Lifestyle Real Estate Investing

Mike Hambright (00:00.399)
Hey everybody, welcome back to the show. Today we’re here with my good friend, Niel, always excited to catch up with old friends. And we’re be talking about, he very much has created a lifestyle business as a real estate investor, has done well, kind of left corporate America behind and all those things. But we’re gonna be talking about kind of how to build your business so that it allows you to live the life that you kind of got into the business for in the first place. So, Neil, welcome to the show.

Niel Kluszczynski (00:24.406)
Hey, thanks. Thanks for having me. Good catching up.

Mike Hambright (00:27.055)
Yeah, good to see you. you one of the reasons I’ve mentioned this before, one of the reasons I do the podcast is it gives me a chance to kind of catch up with old friends and make new ones too. But, you know, we haven’t talked in a little while here, but fortunate to have a ton of kind of old friends out there that I love to use the podcast to catch up with, including you, buddy. Yeah, yeah.

Niel Kluszczynski (00:47.298)
Yeah, thank you. Thanks for having me.

Mike Hambright (00:49.881)
So tell us a little bit about, I wanna jump into, I know you’ve attempted to kinda scale the heck out of your business, you’ve tried some other things, we’ll talk about that a little bit today, but before we kinda jump into that, just tell us about you, your background, how you got started in real estate a little bit.

Niel Kluszczynski (01:05.038)
Yeah, sure. So I’ve been in real estate since like 2009, but started as a realtor in 2005. So I’m in Northwest Indiana.

right near Notre Dame and I always loved real estate. I grabbed the Homes and Lifestyles magazines when I’d walk through the grocery store and just look at them and and then in 2005 I was like I’m gonna get my real estate license. Well, I still had a corporate job at Coca-Cola and ended up holding that job until early 2017. I would starting in like 2009 I’d flip a home but still have still have the corporate job, right? And it got to the point in like 2016

where I was doing like seven or eight houses flipping them at a time and then still managing two shifts of people. So I left early 2017. I don’t know how I did it but…

I went full time in 2017 and then I think in 2019 I found you guys and started direct mail marketing and kind of got associated with Investor Fuel and hung out with the guys in there and met a lot of friends and made a lot of friends and went direct to seller on the marketing side.

Mike Hambright (02:16.101)
Yeah, yeah, there’s a lot of lessons you learn. Like if you still have your job or I think, you once you start, once you jump into it full-time, if for those that are listening that are not full-time, and once you get around a bunch of people that are doing things differently than the way you’ve done them, it’s a little bit of baptism by fire, right? You just start to see what’s possible, opens your mind to things that you didn’t, you know, sometimes it’s not even.

like rocket science, you’re like, it’s a little epiphany. It’s like, my gosh, yeah, I don’t know why I ever done that. Or I used to do that, why did we stop doing that? And it just kind of forces you, it starts to force some accountability to do things differently that are working for other people that you think could work for you, right?

Niel Kluszczynski (02:56.044)
Yeah, that’s absolutely right. So I had a partner who he was the money guy and I did everything else. So I learned a lot by fire, but he even said, you know, he had limiting beliefs too initially. And he said, you can’t really make a living off of doing two or three houses a year. So, I mean, I had that mentality from the beginning of like, Hey, I’m doing this full time job and the rest is just, you know, hustle side income. So, getting around people that, you know, you’re like, that’s possible. All right. If, if one person can do it, I can do it too.

And then you start implementing things and moving the needle a little bit.

Mike Hambright (03:30.481)
Yeah, that’s one of the things I’ll say about.

Investor fuel in our group is there’s a lot of amazing people in there, but there’s nobody that’s like superhuman, right? So you you just you kind of have this feel like if that person can do it I can do this too. There’s nobody that’s like I I could never do that because they’re special there They’re all equally, you know, I guess we’re all equally special or on special whatever you want to say there But it’s it’s not like rocket science It’s just a proven formula or a roadmap that somebody else has followed that generally in our group. They share with everyone

Niel Kluszczynski (04:02.21)
Yeah, absolutely. Yep.

Mike Hambright (04:03.281)
Yeah, so I know you’re, I think you’re typically doing kind of four to six deals a month or so. And so let’s talk a little bit about, know you’ve tried to scale it up. You’re very much a lifestyle guy, have a young family and all that, which is great. It’s funny in my, cause I’ve done a lot of volume in years before and there are times where people would say like, know, I just didn’t really like, it was too much for me, too much work or working too hard.

