How New Multifamily Investors Can Partner With Wealthy People to Buy Bigger Deals

Ken Gee (00:00)
If you’re the person without the money, you need the person with money to help you. And so, so many times people don’t understand that. Yes, you add a tremendous amount of value to that wealthy person’s life.

And that is you’re willing to do the work and take care of business. They don’t want to do that anymore. They’re wealthy. They’re good. Right. They want to help you. They want to help make money through you. That’s the secret. That’s how it works here. And I can’t make it any simpler than that because what most people don’t understand is wealthy people don’t want to do the work anymore. They want someone to help them do the work.

Michelle Kesil (02:07)
everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Ken Gee, who is a multi-family investor with a private equity real estate firm. So really excited to have you here today, Ken.

Ken Gee (02:27)
Thanks for having me and looking forward to it.

Michelle Kesil (02:30)
Great, let’s dive in. So first off, for those not familiar with you and your work yet, can you share what your main focus is these days?

Ken Gee (02:39)
Yeah, so we’re a real estate private equity firm and an education firm. So if you’re trying to create wealth through real estate, whether you want to do your own deals or whether you want to invest passively, we can help.

Michelle Kesil (02:52)
Awesome. In which markets do you operate in?

Ken Gee (02:56)
Yeah, so in terms of the education side, all over the US, but on the investment side, most of our portfolio right now is in Florida.

Michelle Kesil (03:06)
Awesome. And what would you say have been some of the main keys that have allowed your business to grow and run successfully?

Ken Gee (03:15)
Yeah, probably our attention to detail. So I’m a CPA, commercial lender by background. So the details just kind of come natural to me. And so we’ve built this company over the last 28 plus years, really from the ground up, paying attention to every single detail. And I think that’s what makes us successful.

Michelle Kesil (03:36)
Awesome. And why specifically multifamily is the investment route that you choose?

Ken Gee (03:45)
Yeah, that’s a great question. So I’m a pretty risk averse person. And here’s the thing about multifamily. I can’t figure out how to make it go away. Right. If you think about it, people need a place to live. And I don’t see that changing anytime soon. If we don’t need a place to live, we probably don’t need to worry about investing. Right. That means we got a much bigger problem. So that’s why I do multifamily. It’s what we’ve always done. We’ve kind of stayed in our lane.

And so if we can generate decent returns off of a relatively low risk asset class in terms of real estate, like why, if it works, why not? Why, why change it? Right. And it’s working very well.

Michelle Kesil (04:26)
Yeah. And when you say it’s working very well, what would you attribute to that success?

Ken Gee (04:26)
Yeah.

Yeah, so we, there’s a number of things. One, we maintain our discipline, right? So there’s this thing called FOMO. I’m sure you know what that is. Fear of Missing Out. People get it. I tell people it’s fatal. If you get it, you’re done. I mean, there’s no cure. It’s worse than cancer. Like you’re done. We don’t get FOMO. So that’s the first thing that I think has helped us. Number two is our long experience, because we’ve experienced a lot. And the third is we’re vertically integrated. So we manage our own stuff.

And so nobody’s going to care about your property more than you will. I mean, that just makes sense. So we built our management company right alongside everything that we do. And so we manage everything. And that just makes the whole thing more efficient.

Michelle Kesil (06:08)
Yeah, absolutely. And what have been some obstacles or challenges that you’ve had to overcome and learn from as an investor?

Ken Gee (06:19)
Yeah. So over 28 years, we’ve had our share of obstacles and, you know, early on it was, you know, there was nobody around to help you figure out the business. It was literally all on your own. But, you know, that was almost 30 years ago. That was the challenge back then. Now the biggest challenge is probably deal flow. That’s the biggest challenge that we face now. It’s just finding deals that that makes sense to us. So, you know, it depends.

Now, you look, if you talk about operations, mean, geez, the challenges have been many. You know, I built this company over a long period of time with the mindset that, okay, we have a problem. We identify it. We understand why it happened. We fix it. Then we put something in place so that it doesn’t happen again, that we document that fix. And then that allows us to scale, right? Because now my goal was only to solve every, any problem one time. I mean, who wants to solve the same problem over and over again?

So that’s how we would do that. And over time, we just built out our SOPs naturally. And every challenge that we’ve met, we’ve been able to get through it, right? And not have to deal with the same thing over and over. So that’s kind of how we built things up and how we’ve dealt with those challenges.

