From W-2 to 134 Houses: How Grant Lewton Scaled His Real Estate Portfolio

Grant Lewton (00:00)
when you are expecting when you get a term sheet and you’re supposed to get back five to seven hundred and fifty thousand dollars in cash back and then all of a sudden that becomes almost zero, you go, ⁓ that is feeling very bad that five hundred thousand disappeared by one email, right? ⁓ but then, like I said, you you get over it, you formulate a plan and you execute. So

Welcome back that five hundred thousand dollars into my life.

Joseph Crooms (01:57)
Hey everyone. What’s well welcome to Investor Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. today I’m joined by someone I’ve been looking forward to chatting with. His name is Grant Lewton I hope I got it right because I think that’s how you pronounce it.

but Grant he’s ⁓ thank you Grant. he’s already on the line, he’s talking to us. so Grant, you know what? ⁓ before we get into your niche, which has been flipping and a lot of new things have been happening to you, hey, glad to have you here. Say hello to everyone.

Grant Lewton (02:30)
Hello everybody.

Joseph Crooms (02:31)
Great, great. So I think our listeners are really going to take something away from how you’ve been approaching business, especially in the flipping. But before we get there, let’s dive into this. So first of all, for people who may not be familiar with your world, give us the short version. What’s your main focus these days? And what market are you operating in?

Grant Lewton (02:53)
Yeah, that my main focus is real estate. We’ve had other distractions like owning a service industry, a HVAC company and a handyman company, but ⁓ the more we get into it, the more we realize our specialty is real estate. So we try to stay there. ⁓ we operate in the Kansas City market, but we do buy and holds and residential flips, residential ⁓ commercial, ⁓ office industrial, ⁓ you know, mechanic shops, that type of commercial, and then

Dabble in multifamily larger properties, a hundred plus units.

Joseph Crooms (03:23)
You said something to Grant that got my attention. What made you realize? You know what? The other things that I was into, but real estate is my niche. Where you f started flipping a couple of houses, how did you get into it?

Grant Lewton (03:35)
Yeah, so I ⁓ you know, graduate college, got a fancy, fancy in quotations job at a big four accounting firm. ⁓ hated it basically from day one. Great people around me, but just hated the work. ⁓ lasted until I got promoted, and then everyone told me it should get better once I got promoted, and I hated it worse. so I left, didn’t really know what I want to do. I’d already bought two houses at that point. And I said, Hey, this is something that really n I enjoy.

I spend my free time doing it and honestly I spent my time at work when I was supposed to be doing other stuff looking at houses and thought, What would it look like if I did this full time? So that ⁓ took its way that I I had some time to think ’cause I’d already rented one house and I had a roommate. So I had some room to breathe in life and I ⁓ took that and I worked for a national multifamily company that did management and acquisition. So ⁓ I started as a manager, worked my way up and did

other things in capital improvements, CapEx, and acquisitions. ⁓ and that was off and running. So that allowed me to build the commercial side, the multifamily side of understanding how to manage, operate, buy and sell all in once. I got a wealth of experience working with them. ⁓ and I continued to build my portfolio on the side. So when I left them, I worked with a a local ⁓ they were coastal on one of the coasts, but they had to

more localized portfolio here in Kansas City once I met my wife and we decided we didn’t want to travel near as much. So stopped working nationally and just worked locally for the most part. ⁓ and continued to build my portfolio. ⁓ as I did that and then eventually the portfolio got big enough where I said, Hey, you know, it’s unfair that I’m working full time for someone else. I need to focus on what I’m doing full time. ⁓ and then we were off to the races.

Joseph Crooms (05:22)
When did that come to fruition? When did you say, Hey, you know what, my my portfolio’s full? how long have you been operating at this level now?

Grant Lewton (05:29)
Yeah, so I I got to around fifty units, ⁓ twenty twenty three, twenty twenty four and had outside managers and really relied on outside people to do all the construction work, right? ⁓ so when I got to fifty doors, that was really when I that was the earmark in my brain where I said, Hey, I need to start considering this and then as I continued to push from there, ⁓ I really didn’t do any flips and you know, twenty twenty four is kinda

where ⁓ my duties at work continued to grow as the company continued to grow. Thankfully I was ⁓ happy to be in a leadership position there. And ⁓ it grew, commanded more of my time and so did my portfolio when starting to flip houses. And I said it’s just not longer fair to my ⁓ employers, the other people in the leadership team that I continue to do this. And I said, what would it look like if I went out on my own? Spoke with my wonderful wife. She said she was willing to make the sacrifice as well. So we jumped

made the jump there at the end of twenty twenty four, beginning of twenty twenty five. ⁓ and went full time. So I went from around fifty doors ⁓ at that point. You know, now we’ve bought a multifamily that’s 150 units that we’re a general partner in and then ⁓ and then since that time that I stopped working my last W two endeavor, I’ve bought a hundred and thirty four houses. So last last year and a couple months.

