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Real Estate Investing School Podcast
201: Unlocking Passive Income with CASTR
00:53:36
Welcome back to another episode of the Real Estate Investing School Podcast! Today, we’re joined by Lamè Kinikini, the mastermind behind Elk Ridge Management and Holdings, and someone who’s made waves in the real estate world, earning the...
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- [00:00]
Lame Kenny Kinney
And what you just said is exactly why I love what I do, especially with where today's market is, is because we help people.
- [00:12]
Joe Jensen
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. Our guest today is Lame Kenny Kinney. He is the owner of Elkridge Management and Holdings. He owns over 100 doors and a short term rental investment firm. He's also a husband and a father of three. He cut his teeth in the door to door world and he's got a lot of stuff to offer. I'm excited to have him on the show today. Welcome, Lame.
- [00:37]
Lame Kenny Kinney
Hey Joe. Thanks for having me, brother. I huge fan of the real estate school. I've been following you guys for a long time. So when I got the text to join, I was super stoked. So I'm excited to be here. Thanks for having me.
- [00:48]
Joe Jensen
Yeah, man, I appreciate you sharing your story with us. You've got, you've been doing some, some, you know, large volume of work over the past few years. You've been hustling for a long time, but maybe you can just back it up. Where, where did it all start for you as far as like real estate as an investment tool? Where did that kind of come on your radar?
- [01:11]
Lame Kenny Kinney
Yeah. Love it. I love this question simply because I love sharing my story because I think it's. I try and share it as much as I can just because I want people to know that like I'm not special. I'm like you. And my, my story will prob. Resonate with a lot of people. And that's that for a long time of my life, I, you know, was good at my per se. 9 to 5. Right. Which was door to door to me. You know, it's not really a 9 to 5. It kind of is in some ways. Right. I've been doing that for years. I was with Vivivint for about six years. And you know, you make good income there. Couple sixes. It's a comfortable lifestyle. But just like everybody else, I think you get to a point where you just want more. And we always hear these stories of real estate, of passive income. Right. And you don't, you know, passive income ain't a real thing. But, but like you hear these kind of, like these kind of trigger words that make you want to think bigger and go bigger. And you know, my story started when I just decided to kind of take a jump and be like, look, you know, I could stay in this capacity my whole life or I can start to dabble in things. And so I bought my first investment property in 2018. I bought it just on a normal traditional FHA loan, primary residence, lived in it for 12 months and then moved out. I. I didn't know it was going to be a short term rental until it was. And a lot of that was out of laziness because I told my wife, I was like, I don't. I do not want to move furniture. Yeah, just leave it.
- [02:39]
Joe Jensen
It all fit.
- [02:40]
Lame Kenny Kinney
Exactly. So I was like, hey, let's just. Let me just freaking, you know, let's try out this airbnb thing. Right? So. And it's funny because I still have that listing on my profile, mostly because it kind of is like a started from the bottom, now we're here type of moment. Right? Because, like. Because it's garbage. It's trash. Like amenities, SEOs, design. I mean, compared to what I know now, it was. It's nothing good. And so. But even then I made money. Right. My whole goal at the beginning was like, hey, if I could break even and this mortgage not be a liability, that will be a win.
- [03:15]
Joe Jensen
Yeah. I remember the house and buy another one as opposed to selling it like most people do, which is most people's biggest mistakes.
- [03:23]
Lame Kenny Kinney
Exactly. Right. And so I was going to kind of do that. And long story short, after the first month of it being live, I made about $2,000 net. And so what? Yeah, I was like, well, this is an opportunity. And so. But really, I still didn't. I still wasn't at a point to where I jumped. Right. I kind of wanted to do it passively, so I did. I started to kind of dive deep into education, specifically in short term rentals. And that's really the beginning of a management company. So Elkridge Management originally, back then, started as just a property management company specifically for short term rentals.
- [04:00]
Joe Jensen
Oh, cool. So you're based out of Utah, right?
- [04:03]
Lame Kenny Kinney
Yeah, based out of Utah. And so Elkridge is, you know, there's an Elkridge Utah here, which is the city my wife's from.
- [04:10]
Joe Jensen
Oh, okay.
- [04:10]
Lame Kenny Kinney
And I met my wife because when I got home from my mission, my family moved. Right. Next order. So our logo is Two Next doors, so.
- [04:17]
Joe Jensen
Oh, nice.
- [04:18]
Lame Kenny Kinney
Kind of. Yeah, it's kind of the origin story.
- [04:21]
Joe Jensen
Of a little love note right there. I love that.
- [04:24]
Lame Kenny Kinney
Exactly. And so but we, we started our management company. I got really, really good at really how to operate, and I didn't realize how valuable that would become as I started to kind of step into the acquisition space. So in 2021, we found this thing called Creative Finance. As you know, the umbrella term of seller finance, lease to own, subject to, yeah, defil contract. All these different acquisition strategies that a lot of people don't know about. We, we got excited about this because we had this huge cash flowing management company and really we were like, well, where do we put our money if we want to start owning? And so fast forward to today. Over the course of the last three years, really we've purchased over 100 doors. Our portfolio has kind of switched to where now we own most of what we manage, although we still manage a decent amount. And so, but that's how it all started and that's where we're at today. And I, I feel blessed.
