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Show Summary
In this conversation, Karly Worth shares her journey from the fitness industry to becoming a successful real estate investor. She discusses her first investment in a 36-unit property in Oklahoma, the challenges and opportunities in multifamily and single-family investments, and the importance of networking in the real estate space. Karly also highlights her current projects and offers insights into investment strategies, including turnkey rentals and the significance of partnering with experienced individuals. Dylan Silver also contributes insights on investment approaches and market trends.
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Investor Fuel Show Transcript:
Karly Worth (00:00)
And it’s like when you’reWhen you’ve never done real estate and you’ve never invested in real estate, you’re kind of like, that seems so far-fetched. That’s something not attainable. And then like coming into that and like buying one building and becoming a multimillionaire for that one building, it’s like, this is life-changing.
Dylan Silver (01:51)
Hey folks, welcome back to the show. Today’s guest, Karly Worth, is an investor based in San Diego and holds a Connecticut real estate license. She’s acquired over 140 doors in several markets, including Oklahoma, Texas, Arkansas, Tennessee, and Mississippi. She’s been featured in Authority Magazine for being a leader in the real estate space. You can find her on Instagram, REwithkarly. Karly, thanks for taking the time today.Karly Worth (02:18)
Yeah, thanks for having me. See, we’re happy to be here.Dylan Silver (02:21)
You know, you’ve been involved in quite a bit. We didn’t even mention in the bio transition from from fitness industry to real estate. And then we were talking before the show about like, where are the markets that you’re active in? said I’m in San Diego, but I’m in Connecticut and then I’m active in Florida as well. One of the things that interests me about, you know, real estate investors in general is there’s no like cookie cutter story of a real estate investor, right? You know,Karly Worth (02:47)
pressure.Dylan Silver (02:48)
When we talk specifically about how people get into investing, it’s a number of different paths. How did you get into the investing side of the game?Karly Worth (02:59)
So I got my Connecticut real estate license five years ago. I just finished year five technically. So I’m going into year six as of January. So I came into the space, the fitness industry obviously took a nosedive along with a lot of other industries during COVID. So I transitioned into real estate, got my real estate license, instantly fell into the investment space. So I had acame to be client in my real estate course. he was kind of, he and I were like pals, but he was really just taking his course just because he was bored. So after I had passed my license, he was like, hey, Karly, do you want to help me find my next investment property? And I was like, heck yeah. I’ve been licensed for like six hours, and I have a first client. Like, how great. And instantly started.
Seeing things on Facebook, especially in the Connecticut investment groups where people were wholesaling and I was like, what is this whole wholesaling thing? So I started researching that and within my first seven days of being licensed, I had two deals on our contract with two different investors and realized like this is a space that a lot of people don’t tap into and there’s a lot of upside here. You’re getting the…
you know, the sale on the front end, you’re getting the listing on the back end, which it’s like double dipping, right? So it’s not just one transaction, it’s going to be two transactions per client, per project. So I fell into that space eventually pretty early on, maybe like at month three, I transferred to an investment brokerage where I really learned the ropes of hard money lending, bridge loans, fix and flips, like.
buy and holds, all of that. So started taking on more clients in that space and then about a year and a half later became managing partner for that brokerage and then slowly started transitioning with one of the owners into buying properties out of state. So Oklahoma was our main market. I would say, my first ever investment property was a 36 unit in Oklahoma. So once we expanded there,
just kept buying and that’s pretty much how it started and it’s just been a snowball effect since then.
Dylan Silver (05:24)
Now a 36 unit in Oklahoma, the first deal, right? Quickly, walk us through that. That seems like a step to take, right?Karly Worth (05:28)
Yeah, it a little crazy.Yeah, and it’s funny because everyone like, you know, when I say that they’re like, wait, what? Like you didn’t start on single families and whatever. So I have this connection. My now fiance, his friend was selling this deal in Oklahoma and I had been working on it for close to a year to try to find a buyer for this deal. And I was like, this is such a good value add deal. Like, but no one can get financing for it. Like it’s almost like
Too distressed, but it has so much potential, but the price per door is kind of low. So lenders weren’t lending, and a lot of people know in that space at the time, the multifamily and commercial lending was really kind of very difficult to obtain. So ⁓ I had probably two or three buyers on that project. No one could obtain financing. It was just like,
a never-ending thing and I’m like, this is such a good deal, I wish I could buy it, but I have no idea what I’m doing. And when I partnered with my business partner, Chris, who was one of the owners of the brokerage that I managed, I was telling him about this deal, kind of making a joke. We had sat down to start a debt fund and I’m like, you wanna buy a 36 unit in Oklahoma? And he’s like, yeah, what’s the deal? Do you have the numbers?
