On today’s episode of the BiggerPockets Podcast, we talk with one of the most influential voices in the real estate investing world today – Ken McElroy.
Ken, the author of The ABC’s of Real Estate Investing and several other influential books, shares his story of getting started with nothing and building up a real estate investment company with thousands of units and hundreds of employees. Ken has a lot of great advice and knowledge for people at all stages of their investing careers, and shares it in a fun, entertaining manner.
On today’s show we’re going to talk a lot about getting started, raising capital, and investing in large apartment complexes for big wins. Don’t miss a second of this exciting show!
Read the transcript for episode 52 with Ken McElroy here.
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In This Show, We Cover:
- Getting started with no money – through property management
Why should someone invest in multifamily properties?- Using other people’s money to invest in real estate
- Investing at a distance vs. investing locally
- Determining the best locations and markets to invest in real estate
- Cash flow vs. appreciation: which is best?
- Ken’s newest $9 million dollar project
- Why Ken loves bad landlords
- How to find amazing apartment complex deals
- Raising millions of dollars in 20 minutes
- How to find a great property manager?
- Should someone start with Apartment Complex Investing?
- The worst mistake you can make as a real estate investing
Links from the Show
- What is a Cap Rate? (Capitalization Rate) (article about Cap Rates)
- BiggerPockets Presents: The 21 Best Real Estate Books Ever
Books Mentioned in the Show
- The Art of the Deal by Donald Trump
- The Best Real Estate Advice I Ever Received by Donald Trump
- Turning Pro by Steven Pressfield
- Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization by Dave Logan
- The Crash Course: The Unsustainable Future Of Our Economy, Energy, And Environment by Chris Martenson
- The ABC’s of Real Estate Investing by Ken McElroy
- The Advanced Guide to Real Estate Investing by Ken McElroy
Tweetable Topics
The faster you fail, the smarter you get. (Tweet This!)
“You don’t need to be an expert at everything.”(Tweet This!)
There’s a lot more money out there than deals. (Tweet This!)
The best deals are generated from face to face relationships. (Tweet This!)
The entire goal of my company is to replace myself. (Tweet This!)
Connect with Ken
- Ken’s Website: KenMcElroy.com
- Ken’s BiggerPockets Profile
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38 Comments
Amazing Listen!
I am began on single family homes. I think I have shy’d away from Commercial mainly because I did not understand it. As a newer investor I think a good base to start with is finding a duplex or triplex to understand the fundamentals of the business. I think Fear is what stops many of us as newbies from moving forward and investing in that piece of commercial real estate. Taking gradual steps and educating yourself along the way is key.
Sounds like Im your path. Next up, Duplex/Triplex ! 🙂
Wow! Ken McElroy! What a surprise! Who’s next? Robert Kiyosaki himself? What a great Podcast you guys. Some really great information and advice. I like his point about property management being a very important but often overlooked part of a successful deal – makes total sense. It’s all part of the forced appreciaton equation. And there’s definitely no way you can get that successful without surrounding yourself with a lot of great people. Also like the part about studying the demographics, job growth, (since he needs renters) and getting out there and meeting the top people face to face, looking at deals, getting on their mailing lists, etc. – all good advice, same advice he gives in his books.
The Mac Daddy….wicked smart.
Wow you got Ken on the show. Great show.
Frank
Way cool guys. WAY cool! Ken’s book was one of the first real “game changers” for me when I was starting out as a new investor. I am PUMPED to hear this podcast!
Don’t miss it, Seth. Ken is a good guy and is candid in this fascinating interview.
EPIC times EPIC to the infinite power. Great show Josh and Brandon. Thank you Ken!
Hey Douglas — It was definitely a great show! Thanks for listening and please share it . . .
You bet I have and will Josh! Great great stuff that was very sober take on what it takes.
Hey, hey, I read the book and thought it was great! Glad to see him on the show.
No way! Ken McElroy!? I just downloaded this podcase and CAN’T WAIT to listen to it later in the car. I have read Ken’s “ABC of real estate investing.” It is very inspiring and got me interested in looking at commerical properties. I also just order his other book “The Advanced guide to real estate” from Amazon. It is still in the mail and I can’t wait to receive it and start reading that too!
Josh, Brandon, you guys are awesome. Keep up the great work. BP Rocks!
Thanks Sam! Let us know your thoughts once you listen — it’s another great one!
Although cheap does not mean that there are no renters. There are many investors doing very well in Cleveland. You just have to analyze all investments individually per submarket.
I was introduced to McElroy from “The Real Book of Real Estate” I then read his ABC books then listened to the Real Estate Guys talking about him.. Now he is a Bigger pockets podcast contributor and I am on the verge of Idol worship :). Seriously though K.M. Thanks for the help, and Bigger Pockets you continue to impress me this site is awesome..
