From Law Enforcement to Real Estate Investor: How Ken LePosa Built His Portfolio

Ken LePosa (00:00)
That’s why my whole theory now with investing is if you’re going to go buy one rental property, buy two more as soon as you can.

Dylan Silver (01:37)
Hey folks, welcome back to the show. Today’s guest is based in South Jersey with a background in military and law enforcement. Now as an active agent and investor, please welcome Ken LePosa. Ken, welcome to the show.

Ken LePosa (01:53)
Thank you very much, appreciate it. Happy to be here.

Dylan Silver (01:55)
It’s great to have you on here Ken. We talked last week and I’m glad to have you here on the show today. I’m a New Jersey guy at heart. I was born and raised in northern New Jersey and now I’m abroad but whenever I can connect with anyone from the tri-state area let alone New Jersey it’s great for me. I want to ask you about getting into the real estate space because it wasn’t a natural transition for me. I kind of was a mix of intention, focused effort and a little bit of luck. How’d you get into real estate?

Ken LePosa (02:25)
Well, I kind of fell into it from the standpoint that ⁓ after my stint in the military, got into federal law enforcement down in Washington, D.C. So ⁓ when I moved out, when I moved down there, my agent actually asked me, hey, after a couple months living over there, hey, I a question. You know, you ever think about flipping houses? Said, well, you know what? You know, thought about it, never really wanted to do it, but yeah, why not? So he’s like, hey, there’s two kinds of people. The ones that think about it and the in the doors.

So I’m like, you know what, let’s get it done. So we went ahead, we flipped the house in Arlington, Virginia. It was actually a two bed, two bath, 1600 square foot condo. Then we went ahead and flipped it to 340 and sold it for 455, three months later. And it was actually at the time the largest sale of that model in that complex.

Dylan Silver (03:05)
Yeah.

That’ll make me want to become an investor. What year was that?

Ken LePosa (03:20)
yeah.

That was in the end of 2016.

Dylan Silver (03:25)
So 2016, at that point in time, you’re working in law enforcement? And so were you thinking at that point like, hey, this is a business that I’m gonna dive into, or were you still skeptical about it? What was your thought process?

Ken LePosa (03:29)
Yes.

I mean, well, the whole time we did it, we used the dot coms to go ahead and try and find places, like home advisors and thumbtacks, so, you know, to try and find contractors, and we’re doing interviews on the spot. So we had no idea what we were doing. But between my impulsiveness and my wife’s organizational skills, you we were able to get through it. But ⁓ yeah, right then we got the bug. We definitely got the bug.

Dylan Silver (04:04)
I

can only imagine. You mentioned ⁓ really being a partnership, you, your wife, and ⁓ was it your friend who got you into it? Someone that you knew?

Ken LePosa (04:14)
Well, yeah, my agent who we bought our primary down in Northern Virginia.

Dylan Silver (04:20)
Okay, what’s the communication like between all three of y’all when you were going through this process? Was it like, I’m gonna find the property, hey, I’m gonna find the contractors, hey, I make sure that we’re on schedule? What were the roles divided up like? Was each person involved in a little bit of everything or did people have specific?

Ken LePosa (04:38)
No, when

I say he literally called me up and asked me if I wanted to flip a house, he literally called me up and said, hey, listen, I think I can get you this number for this house. And it’s definitely flippable. You got the comps for it in there. Do you want to do it? I need an answer. So I spoke to my wife that night and for some reason she became impulsive at that moment too. And we went in and did it. That was it. He didn’t go out looking for houses for me. I fell on his lap, which then he threw it at me.

Dylan Silver (05:44)
So you said, let’s figure it out.

What was it like from there? mean, 2016, really a great time to be looking at flips. I kind of think I wish I got in then. I got in in 20, right during COVID, 2023, I guess the end of COVID. I’m curious, what was the next couple of years like for you? You had one flip and went real well. You mentioned how successful it was. Were you then looking at a bunch of flips immediately? Or were you selective? What was your process like?