- [05:23]
Joe Jensen
So I, I love that, I love that you own the properties you manage, you know, because it's like you, you might as well like that's where the real wealth is going to be grown, you know, because you can be making awesome money from taking all these clients and you're still, you know, managing another 50 plus doors that you don't own. But you know, for the 100 plus that you do own, it's like not only do you get all that cash flow and all that benefit, but they're actually going up in value, you know what I mean? And it's, it's that scale that makes a big difference because you know, if you own one or two or three, honestly that can be life changing to be honest. 100, but man, when you own 100, it's like when a hundred properties all go up, just 10,000 each, which isn't, that's like pretty low appreciation. You just made a million dollars, it's like, oh, exactly. Okay, you know what I mean? Then they go up 20,000, you made another million dollars, you know, so when you have that scale, it's like, and not to mention the tax write offs, the depreciation on a hundred properties, like good luck even having to pay taxes, you know what I mean? Like, it's so awesome when you can get at that scale and a lot of people might be listening to this and it's like, oh, I'm never going to own a hundred. It's like it might not be as far off as they think because you, you got your first primary turned into a house hack short term thing just in 2018. You haven't been doing this 20 years, you know what I mean?
- [06:51]
Lame Kenny Kinney
And I love that because I'll chime in because that's why I love telling my story is because I remember when I bought my door in 2018, the first thought was how the hell do people own 100 doors, right? Because I was just like, holy. Because we're 1099ers, as, you know, as independent contractors, as salesmen, and there's this game of writing off all of your expenses for tax, low tax liability, but then you shoot yourself in your foot because then you have no income to show, right?
- [07:20]
Joe Jensen
And so you can't go qualify for conventional loans.
- [07:23]
Lame Kenny Kinney
Exactly. And. And that's why, in my head, I was like, how the hell do people do this? Right? And so as I started to kind of build what is now Elkridge Management, those are some of the questions that naturally I just had because of where I was brought up in, in terms of, like, how do I buy a property without any taxes, without any of my own money, without having season money, all the riff raff, dti, all that stuff in traditional. And a lot of people don't know that there are ways, right? And granted, they're not easy by any means. Like, nothing that's worth anything is easy. However, it is very simple, right? And so it takes a lot of hard work and a lot of commitment to, like, learning the game, learning and understanding real estate, which is a very hard thing to do. However, it is a lot simpler than you think, right? And. And it's crazy because in certain capacities, like door to door, I tell this all the time to my wife. I'm like, to this day, the hardest thing I've ever done in my life was knock doors. Like, like, it's crazy.
- [08:28]
Joe Jensen
It's like trying to get kids down on bedtime. You know.
- [08:35]
Lame Kenny Kinney
Facts. But really, I, you know, the point being, and this is like a life principle is like the capacity that you're in right now. You have no idea that there are skills you're developing there that will serve you a lot better in some other capacity that is going to make you more money. It's going to be easier than you realize, and it's not as difficult because of what you've been prepared for, right? And so, because my door to door, I owe a lot of what I've built to my ability to communicate, which directly came from door to door for so long, right?
- [09:08]
Joe Jensen
When door to door teaches you how to grind so hard, like, I remember thinking, like, when I first started my real estate career, I'm like, dude, if I just put in half the effort that I did on the doors to, like, just really being that committed, because it's the level of commitment that a full summer takes where you're just all in, you know, I'm like, dude, If I did half that with real estate, I'll figure it out for sure. And the problem, like you said, is, honestly, it doesn't take as much effort as the door too. Like pe, most people don't even accomplish near what they could. And I know I didn't either because I was able to accomplish what I needed with way less time, way less energy, way less effort than, than what it took me to, to do it on the doors. Instead of making six figures one summer and then have to put all that effort again, I was able to put all that effort in one year and then make six figures every year because of the effort from that one year. And it's that infinite return that real estate is like, oh, like, that's what I love so much about real estate. I'm not worried about. You know, it's cool to make some big bucks, but. But having an infinite return. You know, it's not passive income, but it's residual and it's infinite because it'll just keep coming and coming and coming and coming. That's what's so powerful. But, but lami. But how'd you get to a hundred? Like, how'd you do it then, right? You didn't go out and do a hundred house hacks, right? You know, how, how did you scale? You know, because 20, 19, you probably still only had one door, maybe two, you moved and not your second. Right. Like, where did the scaling begin and how did you get to a hundred?
- [10:40]
Lame Kenny Kinney
So the scaling came. There's two things that I figured out, right. And it's crazy to me that these things aren't taught in schools, like legitimately, because these are the things that are, these are strategies that I think make the most sense. But the first thing that I learned and came across was somebody I consider a mentor, Pace Morby. Right. And the whole creative finance thing. And granted, you know, and we could, we could do a whole podcast on what creative finance is.
- [11:08]
Joe Jensen
Sure. I can just dive it deep into that.
- [11:14]
Lame Kenny Kinney
Well, and just in a nutshell, right. Tip of the iceberg is it is an acquisition strategy that allows you to buy real estate without having to go through all of the hoops that you normally would. Right. We just bought a. We're getting ready to close on a temple in Ogden. And for this million dollar property, the terms are, I'm putting 15 down, which is 5% cheaper if I were to buy it. Traditionally.
- [11:38]
Joe Jensen
Yeah. Or 20 cheaper. I mean, some of these investment loans want 30% down, 25. You know, like you're getting way better.
- [11:47]
Lame Kenny Kinney
Well, and then, and then the huge thing with that is my interest rate is 4% flat. That's half of what market is right now. Right.
- [11:54]
Joe Jensen
Yeah.
- [11:55]
Lame Kenny Kinney
And so. And I was able to do that without. I didn't. They didn't run my credit. I didn't, they didn't ask for any taxes. They asked for a little bit of financials just to, just to show that I was a responsible adult. Right. Responsible business. But outside of that, I didn't really. I found out about this property three weeks ago. We're closing on Friday.