Joseph Crooms (06:48)
Wow.

So thanks for sharing it. So ⁓ what is your volume currently ⁓ and and and how does that translate into revenue on a monthly basis for you?

Grant Lewton (07:49)
Yeah, certainly. So I ⁓ you know, we do we we religiously keep raw data and my friend Claude does an excellent job summarizing things for me. So what that looks like on a yearly basis, so in twenty twenty five we were kind of building out the systems and we really started to push by like I I had ended my W two employment early that year and by May we’d really kind of got the formation of building it out with lenders and everybody.

So we started buying around ten houses a month, the back half of last year. So we ended last year at sixty-seven purchases. ⁓ and that was most of those we refi and kept. So we kept thirty plus of those and then ⁓ sold seven last year. So going into this year we said, Hey, let’s let’s double down on this and flip more houses, ⁓ and then roll that money into commercial properties.

So we ⁓ so far this year we’ve purchased sixty-seven, ⁓ sold thirty-seven. So that so far that looks in dollar amount, we’ve purchased fifteen million dollars in single family homes and we have sold just under ten million. ⁓ we have about forty active projects right now that were in the finishing touches of wrapping up and then we’ll list those for sale. So we should be almost doubling that number to about twenty. So if you annualize that.

⁓ switch my tab here. We’re on pace for about thirty million dollars of purchases in the single family realm. ⁓ we’ve sold we will project to end the year around twenty to twenty two million of selling ⁓ those flips and then we’ll refi ⁓ between seven and nine million in residential refies. So we’re we’re on pace to for every one that we keep, we sell two to three, which is a good number.

⁓ you know, I rely on the wisdom of people older than me. And that is what many people that have been flipping and holding residential for many years tell me the right ratio is ⁓ to create cash flow. ⁓ so right now most of our cash flow goes into just well there’s obviously a burden of monthly interest payments. We have negotiated friendly terms, but that doesn’t mean the interest is zero on our hard money. We we pay friendly, you know, eight to ten percent on hard money. ⁓

So some of the flips go to feed that, some of the flips go to feed our families, ⁓ some of the flips go to feed ⁓ refining properties that are the real retirement plan, right? ⁓ as we refi these properties, they get cash flow now, ⁓ depreciation now, and ⁓ principal pay down.

Joseph Crooms (10:23)
So your primary business is just ⁓ commercial flips?

Grant Lewton (10:27)
So we do we mostly do residential flips based on volume. ⁓ the commercial stuff we refi and hold long term for the most part. So we’re ⁓ as many people are, ⁓ you know, as residential as I wouldn’t say the fad has died, but a lot of people have gotten wiser to the cash flow is not immediate in residential burrs right now, right? A lot of it’s cash flow neutral and you’re getting tax benefits, principal pay down, et cetera, et cetera, right? So we

Personally, do get a lot more cash flow from commercial properties. So ⁓ our best cash flowing properties are ⁓ Burr’s on the commercial front. So we buy Flex Industrial, so it has an office component with warehouse component. ⁓ so we buy, renovate, refi it, place a tenant, then re-fi it. And ⁓ the a good portion of our monthly cash flow does come from commercial properties.

And we’re using the money from the residential flips to to serve as the feeder to fund those projects.

Joseph Crooms (11:27)
So ⁓ let me ask you this, the building you’re sitting in, how did you get that deal? ⁓ what what ⁓ what made you expand or what type of office did you have in the beginning before you purchased that building? How long?

Grant Lewton (12:13)
Yeah, certainly. So we are sitting in an office building in if you’re familiar with the Kansas City market, ⁓ this is in Johnson County, which is generally regarded as the best area of Johnson ⁓ best area of the Kansas City Metro. ⁓ we actually went to look at ⁓ for one of our service businesses, there’s a building just down the street from where I’m sitting now. We went to look at that property. We actually ended up buying that property on ⁓

creative finance deal where the seller had motivation to be out of the deal very quickly ⁓ to get their overhead reduced. So we bought that owner finance from them very friendly terms for both sides. Worked for them, worked for us, we’re happy. And ⁓ as we were doing that deal we saw this building up the street and said, Hey, we’ve never seen that building for sale. ⁓ and that was because it had been for sale for several years and somehow through the post COVID time just kind of got ignored.