Ken LePosa (06:21)
At the time I was going through a transition because I was on ⁓ a security detail for the incoming president. So I went ahead and got a transfer after that detail was over back up to the Philadelphia area. I gave up the badge and the gun and took a federal position. And at the time also, my youngest son was only two weeks old. So we had no time to go ahead and really look for flips. So my wife was like, hey, you know what, we got to turn our

Dylan Silver (06:46)
Yeah.

Ken LePosa (06:49)
turn our attention to try and start buying rental properties, which we never did. So while we’re living in my in-laws house, looking for houses over, and now we live in Camden County, we actually found our first rental property before we found our primary. So we knew where we wanna live, and we went ahead, I found a deal. I’m like, well, we don’t wanna live here. We don’t wanna be in a duplex, but we bought a duplex. It was already half rented, half completed.

Dylan Silver (07:06)
So.

Yeah.

Ken LePosa (07:17)
All I had to do was just find another tenant. So we’re like, all right, let’s do this. And then we bought, and then we found our actual house.

Dylan Silver (07:26)
house hacking in a way, renting before owning, then owning the properties that you rent out. And so you were looking, I’m assuming this was all in the Virginia area, yeah?

Ken LePosa (07:31)
Yes.

No,

that was in Jersey at time of when I was on my way coming back up to the Philadelphia area after I got a transfer.

Dylan Silver (07:43)
So going from one area to another, imagining there was a little bit of, I mean, I’m a Texas licensed realtor, so I can understand the differences between states. Was there any bit of ⁓ apprehensiveness or concern about different market between Virginia and New Jersey?

Ken LePosa (08:01)
Hands down, definitely. When I was moving back up from Northern Virginia, you look at the Northern Virginia prices, the prices are high, taxes are low. And then in Jersey, it’s actually reversed. Where in South Jersey, and you know you’re from Northern Jersey, I’m actually a Central Jersey guy at heart. you know, North Jersey, Central Jersey, the prices are astronomical and also the taxes are astronomical. South Jersey, at the time, back in 17, where we were looking,

Dylan Silver (08:26)
Yep.

Ken LePosa (08:30)
wasn’t all that expensive. But the taxes were insane still. So our mortgage was higher and I didn’t understand why. I’m like, why is my mortgage higher when my prices of the house literally have the price of my house in Northern Virginia? That’s because I was paying $5,800 a year in taxes in Virginia to $13,000 a year in Jersey. yeah, so when we were going ahead and when I saw this rental property,

and got the rental property, picked it up and know, just it fit all fit fit every check mark possible. You know, we bought it for 125,000. Not it was it was definitely on our rent at one side of $900 a month, but at least we had money coming in. I got the next 10 in at 12 at little over $1,200 a month. And then we’ve been raising the other person every year since then and make and making proper proper rehab decisions as well on the property. What?

Dylan Silver (09:23)
Duplex, right?

It was a duplex, right? So go from doing a flip in Virginia, then you go to this duplex deal. How are you managing this while having a very important full-time job? It can be tricky, I think, for people who had not a law enforcement career. How are you managing it?

Ken LePosa (09:29)
Yes.

At the time it was more of a hobby, right? Because it was only one property and two tenants. So not that big of a deal. then all of a sudden, once you go ahead and tack on a couple more properties here and there, what have you, ⁓ it takes a life of its own. ⁓ The areas where we were looking, the one area where the first property’s at, it’s kind of like, I guess, a sea area.

Dylan Silver (10:30)
Yeah.

That’s right.

Ken LePosa (10:54)
And then I’m like, well, you know what? If we’re in a C area, how’s a D area? Let’s check that out. Go over there. And I’m like, you know what? I’m prior to military, prior to federal law enforcement. I got no worries about going where I’m going. So we went into other areas. And now I’m like, wow, that one property we bought for $125, I could buy three. I mean, that’s great. Let’s do it. So six months after we had the duplex, I refried the duplex and cashed out and went ahead and bought three more properties.

Me doing.

Dylan Silver (11:25)
At this point in time, you’re stacking a real estate portfolio here, but you also have a whole career outside of real estate. Were you thinking at all about becoming an agent at that point, or was that not a thought?