- [12:13]
Joe Jensen
That's all.
- [12:14]
Lame Kenny Kinney
And so like these are, this is a real deal that, like, it's not like these are. You're not looking for a needle in the haystack. They're all over. Especially in a market that's hurting like today. Right. And so first and foremost, answer your original question. How do I scale? I figured out an acquisition strategy that allowed me to buy quickly, buy multiple. Right. In the. My best month was in 2022, the end of that year in December, we bought 18 doors. Right. And so all in one month. All creatively. Right. And so. And if you were to. It's almost impossible to do that traditionally. Like it's almost. Nearly impossible.
- [12:52]
Joe Jensen
Yeah.
- [12:53]
Lame Kenny Kinney
Unless you have a ton of money and all these other things. Right. But that was the first thing I figured out. The second thing, that is also a huge opportunity that to be honest, I feel like I just got lucky in the market cycle of the economy is really capital markets, other people's money. There is layers to capital markets. You have family offices, you have banks, you have all these other ways of leveraging money. And then there's a retail space of capital markets. There's a lot of grandmas, sisters, uncles that have, you know, not just family members, friends, co workers, old high school people that really just have these nest eggs that are sitting a lot of times in investment accounts that are doing nothing for them.
- [13:34]
Joe Jensen
Yeah.
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Lame Kenny Kinney
Right. And so I mean, the car. The greatest cardinal sin in, in W2 is promising people that, that like a retirement. Like a 401k would retire you. I can't tell you how many people come to me and they're getting ready to retire after a 30 year career and all they have is maybe a couple sixes, 500 grand or less. Like that is so common. And it's tragic because it's like you got 30 years left to live. You ain't living off 500,000 for the next 20 years, you know, 20, 30 years. Right.
- [14:06]
Joe Jensen
And so especially with the rate of inflation and things like that. It's like there's just not like good luck, you know what I mean?
- [14:13]
Lame Kenny Kinney
Exactly. And so the capital markets really. So on my deals, like, I have a lot of capital partners. I just have a lot of people that have brought me money to allow me to go and execute on this deal. And we're just JV ing on these deals, right? Where I've been able to scale and, and create this opportunity for myself is learning how to short term rental and learning how to buy. Right? And so I like to call it castor, which is creative acquisitions into short term rentals. That's kind of the methodology in which we've scaled so quickly. But those are the two. And honestly, I think those are, you know, those are two separate, like, categories that I think anybody could create a business off of. Like being able to just help people place money in assets that are making them greater returns than these traditional accounts they, they have. But then also the creative side of being able to buy properties and cash flow them and buy them in a way that you can do it at scale. So those are, to answer your question directly, those are the two things, two levers that we kind of figured out. And I like to consider myself really proficient in those categories that have allowed us to scale really fast. So.
- [15:23]
Joe Jensen
And I, I love that. Like, I love the, the focus of your buy box and your strategy. I guess I should say the focus of your strategy even coined it caster, right? CA str. Because it's the creative acquiring of strs of short term rentals. And it's like when you, you know, you've branded this, you've coined this strategy, but it's that focus that I think is so powerful for you that a lot of people, you know, they get so distracted. There's so many ways to make money. There's so many options. Well, should I do this or should I do that? Should this? And then they never get deep enough. What do they say? Like, it's better to go a mile deep in the right thing than an inch deep on a hundred different things, you know, and that's what happens. What I see in real estate a lot, people get a little bit deep in a lot of different things, but never really get the momentum. But if you can go a mile deep on creative acquiring strs, boom. Like, that's lame's thing. That's Elk Ridge's thing. And so you're able to really, you know, get proficient at it because there are nuances. You know, you say it's like it's not Easy, but it's simple. It's also not that simple. Like, once you start getting into the details of. Of of creative finance stuff, like, they call it creative for a reason. You know what I mean? Like, there's a lot of nuances that once you know them, it actually does feel pretty simple. You're like, okay, it's not that bad. You just do this, do that. And this is how you do the insurance. This is how you do that. But before you know it, it's like, well, how do I do the insurance? Well, how do I do. What about, like, if the nodes call due or what. How. What about, like, the ownership? Or how do I access the bank account? Like, who, Who? Like, there's all these little things like, well, what if they declare bankruptcy? And what about that? Like, all these little questions that you're able to get deep enough to know all that, be proficient at it, so that when you go do bring in partners, they don't have to spend a year figuring that out the hard way. They just go, oh, I'll just invest with lame. And he's already done that.
- [17:16]
Lame Kenny Kinney
Yep.
- [17:16]
Joe Jensen
And then they can just rock and roll and start making a lot better returns they're making in their crappy 401ks.
- [17:22]
Lame Kenny Kinney
Exactly. And you know, it's funny, you bring up a good point that I think a lot of people, this is where they get analysis paralysis is when people are wanting to jump into real estate. The hardest thing about it is there's a blessing and a curse. And that is that there's a million ways to make a million dollars. And so. And I recognize that early. And, you know, it's easy to get, like, shiny object syndrome. And that's why a lot of people go an inch in a thousand different things when really, if you can go deep enough, like, that's where I think the real money is found, in the niches. And so for me, when I started to go deep, I also started to find that, you know, it took a lot more work, took a lot more study. I had to really put in the time to consider myself like an actual expert. But, like, once I was there, competition was like, there isn't any. Right. Like, granted, there's people that are doing similar things, but there's nobody that's doing caster. And like, when I could do that, that allowed me to provide value to the people that you're talking about. Right. The people that don't have the time to be able to have a career change and do everything that I did in full jump. But maybe have money and have a good income and want to be able to call themselves an investor. Right?