It’s a little bit of a unique building where it had been sep eight separate suites. The previous owner-occupant took down a few of the walls to convert it to a single owner-occupant, which reduced its theoretical value to most shoppers because they’re they’re kind of immune to wanting to do a lot of work to it. So ⁓ this building was for sale for close to two million dollars for a prolonged period. ⁓ when we started looking, they had just done a price reduction, and we ended up getting it for roughly half of that original two million dollar asking.

⁓ that was about fifty dollars a square foot. ⁓ well a little bit more, but in that area. We ⁓ great area, great building, built in the 80s, just needed a little bit of work. We we don’t mind doing the work. ⁓ so we we occupy one suite. We have seven other tenants in the building. ⁓ we’ve built out a great community of like-minded people that rent from us here. ⁓ we’re very excited about it. Got a just got a

appraisal done for the refinance and we have essentially doubled the value of the building as far as the appraiser’s concern. So we are ⁓ we’re not office people, we are opportunists and because of the post-COVID office market was depressed, we found what we feel is a great opportunity. And ⁓ obviously when Burrs have gotten more difficult over the years, it’s very exciting to have a very successful BRR that we’ve taken full circle.

Especially in the commercial realm, we’ve taken it from ⁓ fully vacant ⁓ purchase to fully renovated refinance in less than six months. So ⁓ you know, we we’re ecstatic about that and see what else we can do in similar realms going on.

Joseph Crooms (14:42)
Thanks for sharing that Grant. Grant, you told me ⁓ you got a good community within your building. And I thought that was interesting ’cause you as you know in and real estate relationships ⁓ are very important. What are some of those partners in your building that you may have partnered with? or if you can explain if you have or have not, just, you know, regular relationships whatever whatever.

Grant Lewton (15:05)
Yeah,

absolutely. It wasn’t ⁓ it wasn’t something that was necessarily intentional, right? When you list something for rent, when we bought the building and listed it rent, we thought, hey, it would be cool if we found people that were on the same path as us, is growing, building, motivated. ⁓ you want to be a r surround yourself by optimists that are doing stuff, right? that is how you grow, is you have people around you pushing you. ⁓ it ended up working out that way. It we thought it would be cool, but

Lucky us, worked out that way. We have ⁓ one of the premier Airbnb operators who also does property management in our building. He also manages four of our four or five of our Airbnbs for us. ⁓ highly motivated ⁓ person that came from ⁓ humble beginnings. ⁓ his team sits right next to us across the hall. We have a mortgage lender and a ⁓ realtor group.

That’s on the back side of us. Again, young, hungry, motivated people, started from humble beginnings, moved into town, and are really pushing the limit. We have a capital group that’s bought several multifamily properties in the last five years, does various other things, has a couple service businesses, and an attorney that share a space. Behind them we have a ⁓ we have a CPA, a local CPA that does tax returns, bookkeeping, et cetera, et cetera. We had a

wholes one of the largest wholesalers in in town, that we’ve bought purchased many houses from. ⁓ and then a ⁓ like a co working community is moving into the larger space in the back. So we’ve ⁓ which has a whole other gamut of ⁓ people that we enjoy being around. So it’s it’s often when someone comes to visit one of us, they end up visiting multiple of us. It’s ⁓ it’s really worked out the unintentionally, but

worked out to where everyone’s moving in the same direction and it’s really gives us motivation to say, hey, the next time this is a fifteen thousand square foot building, what if what happens when we have a hundred and fifty thousand square foot building opportunity, right? What if we could build a community as we continue to increase our real estate holdings on the office side? What what would happen if we continue to surround ourselves with like minded people that are all pushing in the same direction and influencing our community? One of the the realtor group on the backside

⁓ is doing a back to school event where they’re giving ⁓ backpacks and needs and doing like a mini mini event mini carnival with food and drink and and ⁓ with the purpose of getting students ⁓ school supplies. When they went to look for sponsors, everyone in the building volunteer raised their hand and we’re we’re racing to write checks to sponsor it so we could do more backpacks, right? ⁓ it’s really cool to see everyone moving in the same direction and we’re happy to be a part of

Joseph Crooms (17:45)
Amen. God bless you guys. ⁓ Grant, ⁓ here’s another question for you. I know, you know, building relationships and in your case and your unique ⁓ positioning and and just had in your mind you brought it together. That’s not easy, especially in this climate. What’s been the key to keeping your machine running smoothly?