So I pulled up the numbers, called the property manager, and we’re asking her a bunch of questions. And he’s like, we need to buy this building. And I was like, wait, what? So a week later, we flew out to Oklahoma, looked at this 36 unit building, and ended up buying it. So it was something I really never thought possible.
And it’s like when you’re
When you’ve never done real estate and you’ve never invested in real estate, you’re kind of like, that seems so far-fetched. That’s something not attainable. And then like coming into that and like buying one building and becoming a multimillionaire for that one building, it’s like, this is life-changing.
This investment strategy can be life-changing. Granted, it was a big value add, but my partner has a 10-, 12-year background in construction. ⁓
property management. So that kind of helped carry us through that project. And then my side is more of the relationships from people in Texas, as well as raising capital. That’s always been like my niche in the space. So combined, we were just really able to take that building to the next level. And we still own it today.
Dylan Silver (09:03)
Now, when we talk about multifamily acquisition, there’s a lot of people right now talking about how there’s some level or a large degree of distress with operators who may have had variable rate debts and didn’t, you know, no one could have COVID happening. And then you have, you know, lots of new construction happening and then rents going sideways, stabilizing. So you have this, you know,perfect storm of events that are not favorable for people in these positions. And so there does seem to be a big opportunity right now, maybe even for newer multifamily investors to get into some of these deals. Do you have any advice for folks who may be looking at multifamily right now trying to figure out how to get in?
Karly Worth (09:41)
Pressure.Yeah, so we’ve been getting asked this question a lot. My fiance owns and runs a pretty big education company, primarily focusing on flips and fix and flips and buy and holds in the residential space. And we are now creating a multifamily aspect to that because we’ve been getting asked so much. the entry level, I mean, I think we needed like $600,000 to close that and like
Thankfully, we had the capital to be able to do that. But it’s really not as far out there as people assume. Like everyone just thinks that like, residential is just so much more attainable. It’s so much easier. But really, at the end of the day, you are putting the same amount of work into a single-family rehab as you are into a multi-family rehab. It’s just a higher scale. Like instead of designing one bathroom, like you’re designing one bathroom, but you’re just buying 36 of
So it’s really not like that much of a difference from single-family to multifamily Obviously, you know if you are bouncing into that multifamily the down payment is going to be higher minimum 25 % down Sometimes higher based on your experience. So it is different than buying residential. You’re gonna need more liquidity at the end of the day but if you do have some capital to kind of
Dylan Silver (11:21)
Yeah.Karly Worth (11:44)
go through on your first one, even if it’s like a 10 or 15 unit, you have that capital. Once you get that under your belt, you can then go to a bigger deal and have that track record for people to lend capital to you to be able to keep scaling as you progress in projects.Dylan Silver (12:01)
Now, now when we talk specifically about, know, the number of doors that people are looking at, you some people might say, well, I’m coming from single family or I’m looking at single family homes. Let me let me get a duplex, a triplex or quadplex, right. But and you make could potentially house hack that and there’s there’s a you know, value there, of course. But then if you’re looking at like eight units and 16 units, I had someone tell me recently that, you know, the work to manage 20 units and the work to manageKarly Worth (12:14)
Yeah, for sure.Dylan Silver (12:29)
50 or 75 units is comparable. Like you’re with 50 and 75 units, you can hire a property manager, you can have more support with eight to, know, anything under 50, let’s say you might be having to do most if not all of that yourself. For folks who are starting out and maybe they have the option, let’s say that they’re blessed enough to have the option to go bigger. Would you tell them to go bigger? Would you tell them to start small?Karly Worth (12:34)
sharing.If you have the option in the capital and you have, I would definitely partner with somebody who has the experience in something that you’re lacking. If your strong suit is not construction, I would not advise going into that alum because obviously there’s a lot more risk in a 50 unit than there is in a single family. So that deal can go completely sideways. Always do your inspections. Always get multiple quotes.
But yeah, I would say going bigger because like eight, 16 units, like you don’t, you’re not going to have an on-site manager, right? So that means you could put somebody in there who’s going to live there for free. And in that aspect, it’s, yeah, you’re, you’re losing maybe $1,200 of rent, but you have someone who’s watching over the building, who’s doing the handyman work, like that sort of thing. And since we implemented that in the 36 unit, it’s been a lot easier. It’s been a lot cheaper.
