Retire With Real Estate: The Solo Self-Directed 401(k) Strategy for Entrepreneurs

Kevin Malmgren (00:00)
somebody is out there fighting for them. And there is another choice rather than just slugging along in your business, paying these huge tax bills and relying on the sale of your business to retire. You know, that’s not actually the best strategy for a lot of people. And you should be diversifying outside of just what your sweat brings to the table. And so over the next three to five years, I just want to continue to have a lot of conversations with entrepreneurs. And the next thing I want to show entrepreneurs is they are able to build the life they want while they’re building the businesses they want—

Issa Hanna (02:06)
Welcome back everybody to another episode of the Real Estate Pro Show. And today I have a man who’s revolutionizing the way that people retire. He’s built a platform for real estate investors to leverage their 401(k) into real life retirement. Ladies and gentlemen, Kevin Malmgren. Kevin, welcome.

Kevin Malmgren (02:27)
Hey, thanks for having me on the show. I love this podcast. You’re doing such great things for entrepreneurs out there. I love it.

Issa Hanna (02:32)
Well, we appreciate having you and I’m super, super excited to talk to you about what you’ve got cooking. But instead of me telling them, why don’t you tell them about this platform you’ve built?

Kevin Malmgren (02:42)
Hey, thanks. so my wife and I have been running our own retirement accounts for years and years. And we went through one of the big box providers that’s still around, and we found the entire process to be incredibly clunky and slushy and really low grid. And if you look up what is possible through a properly structured solo self-directed 401(k), there’s huge benefits. It is the most powerful retirement platform or guidance structure that the IRS has provided, the ability to use those structures are really difficult because you have to make make sure you’re staying within compliance. And all the big box providers out there, they charge a big fee up front, they charge a yearly fee basically to provide a plan documents. They set up the plan and then they just leave you alone. And what we always wanted was somebody to help us figure out how to run a retirement account. And so through years of running our own retirement accounts, my wife and I figured out the way to actually run them, but it was still so difficult. We were tracking stuff on spreadsheets. If we wanted to send money out, we had to go to a banking platform, then back over to our spreadsheet platform, then to our document storage. And so what we created is a platform that integrates everything together in one piece. And we broke everything down to make it simple for an entrepreneur to take control of their retirement and use all of the benefits that you can possibly get through a solo self-directed 401(k), all backed by the best compliance team in the country.

Issa Hanna (04:15)
Beautiful, beautiful. And it’s definitely a revolutionary type of idea that you’ve had. we all didn’t start in this game knowing all that we know. So Kevin, what’s your origin story? How’d you get into the real estate business? How’d you get into the 401(k)? How’d you— how’d you get started?

Kevin Malmgren (04:33)
Yeah, this is a little bit of a longer story. It started all the way back when— I’ve always had a pretty entrepreneurial mindset and did a lot of things that did not work and finally landed in the unattended retail space, which for people that don’t know what that is, that’s vending machines, micro markets, coffee service, pantry service. Started basically out of a garage and grew it to the largest privately owned in Colorado until it got absorbed by a Fortune 500 company a couple of years ago. During that rise, there was a lot of drama as anybody would guess. But during that rise, my wife and I made the wise decision to say, let’s not put all of our eggs in this one basket, but let’s spread them out. So our story starts out with us buying a house when we were young, nineteen and twenty, my wife and I got married right out of high school, been together our lives. And we bought this five-bedroom house right in— after the crash in 2010, and in the middle of downtown Denver, walking distance to downtown for $169,000. So that was the start of real estate investing just clicking. We bought this house and we rented out every single room to high school friends. And all of a sudden we had no mortgage. We were cash flowing. And now I had this business that was struggling and we were pulling money out of the house to grow this company. So real estate really is at the foundation of everything that we’ve ever done. And as we fast forward as I’m growing the company, we moved houses and we turned our old houses into rentals. Then we got into doing Airbnbs and kind of built this personal portfolio. And once you get the real estate bug, it’s just over for you. You’re just a real estate person from then on.

Issa Hanna (07:02)
Definitely.

Kevin Malmgren (07:03)
COVID hit and my wife and I made the decision to liquidate a lot of our managed rental properties because we were managing everything ourselves and get into the private placement space. All while during this time, we were trying to manage our retirement funds. So all of that happens basically all at once. We got into real estate investing, we got into private placements while we were trying to self-direct our own retirement income. going through all of the podcasts and information that was out there, just trying to fumble our way through.