And we all kind of got into this business to live a better lifestyle. And sometimes, you you’re just not happy with where you’re at. you know, of social media and things like that.

Niel Kluszczynski (04:40.142)
Yeah.

Mike Hambright (04:43.043)
might put you on a pedestal because of like, you’re doing all that, you’re crushing it. But in your personal life, you don’t feel like you are, right? And so I think we’ve all tested those boundaries a little bit. And so let’s talk about like, you your attempts to kind of scale and then just kind of how you built your team out so that allows you to live the life you want, still live a very good life, have the financial freedoms and all that without having to be like, have a massive machine that keeps pulling you back in.

Niel Kluszczynski (05:13.302)
Yeah, well, I will say I don’t have it figured out. So I appreciate the introduction on that. Yeah, it’s a journey for sure. So I

Mike Hambright (05:17.743)
Yeah. Well, it’s a journey, right?

Niel Kluszczynski (05:23.414)
You know, I’ve had some hardships over the past year. You know, we had some health challenges with my son and recently lost my mom. And, and I keep thinking to myself that like, you know, time’s going to run out on everyone. Right. So, we all think about like, when I get here, I will do this. Right. So, I’m really trying to optimize for, you know, time with my family and what I feel, is really important to me right now in this

season of life, right? So, I, I’ve structured a team around, you know, that’s, that’s better at things than I am. And, and that was through trial and error also, right? So I think the biggest hire, I’ll just kind of iron out my team real quick. So I have a salesperson who’s been with me five years. I have a follow-up specialist that I think we’re going on two and a half or three. And then, I recently hired a rock star assistant, replacing my, my other assistant, that I, that I have.

probably some stories about that I could tell you that I didn’t even know was happening, right? So they help me so much that I would not be able to do what I do without it, right? They give me the time to kind of go out and try new things and see if it’s worth bringing them back into the business. And I couldn’t do without them, you know? And so from a structure standpoint, that’s how it looks. And I probably am working 20 hours a week right now.

We do have this big large remodel on the river that is dragging me into some design and project management like I don’t want to have happen, right, but but

We kind of manage this through a Monday meeting. You know, we have one-on-ones Monday and then a one hour meeting on Mondays. And then we’re, we’re pretty engaged. Every time we get something in contract, we do a deal review and that sort of thing. So, and my, my assistant and I do talk often via email, but she, she’s, she’s the best.

Mike Hambright (07:27.887)
Yeah, let’s talk about, because I think of this, almost this spectrum and sometimes I reference the, like, Kiyosaki’s cash flow quadrant where you go from employee to self-employed, which means you have a business but the business owns you, like you’re doing all the work, to you’re a business owner, the upper right.

Quadrant to your money is working for you and and you don’t have to do anything and I think we all not all of us I mean I personally I have things going on and probably all those boxes Some path, you know more passive investments like multifamily that is kind of that that cash for the the lower right cash flow quadrant I have businesses that I’m always kind of starting something and so I’m like Self-employed I’m doing everything and then I have business businesses where I have a team right and I think a lot of us You know, you can’t jump into any of those boxes overnight

unless I guess unless you inherit a bunch of money and you kind of go right to the right to the passive investing but

Most people that start a house flipping business get stuck in that self-employed box. And I know you were there, I was there, we were all there at one point. And then inside of that, once you make it to the business owner box, if you will, there’s a spectrum, right? It’s like, you could have a huge team and you’re really closer to the end of like not being involved, or you have a small team but you keep getting pulled back in. It feels to me like from our conversations, you’re kind of like…

you know, halfway or three quarters of the way through that where your business is right sized, where it can run largely without you, but you have some touch points. Every once in a while you get pulled in if there’s a problem. And I think a lot of us as entrepreneurs are okay with that. I mean, we don’t really want to be completely out because we like solving problems. We like being involved in the business, but we don’t like to like have to do everything. Would you agree with that?

Niel Kluszczynski (09:19.116)
Yeah, I mean, I want to feel useful, right? At least feel useful within the business, right? Cause if your team doesn’t bother you for anything, then it’s like, okay, now I got to go start something else like you, like you mentioned before, right? So, so yeah, you’re absolutely right there. Yeah.

Mike Hambright (09:21.593)
Yeah.

Right.

Mike Hambright (09:31.664)
Yeah.

