because again you got to thicken asset like it. That was one of the most powerful things I think he said today is like he said it numerous times. Pick an asset. Like people like I want to buy you know all sorts of things. Just pick something. What are you going to do? Right? Are you going to do you know whatever. Just pick something. Shopping centers or I’m going to buy factories or office buildings. Just pick something. Go learn everything you can on it. Set up those Google alerts and get it done. Very very good advice from Ken.

David: It’s very good advice and you gave that to me when we were in Hawaii I’ve been thinking about it quite a bit. Like it doesn’t matter what you pick.

Brandon: It doesn’t matter.

David: You just have a good thing and then.

Brandon: Yes.

David: Go dominate it.

Brandon: Yes, yes I actually say that a lot because I’m like people get torn all the time over like what should I do. I don’t know if should go this way or that way or this way or that way. At the end of day it does not matter. It really doesn’t. You’ll never know if you picked wrong. Like oh I should have gone into industrial and I went into commercial. You know, no one’s you’re never going to oh I picked the wrong one. Just as long as you pick one and put your heart and soul into it you’re going to be fine so for those people out there struggling with indecision right now just know that it really doesn’t matter all that much. Just seek to become the best at whatever it is you choose. It’s kind of like that way with like this is way deeper than we need to go in this podcast, but I’ll say like almost with like spouses. You know like I think I’ve heard people like, “Ah I’m not sure if I picked the absolutely perfect person.” Or you know I really like them a lot, but I’m not sure if I should get married to them because I’m not just sure if they’re quite perfect. What if somebody more perfect comes out later? I always generally my advice to those people is like like you’ll make it good enough. Like just you know if they’re good enough like this maybe is horrible advice, but if they’re good enough go with it. Like if you feel it and you’re like yes they’re good. Go with it. You’ll figure it out. Like you’re going to choose based on your actions whether or not your marriage is good enough so I’m not saying go marry someone horrible, but just that make sense. Am I just am I crazy here?

David: No, I think what you’re saying is most of us our more powerful than we think we are. We will make the choice that we make.

Brandon: Thank you for making that.

David: Good. It’s not the actual choice.

Brandon: Yes, I’m better. Yes, yes it’s not like a choice. It’s you have the responsibility to make something good or not good. Stop thinking that like the universe has like this absolute what’s good and what’s going to be good and what’s going to be bad for you. It’s like you make it good or bad. You control your life. Anyway, off my soapbox and I’m going to go eat some breakfast.

David: Awesome, well I had a great time today. Thank you for being.

Brandon: Me too.

David: Thank you for being a great host and making the way for a cohost like me, Brandon.

Brandon: Well thank you.

David: This is David Green for Brandon the philosopher Turner. Signing off.

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In This Episode We Cover:

  • How he builds relationships
  • How he learned the commercial business sitting across from a mentor and listening
  • How he buys laundromats
  • Investing in commercial spaces
  • Using OPM to buy land and selling a 5K investment for 150K 
  • How he earned a commission of 50K on a deal he couldn’t do
  • How he chooses his business partners
  • His morning routine
  • What to look for in a potential partner to disqualify them
  • How newbies should start off investing in commercial property
  • How to balance investing with family time
  • How he structures deals
  • Tips on owning a business inside your commercial building
  • How he invests in other people’s deals
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “No matter how smart the potential partner, it’s still better to find someone with a growth mindset.” (Tweet This!)
  • “Integrity is the foundation of any partnership.” (Tweet This!)
  • “Own a small percentage of a lot of deals because they add up.” (Tweet This!)
  • “Walk away from things that seem too good to be true.” (Tweet This!)
  • “Saying no is a very important thing.” (Tweet This!)
  • “You can create something out of nothing.” (Tweet This!)

Connect with Ken

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.

    Chris T. rental_property_investor from Charlotte, NC
    Replied 5 months ago
    Fantastic episode! Great to hear more on the commercial side which so much focus usually on residential investing.
    Chad New from Orange County California
    Replied 5 months ago
    Great show guys. It is nice to hear someone successful admit they got burned in the life settlement investment. I have been kicking myself for years for making such a blunder. Would it be possible add the white paper Ken spoke of to the episode page? I just started to listen to you guys as I am five years away from retiring from law enforcement and am educating myself for the next chapter in my life, Real Estate.
    Kaenan Whitman specialist from Sonora, CA
    Replied 4 months ago
    Great show and thanks for sharing Ken. Just curious if you guys posted the white paper Ken wrote on the 10 or 12 metrics people should pay attention to when looking at NNN investments. Thanks again!
    Justin Gittins from La Mesa, California
    Replied 13 days ago
    Ken had mentioned he'd leave a white paper on the 12 metrics he uses for NNN investing, has he done that? Can you please ask him to provide that.