Issa Hanna (07:37)
Wow, wow. And then you’ve been able to grow such a company and you’ve only been in business for two years, but you’ve already made an impact. such an impact and it’s such a revolutionary idea. Now I want to get into the part of the podcast where I’m gonna ask you— and— and— and you’re not an investor right now. You were a real estate investor before, but every businessman, every investor, everybody has some time where something went sideways. They had to pivot. Can you— can you share with us a story of where you may have had to pivot one time in one of your business dealings?

Kevin Malmgren (08:12)
Yeah, there— there has actually been quite a few. I can share one of the most meaningful times that I had to pivot, and a lot of people can probably think back if they were in business during the time of COVID and I had the unattended retail company. And when COVID first hit, obviously it shut everything down in Colorado for sure. And we made the commitment that, you know what, we’re gonna pay our employees no matter what. We took on the responsibility to feed these families. And so we just started pouring out of our savings to make sure that everybody got paid so that when we restarted, I had a full staff of happy employees. What I didn’t realize at the time is that the government had also set up the ability to pay people a salary while they were home. And we were also accessing— as soon as we were able to work part-time, there was a program where you could use part of your workmen’s comp insurance, that sort of thing to pay your employees so that you would pay them 20 hours and then it would boost them to 40. All that being said, because we were such a large company, Pepsi came in and gave us an exemption so that our company could come fully back up and running because we were a big customer for them. They had a big lobby group and we provided a lot of the food and drink for about 80% of the nursing homes in Colorado. And so we had a big user base that we could get up and start operating right. And the day we reopened and said, “Hey, everybody come back, hooray, 40 hours,” half my staff walked up because they said, “You know what? We’re making double the pay to sit at home. Now we’ll make the same pay if we come back, or we can just go back home and make the same pay just sitting at home.” And my business grinded to a halt. And so what we did to pivot, similar to the AI revolution now, is we went out into the market and we found a technology base that allowed us to turn all of the credit card readers that were on all of our machines into signal senders. And we bought a program that now we could see every Snickers bar, every potato chip in every machine. And we were able to reconfigure our entire company so that instead of a driver going out there seeing the product they need, pulling the product from a truck and bringing it in, we now just needed a warehouse crew to prepack everything overnight. We knew exactly what was needed in the morning. So we could buy smaller trucks, run less route staff because that’s the hardest to hire is professional drivers. And we could hire just warehouse staff. And so that was the largest pivot I’ve ever taken a business through because we fundamentally changed in the matter of a few months the entire way my company functioned. And we were able to function off of about fifty percent of the staff that we did before COVID.

Issa Hanna (11:25)
What a pivot that is, you know, functioning off of fifty percent. And I do know a lot of people that are using AI now to make those sort of budget cuts in their businesses. So AI is definitely on the forefront of every American or every business in the world, I— I could definitely say. With that, what does the future hold for you, Kevin? Where do you see yourself in a year or two, maybe five years down the line?

Kevin Malmgren (11:50)
Yeah, that’s— that’s a wonderful question. So a lot has changed over the last couple of years for me, and so it makes it a little bit harder to see what’s coming next. But in the last couple of years, my unattended retail company got absorbed by a Fortune 500 company. It gave— some gave me— gave me the ability to take a couple of years off with what my is— is now my three and five-year-old. I got a son and daughter, and just be able to enjoy time with them, and it really changed my perspective on my entrepreneurial journey. I love having conversations like this, which is why I run a financial education and business coaching platform. So I would love to continue to do that. I just absolutely love talking to entrepreneurs and helping them figure out the problems in their business and helping people figure out what they could do to build wealth. But my primary goal right now is to change the way entrepreneurs see retirement. And so my goal right now and in the next couple of years is to get on the stages, get on the podcast, get out the information to let entrepreneurs somebody is out there fighting for them. And there is another choice rather than just slugging along in your business, paying these huge tax bills and relying on the sale of your business to retire. You know, that’s not actually the best strategy for a lot of people. And you should be diversifying outside of just what your sweat brings to the table. And so over the next three to five years, I just want to continue to have a lot of conversations with entrepreneurs. And the next thing I want to show entrepreneurs is they are able to build the life they want while they’re building the businesses they— so my wife and I are both serial entrepreneurs. My wife runs Your Agent Asset, which is a nationwide virtual assistance company, primarily for real estate agents to run marketing and that sort of thing for them. And then I run the coaching company and Retire for Real. And if you follow us on our social medias, you’ll see, *Thank God It’s Monday* because we don’t dread Monday. And you’ll see us set up our desk on the beach in Florida and we’re working from anywhere. Right now I’m in Arkansas. We’re headed into Kansas and into Colorado from here on a 30-day road trip with our family while running multiple businesses remotely. And so we really want to show other entrepreneurs you can actually build the life that you want and the company to support it.

