How Networking Built a Real Estate Empire in St. Louis – Rich Groves

Rich Groves (00:00)
I have done deals with people that I met at real estate investor, you know, meetups, just monthly meetups. I’ve done deals with people I’ve met at conferences. It’s it’s just I mean, you just don’t know, right? You go to these meetups as long as you have an open mind and go with a goal, you know, have a purpose when you go network. You should always network with the purpose. I truly believe that. And, you know, even have some questions made up as you network with people.

maybe specifically trying to help you figure out if that person can help you achieve that goal. I’m not saying to be ignorant if they can’t. You walk up and if you’re trying to raise money at a meetup and you go and say, hey, do you have any money? I mean, there’s ways to do it, So, just kind of, and there are ways and I know people and can tell people how to do that, but there are ways to find out as you’re talking to somebody where they can fit in your team. Cause it’s all about building a team and

by a team isn’t necessarily people you’re hiring to work with you. But it’s people you know you can connect with, whether you’re hiring a contractor or you know somebody that is rehabbing properties in a certain area and you’ve got one that you can wholesale to them. It’s all about building those connections. I mean, I really think you should go with a purpose. I know I’m rambling here. You should definitely go in with a purpose and meet people that can help you achieve that purpose.

Kristen Knapp (02:53)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Rich Groves, who is throwing the third annual Gateway to Freedom REI event in St. Louis. I’m excited to have you here. Thank you for being here. Well, let’s go back to the beginning. You’re a real estate investor. You got a lot going on. How did you get into this space?

Rich Groves (03:03)
Thank you, Kristen. I appreciate that.

You know, I was looking for something to supplement income, you know, kind of a side hustle. I caught a couple TV shows about renovating properties back in the day. They weren’t huge like they are now, but there were a couple here and there. And I had a cousin that was a contractor talking about some people he was working with that were making a good deal of money rehabbing houses and stuff like that. So I was like, well, let me give that a shot.

Kristen Knapp (03:34)
Not as simple as that.

Rich Groves (03:37)
Yeah, pretty

much. mean, it was, it was looking into it, obviously. ⁓ We purchased based on his guidance and connecting me with a wholesaler at the time was my first taste ⁓ into the creative real estate, not just go to a realtor and buy a property, things like that, but more working with wholesalers and being more creative. That was our first dabble. That was back in 2005. And we purchased our first rehab then.

Kristen Knapp (04:05)
Wow, and you just fell in love with it right away.

Rich Groves (04:08)
Yeah, yeah, I did. thought it was amazing. And that was from a guy I had very little, know, very no, I would almost say no education on the thing. had taken a couple real estate investing classes in ⁓ in college. But other than that, you know, nothing like real world, no real world experience.

Kristen Knapp (04:26)
Yeah, how did you learn? What is your advice for people who are just starting out? The best way to learn.

Rich Groves (04:32)
Well, don’t do it like I did.

Mine was just like, well, ⁓ it seems to make sense. We know we bought it for this amount. Looking around, once we fixed it up, we knew we could probably sell it for this amount. So I guess this is our budget as long as we don’t overspend to where we’ll have to sell it for more than it’s worth. But I mean, that was kind of it, just ⁓ with not really any education other than being able to do comps at the time. I knew how to do that. ⁓ And I would just say that

my advice to folks just starting out is learn how to run numbers, connect with somebody who does know how to do things correctly. ⁓ Just meet with people at real estate investor conferences or even your local RIAs and just start picking brains. offer, I do say that cautiously to newbies, do offer some kind of value back to them because folks are a lot of times skeptical on, this person just wants to come pick my brain. Not a problem. Just make it a two-way street.

Kristen Knapp (06:18)
Absolutely, and you’re kind of like a networking expert. You run multiple networking groups and you’re throwing this big event. ⁓ When did you start kind of hosting these ⁓ meetups?

Rich Groves (06:30)
Yeah, mean, no, that’s a great question. You know, about we’re in our ninth year for the one that I’m doing that’s just 100 percent networking. I had a real estate investor that I met at a local RIA. Pardon me. That was kind of just outside the St. Louis area. So it was kind of a task for him to come to St. Louis. But he would reach out to me and say, hey, I’m coming to St. Louis on such and such date. You want to meet lunch? We’ll grab lunch. I was like, sure. So we started doing that. And eventually he’s like, hey, why don’t we just host a.

a meetup and invite other people to come have lunch with us and talk real estate. And I was like, all right, cool. we started that and then he kind of like just fell off and I just started kept hosting it. So I still host that one to the day. It’s not a lunch one anymore. It’s in the evenings now. We went virtual during COVID and then we brought it back up live and started doing the evenings once a month as well. that about, yeah, it’s this our ninth year doing that. And it’s just, I love connecting with people. That’s why keep doing it.