Michelle Kesil (07:38)
Yeah, and why it constitutes ⁓ the right deal for you.

Ken Gee (07:44)
Yeah, so we never negotiate location. It’s got to be in a growing market. It’s got to be in a good neighborhood. ⁓ That’s not negotiable. ⁓ It’s got to be a deal where we think we’re getting in close to even leverage. And for those of you don’t know what that means, that means our cap rate is kind of close to our debt interest rate. That’s what that means. And then we’ve got to believe there’s some upside there in terms of a couple hundred dollars in rent upside.

So, and we look at the market, we’ve got to have very strong conviction that it’s going to be there. So we follow that model. We don’t negotiate it. That’s the not getting FOMO thing I talked about. And so it’s worked really, really well for us. That discipline, you know, we have this saying, don’t negotiate your discipline because there’s a lot of temptation out there. And if you just don’t negotiate it, you’ll be all right.

Michelle Kesil (08:35)
Yeah. And as far as your education platform, what exactly does that walk people through?

Ken Gee (08:35)
you

Yeah, so everything. So everything that we do, we teach our people in our programs how to do. It starts with underwriting. It has to, because you can’t do anything unless you know the numbers. We help you develop your business plan, help you do all the things that you need to do to be able to get a deal. You write your personal financial statement, your bio, all that kind of stuff. Then we get to teach you how to talk to the brokers.

Then we got to teach you how to get the deal, how to actually be awarded that deal, because it’s harder than you think. And then of course, you got to get money. You got to get debt. You got to get equity. So we roll through that whole process. We show you exactly what we do. Literally, there’s no difference, right? We do. We raise capital the exact same way we show you. We train our people the exact same way we train our education people. So then you got to get through DD.

Again, same thing we do on our deals. We teach you how to do it. Then we get the deal close. And then here’s the part that’s crazy that nobody ever pays attention to. And that is you actually have to run your business for five, six, seven, eight, 10 years, however long you’re going to hold that. All of that management stuff that we’ve learned over almost 30 years, it’s in our program. We teach you how to do that because, you know, my goal is to save people the millions of dollars in mistakes that I made over the years. Right.

And so ⁓ that’s it, right? It’s the full real estate cycle in our program. And it’s literally just teaching you everything we do. No difference. There’s no daylight between the two.

Michelle Kesil (10:51)
Yeah, amazing. And when you say the capital raising process, what does that entail?

Ken Gee (11:02)
Yeah, so we start at the very basic, right? Most people starting out in this business, you know, how do you introduce people to this concept that you’re going to go do, right? Because they’re scared. They don’t want people to laugh at them or whatever, right? So we help them figure that out. Then we got to we got to help them understand how to go to real estate events, conferences, summits, all that stuff, and actually have some production there, right? Go there with intention.

We teach them literally how to go there and get the information that you need, meet the people that you need to meet. And then we go to one to many, right? Because most people, we do webinars all the time. So we have to teach you how to present your deal one to many, right? On a webinar if that’s what you’re going to do or if even five people standing around ⁓ the common area in an event. And then after that, we got to show you how to do the one-on-one meetings.

And what’s funny, most people think that they are selling somebody some investment. That is never what you’re doing. What you’re doing is trying to get a good understanding of who that person is and what are they trying to accomplish. That’s it. Most of our meetings are about you, right? We’re here for you. What are you trying to do? What are you trying to accomplish? Okay, does what we do, does it even come close to matching up? And if it doesn’t, that’s cool, right? We don’t try to put a square peg in a round hole.

Once people make that transition, they understand that, the whole capital raising thing becomes not scary anymore. Now you’ve got to back that up with knowledge, right? Because if I’m having a conversation with you about investing in my deal and you figure out this guy doesn’t have any idea what he’s doing. I mean, it doesn’t matter what you do. You’re not going to give me your money. So that’s why our program kind of builds, right? You’ve got to know the whys. You got to know how. You got to understand everything that you’re doing.

And so that’s why you see this whole thing fit together for it.

Michelle Kesil (12:57)
Yeah, amazing. And where do you see during this life cycle of the process people usually have the most mistakes or bottlenecks or misconceptions?