And everybody I’ve known that finds a way to kind of be out of the business, pulled out, they just go start starting other stuff or get shiny object and start to get into other things. I know you’ve done some of that as well,

Niel Kluszczynski (09:48.386)
Yeah, yeah, yeah. Yeah, I ended up remodeling an assisted living facility. did a memory care, an assisted living to memory care conversion as the contractor. That was, I don’t know how I got, I don’t know how, you know, you look back and you just don’t know how you get talked into this stuff, but it’s like new and you’re learning and that’s how you get sucked in, you know? But on the scaling side, you know, the past couple of years have been pretty,

Mike Hambright (10:04.635)
Yeah.

Yeah.

Niel Kluszczynski (10:14.168)
You know, pretty similar for me, right? We’ve tried more marketing. We’ve tried less marketing. We’ve tried wholesaling. We’ve tried not wholesaling. And I think the common theme here has been, you know, when we get to a certain point, we either have to add a bunch of infrastructure or make a change within the business that, quite frankly hasn’t worked out for us. You know, when we, when we ramp marketing, our cost per deal goes up too high or when our overhead

is just way high. We feel like we have to purchase things and then we look back on the year and we had like 15 % of our purchases like didn’t really make the minimum of what we like to make you know on a property just to pay the bills you know so you feel like you’re always in action trying to trying to feed the machine at the beginning of the month.

Mike Hambright (11:05.55)
Yeah, yeah, there is this issue of, especially if your team doesn’t change, they all have these pre-existing beliefs of like, especially if it’s salespeople, if they’re too comfortable, then growth kind of gets hard. so then you bring in, you might just have to add, and yeah, I you’ve tried this, but bring in a second salesperson, double your advertising, bring in more administrative help, but.

Niel Kluszczynski (11:31.427)
Yeah.

Mike Hambright (11:35.793)
Sometimes in the journey of like scaling up, you start to convince yourself why you could pay less for deals and you start to focus on units and then they’re not as profitable. And so maybe you grow by 30 or 50 % unit-wise, but not necessarily profit-wise.

Niel Kluszczynski (11:51.212)
Yeah, top line and bottom line are a lot different numbers to talk about, right? So there was a year where we did 30 % more top line, but the bottom line was very similar.

Mike Hambright (11:55.983)
Yeah.

Niel Kluszczynski (12:03.316)
not worth the effort really, you know, so we kind of learned that through the pain of it. And there’s months where we, you know, when we’re rolling, we do experiment like some R &D and, you know, bump what we think is a unit on marketing, right? But we found that that four to six deal range, like it honestly keeps us most profitable that we found.

Mike Hambright (12:27.931)
So share some thoughts here or what you’ve done to, so everybody is a little bit different. Nobody should go take your blueprint exactly, right? But because it kind of takes your skillset, what are you good at? And you build your team around that. So for example, there’s some people that we, they’re friends of ours that we know that I’ve told, like they really, know, maybe their business has struggled a little bit. And I’m like, you’re really good at acquisitions until your team is stable.

Niel Kluszczynski (12:36.013)
Yeah.

Mike Hambright (12:54.767)
You just need to do all the acquisitions. Stop trying to outsource that because you’re good at it and nobody’s ever gonna be as good as you, at least in your eyes. And you keep struggling with finding the right person and basically telling them, like, I’ll just go do this one because you know you’re a better closer. So stop pussyfooting around. Just do it. Just do that thing. And then build a team around you so that you don’t have to do as much administrative stuff because nobody really wants to do that.

Niel Kluszczynski (12:58.542)
you

Niel Kluszczynski (13:21.686)
Yeah, so I’d say it’s maybe not a positive, but I stayed in like every seat for too long, you know, so I unfortunately or fortunately do know a lot about maybe every position within the company, right? I can jump in when needed and I can coach on that. And I think probably my best skill set from a team standpoint is I’m pretty good at putting a team together.

And I don’t know how it’s happened, even when I look back early on in my, whether it was hiring a merchandiser or hiring a salesperson, I feel like I’ve just been a pretty good gauge of people.

And I don’t know if that’s, you know, replicatable, you know, but I think that that’s probably been my strong suit is like finding good humans, good people in general that the skillsets easier to teach than, people being a good human, know.

Mike Hambright (14:25.915)
Yeah, if you find a good athlete, you can kind of teach them how to do the job. Yeah. And you don’t know where that comes from? mean, was it some of that from your kind corporate America days?

Niel Kluszczynski (14:37.036)
Yeah, I mean, I’ve done hundreds and hundreds of interviews and you get to the point where you kind of know right away, right?