- [18:35]
Joe Jensen
Yeah.
- [18:35]
Lame Kenny Kinney
So. And that's where like when you can be niche, you've, you've created an opportunity for yourself. So I agree with that. 100.
- [18:42]
Joe Jensen
Yeah. There's so much power in being really focused on, on one thing and I think that's one thing. Honestly going back to the door to door, you know, you should just go sell that thing you're selling like, like that, that is, that is it. You know there's other things you have on your to do list but 99 of your focus is like go sell that thing you're selling. Yeah, it's very, very straightforward. And I think that's one reason why it's so powerful though because every day, all day long, you're just focused on doing that one very specific thing. And if you can translate that into your investing and go okay, I'm just going to do this one thing really good and get it done and get it done and get it done and get it done. It, you know, it can be, it can be really powerful and, and I love. So with these short term risks. So you're, you're getting stuff to cash flow in Utah. So that's the hard thing. A lot of buddies, oh, there's no cash flow in Utah. I want to buy but you know, nothing's even going to be self sufficient. It won't even cover its own debt, let alone give me any extra like this, this Ogden 10 unit. Like how are you getting that to pencil where it won't be hemorrhaging money or is it going to hemorrhage for a few years and you have a long term stabilization program or what's your approach on, on that, that one.
- [19:51]
Lame Kenny Kinney
So this is where the caster as a whole has become my niche. Right. Because you can get in trouble with Creative. Like the problem with creative is like you could go and buy like there's almost like, like you almost take the barriers off that the banks provide you of like making like rash decisions. When you can buy creative you go to any wholesaler and just buy every deal that he has.
- [20:15]
Joe Jensen
And like actually buying a lot of trash, that's going to be trouble. And no, no, no guardrails to stop you.
- [20:22]
Lame Kenny Kinney
Exactly right. And even at a 4% interest rate, that's just a number. Right. That doesn't necessarily mean that long term rents are still going to check out that your exit makes sense. And so that's where the whole SDR short term rental exit provided an extreme value for my business was I got again, you got to know where I came from. I came from the management space. I came from a place where I had to perform for other people's properties for me to make money. And so that forced me to be able to go super deep in like being a dog at driving occupancy. And so what? The way that we're able to do this and the way that we're able to stay cash flow positive and the way we make every deal pencil is just relying on our ability and our expertise of running it as a short term rental. And that when you can do that at a high level, honestly, my buy box becomes freaking massive. And it's because I now have a lot more cash flow to work with because of my ability to short term rental than most. And so the way that we underwrite all these is through that exit, there's very few doors. Of my entire portfolio, 90 of it is all short term rentals. Really people, some people look at that and think it's crazy. But then you look at my numbers and it's like, you know, it works, right?
- [21:36]
Joe Jensen
You're like, I'll be crazy for a while, right? Let's roll with this. Because I think I'll come out ahead.
- [21:43]
Lame Kenny Kinney
Exactly. And like a nugget that I'll share in this industry is that because everybody hears the noise of today, that Airbnb is dead or that it's dying or that it's hurting.
- [21:52]
Joe Jensen
I know multiple investors that in the past year or two have all liquidated their STR portfolios and got out. They're like, oh, the short term rental, I'm out, I'm out, I'm out. They're like, they're all exiting it. So it's interesting hearing you go and double down on it.
- [22:09]
Lame Kenny Kinney
And the reason for that is, and this is where our operation side really provided insane value for us. Airbnb, what it did is it made it really easy for people to think that they were operators, right? Because you can just post on this app that automatically gives you millions of people and eyes on your property without you having to worry about SEO, having to worry about driving occupancy different verticals. Before Airbnb, the OGs were direct booking hoteliers. These are all the people that understand that there is a marketing game that has to be had.
- [22:52]
Joe Jensen
It's a business. They understood there's an actual business and it has nothing to do with real estate. It's a business in and of itself. And then these people get in thinking oh, I'll do real estate. I'll do str. It's like, well, those are two different worlds.
- [23:07]
Lame Kenny Kinney
Exactly.
- [23:08]
Joe Jensen
They really are. Now you can combine those worlds in a beautiful way, but they're different worlds.
- [23:13]
Lame Kenny Kinney
And.
- [23:13]
Joe Jensen
And you need to learn both if you want to play both.
- [23:16]
Lame Kenny Kinney
Exactly. And us backing into this as an operator. Right. When I was learning how to make my clients more money, because that made me more money. We started to find insurance contracts. We started to find government contracts. We started to find professional contracts. Right. We just signed an insurance contract for a young lady that had her condo flooded.
- [23:37]
Joe Jensen
Yeah.
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Lame Kenny Kinney
So the insurance broker who we've, we've closed a few deals with called us and he's like, hey, I got this. I need a two bedroom, one bath that's fully furnished. In Salt Lake, we had one, and it's actually a basement unit. And they're paying me $3,750 every two weeks. Every two weeks for this two bedroom, one bath in salt Lake.
- [24:01]
Joe Jensen
And the insurance is covered.
- [24:03]
Lame Kenny Kinney
Insurance is covered because you're not going.
- [24:05]
Joe Jensen
To get a person to fork that out. They're like, yeah, right, dude. But insurance is covering it. It's doable, you know?
- [24:13]
Lame Kenny Kinney
Exactly. And these, and these insurance brokers, they just want to know, do you have the capacity, do you have a property, Is it well maintained and well furnished? And do you have the ability to deliver on the service?
