Real Estate Investing School Podcast

Episode 183: First Deals, Lifetime Lessons with McKay Dobbins

Date: August 12, 2024
Host: Joe Jensen
Guest: McKay Dobbins

Overview of the Episode

In this episode, host Joe Jensen sits down with McKay Dobbins, a financial advisor and new real estate investor based in southern Utah. Over the last two years, McKay and his wife Sammy transitioned from traditional careers to actively building a real estate portfolio. The conversation centers on McKay’s first three deals, the challenges and lessons learned, and practical advice for others considering a similar path. The episode offers a candid look at the steep learning curve, personal growth, and the reality behind “getting started” in real estate investing.

Key Discussion Points and Insights

1. How McKay Got into Real Estate (01:22–05:16)

• At 29, McKay was influenced by seeing others like Brody start their real estate journeys on social media.
• With a background in financial advising, McKay felt compelled to escape the 9-to-5 grind for something more flexible and lucrative.
• Initial interest was sparked by lifestyle design, wanting long-term freedom rather than working until 65.

“We’ve both realized over the past couple years, like, dude, we just don’t want to be doing what we’re doing for 40 years.” — McKay (01:48)

2. First Deal: Buying a Primary Residence (05:16–08:49, 15:32–18:05, 48:10–49:14)

• McKay bought his first home as a lifestyle move, not initially for investment.
• Admitted to prioritizing a “nice new home” without consideration for rental potential—a common mistake.
• Put 5% down (could have put 3%), highlighting a knowledge gap common among first-timers.
• Added a bedroom later to improve rental value and opened a HELOC for future opportunities.

“If I could go back…I would have found something that we liked to live in but would have been more or easier to turn into a long-term rental.” — McKay (06:01)

• Takeaway: Even imperfect first steps teach essential lessons and can later be pivoted into assets.

3. Mindset Shift & Sales Experience (08:49–14:42)

• McKay’s first year in financial services was challenging due to lack of discipline and hustle.
• Realized success required treating his job like a business—consistent effort, follow-up, and pushing comfort zones.
• Key mantra: “Create opportunities and capitalize on opportunities.”
• Sales and entrepreneurship demand more effort upfront—a theme that parallels real estate investing's steep early learning curve.

“At that point…I want to do more and I want to make more. And in order to do that, I got to have a mindset change and an attitude change and an effort change.” — McKay (09:19)

4. Second Deal: College Room Rental House (18:05–41:35)

• Looked for a local investment property and found a 1970s home near Utah Tech with six bedrooms (20:06–24:15).
• The house needed substantial rehab; “gross…smells weird…haunted.” Initially hesitant, but realtor Eric’s encouragement was pivotal.
• Lost initial offer; became the third backup and ultimately secured the property (24:15–26:14).
• Roof needed replacement ($15–20K); negotiated with the seller to pay from proceeds at closing via escrow (27:15–28:38).
• Strategy: Added two bedrooms (total of 8), self-renovated with "sweat equity."
• Rented by the room, primarily to male students for practicality (35:14–36:16).
• Overcame property management challenges—multiple leases and maintaining an older property.

“We painted so much of that freaking house, dude…there’s like a three-day window…we’re painting in like 100 degrees inside the house.” — McKay (32:48)

• Key learning: Many obstacles seemed overwhelming at first but became manageable with experience.

5. Compounding Experience & Learning Curve Analogy (39:23–41:35)

• Real estate (like sales and golf) has a steep learning curve; things become easier with repetition and persistence.
• Each “okay” deal leads to better deals and broader networks—a compounding effect.
• Taking action is more valuable than waiting for the “perfect” opportunity.

“Someone gave me an analogy between real estate investing and golfing…learning curve is super, super steep at first, and then at some point it starts to level out, and you’re like, hey, I got this.” — McKay (41:10, repeated from cold open)

6. Third Deal: Primary Residence as a Strategy (42:06–49:14)

• Sought a new primary residence to maximize leverage (5% down) and find something with long-term rental potential.
• After a long search, found a discounted property with large acreage outside St. George. The seller was motivated, having slashed the price six times in a month.
• Repeated roof-repair negotiation strategy; handled via proceeds at closing.
• Agreed to a two-month lease back to the seller to aid her transition.
• Simultaneously rented out their first home to a group of summer sales reps, leveraging the added bedroom to maximize profit.

“We now have to get our current primary home rented out…We just got them under—we just signed leases with them a couple days ago, and they’re going to be August 1st…” — McKay (48:10)

Notable Quotes & Memorable Moments

• On Taking the Leap:

  “Just buying something and getting in is better than not.” — Joe Jensen (15:32)

• On Creative Financing:

  “Deals aren’t found. They’re made…you make it into a deal by getting creative and finding a way to make the seller happy, make the buyer happy.” — Joe Jensen (28:55)

• On Fear in Investing:

  “There was so much fear the first two deals, because I just assumed that they either weren’t going to work out or I didn’t know what I was doing. And then in hindsight…they’ve definitely worked out. So that fear was pretty irrational.” — McKay (49:39)

• On the Compound Effect:

  “It all just compounds and snowballs on itself because you’re in the game as opposed to sitting aside waiting for that perfect deal to come along.” — Joe Jensen (40:43)

Timestamps for Key Segments

• Getting into Real Estate — 01:22–05:16
• First Deal Breakdown — 05:16–08:49, 15:32–18:05
• Mindset Shift in Sales/Business — 08:49–14:42
• Second Deal Discovery & Rollercoaster — 18:05–26:14
• Negotiating Roof Repairs — 24:48–28:38
• DIY/Sweat Equity Renovation — 32:48–36:16
• Rent by the Room Strategy — 34:30–36:16
• Learning Curve & Golf Analogy — 41:10–41:35
• Third Property & Using Leasebacks — 42:06–48:04
• Renting Out First Property — 48:10–49:14

Final Four: Reflections & Recommendations (50:25–53:58)

1. What McKay Would Do Differently

• Would focus first purchase more on long-term rental potential, not just lifestyle.

“I would have bought something that was just a little bit more conducive to being a long-term part of our portfolio.” — McKay (50:42)

2. Recommended Books

• Rich Dad, Poor Dad (mindset)
• How to Win Friends and Influence People (people skills)

3. Expensive or Interesting Mistakes

• Buying at the top of his approval instead of for investment logic; putting more down payment than necessary due to lack of knowledge.

4. One Word to Describe “Why Real Estate?”

• Freedom

“If you do things the right way and your priorities are aligned correctly, investing in real estate can give you freedom…” — McKay (53:33)

Tone & Takeaways

The episode remains conversational, candid, and encouraging—focused on real-world lessons, rookie mistakes, and honest self-reflection. McKay’s story illustrates that taking imperfect action is crucial, relationships and resourcefulness are more important than expertise, and financial “freedom” is the ultimate motivator.

“Start building that momentum.” — Joe Jensen (54:24)

Connect with McKay Dobbins:
Instagram: @mckaydobbins

For anyone wanting an honest view of what starting out in real estate really looks like—with both the wins and rough patches—this episode will resonate and inspire.