Grant Lewton (18:43)
Yeah, I think ⁓ I think that we are surrounded by a lot of people ⁓ that are doers, right? At the end of the day it boils down is people a are people a doer or not a doer, right? Are they someone that finds a way to get it done or do they find an excuse to stop? Right? We’ve ⁓ what keeps us going is that we it is not easy and we definitely fail at it frequently, but we keep the mindset of getting it done, right? The a lot of

people and it’s through no fault of our own, it’s oftentimes a problem in our culture, I would say, is they fall into this bucket I’m trying to get something done, right? But if you think about trying, at the end of the day you either got it done or did not get done. And I think that fail is a very like ⁓ a word that no one likes to say. We get very good at saying we failed here, right? Because it allows us to grieve that we’ve failed, make a plan, move on and stop failing and get it done. Right? So we are people who get stuff done.

And ⁓ sometimes we have to tell ourselves that in the midst of failing, right? It is never too late to stop failing and start getting it done. Right. ⁓ it’s ⁓ sometimes it you kinda have to tell yourself it in an aggressive manner so you get over the thought of it’s okay to fail, let’s grieve it, let’s figure out why we failed, now let’s fix it and move on, right? So there is a lot of deals that we do that we have some deals that take almost a year to get done through the different

minutia that happens, you know, bankruptcies, foreclosures. ⁓ we’ve seen it a about all of it, you know, feisty sellers, feisty brokers. There’s there’s a million different people in real estate in every transaction. You got the title, the realtor, the broker, the seller, and a lot of people that shouldn’t be involved sometimes, right? So at the end of the day, we are people that find a way to get done things done. We’re problem solvers. That is that is how we keep the machine going.

Joseph Crooms (20:30)
Grant you opened up something when you said about problems. So now every operator I know has a moment when things just got real. Maybe a deal that went sideways or time had a pivot. Would you mind sharing one of those moments with us if you can, if you have something fresh in your mind or just something that that just stuck sticks in your mind, stucks and stands out?

Grant Lewton (20:49)
Yeah, I mean we we are not immune to it. Like I said, we are real estate and construction, which is a huge aspect of what we do is buying ugly things and making it less ugly. ⁓ it is imperfect. And if I’m honest with myself, there’s probably one thing that happens a week, if not more, where I just feel sick to my stomach and say, Why the heck am I doing this? I want to give up and go live the easy life, sell it all and go live on the little bit of residual I would have from that, right?

⁓ but then I drink a Diet Coke and ⁓ and feel a little bit better and say, okay, let’s let’s find a solution to move on. ⁓ anything in particular lately? I mean, yeah, the the building we sat in, we we ⁓ originally got a really low appraisal on the refinance and we dug into it and said, How did this happen? Why did this happen? There were some things we needed to fix on our front, ⁓ there was some things we needed to fix on our leases, there was some

aspects we need to choose better on the lender. So we fixed them, we went to a different lender and we fixed it, right?

when you are expecting when you get a term sheet and you’re supposed to get back five to seven hundred and fifty thousand dollars in cash back and then all of a sudden that becomes almost zero, you go, ⁓ that is feeling very bad that five hundred thousand disappeared by one email, right? ⁓ but then, like I said, you you get over it, you formulate a plan and you execute. So

Welcome back that five hundred thousand dollars into my life.

Joseph Crooms (22:14)
Thanks for sharing that, Grant. So, okay, so ⁓ that’s the kind of stuff people don’t talk about enough. And honestly, what separates the folks who who are just dabbles from the ones who stay in the game. Thank God just staying in the game. Let me ask you this. What do you focus on solving or scaling next? What’s the next ⁓ real goal for you?

Grant Lewton (22:32)
Yeah, that’s a good question. I think ⁓ we obviously hope to continue to build out our ⁓ active cash flow, right? As Carl Icon said, I don’t think I’ve given away all of my pillows from my ⁓ from my ⁓ shelves behind me, but positive cash flow is happiness, or happiness is positive cash flow. ⁓ so we we want to continue to build out our active cash flow.

⁓ active positive cash flow because then a lot of times in real estate you can get to the point that you have neutral or negative cash flow but long-term benefit through appreciation, principal pay down and depreciation, right? So while we have largely built a single family portfolio, the ones that we’ve kept that are cash flowing a little bit, but most of them we’ve acquired post COVID. So there’s not a ton of cash flow on the bone in that. So we are looking to continue to build out

Positive active cash flow, not just rely on the depreciation and good basis that will benefit us five, ten, twenty, thirty years down the line. Every house that we buy, if we don’t refinance it, pays off in 30 years. It will be cash flowing like a monster. It’ll be a mini retirement bomb. That’s usually what I call it, right? Because what is a $250,000 house worth 30 years from now? Probably at least $500,000, right? that will be paid off and it will be its own mini retirement plan. We have over a hundred of those.