Issa Hanna (14:07)
Definitely, well, you’re definitely building the life that you’ve always wanted. and congratulations to your wife being such— you guys are such a power couple. With that, you have a lot of business relationships. You’ve been able to foster a lot of, you know, grow your network, if you will say. Can you give our viewers who are just getting started any advice on where to start growing their network, how to foster these relationships?

Kevin Malmgren (15:15)
God, I love that question so much. So there’s a couple of things to that. I get asked all the time to give my time away for free. I’m sure you get the same thing. When you’re trying to build your network and when you’re starting out, come in with some value. I have had more cups of coffee bought for me than, you know, my body can hold. Stop offering to buy people a cup of coffee for their time and to build your network, and start coming in and providing something of value. “I have this. Are you interested in it? What I want from you is this.” The next thing, get involved in your community. BNI groups, one of the things that was absolutely game-changing for me coming up in the entrepreneurial world was the Small Business Association and SCORE. You know, you go to these events and they’re really good entrepreneurs that have exited businesses and that sort of thing that are coming down and teaching you what you need to— simple as writing a business plan. Or for me, when I was getting ready to sell what was a large company, I honestly had no idea how to do it. And I went to SCORE and they set me up with a mentor that helped me ask some of the right questions. But it also puts you in a room with other entrepreneurs that are at your level. And so there’s a lot of events you can go to, and don’t be the guy that just shakes hand and hands out business cards. Meet people and then provide value. Offer something. And that’s how you’re going to build a network. Don’t be afraid to give some of yourself away.

Issa Hanna (16:44)
Definitely. That’s some great advice. And that’s probably exactly what’s put you in the position you’re in right now in selling one of your companies for an amount we shall not say. And then now growing such— there you go. See, he’s under the paperwork, guys. You can’t say it. But he’s building another company now already, with his knowledge. So with that, Kevin, if people are interested in— in what you’ve been talking about, they want to get involved in your company, how could they get a hold of you?

Kevin Malmgren (17:16)
I would love that. So they can get a hold of me. You can go to my coaching website, which is plannedforlife.com, or you can go to our R 4 R website, which is r4r.life, and they can figure out more about what each of those companies do. There’s contact form on both of those companies as well to reach out to us. But you know, I love just giving out my email, [email protected], or my cell phone, seven two zero two six one eight zero five zero. You’re not very likely to call me and get an answer right away because I got kids and I got things going on. But if you text me, I just love engaging with individuals and helping them figure out what is a very complicated life of entrepreneurship and finances. And I would love to just have a conversation with any— anybody.

Issa Hanna (18:04)
Definitely well, Kevin. Thank you. And I would definitely recommend people give Kevin a call or an email. He can definitely give you a lot of information on retirement and how to leverage your properties and your equity into retirement. With that, Kevin, we’re gonna wrap things up. I appreciate having you on the podcast. and if you guys liked hearing what Kevin had to say and loved our conversation, make sure to like and subscribe. I talk to new people every day that could bring you different knowledge on all the facets of the real estate industry. Once again, Kevin, thank you so much for being on.

Kevin Malmgren (18:38)
Can I provide some extra value to your listeners? If we can add in the show notes, I can provide a free ebook on step-by-step instructions on exactly how any of your entrepreneurs that have a sole self-directed 401(k) like an R4R account to buy rentals inside of their retirement account so that they can get away from cost segregation, so they can get away from having to track depreciation, 1031 exchanges, and they can just grow their wealth intentionally. So if you would like, I can send that to you so that it can be provided to your audience.

Issa Hanna (19:09)
Definitely, and we’d— we would definitely appreciate you doing that. And make sure, guys, to like and subscribe. We’re getting free ebooks, free knowledge. People just don’t give this stuff away for free. So Kevin, thank you so much. I really enjoyed having you on today. And with that, the real estate pros are out.