Kristen Knapp (07:22)
Yeah, and it’s probably so gratifying to help other people as well. mean, the networking is so important in this industry.

Rich Groves (07:29)
Yeah, 100 % true. It’s I mean, you hear it over and over again. I know it becomes tired where you’re like, oh, your network is your net worth. But I mean, it’s so true in this space and real estate investing. You don’t know the next person. You know, I I’ll be honest with you, a few years ago, I thought, oh, I don’t I don’t need to keep going to these real estate meetups. I know everybody I need to know. I’ve got my connections or whatever. And and probably it was almost two years that I hadn’t gone to a real estate. I was hosting mine, but I hadn’t gone to a real estate and another real estate investing meetup.

Kristen Knapp (07:35)
Yeah.

Rich Groves (07:58)
for a while and I showed up at one and I was like, holy cow, just being out of the scene for two years, there are so many people here, I have no idea who they are. So that lit a fire to me to start a second networking group where, and meetup that we do more traditional where we have a speaker each month and a topic and networking and food and drinks and all that kind of stuff, like a traditional meetup. we do that now too. So we have two a month.

Kristen Knapp (08:24)
That’s amazing. then tell me about a time where maybe one of these connections really paid off for you.

Rich Groves (08:30)
Yeah,

it’s I mean, we

I have done deals with people that I met at real estate investor, you know, meetups, just monthly meetups. I’ve done deals with people I’ve met at conferences. It’s it’s just I mean, you just don’t know, right? You go to these meetups as long as you have an open mind and go with a goal, you know, have a purpose when you go network. You should always network with the purpose. I truly believe that. And, you know, even have some questions made up as you network with people.

maybe specifically trying to help you figure out if that person can help you achieve that goal. I’m not saying to be ignorant if they can’t. You walk up and if you’re trying to raise money at a meetup and you go and say, hey, do you have any money? I mean, there’s ways to do it, So, just kind of, and there are ways and I know people and can tell people how to do that, but there are ways to find out as you’re talking to somebody where they can fit in your team. Cause it’s all about building a team and

by a team isn’t necessarily people you’re hiring to work with you. But it’s people you know you can connect with, whether you’re hiring a contractor or you know somebody that is rehabbing properties in a certain area and you’ve got one that you can wholesale to them. It’s all about building those connections. I mean, I really think you should go with a purpose. I know I’m rambling here. You should definitely go in with a purpose and meet people that can help you achieve that

Kristen Knapp (09:53)
Yeah, and you never know when one of those connections is going to pay off. So just being open to everybody because you never know what’s going to happen and when that’s going to be really valuable in the future.

Rich Groves (10:04)
Absolutely.

mean, had a lady show up at one of my meetups one time and I tease her and if she ever if she watches this, she’ll know it’s her but I’m not going to drop a name but she showed up at one of my meetups and it’s the one that we do that’s 100 % networking. You just buy your own food and drink at the restaurant and she had all she had was an iced tea and she forgot to pay. She left without paying. So I was like I gave her a hard time. I had to buy you a nice tea, you whatever. But later down the road as I got to know her and her husband better, I wholesale them.

couple different properties. know, so I mean, just just networking with people, you never know the connections are going to make. And it’s amazing when you do meet somebody that you can build this business relationship with.

Kristen Knapp (11:19)
Yeah, that’s amazing. So tell us about the Gateway to Freedom event in St. Louis.

Rich Groves (11:25)
Yeah, so we have over 20 speakers going to be taking the stage over two days, October 11th and 12th in St. Louis at the Hollywood Casino. And we have some nationally recognized speakers like Sam Prem and Justin Colby. We’ve got Joe McCall there. Sean McClossie is going to be there. Some other really well-known national speakers as well as some local speakers. And the great thing, though, is we handpicked every one of our speakers because we know they’re doing amazing things or having

incredible success, whether it’s in St. Louis or nationwide to provide value to people to learn. But the great part about real estate investing conferences, it’s not just the people taking the stage where you’re granted just open up like a sponge and soak up as much as you can. But it’s also the connections we have built in networking breaks throughout the day. We have a couple each day where you’ve built in networking breaks. Our VIP package offers a set the Saturday night.

VIP mixer where it’s our VIP speakers and sponsors are all networking together. So you’re trying to build those stronger relationships. we have, I kind of joke when we were doing our first one a couple of years ago, I was joking that, you never know. You might meet your spouse at one of these conferences. You never know. And true enough, had a young, two individual people, guy and a gal show up that,

met at the conference and started dating and they’re still together today. So, you know, it’s a true story. You never know what you’re going to get.