But that doesn’t solve today’s problems, right? We need to continue to build out our active cash flow ⁓ to withstand the weather, the storms of the economy, of the local environment, et cetera, et cetera. So what that looks like in building that out is we’re doing currently we’re doing more commercial deals that have positive cash flow from day one. We’re closing on a warehouse that ⁓ you know through a a hard work in the first sixty to ninety days, it’s gonna be around a fifteen cap on purchase.

which is something that is very hard to do in today’s real estate environment. ⁓ it’s not the prettiest thing ever, but it’s big, it’s nice, it’s got good bones, I should say. It’s probably not nice, but little ugly, but it does the purpose and we can have active cash flow ⁓ starting in month three. So that is our big ⁓ effort for this year is building out positive cash flow now.

Joseph Crooms (24:46)
Okay. The next move can either compound things or create chaos depending on how you play it. So ⁓ now I know a lot of listeners ⁓ are either early in the journey, Grant, or looking to level up. I think they’ll benefit from the hearing this. When it comes to building relationships and growing a network, what’s made the biggest difference for you?

Grant Lewton (25:08)
Bill I think that I am naturally not a ⁓ extrovert, right? So I have to force myself to go out at times. ⁓ but forcing myself to go out and meet people and do things, ⁓ is always beneficial because you never know when you’re gonna meet the person that you do your next deal with, whether it’s on the lender front or use them as a subcontract or even be your tenant, right? Like a lot of the people that are in our building, at least

Half of them I met at some random event or in line for a taco ⁓ three to five years ago, right? And that’s where the relationship started. I am naturally someone that loves to sit at home on a Friday night and figure out some new innovation, ⁓ talking to Claude and Excel, right? Like I I enjoy that and that’s where most of my breakthroughs come from.

I am someone that needs to force myself to go out and make those connections, but when I do, it almost always benefits long term. I most of the best deals are not found on Zillow or Loopnet, et cetera, right? It is going out and seeing somebody, ⁓ even on a tour and asking what else is coming, right? I get a shot ⁓ when things are most of our best deals come from right before it’s pushed out to the public or at the very end of its listing cycle.

where the broker says, Hey, I need an offer because this seller needs to move this, right? That’s where a lot of our opportunities come from, either in seller finance, we have to pay asking, but we have friendlier terms on seller finance. Or we have a discounted asking price or some other variable that makes the deal viable for us and a home run for us that had not been present before.

Joseph Crooms (26:49)
Thanks, Rant. All right, so ⁓ before we wrap things up, Grant, ⁓ you know, you can’t fake that, relationships, everything. ⁓ thank you for sharing coming out of your comfort zone and you know, just the surprises that it opened up for you. before we wrap things up, if someone wanted to reach out to you, connect with you, maybe collaborate to learn more about what you’re doing, what’s the best way to reach you?

Grant Lewton (27:10)
Yeah, I’m ⁓ I’m never too much of an Instagram or TikTok or Snapchatter. I I mostly stick to Facebook and LinkedIn. So I think both of them are public profiles or whatever those settings behind the scene are. So Facebook, Grant, Lewton L E W T O N or ⁓ LinkedIn, either one. That’s the that’s the easiest way. ⁓ you can see some of our Active Holdings Barzel, B-A-R-Z-E-L Holdings.com.

Joseph Crooms (27:37)
Hey Grant, do you mind me s repeating it one more time? ‘Cause somebody was looking for a pinch that he was getting ready to get so let’s go.

Grant Lewton (27:43)
Yeah.

barzelholdings.com B-A-R-Z-E-L Holdings.com or Facebook or LinkedIn. I try to post once a week. sometimes I’m successful, sometimes not. But I also have a newborn infant in my life, so I love I love my sweet little daughter who is about five months old right now. So you might get some of that content as well.

Joseph Crooms (28:04)
Well, God bless you and bless you, your wife, and your newborn family. That’s tremendous. Well, perfect. Well, listen, I appreciate your time, your story, your perspective, Grant. ⁓ we need more people in spaces that are doing the right thing the right way. Thanks again for being here. ⁓ and for all of you tuning in, normally I say I know you got some value from us. I know that you got some value from us. I’m saying that with emphasis. ⁓ make sure you subscribe.

we got more conversations coming with operators just like Grant Lewton who’s out here building real businesses, helping real people, helping businesses in their community grow. ⁓ so we’ll see you on the next episode of Real Estate Pros podcast. I’m your host, Joseph Crooms. And Grant, hey, tell everybody we’ll see you soon.

Grant Lewton (28:49)
We’ll see you guys next time.