Ken LePosa (11:37)
It wasn’t even a thought because I was buying stuff at the time off market. And so it didn’t really occur to me about becoming an agent. Did it cross my mind? Yes, but I didn’t really think about it any further. All I thought about was if I’m an agent, now I’ve got to be put in this little square box with laws, ethics, this, that, what have you. Not saying that I’m not a trustworthy person I am, but I’ve just…

Dylan Silver (12:06)
You have to disclose

everything. Yeah.

Ken LePosa (12:07)
Exactly.

I like doing a model of what I’m doing and I just kept going on it. Excuse me, me and my wife just kept going on it. And at the time, she had a full-time career as well. And she does still have a full-time career and I did as well. So now, God, I’m sorry.

Dylan Silver (12:16)
I tell people that.

I, it’s,

no, no, no, I cut you off. It’s a thing where it’s a double-edged sword. I sometimes tell people, if you’re an investor, being an investor and you’re thinking about getting your license as an agent, it can be helpful, but also, now it can also limit you, you in some ways. I do wanna pivot back and ask you about what it was like scaling, because you got multiple properties here, your wife has a full-time job, you have a full-time job, raising a family. At this point, is it becoming like, okay, now we have,

We have to figure out some processes and put some systems in place because we’ve got a bunch of doors at this point.

Ken LePosa (12:57)
It didn’t really until we hit like the eight to 10 aspect. Once you hit 10, then you’re like, all right, the calls are coming in, the issues are coming in, and big issues are coming in. And you know, once we hit about five doors, I had two water lines break on me. No, I’m sorry, two sewer lines break on me within two weeks. So that was $15,000 at the back. So when now…

Dylan Silver (13:18)
Yeah.

Ken LePosa (13:22)
That’s why my whole theory now with investing is if you’re going to go buy one rental property, buy two more as soon as you can.

Dylan Silver (13:30)
What

would be your feedback to folks who may be in a similar career ⁓ and are looking at real estate investing? Would you tell folks, right away you wanna look at property managers, you wanna do this, or would you tell folks follow a similar path that you did, which is basically self-manage up until you reach a certain number of doors?

Ken LePosa (13:47)
If you can self manage, self manage. ⁓ know, at the time, in fact, if I can revert back real quick to answer your question, I actually took a class, me and my wife went to ⁓ a, a RIA class and we took a class, paid for it, paid a lot of money for it and did nothing for us. So that gave us the actual fire and a burn to go ahead and make back that money. So.

Once we did that, then we’re like, all right, now we’re cooking with gas, now we gotta get going. We’re not paying anybody else. So now we kept everything in house. And then, for anybody that’s looking to go ahead and do this, you really need to go ahead and try and do it yourself. If you’re scared and you don’t wanna do it yourself, find somebody that can mentor you. And also that’s not gonna be charging you fees.

Dylan Silver (14:40)
Yeah.

Ken LePosa (14:45)
to be able mentor you.

Because for me personally, I I mentor, but I mentor in South Jersey and also I don’t charge any fees to the people that I’m mentoring except for obviously commissions, you know, from real estate. yeah, try and find mentor, do it yourself, wait for the property management companies until you get, until you’re just tremendously too big and you just can’t handle it yourself and it might be causing problems in your family or where.

Dylan Silver (15:55)
I want to ask you about when those two sewer lines broke. That can be, I’d say, a big, big headache. And how did you manage that? And how were the tenants when they were going through this?

Ken LePosa (15:58)
Yes.

The tenants were fine. Actually, one tenant didn’t even know that he even broke because he wasn’t down in the basement. He said for like two months. I’m like, great. So when did this even happen? And then the other one just backed up and they saw it immediately. But yeah, mean, we got them both fixed. And it was just horrible. And on top of that, too,

Dylan Silver (16:18)
Yeah.

Yeah.