And so I think just repetitions kind of got me to where, um, but I handpicked my sales guy. mean, we were in the corporate world together and I said, Hey man, if I, if this ever doesn’t, he was a director level guy. And I said, Hey man, if this, if this starts working, like I’m going to come and try to recruit you. Right. And that was a long time ago. And we do life together. I mean, it’s, it’s rare that you could not talk about work with your salesperson, but it works for us and maybe it work forever, but.

I’m really happy to do life with the people that work with us.

Mike Hambright (15:19.109)
Yeah, that’s great. So can you share, I know it’s easy to get pulled in directions of shiny objects as well. And I think, you told me before we started recording here that you’ve got your team dialed in to where you’re probably working about 20 hours a week, right? And so how do you balance going after shiny objects? Because you’ve got the time to do it.

And living the life, I mean, we kind of talked about you being a lifestyle investor, living the life that you got into the business for in the first place. Because I’ve kind of found that even a lot of real estate investors that want to have the business fuel their life, it’s easy to get bored and not want to solve a business problem or pursue a new business or something. And I know you’ve tried it both ways, and I’m always trying new stuff to you. But just share how you’ve kind of managed that balance in your business.

Niel Kluszczynski (16:15.136)
Yeah, so I pick verticals within the business, right? So at least it’s not a brand new learning curve.

You know, and so I like to exercise in the morning. I like to do that. That’s, that’s what I like to do outside of, of working. So I make sure that’s done. And then with the time that I have, like I’ve, I’ve recently got into, to doing notes, like seller finance. and then as well as like doing some local hard money for investors. Right. And I feel like, a lot like you, like, I just like talking to people. And I feel like in, in flipping homes.

it’s a little bit more of a transactional business where you’re, you know, you’re, you talk to one person one time, you help them, and then you maybe never get an opportunity to talk or to help them again, right? Whereas if I’m helping somebody with a loan on a property, then it’s most often reoccurring stuff, right? So I think that that’s a cool change for me. And then I really like seeing our active money get turned into a cash on cash, right? So I’m, I’m just

learning money in a sense where, you know, we’ve all got debt equity in Reynolds. If you started early enough that, that if you, if you made a calculation on, would say, why am I even holding this thing? Right. So I’m, I’m looking at doing some redistributions of stuff and there’s always something to do. You know, it’s just at what level do you want to do it in? but I, don’t do any evening events. know there’s like some RIA groups and some meetups and stuff. And, and this, this young season, I got a 10 month old.

and the five year old that I just have a hard stop at 530. And it just is what it is. And I know I’m missing business and I know I could run up the scoreboard, but it’s just not that important to me. Yeah.

Mike Hambright (18:06.757)
Not what you wanna do, Yeah, I found, and it’s been easy over the past few years, I think with, you know, between COVID and the interest rate change that caused the downturn in the market and stuff, for people to jump into totally different businesses or go into something totally different that’s a shiny object. But I found the people that jump into other things that are tangent to their business, whether it’s lending.

or coaching or some service company that supports, that serves the real estate investing industry, it’s not as big of a jump. mean, usually you’re solving a problem that you had in your business that clearly other people have as well. And so it’s not as big of a jump as like, I’m gonna become a crypto day trader and I don’t know anything about

So

Niel Kluszczynski (18:52.574)
Exactly. mean, there’s overlap. Yep. Yep.

Mike Hambright (18:55.675)
Yep, yep. So I know you’ve also tested a little bit going into other markets, like nearby markets, right? Maybe share your experience on how that works. And I know I just had a guy that’s in our group on the show here recently, and he’s like laser focused.

He operates in San Antonio. He’s laser focused, not on San Antonio, like literally like one neighborhood of San Antonio. just, and honestly, I don’t know anybody that’s that laser focused. He’s like, there’s 500 houses in this area. He owns 200 of them now. And he’s like, just going to buy them all. And it’s super, I mean, super focused, but, it’s, and it’s funny because a lot of us, even in, kind of gave the comment during that show of even in a market like where I’m at, DFW is basically like 8 million people.

Niel Kluszczynski (19:20.805)
wow.

Mike Hambright (19:44.181)
now and there’s a lot of investors here that think they’re if they go out in some off offline market like outside of town that the grass is greener over there right so we have this tendency to think that grass is greener somewhere but I know you’ve tested that and what’s been your experience

Niel Kluszczynski (19:59.628)
Yeah, we have. So early 2024, we switched to like, you know, shiny object, virtual wholesaling, you know? And so we, we were like, all right, well, two hours within our…

coverage area, right? And we just couldn’t get the repairs correct, right? And so we, every time we’ve tried to push outside of where we’re comfortable at, we get rural towns that, you know, have 600 people in them and they sell four houses a year in the whole town, right? Or just areas where we don’t know the buyers or we, none of our rehab team wants to drive out there. And so, it’s

It’s just a lot, a lot. Especially for a guy that I don’t particularly right now. I mean I’m sure when my kids grow up I’ll, you know, to stomp the pedal back down, right? But it’s a lot of effort right now for my specific season of life.