- [24:25]
Joe Jensen
Like, right now we need someone today, like, this is emergency. And that's what's more beautiful about your scaling again. Like, people think, oh, it's safer if I only own five or 10 properties. No, it's safer to own 100 because now your options are limitless because now you do have a vacant one, which isn't a big deal to you, but you can put someone in it and you can do these contracts. And like, it's so much safer to go bigger than to go smaller. Which a lot of people don't realize that, like, oh, I don't want to get over leverage and own too many. And that's scary. It's like, dude, the more you have, you just have more pieces to play, which just gives you so much opportunity.
- [25:01]
Lame Kenny Kinney
And you can serve people that others can't. Right. If I have five doors, good luck getting an insurance contract. That is a needle in a haystack. Right. But like, these insurance brokers are calling me because they know that I have this mass amount of doors. But on top of that, now suddenly in this model where I'm driving different occupancy, how reliant Am I on an Airbnb? They take a back seat now. Like, if I get a hotel contract, I will cancel a reservation, which is the cardinal sin in that industry. But again, it's because it's. Airbnb has like, it's fooled people into thinking that they're like legit operators. Right. Whereas like, to me, Airbnb was never the mainstay. It was at one point. But like when we started to understand there is so much demand in the rental space as a whole. As a whole for furnished rentals. I like now it's an abundance mindset of I need to just outwork everybody to go find it. And so I guarantee that our company is probably the leading provider of, of delivering on, on insurance contracts, hands down, simply because of.
- [26:09]
Joe Jensen
Are you just in Utah, Are you nationwide or where? How's that?
- [26:12]
Lame Kenny Kinney
So we're primarily in Utah. We're in four other states, but 80 of our portfolios here. And so.
- [26:19]
Joe Jensen
So you don't rely on Airbnb for your business. You have.
- [26:24]
Lame Kenny Kinney
I don't.
- [26:25]
Joe Jensen
Other ways you're tapping into it, the, the insurance contracts. What else do you use? You mentioned a couple other ways that you're finding clients to fill these homes.
- [26:35]
Lame Kenny Kinney
So in. In Utah County, Lehigh is a huge tech haven. People know that.
- [26:40]
Joe Jensen
Silicon slopes, baby.
- [26:42]
Lame Kenny Kinney
Yeah, exactly. One of the things that we've tapped into is executive assistance. So there's a ton of executives for all these tech companies that often fly in quarterly, bi, quarterly, sometimes monthly. And, and they want a consistent place to stay that isn't a hotel.
- [27:01]
Joe Jensen
Yeah.
- [27:02]
Lame Kenny Kinney
And so we have a lot of these people that are calling us and hitting us up and they're booking direct. So automatically we're saving them 5% while we're making 10% more because we're avoiding platform fees. Right. So professional contracts is a huge one. The other one is professional services. So we just housed a government contracted construction company to do some build out for some foundation work in Moab. And they paid me $8,000 a month for six months for a, for a five bedroom house. Right. And so, and, and that's like, that's a government contract. Right? That's them coming in and trying to find a place to stay for people. And so, and I'm telling you, like, Joe, these are everywhere. They're everywhere. If anything, these. I can't tell you how many government contractors, like relocation specialists, insurance brokers call me and they're like, I've been looking for somebody like you for months. Right. Like, it's wild. And the problem is is because we've gotten so lazy as operators. I don't even consider people. If you're only on Airbnb, and I might ruffle some feathers saying this, I don't, I don't. You're not an operator in me. Like, like, if you're only on Airbnb, like, you're just out. You're out there for low hanging fruit right now. Mind you, it's still a piece. Like, I'm not saying stay off it, but like, there are other ways to demand the dollar with a furnished rental that people just don't. They're not willing to go out there and find it. Right. And that's. That's kind of been my mindset.
- [28:37]
Joe Jensen
Differentiates. It's like having a diversified portfolio in a way where it's like, you're diversified, where you're not. Like, all your eggs are not in the Airbnb basket. Because what if they make a stupid rule and what if they just change their policies and you're just destroyed overnight? Which that stuff. It will happen. It does happen. It happens regularly, you know, or what if they get shut down because of embezzlement or some crazy thing, you know, and you're like, oh, I'm destroyed. You don't want all your eggs in one basket. I love how you're diversified throughout. And there's VRBO and there's other ones that, you know, most people know of. But. But you've got to like more than even just the vacations, because that's one cool thing about what you're talking about. As I think of, you know what if another Covid happened, half of your clients would still be doing their thing because these are government projects. These are contracts that. This isn't just based on vacationers.
- [29:27]
Lame Kenny Kinney
Yep.
- [29:28]
Joe Jensen
Which is really cool because as the economy shifts, you can bend with that. But is there any room in any of this conversation for the average person who does only own two or three or four, they get their first Airbnb or a furnished building. They're like, oh yeah, we've got a furnished home. Like you. You know, I'm going to move. I'm going to leave all my furniture. What would the average person do? Is there space for them to look at more than just Airbnb or is that kind of just exclusive to because of your scale?
- [29:57]
Lame Kenny Kinney
That's a really good question. And to your point, these opportunities of different verticals of occupancy have become more available at scale for me. Right. Sure. Because if I'm trying to find an insurance contract it really is a needle in a haystack because it's micro location. If I only have five, like, I gotta hope that because when somebody's house burns down, they don't want to live an hour away. Right. And so you gotta like hope and trust that like if somebody does burn down, you're within proximity of where their life is. Right. And so it becomes a very narrow like window of opportunity if you don't have scale. With that being said, I still do think that there is a lot of benefit to the everyday operator simply because of the time and attention that they can give it. Delivering an experience on Airbnb. Airbnb nowadays has become a, it is an experience based platform.