Ken LePosa (16:36)
The one that backed up into the basement for about seven or eight inches where the sewer water, I had to get cleaned out by a company which my insurance company took care of, but I still had to take care of the sewer line. I still had to take care of the cleaning after all the sewer water was out. So it wasn’t fun at all, but it is what it is on that aspect.

Dylan Silver (16:55)
I want to pivot it.

It’s tough. mean, I lived in Texas most recently before moving out here in Santo Domingo. And one of the things that I tell people is in most places in Texas, nothing is winterized. So if you have a freeze, everything can potentially break. You have to shut everything off. You, mean, not shut everything off. You have to keep it dripping. You can’t, you can’t shut it off completely. Otherwise the pipes will burst. And so I definitely know about kind of the headache that that can become even more so.

I do want to pivot a bit here and ask you about getting a real estate license and what really prompted you to do that. And then also, how has it been being a realtor coming from a totally different background in military law enforcement and then also as an investor yourself?

Ken LePosa (17:43)
So me and the wife, we were going perfectly fine as far as rentals. then I was like, you know what, let me reach out to a couple of agents. Got a couple of agents. They found some deals for us, but I was still finding the deals myself and then having them write the contracts. So it was, what am I doing here? So 2022, we bought a large amount of properties in the last six months of the year. Saw the fact, I’m an agent, I’m like, wow.

She really made a good amount of money on me. So, I mean, yes, she wrote the contracts up and everything, but I’m really the one finding the deals. So said, you know what? I’m get my license. So I went ahead and got my license. And then from there, then I noticed, I’m like, all right, well, got my license. And I know a lot of investors already, just because I’m in the investment world. And you know as well as I do, it’s a very small world. A very small group, a very small population. you almost become friends with everybody.

And so I finally deal with people and that’s how I built a small book of business at that time. ⁓ And then I started getting phone calls from new investors, which was pretty cool to go ahead and help.

Dylan Silver (18:55)
I think it’s an interesting ⁓ niche to be in because I tell a lot of people this who are thinking about getting their real estate license. First, I tell them if you’re an investor, it might limit you. But then I also tell people that ⁓ it’s two different worlds. It really is, Ken, right? I mean, you go, I know when I took my real estate classes earlier this year, I got licensed in April, there was very few people who were talking about working with investors. Very, very few people. You had more people who were maybe thinking about doing commercial.

or people who wanted to help a lot of first time home buyers and this sort of thing. But very few people were talking about interfacing with investors. And I was a wholesaler before I was a realtor, so that was even worse in a lot of ways, Ken. They were saying, people who come up with these creative offers and people who are making low offers, you have to really screen pretty heavily. So I came into it from a totally different mentality and totally different side of things with really.

Ken LePosa (19:35)
Yes.

Dylan Silver (19:50)
very little intent to actually sell and list properties for other people. Similar to yourself, I was working with realtors and investors and I was having to refer out the contracting duties, if you will, because I didn’t have a license. Now that I’m licensed, see, well, like you mentioned, a whole community of people, ⁓ and it seems like everybody does really know everybody, specifically in the regionality of real estate, so I mean.

Ken LePosa (20:17)
Yes.

Dylan Silver (20:17)
I’ll be out in North Texas and it seems like I know everybody. I want to pivot a bit here, Ken, and ask you about investing in New Jersey in general. I think a lot of people, perhaps rightfully so, look at East Coast and it can be more risk, know, more leverage. You’re looking at higher home pricing. But then you also mentioned that you’re able to find some deals in maybe some rougher areas.

Ken LePosa (20:20)
Mm-hmm.

Dylan Silver (20:41)
What would be your advice to folks if they are looking at investing in New Jersey but maybe comparing it to investing in Texas or Florida or some of the more cost effective areas of the country?

Ken LePosa (20:51)
If you find the areas that are, with lack of better words, lower income, depressed areas, you will go ahead and be able to find properties that have lower taxes. Once you find those properties with the lower taxes, then right there, you’re making money. Because the lower taxes, especially with rentals, six, seven, $8,000 a year is a big chunk out of your cash flow.