Mike Hambright (20:59.097)
Yeah, no, and the grass is not green. sometimes, typically what happens is in the rural areas, it’s way easier to buy. Real estate investors get super excited. They probably overpay a little bit for that market because, you know, if you’re in your main market, it’s like, hey, you know, you’re lucky to get something at 70 % of ARV less repairs. And you go out there and you’re like, I bought it for 50 % of ARV, but it wasn’t deep enough because the Dispo side is way harder, right?

Niel Kluszczynski (21:25.368)
Yeah. yeah.

Yeah, absolutely. Absolutely. we, we, we try, we started wholesaling and then we had to, just because the cost per acquisition, got too high for our spreads, we had to go back to our initial model, which is crazy because, you know, we, we see other people being really successful at it and that’s amazing. and it’s just crazy how some stuff just doesn’t work for some people and that’s okay, you know, but oftentimes when you change, like you’ve been working on this business for 15 years of your life.

and then you’re like, I’m gonna change stuff. Well you’ve been changing stuff that have worked for a long time and then you decide, well I’m going all in and gonna change all this and you’re like, well where you were is better than where you’re at now. So it’s just interesting how that happens over a long period of time.

Mike Hambright (22:10.309)
Yeah.

Yeah, there’s no doubt. think we got, if you think of this analogy of a cat, like we’ve all, we’ve had cats before, I’m not really a cat person, but like a cat and like a ball and they’re like just laying there and they’re bored and they just got to start batting that like ball around. Like they’re like, hey, you know, I’m going to entertain myself here by mixing it up a little bit. And so I think as real estate investors, we sometimes break stuff that isn’t broken or go try to fix stuff that isn’t broken just because we’re bored.

Niel Kluszczynski (22:41.804)
Yeah. I’m guilty. I’m guilty. could fuck all day on just that. Yeah.

Mike Hambright (22:44.909)
Yeah, me too. That’s why I said it. So what kind of struggles are you dealing with these days? Like, what’s your focus on these days? What are the things you’re trying to repair?

Niel Kluszczynski (22:54.378)
Yeah, I think so. Right now we’re just, mean, things are taking a little bit longer to sell, probably like everywhere else, right? So combating that a little bit on the buyers inspection responses are getting a little dicey out there for us. They’re there. They happen to want a lot more right now. And then we, you know, we are more conservative in what we’re offering, right? But there is a point where if you’re too conservative, you’re not going to

win deals so there is a number that you always have to play with and internally that that makes sense so we’re always we’re always readjusting that currently yeah

Mike Hambright (23:36.251)
Yep, yep. Well, Neil, appreciate you spending some time with us today. Yeah, yeah. Hey, if folks want to connect with you or learn any more about what you’ve got going on, where can they go?

Niel Kluszczynski (23:39.916)
Yeah!

Niel Kluszczynski (23:45.986)
Yeah, easiest way is Neil Klu on Instagram. Messages is just great. yeah, I’m on Facebook too. Neil Klusinski. Yeah.

Mike Hambright (23:55.377)
We’ll some links down below for everybody. So always great to see you, buddy. Yeah, yeah, awesome. Of course, yeah. Everybody, hope you got some good insights from today. I think one of the lessons here is a lot of us get into it and we’d be excited to have a great lifestyle business that allows us to do all the things we want in life. And then we feel some pressures, whether it’s social media or…

Niel Kluszczynski (24:00.812)
Yeah, you too. You too. Thanks for having me on.

Mike Hambright (24:19.907)
our own internal demons that are saying you need to double, you need to double, right? And so there’s nothing wrong with those things as long as it doesn’t take over your life and force you to, know, sometimes you’re successful in business but other parts of your life are falling apart. So a lot of lessons to be learned from those that have figured out how to build a business that supports the exact life that they would have loved to have when they first got into the business. And every once in a while you need to do a little kind of spring cleaning in your life and ask yourself the questions if…

you know, what would you be happy with? It’s not, bigger is not necessarily better basically, so. Hope you guys got some good value from today. We’ll see you on the next show.