- [30:51]
Joe Jensen
Yeah.
- [30:51]
Lame Kenny Kinney
Like, and that's why when you go on Airbnb, the first thing you see is all these crazy freaking homes. Because people want to experience something they don't want. They don't, they don't want a room in a board. Right. And so like, I think the opportunity for these smaller operators is utilizing Airbnb. And because your portfolio is so small, you can just go all out on the experience, hand delivering cookies, creating, you know, leaving custom notes. Right. Like, and these are all things at scale. Like, it's not that we can't do, it's just hard to deliver. Right, sure. And so I think the opportunity there is, is there from an operational perspective. However, I think the bigger opportunity is being able to, to buy. Right, Right. Especially in today's market. Because if you're only doing Airbnb, then you need to be very wise of how you're acquiring your doors.
- [31:48]
Joe Jensen
So let's talk about that. What does it mean to buy right?
- [31:51]
Lame Kenny Kinney
To me, it's just, and it's not always creative. Right. But in today's market, you're not going to pencil any deal at 7, 8%, especially if it's a single door. You won't even 6%. It's very hard, especially in Utah. Yeah, Right. And so buying right is essentially making sure that you're buying down the note. So whether you're putting more money down, which I, you know, I think there's a lot of people that feel safer doing that to get a, you know, a rate buy down or just to buy some of that principle down. So your note is cheaper or creative. Right. In today's market, I think creative is huge because there's a lot of people that bought between 2019 and 2021 that have a 4%, sometimes sub 3% interest rate. But because from 2021 to 2023, it's only gone down, so there's probably no equity there. So there's probably. There's a lot of people like that where there's a good opportunity to take over somebody's payment of 4%. And. And when you do that, you've effectively won your cash flow back that all these other operators don't have at 7, 8% notes, right? And so that's where I think the opportunity is for anybody at any scale is like, just operationally knowing what you can do based on what's in front of you, but then also like being able to buy, right, to make sure that you're winning your cash flow back. It's crazy how many people are blown away at, you know, me buying houses at 4%. It's crazy to me because of how many opportunities that there is. Like, like, I get. I get like multiple emails in my inbox daily of, like, these deals in Utah at. In the Force, right?
- [33:28]
Joe Jensen
When it's getting more and more popular. Because, like, one, the creative finance as a whole concept especially, I think here in Utah, I know Pace is, you know, has a lot of Utah ties and stuff like that. He's kind of blown that up. It's becoming more normalized. And so the sellers are getting educated on it, you know, because before when I would call people and ask them about this, they're like, well, I've never heard of that. I don't. I'm not. This is weird. They feel very awkward talking about it. Nowadays, more and more I'll talk to a seller and they're like, oh, yeah, yeah, yeah, I've heard of, like, they're actually, like, kind of stoked. Like, can, can you tell me more about that? Like, I've heard about this. I don't know how it works. And it's like, dude, the doors are opening up literally and figuratively for this, for, for this wave of creative finance, which is just a win for everybody except the bank, maybe, but whatever.
- [34:14]
Lame Kenny Kinney
And what you just said is exactly why I love what I do, especially with where today's market is, is because, like, we help people. Like, I can't tell you how many people we've been able to come up, structure a creative deal because nobody was buying, nobody could afford it. And so we came in and saved them from a foreclosure. Saved them from, you know, they've been eating this cost for the last six months and they don't live here anymore. But it's just a liability, right? There's just so many. And that's why I love the approach of it, because, like, you know, if I. If I have to go buy a property cash, I have to be a shark. I have to. Sure. Because there has to be margin there for me to do it. If I'm a flipper, I'm going buying properties at cash. I have to offer 50, 60% LTV. Not because I want to be, but because that's the only way it makes sense.
- [35:04]
Joe Jensen
Yep.
- [35:04]
Lame Kenny Kinney
Right. But with creative, there are so many levers you can push and pull that allow you to have a very human approach about it, a very empathetic approach, which is naturally who I am of like, hey, how can I help you? Right? Like what? Like, how much equity do you have or not have in the home? What's. What are you looking to do after this? Like, why is this a liability to you?
- [35:24]
Joe Jensen
Just customize it around whatever they're trying to achieve. You're not in this box of like, well, the bank says this or the. The flip numbers have to equal this. It's like, dude, let's just do whatever we want to do. Let's make this special between you and me.
- [35:38]
Lame Kenny Kinney
Exactly. And that's what I love about it, is that approach allows you to approach a seller with empathy, genuinely, and being able to have the conversation of like, look, Joe, I'm not here to, like, you know, negotiate you down and take every dime. I. I just want to help, right? Like, you tell me, where's the pain point? Do you need money today? Is the monthly killing you? Okay, let's say you need money today. Okay, Joe, I'm going to get you. Let me just cash out on your equity, right? I can do that for it to make sense for me. What if I just took over your interest rate, which is at three and a half, right? And that's the conversation that happens of give and take. That is from a very natural place. And I like to think that I've been very successful of. With what I've done in that regard, simply because I care, man. Really.