Kristen Knapp (12:56)
Exactly, you can get a lot more than you even think. So this is the third annual, so tell us about the last two and how successful they were.

Rich Groves (12:59)
That’s right.

Yeah, we’ve had some incredible results. And the thing about our conference, sets us apart. And I’m not knocking any of the other conferences because they’re all very valuable. I’ve gone to several conferences and you go to some of these weekend events or whatever and you sit there and you’re like, well, this is amazing information, which it is. And then the conference turns into almost like an infomercial for their mastermind or it’s a… ⁓

pitch to get you to buy into their course or whatever. We don’t have a gateway to Freedom Course to sell or anything. So we’re not pitching. Now our individual speakers might have their own individual mentorships and we’ll ask them all to throw up a QR code or something that if you’re interested you can scan the QR and find out how you can work with that person or learn more from them or something. But we don’t have a mastermind or course or anything like that to sell. So you go in, it’s 100 % just whatever I’m going to get out of this, I’m getting out of this because

It’s on me to make these connections. It’s on me to learn from these folks and reach out to them if I want to know more. But we, and that’s kind of been our theme the whole time, all three years. And we brought in some great, great folks as well. Like last year we had Amy Majuri and Jamil Damji there as well as Sam Pram and Lucas Walls as partner and Joe McCall and Sean McCloskey and all that. And we bring back some folks that have ⁓ done amazing and we’ve got great feedback. So we, we bring those folks back.

And we just had nothing but positive feedback. And the vibes are just, again, they’re positive vibes. try to attract people that are ⁓ there to provide and serve. And that’s where we go with this.

Kristen Knapp (14:48)
Yeah, so you’re just like really helping people connect and learn and that’s, you know, that’s the basis of it. And then tell us more about St. Louis, because I know it’s being held in St. Louis and I know a big part of it is highlighting that market. Can you tell us about the opportunity there?

Rich Groves (14:55)
Yeah, it really is.

Yeah,

absolutely. know, I ⁓ and the reason for that is, you know, I’ve gone to these national conferences before, before I started hosting myself. And I very rarely met people from St. Louis at these big conferences in Vegas or Miami or wherever. And it was really, I was really bombed. And I know, I know that the super ultra successful, many of the people that we have speaking on our stage go to these national conferences, but none of the, the regular Joe’s, you know, or, Jane’s I barely ran into any of them. So I was like, you know what?

We’ve got a ton of success here in St. Louis. St. Louis is such an amazing market because people can get more bang for their buck in St. Louis than they can across many, many, different metro areas. So think why don’t I bring that to St. Louis? Why don’t I bring in some folks from St. Louis to do an event in St. Louis for St. Louis people? That was the first year. This is Gateway to Freedom. It’s a conference in St. Louis for St. Louis from St. Louis because all the speakers but one that year were

from St. Louis doing business in St. Louis. And then the next year, last year, we thought, well, let’s expand that a little bit. We’ll still have the conference in St. Louis for St. Louis people, but it’s also for anybody nationwide. And we’re focusing on St. Louis as just such an incredible investment opportunity because the market, knock on some wood, but the market here in St. Louis is very stable. It’s not, you know, some people in other big markets, yeah, maybe they’ve dropped off a little bit, still don’t buy into any kind of like.

crash or anything near, you know, anytime soon. But, but St. Louis is very stable and we’re just highlighting the market and the incredible opportunities here.

Kristen Knapp (17:24)
Amazing. So it’s a very stable market. That’s the biggest draw there.

Rich Groves (17:29)
Yeah,

it really is. And the bang for buck. You can be all in on properties, whether you’re rehabbing or buying and holding. If you’re buying and holding your net return here in St. Louis is going to blow away many, many other markets.

Kristen Knapp (17:46)
Interesting and you do a lot of business there you do done for you rentals. Can you talk more about that?

Rich Groves (17:52)
Yeah, so we’ve identified a really sweet spot where we’re actually buying distressed properties. We’re rehabbing them, getting a tenant in place, putting them under management, selling them to either new investors or experienced investors that want to build their rental portfolio where they don’t have to go through all the hassle of finding the tenant and getting management company and all of that. We can handpick all that for them ⁓ and hand that over where it’s very attractive.

for especially those investors using DSCR, the debt service coverage ratio options, because the ratios that, can talk a whole hour just on DSCR loans and what it means and everything, but if you don’t know about DSCR loans, look it up, but the lenders are looking for like a 1.25 ratio, we’re way above that, we’re like 1.3, 1.4, 1.5, and I know that doesn’t sound like way over, but trust me in the numbers, that means it’s way over, and the lenders drool.

over, I need to lend on this property because it’s so well above 1.25 that let’s do that. So it makes it very attractive for lenders. So it’s easier for our in buyers to find their lending partners to get these deals done.

