How to Buy Real Estate With Knowledge, Deals, and Little Money | KAYR Robinson

KAYR (00:00)

So I’m so glad you asked that question. I think it’s so important that we really understand what it takes to be successful in real estate. In real estate, it takes two out of three things. One is going to be knowledge. Two is going to be money. And three is the deal. You only need two of them. So if you have the knowledge and you have the money, you’ll find a deal. But if you don’t have the money, what you need to get is the knowledge, and then you find the deal, and then the money will come.

Michelle Kesil (01:59)

Hey everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Kevin KAYR Robinson, who built a multi-million dollar investment portfolio from scratch and is the author of the book, Can’t Break Me. Really excited to have you here today, KAYR

KAYR (02:19)

Thanks.

Thank you so much for having me on your platform. I look forward to sharing my story, my investment insights. I’m looking forward to having this conversation.

Michelle Kesil (02:31)

Let’s dive in. So first off, for those not familiar with you and your world, can you share what your main focus is?

KAYR (02:38)

So what I do is I grew up in Philadelphia, moved around a lot about 18 times before I turned 18. So I got a really good sense of this market. And so what I started doing is buying single families. So I now own apartment buildings and single family. So I do value add. So in 2009, I own one unit, 2018, nine units, 2019, 35, 2020, 105, now 160. What we do is I have the property management business as well. So we buy

assets that are under managed that actually increase their vacancy and re-innovate the units, do a cash out refi and buy more.

Michelle Kesil (03:13)

Awesome. And would love to hear a little bit about your story and background on how you got into all of this.

KAYR (03:20)

So what’s interesting is that I grew up in Philadelphia. remember we lived in a studio apartment where we had a hot plate, no stove, bathroom sheet, no bathroom door. We had a bathtub and we had no shower and 15 people living on top of each other competing with rats and roaches and flies for space. And I remember my stepdad at that point saying, don’t be an eff up like me and your siblings because I had some siblings who were teenagers and they were already parents. And at that moment, I decided to shift my life.

but we used to go and do rehabs with my stepdad. And so he planned to see for real estate. So I always knew I wanted to buy real estate because he said these neighborhoods want to change. And this is my 17th year of being a real estate investor. So what I did is I went out and got the knowledge. What I think you need to be successful real estate is the three C’s. Intellectual capital, you learn in a classroom, outside a classroom. Social capital, whether you’re built relationships to get access to stuff and financial capital, preserve it, grow it.

and magnify it. So that was how I got into real estate.

Michelle Kesil (04:18)

Awesome. And what do you feel have been some of the main keys that have allowed your business to grow and run successfully?

KAYR (04:26)

So what I think was so important, I frame it like the three D’s, which is like, first you got to have a desire. So you want to have more, you want to build this portfolio, you get excited, but desire alone doesn’t get results. So you have to be disciplined, come up with routines so that when no one’s clapping, you’re still doing the work, you’re still locked in. And then the last one is determination because you’re going to have moments where you have setbacks, when you’re actually going to doubt whether you should keep going.

And so I decided to embrace the 3Ds, but also delayed gratification. That’s why it took me nine years to go from one rental unit to nine rental units. But once I established what I call the three Rs, a track record, relationships, you get those two, then your reputation will proceed you. So I was able to show the lenders that I really know what I was doing. I bought the property, rehabbed it, managed the team, and then I was able to get bigger loans, build up my cash flow.

build up my reserves and then I could use that to buy apartment buildings. So that was my strategy. I got successful using the three D’s, the three C’s and the three R’s.

Michelle Kesil (06:16)

Awesome. And where did you learn about investing or did it just come through trial and error?

KAYR (06:24)

So for me, during that time period in 2009, I actually used to cover US home builders, UK home builders, US financials, European financials for a hedge fund. But they told me how to analyze data from a 10,000 feet in the world, per and view. What I did is I learned systems and processes. And I remember having those conversations with my stepdad when I was a teenager about Philly going through gentrification in Camden, New Jersey going through gentrification.

