Millionaire Real Estate Investing
Millionaire Real Estate Investing
What are the advantages of focusing on specific real estate asset classes, like B or C-grade properties?
Our focus in real estate is properties with 100 units or more. For a long time, we concentrated on Kansas City, but now we’ve expanded to areas within a four or five-hour drive—places where we can do a day trip. Historically, we’ve specialized in value-add properties, typically B or C grade, ideally located in an area that's a step up, like a C asset in a B neighborhood. We look for properties with untapped potential. At one point, the market got a little crazy, and cap rates dropped on these older value-add properties because of the hype. We were fortunate to get in early, from 2009 to 2016, and did well with several value-add projects, which became a buzzword during that time.
What strategies can entrepreneurs use to manage interest rate exposure?
Interest rates have had a huge impact on the market. We’ve been fortunate to lock in low interest rates, though we have one deal with some interest rate exposure. Over the last couple of years, we’ve purchased fewer deals than I had hoped, given the rise in rates and how many people are now exposed. We want to buy more real estate in the next year or two, but we’re being very strategic to take advantage if rates continue to drop.
What is the key to successful teams and partnerships?
It’s all about having great partners and good people around me. If I had gone off on my own as an entrepreneur, I think I would have struggled. I’ve been humbled many times, realizing how critical it is to have amazing partners. I have an incredible partner. In the areas of business I focus on, having a team that compliments my skills is essential. I’m a big starter, but not much of a finisher, so I surround myself with finishers. With my partner, our skills fit together like two keys that match perfectly. We balance each other out.
How do you align business growth with your core values?
One of our core values is mastery and focus—striving to be the best in the world at something. Since we're entrepreneurial, there’s always that energy to try new things. But we made mastery a core value because we realized we can only be great if we go really deep into what we do. We had to ask ourselves, "What do we want to be great at? What do we want to be the best in the world at?" As our company has evolved, we’ve added business units that complement what we already do, like private lending and acquisitions. Whatever role someone fills, they need to be, in our view, the best in the world at that particular thing.
How can entrepreneurs avoid neglecting their key priorities?
I have to block time and be very intentional. Without time blocking, I’d be a mess. I know if I don’t spend time with my kids, they won’t be as happy, and neither will I. But once I’m in the swing of a workday, it’s easy to neglect that. Time blocking helps me stay accountable so I don’t neglect those important moments.
I became an entrepreneur because I didn’t want anyone telling me what to do, and now I have to stick to a schedule. It’s ironic—the freedom of entrepreneurship requires more discipline. I’m not accountable to anyone in the traditional sense, though I am accountable to my partners and investors. But with total control over my time, it can be a double-edged sword. I have to be extra disciplined to avoid overworking or losing balance.
*This interview has been edited and condensed for clarity.*