Kristen Knapp (19:03)
Amazing. I mean, that sounds like a great opportunity. And the done for you part, you’re just kind of white glove, essentially.

Rich Groves (19:07)
the

Yeah, we’re

providing as much of the service as we possibly can, making sure we’re handing over something that has been done very well. You’re not just getting some type of slumlord property. We’re going in painstakingly, making sure everything’s done right. And you have a very nice looking property that is in an area that’s getting you very good rate of return.

Kristen Knapp (19:31)
Amazing. And then are you focused mostly on the rental space, short term rentals, long term rentals?

Rich Groves (19:37)
Yeah, right now

long term rentals, I have my own rental portfolio as well. They’re all long term rentals as well. That’s really my focus is long term rentals I’ve thought about and even considered going into at least midterm rentals. But right now, just right now is just long term rentals. Yeah. I do have me I do have sorry, I have some rehab properties going on as well. But yeah, rehabs and short term rentals. I even do some wholesaling still.

Kristen Knapp (19:50)
What would be considered?

Okay, cool. What would be considered a midterm rental? I’ve never heard that one.

Rich Groves (20:05)
Yeah, so the

midterm rentals are, I mean, people think about like traveling nurses. I know, no, that’s not as rampant as it was during COVID, but people think of traveling nurses. There’s always, it’s basically any, you know, you got short-term rentals. People think of the brand Airbnb or VRBO, where it’s basically anything under 30 days, right? Daily, a couple of days, a week, maybe whatever vacation rentals. Midterm rentals goes a little further where it’s anything over 30 days, but less than a year.

Kristen Knapp (20:32)
I did.

Rich Groves (20:33)
Right. So it’s

usually those, whether it’s traveling, traveling professionals, traveling nurses, you know, maybe it’s corporate that, that are bringing in folks to work in their office for a few months, you know, while they’re in this office, before they go off somewhere else. So it’s corporate housing as well. So it’s still all furnished and everything like you would a short-term rental.

It’s just now your leases are a little longer term, so you don’t have that daily cleaning. Now maybe you’re only, you’ve got a cleaning crew in there, you know, once every month or two months or three months or whatever it is when they go out, you know, when they leave.

Kristen Knapp (21:07)
Makes sense, makes sense. That is a mid-tier or midterm. And just to kind of wrap this up, what would be some advice that you wish you knew earlier in your career that you can share with us?

Rich Groves (21:18)
Ooh, that’s a good one. I’ve really contemplating a lot of that lately. I’ve done a couple little shorts and stuff on Instagram, YouTube and stuff like that. And one of the topics is three things that I wanted to know, I wish I knew when I first started, which I’ll go back to like the very first one was just how to properly run my numbers, right? And just marry the numbers, not the deal.

Don’t buy, not that we did, but I just wish I would have known that, but don’t buy based on emotion, based on the numbers. Base your purchase on the numbers, run the numbers, know how to do it right. Be an expert in that market, whether it’s your local market or if you’re buying virtually or whatever, be an expert in that market, know how to run comps, but be true to those numbers. Don’t try to force numbers. A lot of people I’ll see, especially like from newbie wholesalers,

they’ll try to offer you a deal and they’ll say, well, this property only needs $10,000 in work. And you look at the pictures they send you and you’re like, geez, I see $10,000 just in the landscaping. What can you get done for $10,000? it only needs a new roof, new flooring, new kitchen. You’re like for 10,000. So if you have to start forcing your numbers in, like, well, if I can get this whole rehab done for $20,000 and you’re staring at new windows and new roof, new kitchen.

You know it’s not going to work. Don’t force it. If the numbers don’t work, just walk away.

Kristen Knapp (22:46)
Yeah, that’s really good advice. So where can people find you and get we debrief them?

Rich Groves (22:52)
Yeah, so they can find out more about Gateway to Freedom at the website G the number two free.com. So G two free.com for Gateway to Freedom. They can find me on Instagram ⁓ at Metro STL homes is my business. So that’s my Instagram. Rich Groves on Facebook on my YouTube channel is Rich Groves Metro STL homes

But yeah, so Metro STL Homes on Instagram, Rich Groves, Metro STL Homes on YouTube. And I’m also on TikTok at Metro STL Homes, so I’m all over the place.

Kristen Knapp (23:23)
Amazing.

Well, everyone, please check out Gateway to Freedom and follow Rich. Get on TikTok, follow Rich. And thank you so much for being here. I appreciate it.

Rich Groves (23:34)
Thank you, appreciate you having me, Kristen.

Kristen Knapp (23:36)
Yes, and thank you everyone for listening and we will see you back next time.