And so I just went back and said, I’m going to buy one property and had to teach myself because my family members, weren’t investors. I didn’t come from wealth. So it was in the beginning, you’re just trying to figure it out. You’re taking some losses. You learn the hard way. And then you start to see patterns. And that’s what I did over time because I was disciplined. I saw patterns. And then I started to understand systems. And then I realized that if you don’t without systems, you don’t own the asset. The asset owns your time. And so I started to really teach myself.

and learn throughout the process.

Michelle Kesil (07:21)

And where are you focusing now? Is it on the multifamily scaling, that version of your business?

KAYR (07:29)

Yes, primarily I am on the multifamily. And so that’s five units and up. When I first started the first nine years was focused on the single families like single family homes, three bedroom one and a half baths. But now I own a 24 unit, a 14 unit with a restaurant, two 12 units, nine units, couple of six units, five units and a triplex. So I’m multifamily focused now. But if I got a great deal, I may consider single families, but primarily multifamily because you can add the

at value and the banks value it based on the cash flows for the property versus just the comps. When you do single families, they’re based on what the comps are doing. But if I can cut the expenses and increase the revenue, then that operating income will go up for an individual apartment building five units and up. So that’s where my focus is.

Michelle Kesil (08:14)

Yeah, and where do you find the leads for the deals that you’re looking for?

KAYR (08:19)

So what we do, and on my website, KJ Consulting, one of my websites for business, is we have an ebook where we teach people how to analyze a particular industry, a market. So it’s like you pick the state, you do a macro analysis, do a micro analysis. So you figure out is that landlord friendly state? Do they have businesses? Do you have people moving in? And then you narrow it down to like a city and you narrow it down to like three zip codes.

And once I have those three zip codes, I’m looking at the amenities. I’m looking at how many employees are there. I’m looking at what percentage are homeowners versus tenants. So I came up with a framework on how to identify deals for my own. But I also have built that reputation which preceded me. So I’ll have attorneys calling me. I’ll have real estate agents call me. I’ll have wholesalers call me. But I accept blessings from anywhere. I could be walking down the street and if the hot dog man want to tell me about a deal, I will be open to that.

Michelle Kesil (09:13)

Yeah. And are you currently still in the Philadelphia market or which markets do you invest in?

KAYR (09:19)

So I own over 140 plus units in the Philadelphia, Pennsylvania area. And then I own 20 rental units in Harrisburg and the capital for the state. So that is where I’m primarily focused.

Michelle Kesil (10:07)

Can you share a little bit about the book that you wrote?

KAYR (10:11)

Yes, so my book Can’t Break Me, it pretty much lays out my story going from a negative network to becoming a multimillionaire. But it’s not just about my story, it’s about decisions. And in the book, I highlight how it wasn’t like some magic moment where everything magically clicked. It was a small series of realizations where I to be honest with myself, where I realized that nobody was coming to save me.

And so therefore I had to start thinking about life differently. I had to change the way I move, had to change the way I thought. I had to decide what was I going to do consistently. And so the book is a roadmap outlining how if you feel as though like the world is against you or if you feel as though you’re stuck or you don’t know how to go from being nothing to becoming something, it tells you how to build those relationships. Whether you have a personal board of directors who mentor you, sponsor you, help you figure out different stages of your life, building teams.

It highlights some of the things I had to do to build my real estate portfolio. So the book is an opportunity for people to really grapple with, okay, what’s the game plan if I want to be successful? You have to be disciplined. You got to have a desire, but you also want to have a team and you have to be vulnerable. So I highlight all of that in the book, living in basically two worlds. I grew up in abject poverty, but then I went off to work for Goldman Sachs. I went to Dartmouth, I on an I-release for my MBA.

And then I came full circle to the Philadelphia area to give back and hire family members and friends and let people know, look, it’s possible to achieve the impossible. So I talk about one thing I stress is that if you do what’s necessary, then you do what’s possible. You will find yourself doing the impossible. If you do what’s necessary, then do what’s possible. You find yourself doing the impossible. I remember living in that studio apartment, 15 people with basically one bed.

and we didn’t have a stove and we had a mini fridge and now I own apartment buildings. And so anything’s possible if you apply yourself. So that’s what the book lays out.