- [36:27]
Joe Jensen
And that's the thing. Like a good salesman, as you learn, like, there's like the. The mediocre salesman who can sell a lot because he can be, like, kind of scammy or whatever, but, like, the actual good salesman, just learn to actually solve people's problems and give them what they truly want. And it'd be fine to win, win. And then it's like, it's way easier that way because you're not twisting anybody's arm. You're not manipulating. You're not tricking anyone. You're like, no, no, I'm creative enough to find a solution that you're stoked on. And then you're both just like, well, great. There's no sales. There's no like, oh, I got to sell them or on it, which I think, you know, sounds synonymous with like, trick them. You know, it's like, no, I'm a facilitator. I'm not a salesman. Like, I facilitate good situations for everybody. And, And I can tell, like, that's how your approach has been. You carry that over into this and it's like, that's a perfect match, which is cool. And just one point on the interest rate versus purchase price. Right. If you're trying to say, hey, I need that my numbers to hit here, two or three interest points will make a bigger difference. You're going to have to cut the purchase price in half to make a difference of 2% interest. Like you. And you can, if you can show the seller that on like a spreadsheet. Like, look, I could either do it at your three and a half if I take over your loan here and then I can do this purchase price because this is my numbers. Or if I have to go get a new loan at 8%, look at, I'm gonna only be able to offer you a hundred thousand to five hundred thousand. And they'll see you're like, it's not me trying to gouge you. Those are the numbers.
- [37:58]
Lame Kenny Kinney
Exactly.
- [37:59]
Joe Jensen
Oh, wow. Like, you get a much bigger swing on the interest rate than the purchase price. You can only go so low on the purchase price.
- [38:05]
Lame Kenny Kinney
One hundred and again, crazy. It just creates a much more humanistic, natural problem solving approach that is much needed in today's market. Right. Especially with. Because I mean, honestly, I think, and I don't know what your take is on the market, but I, you know, I'm a little worried about this year. Like, I, I mean, worried for people. Like, honestly, the longer the feds take to lower the rates, the better it is for me. Because, like, I'm just going to keep cashing out on deals.
- [38:31]
Joe Jensen
I don't think they're going to lower them that much. I honestly don't. I think we might see by the end of the year. Half a point maybe.
- [38:37]
Lame Kenny Kinney
Yep, we'll see.
- [38:39]
Joe Jensen
Call me in December and, and tell me if I'm wrong. But, but you wait and see. I don't think it's going to be a big shift and I honestly don't care. It makes no difference. And the truth is most people that need something solved, they need it solved today, not in a year from now. You know, the people you're helping, it's like, no, they need to move. They got this new job in Nebraska, their mom died. Like they're going through this divorce. Like they need money for this surgery or whatever. The thing is, like, they probably need it now, you know what I mean? They can't hold on for six years and see what happens, you know, and so it's like, well, let's figure out a solution now. And yeah, maybe it would look different in three years from now, but we're not living in three years from now, right? Yeah, you know, we're living right now.
- [39:21]
Lame Kenny Kinney
And that's where I, you know, but I, I do think, yeah, I mean, because if interest rates stay high, it's good for business, but we're going to start seeing more and more hurt be realized, you know.
- [39:30]
Joe Jensen
So, yeah, you know, and it's interesting where people are at and what we can do with it, but it also opened a lot of doors, you know, so you find a lot of solutions. But I wanted to ask you if someone's like, okay, I want to get into the short term rental game and I kind of want to get into your network, right? Like, oh, you've got all these contracts or this and that, like, can I throw my asset into your network of scale where you have access to these, you know, other government contracts and you just. I just don't want to run a short term rental business because I don't want to learn that business and compete in that area. Can they give you that? Not give you the asset, but have you manage the asset and, and put it into your group and how does that look?
- [40:12]
Lame Kenny Kinney
100 so it's not our mainstay focus. And so with that being said, we, we are very selective on what property, where it's at, type, condition, especially who, like who we're working with. Like that's my big thing. Because it isn't like I said it, forget it. There's still things you got to be aware of, things you're running a full business. Exactly. And so granted, I can take a lot of like the minute away, but at the end of the day there's still going to be some things that as an owner I'm going to need you to do to make sure that you perform and that the property performs and that you make money. Right. And so, so yes, so we do take on properties that we manage. We're selective. But if that's something that somebody watching this wants to just reach out to me.
- [40:57]
Joe Jensen
So what is the best way for people to be able to get a hold of you and your company and reach out to kind of, you know, participate or follow or whatever?
- [41:05]
Lame Kenny Kinney
Yeah, my Instagram's the easiest way to get a hold of me and my team, so. And that's at H A I L E K. So it's my full name, Hamik on Instagram. So that's gonna be the easiest way to get it.
- [41:18]
Joe Jensen
Awesome. We'll put that in the show notes as well, so people can just go click on it if they can't remember that. But yeah, man, this is awesome. I think there's so much to be said for this. I think it is kind of inspiring to see, you know, how hard you've gone and for those listening, you know, I know I've kind of been like, oh, man, it's so cool if you can be at scale, it's so cool you can get scaled, opens all these doors. But like, but also, like, realize like, every step of scale matters too. You know, going from one to five is scale. Like now you have five and you have a lot more moving parts. Just going from 5 to 10 is another level of scale that opens a lot of doors and removes a lot of risk and, and variables. You know, going from that five to 15, like every step is a big deal and opens a lot of doors and honestly lowers your risk, gives you more options and makes things better. It doesn't have to be a hundred right away. And you might not want to run a business. Like I personally. That's one unique thing about how I've done it is from the beginning, maybe this will change someday. But I was like, I don't want to be running a business. I don't want employees. I don't want the insurance. I don't want to be running a business. A lot of people are running house flipping businesses or wholesaling businesses or property management businesses, and that's awesome. But real estate's so customizable, so someone listening might go, well, I don't want to run a business, but I could go figure out what Lame's buy box is, get him a couple and he can run that. Or I can just do it on a smaller scale and not have to run the business. Because guess what? You don't need a government contract if you only need to fill two units. Just get the one off Rando and it's filled. And 100% of your portfolio is filled now because you only have two or three. So it's like you can get away with a lot. There's benefits both ways, even if you're not having 100 units because you're very agile, like, say, you can be more customizable, and. And, you know, there's benefits both ways. So just lean into your strengths of where you're ever. You're at, and. And don't forget what your ultimate goal is.