But if you’re finding properties, which I’m finding properties, 1,000, 1,500 bucks, 1,700 bucks a year in taxes, and your rents are at $1,700, $1,800, $1,900 a month, which in a high-priced area, that’s nothing. But when you’re looking at areas that are a little bit easier to buy, properties that you’re buying for $90,000, $100,000, $120,000, $130,000.

Dylan Silver (21:46)
Yeah.

Ken LePosa (21:50)
They’re great spreads. ⁓ So that’s really what you need to be doing. If you want to cash flow, you want to go ahead and find those areas that, you know, honestly, a lot of investors don’t want to go into. They just don’t want to deal with it because, you know, those areas just have a stigma and you got to get, you got to, you got to have a different mindset than that. Everybody needs a place to live. Everybody. So if everybody needs a place to live, why don’t you just go ahead and just provide that.

Dylan Silver (22:03)
don’t want to go into.

Yep. I wanna-

I want to ask you about the tenant versus landlord issues that can arise. In Texas, 60 to 90 days, you can evict somebody pretty easily in most jurisdictions. I’ve heard, and I’m not too familiar, but I’ve heard in New Jersey it can be like a year-long battle. Is that true pretty much everywhere in New Jersey?

Ken LePosa (22:38)
I mean, so far I’ve had to evict five people. Three literally out of the same house consecutively. yeah, no, it’s during COVID, yes, it was more like 90 to 120. But honestly, since that’s all passed everything, know, I’m going through one right now. It’s coming up on maybe like 65 days or so, not even.

Dylan Silver (22:49)
Yeah. Wow.

Ken LePosa (23:08)
55 days or so, and we’ll be able to go ahead and we’ll have a court date. We should have a court date within the next two weeks.

Dylan Silver (23:15)
I think that’s good. think a lot of people who are listening to this may be shocked to hear that maybe because of preconceived notions about investing in the tri-state area in the East Coast, the New Jersey. They may be thinking, oh, well, you it’s going to be a year long battle. It’s I don’t want to have to deal with that. But you have properties that appreciate faster. You have very strong rents, comparatively speaking. And then you have in many cases, I mean, you’re in southern New Jersey, southern Jersey, but so many instances.

Ken LePosa (23:23)
Yes.

Dylan Silver (23:42)
very close to a major metro or in a major metro itself. And so there’s all these advantages of investing. And on top of that, you’re not having to deal with this prolonged, you know, potential evictions process. So I think maybe we’ll get some more people investing in ⁓ New Jersey because of this episode here. But Ken, are coming up on time here though. Where can folks go if maybe they have a deal that they’d like your feedback on or if maybe they’re an investor out there and they’d like to look at some properties in Jersey?

Ken LePosa (24:10)
⁓ thank you for that question. So myself, Ken Leposa I go ahead and my website is www.kensellsoutjersey.com. And what I do is I work for Coldwell Banker out of Hattifield, New Jersey. But what I also do too is I provide investors, new investors, even some seasoned investors that might just be, you know, need to get the spark again. I provide a mentorship program again.

When I say free of charge, it’s free of charge, but I go ahead and I acquire the property for them. I help them ⁓ acquire the property, run the numbers for them. Then from there, then I go ahead and actually help them rehab the property with my guys. And then they can use my people to refi it. And then we go ahead and rent it and we do it all, we repeat it, do it all over again. But the whole time, especially with that new investor, which I’m working with about five right now.

I’m able to go ahead and kind of hold their hand through the whole process. I go ahead and take care of all the zoning paperwork, all the SEO paperwork, just so that then, you know, they know that it’s getting done right. And I’m holding their hand the whole time. then afterwards, I also manage it for them too. I got three investors right now that have never seen any of their properties. Never. You know, the only thing they’ve seen on their properties was on video on WhatsApp. That’s it. Other than that.

Dylan Silver (25:35)
Wow.

Ken LePosa (25:35)
I’m buying properties for them. I a good track record for my own portfolio. And they want to build up.

Dylan Silver (25:44)
Ken, thank you so much for coming on the show here today.

Ken LePosa (25:47)
Thank you so much. I appreciate that. Thank you for having me.