Ken Gee (13:10)
Yeah, so it depends on where they’re at. The first one is they don’t believe they can do it. They just, I can’t buy a $10 million apartment building. You’re out of your mind. That’s just what they think. Well, guess what? Most people that start out sitting in my chair, most of them don’t have money. If they did, they would give their money to people like us and let us do all the work, right? So that’s the first thing they gotta get over. The second thing they have to get over is understand that this is just, it’s a business.

And I always tell people, hey, I want you to imagine going on Shark Tank, standing up in front of Kevin O’Leary or Mark Cuban, and you not understanding how your business works. You don’t know the details. It’s probably not gonna end well, right? You need to roll up your sleeves, get your hands dirty, understand the details of your business. When you understand that you have to do that, then you can move forward.

because what happens is they don’t usually understand they need to understand that level of detail. They don’t think that, I’m new, I don’t need to know all that. Yeah, you do, because here’s what actually happens. Number one, if you don’t understand what’s going on, nobody will give you money. The lender won’t loan you money. The investors won’t give you money. But what happens even before that is you stop yourself, because you know in the back of your mind, I don’t really understand this. And most people shut themselves down. And that’s what we try to prevent.

That’s the only way I know to move you forward is to teach you because knowledge builds confidence. And when you’re confident, you’re going to go do it. You just are. So that’s kind of the way we’ve kind of put this thing together.

Michelle Kesil (14:46)
Yeah, absolutely. And where do you see people missing out on the knowledge? Like what part of the cycle do people usually not have enough knowledge or background in?

Ken Gee (15:41)
The numbers, that’s where they start. That’s why our program starts there. Now remember, I’m a CPA and lender by background, so the numbers come natural to me, but they don’t come natural to everybody. But I promise you, you have to show people that you understand the numbers. It’s a business, right? It just is. And they’re giving you a lot of money, hoping for a return, and that whole thing is predicated on you understanding the financial side of the business. So, I mean, that’s a thing that a lot of people struggle with, but once…

What happens is you go through our program and the fact that I’m a CPA, this isn’t hard. I mean, if you can add and subtract and push buttons on a calculator, you can figure this out. It’s not rocket science. I’d like to say that, you know, we’re doing something super fancy and nobody knows how to do it. That is totally not the case. So when people realize, ⁓ this isn’t that hard. I just got to do it one step at a time. And it’s wonder, it’s awesome watching them go through that process because when it does click, they’re like, ⁓ okay, I get it now.

And now they know what to pay, the brokers can no longer take advantage of them, the sellers can’t take advantage of them. And now when they have a conversation with somebody about giving them money, they know what they’re talking about and they’re successful.

Michelle Kesil (16:54)
Yeah, definitely. What are you most focused on solving or scaling to next?

Ken Gee (17:02)
Yeah, we’re just continuing. goal for this year is 250 Million in new deals. ⁓ It’s just hard. It’s hard because, you know, deals are competitive. You know, we’ve now, you we’ve been around for a while. So in the first 10 years, we did mostly our own money. We didn’t raise money. Then we went to the syndication model for a few years. And now we’re on fund number six. We raised the money in advance. And that helps you become way more competitive, right? Because when you have money in the bank,

Brokers listen, sellers pay attention, everything’s different. So our business model is that of a true private equity firm where we raise the money in advance. And so we’re just gonna continue to rinse and repeat that process because it’s what we do, it’s what we do well. There’s no reason to go invent something new.

Michelle Kesil (17:50)
Yeah, and when you say that the deals are competitive, what makes people stand out amongst the competition?

Ken Gee (17:51)
Yeah.

Yeah, it’s reputation and people’s, I mean, think about this, the brokers play a big, big part into whether or not you get a deal. They don’t make the ultimate decision, but they certainly do influence it. So your reputation with that broker, because when do brokers get paid? When it closes. So their job is to get the best price and make sure you close. Those are the things that they care about. So your reputation actually matters a lot.

And the fact that we have money raised in advance, I mean, that puts us in a completely different league. Because when we compete against syndicators who haven’t yet raised the money, it’s very hard for them to compete now.

Michelle Kesil (18:40)
Yeah. And how do you see things shifting currently in the market? Do you think there’s different approaches that people need to take now?

Ken Gee (18:40)
Yes.