Michelle Kesil (12:09)

Yeah, and how is your team currently structured?

KAYR (12:13)

So the way the team is currently structured is I have a property management company called KR2 Management. And I have ⁓ family members that work for me. They’re like 1099 employees or what have you. So one of my brothers, he’s a property manager. My stepmom’s a property manager. My aunt helps with cleaning. My other nephew helps with cleaning and also with property management. And my brother’s in-laws, they help with landscaping. And then we have a bunch of subcontractors that we use.

But that is the structure for how we lay it out. We use apps like Buildium or what have you to streamline the process so that we don’t have to stand there whenever tenants want to look at apartments. So it’s really is a very lean operation. The main thing is that you got to have your systems in place in your processes for how to screen tenants and also how to work with your team so you can be nimble.

Michelle Kesil (13:01)

Yeah, absolutely. And what are you most focusing on solving or scaling to next?

KAYR (13:07)

So what we’re really focused on now is once you get to a certain level that your portfolio is very sizable, now what you’re trying to do is make sure that you fully integrate all the new assets that you have acquired. So in 2018, I had nine runs, went into 2019, 35, 2020, we went, got to 105 because I bought 70 units, now we’re over 160. So what we want to do…

is make sure that we’re maximizing the value from each property. So we’re carefully looking at our systems and processes, looking at vacancy, we’re looking at integration, we want to make sure that we’re bringing AI in, we’re trying to get the max return that we can get for each property, but we want to be very thoughtful. So that’s my main focus. Of course, we’re always analyzing deals that come before us, but I want to make sure that we have a smooth operation that’s currently in place.

Michelle Kesil (14:39)

Absolutely. And what have been some of the biggest obstacles or challenges that you had to overcome on your investing journey?

KAYR (14:48)

think one of the biggest challenges is for me, especially when you don’t come from wealth or you don’t have family members that are familiar with the real estate space. had to basically understand, analyze the new market in terms of the real estate market, also analyze a new deal, but also learn how, because I wasn’t just being an investor, I wanted to be an operator. So I had to basically figure out what is the difference between

managing a single family home and managing a 24 unit apartment building or 14 unit with a restaurant. So you’re learning how these leases are very different. So your lease with a restaurant owner is very different from a regular residential tenant. So I had to learn how to navigate these different spaces and also learn how to analyze the different lanes leases, but also build out a team. So I have to build out a team that’s capable and taking on this new responsibility.

and also manage the relationships with the lenders. So that is very challenging. It sounds easy, but to go from single families to big apartment buildings, it is a whole different ball game. Like when I bought individual houses, one to four units, you buy it in your personal name. The lender is looking at your debt to income ratio, looking at how long you’ve been at the job, what is your income, looking at your current assets, and they’re basing on like the comps, but then on your credit score. But then on other hand,

When you buy five units and up, I had to learn that the lenders are looking at the debt service coverage ratio to figure out how much is this building generating. They’re looking at also what is my net worth? Also, who’s going to be the guarantor in case things go wrong? Is it going to be me or am I going to have someone else come along? So it’s a very different game that I had to learn. So I would say that’s the most challenging thing because you’re constantly have to rebuild yourself. So I didn’t decide to be complacent.

And that’s OK. Some people will stop when he gets like three single families. They’re done. But for me, I was willing to take on a new challenge.

Michelle Kesil (16:41)

Yeah, amazing. What advice would you give to someone that’s early or looking to get started in investing?

KAYR (16:48)

So I’m so glad you asked that question. I think it’s so important that we really understand what it takes to be successful in real estate. In real estate, it takes two out of three things. One is going to be knowledge. Two is going to be money. And three is the deal. You only need two of them. So if you have the knowledge and you have the money, you’ll find a deal. But if you don’t have the money, what you need to get is the knowledge, and then you find the deal, and then the money will come.