And just kind of a smoother process in general. But yes, if you have the capital and the knowledge and experience to go bigger off the bat, then I would suggest going bigger off the bat because property management, again, it is the same to manage a 16 unit versus a 50 unit. But in a 50 unit, you can easily put on-site management versus probably paying at least 10 % for management outside.
I never advise people to manage their own assets. Like even a single family, like we don’t manage our own. We don’t manage anything of our own. We own probably about 150 single families between Little Rock and Memphis and we do not manage any of that.
Dylan Silver (14:20)
Hmph.Now, there’s so many ways for folks to, if we pivot to single family, there’s so many ways for folks to get into single family, right? Because there is a lower barrier to entry. So that means, you know, some of these more creative strategies are both more accessible and then in many cases more feasible. Although that’s not always the case because, you know, you’re having a more sophisticated seller when you’re looking at a larger deal. So they may be familiar with, you know, like the idea of like seller financing, for instance. But when we talk
Karly Worth (14:50)
for sure.100%.
I have a horror
story from that, we won’t get into that. Okay, go for it.
Dylan Silver (15:06)
I might ask you about that in second.When we talk about acquisition in the single family space, you could buy on market, you could go to a realtor, we’re both realtors, you could look off market, you could door knock, you could find foreclosure lists, you could go through probate lists, divorce, death, you could also put signs in the ground that you buy houses for cash or something like this, and then spheres of influence. And I know people who talk about
if they’re an end buyer that at this point they don’t do any marketing and I kind of think well you’re missing out but I do think that there is something to be said for those folks who’ve built the business over years where folks already know that they’re good for it. If they bring a deal to them that they’ll give them their honest assessment at where they can close at. Do you have any feedback for folks who you know maybe just starting out in that single family space and aren’t really sure what their primary lead source is going to be and how they’re going to you know go about finding
Karly Worth (16:20)
Yeah.Dylan Silver (16:47)
the right type of deal for them? Are they going to be looking at a short-term rental? Are they going to be looking at, you know, workforce housing, quote unquote, or are they going to be looking for, you know, something year to year?Karly Worth (16:57)
Yeah, I mean, there’s so many different strategies, Like getting into it when we first like when my business partner and I first got into it, we were trying to run like we were only doing first, right? So we are only buying rentals that we could cash out completely on and not have any capital left in the deal. Obviously, those are a little few and far between now, especially in certain markets.Like we primarily flip in Connecticut, but we won’t hold anything that we flip there for a couple reasons. It’s not a landlord friendly state like taxes and the rental like it’s the price to entry there is so much higher that like your rentals are never going to really make sense or like cash flow at this point. So again, it really depends on what market you’re in. When I first got started, I pretty much spent my first year as an agent connecting with anyone and everyone.
I even, would say my third month in, I sold ironically a 36 unit in Alvin, Texas to a big buyer. like, it’s just because of the people I met and the people I knew. And playing off of my last name, which is probably why it’s one of my favorite sayings is your net worth is your net or your network is your net worth. ⁓ You need to know people.
Dylan Silver (18:15)
Yeah.Karly Worth (18:18)
Facebook has a lot of good connection points with people, contractors, wholesalers, that whole thing. You need to be a little careful. There’s a lot of wholesalers now that aren’t experienced, which I’m sure even you’re seeing since you’re involved in that. And there’s a lot that, you know, there’s like, oh, it’s 30K rehab. And you get there and you’re like, this is $130,000 rehab. And the numbers just don’t work, right? But.Dylan Silver (18:41)
YeahFoundation
is rotting. Yeah.
Karly Worth (18:46)
Yeah, like it’s sitting on the floor, but I have so many connections in that space that like we don’t market either for You know single-family fix and flips and I think if you get to that point where you become You know someone top of mind for these people like they’re gonna get a deal and they’re gonna send it to you like if you close a deal with them like they know you’re a legit buyer they’re gonna continue to send you those deals, so I would also recommendand doing your own networking outside of real estate agents, but also get a real estate agent that’s actually investor friendly in the market that you’re looking in. You don’t want a regular agent. They don’t understand numbers of fix and flips. I can’t tell you how many offers I’ve submitted where the agents get like insulted by the offer. And I’m like, you’re putting up a house that you can’t even live in. And you think a residential buyer is going to come in here and
do what? Like, they can’t do this rehab.
Dylan Silver (19:45)
⁓Plus, unless they have it in writing, they got to show it to, they got the responsibility to show it to their seller.