I don’t think so. ⁓ just the thing I want for them to do the most is stay disciplined and not reach. mean, there’s no reason to do that now. I mean, you’re doing this to make money. People mean there’s a reason that rich people have invested in real estate forever. They know that it works, but they also know it takes a minute. It’s a stacking game.

Right? You’re not going to start by a deal tomorrow today and be rich tomorrow. That’s not how this works. You just, you’re slow, deliberate over time. ⁓ it creates an enormous amount of mouth. So I don’t, I don’t know. said, there anything different going forward? I don’t, I don’t really think so. ⁓ I just think it’s, it’s, it’s a basic asset. It’s multifamily. All right. It’s not like it’s a data center, right? Like I don’t understand data centers, but a lot of people like them.

That’s fine. They can have that. I don’t understand it, so we don’t do it.

Michelle Kesil (19:52)
Yeah, makes sense. What advice would you give to someone that’s just getting started?

Ken Gee (20:02)
Yeah, one, find a good mentor. need, I mean, you can do this on your own. I did it. It’s a very long road. The mistakes will cost you a lot. So number one, find a mentor, whether it’s us or someone else, doesn’t matter, but make sure they’re the real deal. Make sure they’re really going to teach you how to do it. So that’s first thing. Second thing is be patient because it’s going to take a minute. I’ve talked about that. Three, dive in and make yourself, make yourself valuable.

to the people with money. And how do you do that? Show them that you’re willing to work harder than everybody else. Show them you’re willing to roll up your sleeves. Show them that you’re willing to figure out the details of the business. Because those people with money, right? Real estate’s capital intensive, so you need money, but they know what a successful person looks like. That’s how they got wealthy. You need to look like that person for them. And that’s how most people that sit in my chair get started. They find someone that kind of helped them in the beginning. They partner with them, both of them benefited.

for different reasons. that’s what, I mean, that’s my advice to people. And just know you can do this. I mean, you can do anything you want. Everybody seems to put, ⁓ a $10 Million apartment building. There’s no way I can do that. It becomes a mountain in their mind and then they think they can’t do it. But I promise you just about everybody starting out had no money. If they could figure it out, I’m pretty sure you can too.

Michelle Kesil (21:26)
Yeah, so given that example of someone starting out and feeling like they don’t have enough money, would the best steps be finding people that have the money and partnering with them?

Ken Gee (21:32)
Mm-hmm.

Yeah, go learn the business really, really well. And then as you’re going to real estate conferences or webinars or whatever network, network, right? But be really intentional about it and show them that they can count on you, right?

If you’re the person without the money, you need the person with money to help you. And so, so many times people don’t understand that. Yes, you add a tremendous amount of value to that wealthy person’s life.

And that is you’re willing to do the work and take care of business. They don’t want to do that anymore. They’re wealthy. They’re good. Right. They want to help you. They want to help make money through you. That’s the secret. That’s how it works here. And I can’t make it any simpler than that because what most people don’t understand is wealthy people don’t want to do the work anymore. They want someone to help them do the work.

So be that person. And over time, you’ll be the wealthy person.

who is now looking for the person to do the work for you. It really is a cycle that keeps going over and over.

Michelle Kesil (22:43)
Yeah, that makes sense. Thank you for sharing.

Well, before we begin to wrap up here, someone wants to reach out, connect and learn more, where can people find you and connect with you?

Ken Gee (22:57)
Yeah, the best way is to just go to our website, KRIPartners.com. KRIPartners.com. So when you get there, you’re going to see two sides, right? If you want to do your own deals, then go check out our education site. If you want to invest passively, check out our funds. We’re currently on Fund VI and it’s open right now. You know what most people do? They invest and learn so that they can become better investors.

That’s the actual smart thing to do because what does Warren Buffett tell you? Don’t ever invest in anything you don’t understand. So just go to our website, KRIPartners.com and check us out and we’ll make sure that you know what’s the best path forward, best path for you, right, based on your situation and everybody’s situation is a little different.

Michelle Kesil (23:47)
We’ll appreciate your time and your story. Thank you for being here.

Ken Gee (23:52)
Thank you so much for having me.

Michelle Kesil (23:54)
And for those tuning in to the show, you got value, make sure you have subscribed. We’ve got more conversations with operators like Ken who are building real businesses. And we’ll see you on our next episode.