And so when I started, I just focused on the knowledge part. And then I was focused on getting the deal. So I got a really good deal. I start teaching myself about how do you analyze markets? What is the bird strategy? How do I work with tenants? How do I work with contractors? So I’m trying to get that knowledge part. And then I had to find a really good deal. And then I will go to the lender and say, will you let me?

let me buy this property. need to get a loan from you or I need to use my knowledge to use some money off of a credit card. So that knowledge part is so important. So when I got started, a lot of people were saying buy in the LLC. I didn’t buy anything in the LLC into 2019 because when you buy in your personal name, I tell people if you’re just getting started buying your personal name because one you will be able to get a loan that has a 30 year a 30 year amortization versus an LLC, which normally has a 20 year amortization.

The longer time you get to pay off the loan, the more likely to lower the monthly payment. You also get a lower interest rate in your personal name versus the LLC. You also get down payment flexibility where you can put 0 % down if it’s your personal residence, a NACA program, you have 3.5%, 10%. Even if you don’t live in it, you can put 15 % down. So I took advantage of that. Your closing costs is lower in your personal name. And a lot of people say, but KR, what about if something wrong happens? Well, what will happen is that just like when I look out the window and it looked like it was going to rain,

I’m going to put my raincoat on and I’m going to take my umbrella. So what you get is regular insurance on a property, but you also get an umbrella policy to protect you. So I decided to buy the first nine rental units and my personal name to take advantage of everything because what’s important, you’re going to be able to get more cash flow and be in the cash is key. So I kept my nine to five job. And this is what I would tell people to keep your nine to five job and buy one property on average every year until you build up that track record, that confidence.

Because what’s going to happen is that when you own real estate for the long term, you’re going to benefit from the cash flows is number one. Number two, you’re going to benefit from the tax benefits. Number three, you’re going to benefit from the debt pay down, the tenants are paying down the debt. And then you’re going to benefit from appreciation, whether that’s natural or forced appreciation. So that’s what I did. I took advantage of those four benefits, cash flows, tax benefits, debt pay down and appreciation.

So I had the cash reserves in 2019 to start buying apartment buildings. I needed that for the down payment. So I didn’t need to have business partners because I was very strategic. So I would say, buying your personal name, things done well is done soon enough. Really understand the dynamic of delayed gratification and run your own race at your own pace.

Michelle Kesil (19:52)

Absolutely, that is great advice.

And are there any goals or opportunities that you’re looking forward to for the rest of this year?

KAYR (20:00)

So for me, for the rest this year, what I really want to focus on is I want to spend some time really thinking about how do we integrate artificial intelligence into our business, whether that’s me spend a few days ⁓ code vibing, trying to figure out how can we come up with something to make things a little bit more efficient? How can we figure out ways to get to and we really started doing this, we noticed that people were submitting fraudulent

KAYR (20:26)

So we had a lot, we had some people submitting ⁓ fraudulent documents. So now we’re starting to use certain software so that we can have them submit through a third party to make sure the pay stubs are right, make sure the ID is correct, make sure the bank statements are true. So I want to make sure that we are getting ahead of this AI thing for efficiency, but also to make sure that we’re doing things correctly ⁓ versus old school because this is my 17th year of being a real estate investor.

Michelle Kesil (20:51)

Yeah, amazing. Thank you for sharing.

KAYR (20:53)

Thank you for having me.

Michelle Kesil (20:54)

Well, before we wrap up here, someone wants to reach out, connect, learn more, where can people find you?

KAYR (21:00)

You guys can find me at KAYRmotivates. That’s my handle across all social media, IG, TikTok, YouTube. That’s KAYRmotivates. And you also can go to my website, which is KAYRmotivates.com. And if you go to my website and you get a free copy of my prologue to see how I think about real estate and business in general. And make sure you guys check out the book.

Michelle Kesil (21:28)

Perfect. We’ll appreciate your time and your story. Thank you for being here.

KAYR (21:31)

Thank you so much for having me. I hope you have a great day.

Michelle Kesil (21:35)

Of course. And for those tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like KAYR who are building real businesses. We’ll see you on our next episode.