Thanks Adam!
This was a great podcast, really enjoyed it. Its good to also know hes a good guy that always is a plus. Lots of good insight.
Thanks for listening, Albert! I’m glad you enjoyed the show.
Great podcast guys!
Regarding job growth studies for due diligence as to where to buy, I would love for Ken to provide some more details. Example, here in So Cal, we have had some recent job growth, unemployment decline and such, but I would not consider buying apartments here simply due to the low cap rates.
In his Dallas example, he found the northern parts of Dallas such as Plano as the place with the job growth. How would he compare that specific job growth to say growth in San Antonio and decide which area to buy (assuming he was an investor just buying one or two).
I second this suggestion by Will. I too would love to get some more insight on how to determine where to buy.
Hey guys…. great podcast…
I have been trying to download the mp3 and it keeps throwing up a new page with the podcast on it, Here is the link when i click on the “download” button. http://traffic.libsyn.com/bpradio/BP_Podcast_052_-_Buying_Apartment_Complexes_Raising_Millions_and_Building_a_Profitable_Business_with_Ken_McElroy.mp3
So how do i down load to listen to in my car?
Tony
Tony –
Try the Podcast app on an iPhone, or Stitcher app for Android.
I’ll be reviewing ABC of Real Estate this weekend. I had bought the book some time ago and forgot I owned it. I found it on my bookshelf this morning.
In the interview Ken mentioned the due diligence docs that he used when purchasing a building. His team used in when walking through the 200 plus units. I went to his site and I could not find the forms, do you know where they are located?
Randy, go to “Resources” in the upper right hand corner of the http://www.kenmcelroy.com site.
Hi Randy,
Go on to Ken’s personal website and click on the “Resources” icon (top-left of the page). It will ask you to register, once you’ve done so you will have access to a number of documents, one of which is the due diligence checklist.
I learned a lot this is one of my favorite podcast
I’m a senior in college looking to purchase a multi family in New Haven, CT. I found someone who would lend me 65% to value of the house but I have no money to actually put down on it. What should I do? Is there a way for me to get the property for less and still pay closing costs?
What a great interview. Each of Ken’s replies deserves another session! Thank you Joshua and Brandon for providing this kind of insight into Ken’s world. Ken is a great example and quite honestly is simply further along the same path that is available to all of us. Very inspiring and thank you again.
Great job on the interview guys.
This was one of the better episodes (and that IS saying a lot!) you’ve had.
Ken had so much great information and awesome stories about getting to where he is now.
Like many others have said I read the “ABC’s” book a while back and it was a foundational book that really helped propel my interest in investing.
Thanks Shaun. We’re aiming to bring more high level interviews this coming year . . . keep listening!
Totally amazing podcast guys! I love what a down-to-earth guy he is, who never talks over your head. Definition of keeping it real.
He’s got me thinking that my experience/background in property management could be some awful good leverage when I get to Houston and start investing again. Wheels churning…..
Two big aha moments… One where I realized probates are really going to be in full effect within the next 10 years (sorry baby boomers) and secondly when I put together the fact that Ken’s research keeps him in multiunits seeing how the biggest generation is now coming into the workplace (boomer’s kids).
The second makes sense since a high percentage of my generation don’t see owning a home as the American dream.
Development where I’m at has really increased with luxury apartments…….. Is this a shiny object or something to really be thinking about? Two big turn of events over the next 5-10yrs.
Incredible show, Joshua and Brandon!
Love these Podcasts!
Loved it!
Ken was Awesome!
Running out and getting his books asap!
Got a lot more confidence now in developing my niche for Multifamily and Apartment Complexes.
Thanks again guys. Great big thanks to Ken also for sharing his personal experience in REI and taking out the time to speak with all of us, answering a lot of really important and informative questions. Greatly appreciated.
Thanks again Ken.
Have an Awesome week guys!
Gratefully,
Jay
Awesome, Jay! 😉
After hearing some guests recommend his book, The ABC’s of Real Estate Investing, I searched the podcast to see if they had Ken as a guest and I was so happy to see that he was. I started with a duplex that I currently house hack but I own free and clear and now want to buy a small apartment. I’m still reading his book and I’m half way done but can’t wait to finish. Great points and advice in his book. Definitely one of my favorite BP podcast episodes.
Another great show, I listened to this twice excellent stuff. Guy!! Thanks
Michelle
This was an awesome podcast!! I really enjoyed it and learned a lot. Where can I find the 9pg due diligence list Ken mention. I couldn’t find it on his website. Thanks!