Karly Worth (19:53)
100 % and I don’t do verbal offers anymore. I have this one friend and they’re always like, oh, just run it by them verbal. And I’m like, if it’s close enough, I’m like, no, we’re just putting in writing because they won’t go and show their seller this. They’re just going be like, no, that’s way too low or whatever the case is. But you’re definitely going to want an agent that’s in the investment space. That is a huge, huge, huge must when you’re looking for those assets.Dylan Silver (20:09)
Right, right, right.Karly Worth (20:21)
I mean, people like me, like I can find deals for people in other areas. Another thing that some people are really getting into is the turnkey rentals. That’s also a really big thing. Yeah, I mean, it’s great. I mean, you’re buying, like you’re probably paying 25, $30,000 down, but you’re going into a cash flowing and equity, you’re coming into equity as well.Dylan Silver (20:33)
That’s a great.Karly Worth (20:48)
They’re usually probably like 85 % of what it’s actually worth that you’re buying it at, but it’s turnkey, management in place, tenant already in there, already cash flowing. So that’s an option.Dylan Silver (20:58)
Yeah, with those properties,that’s, I’d say there’s so much more of it. And I can’t speak for every market, but in Texas, know, Oklahoma, might throw Arkansas in there as well. I don’t have experience in that market, but I can imagine even the new construction properties, if you’re coming with that much down, you know, new construction, you’re coming with, you know, 25, $30,000 down. I’d be curious to see how much equity there is like right then and there based on, you know,
Karly Worth (21:24)
Yeah.Dylan Silver (21:25)
Especially if you’re renting an outlet even at the first year. I mean it might have equity right away I don’t know but this this is YeahKarly Worth (21:29)
Yep. Yeah. Well, these do. Yeah.Yeah. I mean, these projects, these products do. We actually own a turnkey rental property company, and it’s great for people who are like, hey, I don’t want to get into the whole like rehab, buy rent, figure it out on my own, because then I have to deal with the contractor. I have to deal with the construction, the refinance, blah, blah, blah, blah, like.
I have 25K, if that’s gonna get me $250, $300 a month in cash flow, and then five years from now, I need to send my kid to college, I can go refinance that house now and take out all that equity that I built over the past 10 years, and it’s probably gonna be more than that initial investment. So that’s been a very popular strategy for more of like a hands-off investment strategy, because really like,
Dylan Silver (22:12)
Yeah, great play.Yeah.
Karly Worth (22:23)
Construction and management really isn’t for everybody. It’s a lot. It’s a lot of work. So people that have more of like higher paying W-2 jobs that want to get into real estate but can’t leave their full-time job, that tends to be like a really happy medium.Dylan Silver (22:39)
Yeah, and I think there’s so many ways for folks who are not wanting to leave their W2 job to get into the real estate space. And one of the unique things, you know, when we talk about some of these other markets, I might I’m a little hesitant to say Connecticut because I’m from New Jersey. I grew up in New Jersey, so I kind of. Yeah, I mean, Texas, I’ve noticed there’s a lot of what I would call mom and pop investors, you know, folks who have jobs andKarly Worth (22:46)
Yeah, for sure.We’re just following each other around apparently.
Dylan Silver (23:08)
and they’re investing in real estate. I really didn’t, and this may be changing now, but I really didn’t know too many mom and pop investors. Like that seemed to be like, if you were in real estate where I grew up, that was your location. Yeah, it wasn’t something that you were doing on, and that could be for so many factors, but we actually are coming up on time here though, Karly. Any new projects that you’re working on or how can folks reach out to your team?Karly Worth (23:20)
You’re a big. Yeah.Yeah, we’re currently working on 40 units in Texas right now. Major, major rehab. But the exciting thing is, based on how I always buy, so I guess it’s not that new and exciting for me, is that we’re going to be able to completely burr out of these 40 units and get capital. We’ll even get additional capital, which is tax free. So we’re super excited to basically own 40 doors for $0.
and continue cashflow for the next 30 years. So that’s kind of what we’re working on. If anyone has any questions or wants to go little bit more in depth in anything we talked about, whether it’s the capital side of things or the turnkey rentals or the education, we’re happy to have a chat with you. So you can either reach out to me on Instagram at rewithkarly.
That’s also my email, [email protected] So just happy to answer any other questions that anyone has and continue to grow all together.
Dylan Silver (24:40)
Karly, thank you so much for coming on the show. Thanks for your time today.Karly Worth (24:43)
Yeah, thanks so much for having me.