- [43:18]
Lame Kenny Kinney
You know, I. I love that. And I think what I'll add to that is, you know, the. The greatest asset, the most valuable asset that we own is the asset between our ears, Right? And I think where economies of scale, whether that scale is 1 to 5 or 1 to 100, the most valuable thing that you take from that is what you learn and what you become. Yeah. And so to me, like, the guy who's able to go from one to three and change his life, that is just as valuable as Blackstone, who owns, you know, billions of doors. Right? And so to me, I. I think. I think really the purpose of any good business is just the people that we serve first and foremost, the clients you serve, the value bring to the world, but then also the people that you develop and become, including yourself. Right. And so that's where I, to me, really resonate with what you said, is that, like, you know, you're. You can win with wherever you're at, and it's just a matter of just taking the next step that's going to make you a better version of yourself than yesterday, So.
- [44:22]
Joe Jensen
I love it, man. I love it. Well, I want to run into our final four questions before we let you go back to conquering the world like you're doing, but question number one, man. What is your dream deal or a deal that you just would think would be so awesome to be able to tackle someday?
- [44:40]
Lame Kenny Kinney
That's a really good question. I think my dream deal, honestly, is being able to. To purchase some commercial real estate out in the motherland. Good old island of Tonga, baby.
- [44:50]
Joe Jensen
Okay?
- [44:51]
Lame Kenny Kinney
I would love to own real estate out there. It's hard because of the economy. It's still a developing country, but there are some commercial assets out there that I'd love to own. Hotels and just to be able to visit with my family and have a place that I can always house. Set aside a few of those doors for anybody that needs it when they need it. Right? And so that's my. That's my dream. That's my dream deal.
- [45:11]
Joe Jensen
Okay? Promise me you'll give us a call when you get that first deal in Tonga. You give me a call, and we'll get you back on. I want to hear all about it. Okay.
- [45:19]
Lame Kenny Kinney
100. 100. You're gonna be first call, Joe, So love it, man.
- [45:23]
Joe Jensen
I'm gonna go find it for you now. I'm invested. I'm like, I want to get. I want to get in Tonga as well.
- [45:28]
Lame Kenny Kinney
Let's go.
- [45:30]
Joe Jensen
All right, question number two. What's been one of the most pivotal books you've ever read or, you know, recently, one you're stoked on?
- [45:38]
Lame Kenny Kinney
That's a really good question. I'm a huge podcaster, so I'll be honest, I don't read too many books.
- [45:45]
Joe Jensen
But let's say podcast, which one of your go to's?
- [45:48]
Lame Kenny Kinney
So honestly, the Bigger Pockets. I mean, and that. That sounds super. You probably get that a lot. But really, I think. Yeah. Well, I think the best thing that anybody can do for themselves is just like exposing yourself to that industry. And Bigger Pockets does a great thing with that. That's led me to a few books that I'll mention. So it's Pace Morby's book. I've skimmed through that book, and that's super valuable. I forget.
- [46:14]
Joe Jensen
Well, it's that money.
- [46:16]
Lame Kenny Kinney
Thank you. Yep. So that one has been a good resource of reference for me. And then one that, like, I read a few years ago that I. Everybody always asks me, what's the most valuable skill? And I think it's sales. Like, I don't think I know that is the number one skill. And the Science of Selling is a book that I read, I mean, over 10 years ago, and I've read it a few times, listen to it a few times since then. That opens up an entire different perspective of what sales is, and it helps you understand that it is really a developed skill that has a science to it in terms of, like, being very intentional about how you communicate. And so those are kind of my three references.
- [46:52]
Joe Jensen
Who is that?
- [46:53]
Lame Kenny Kinney
Brian Tracy or I. I'm terrible with authors. Have no.
- [46:58]
Joe Jensen
I don't know. It's called the Science.
- [47:00]
Lame Kenny Kinney
If you have the picture of it, I can tell you that one. It's a red book, but, like, I don't know who wrote it. It's.
- [47:04]
Joe Jensen
Love it, man. No, I appreciate it. That's awesome. All right, question number three. What is one of the most expensive or just interesting mistakes that you've made in real estate investing?
- [47:17]
Lame Kenny Kinney
So. And this is where creative can get you in trouble. One of my very first deals, I bought a deal that I anticipated to renovate, and this actually was, like, it helped me, like, actually know my buy box Because I always thought like, yeah, I'm gonna do some value add. And anyways, I bought this property in Salt Lake. It's a duplex and the original budget was 40 grand. That was like what I had thought for the healthy budget. Yep. For the rehab to be able to like. And it fit right in my numbers. Cash on cash, look great, everything like that. And anyways, what I ended up spending on it was about 250 grand. I mean we ended up digging. This is a property that was built in 1900s. I mean we ended up having to redo a ton of plumbing stuff, just stuff you don't see. And I even had an inspection and so like I thought I could skirt, you know, the, the renovation. And it just ended up not, not being a good, good thing. But I, what I will say is that it's one, it's one of the best performing short term rentals that I have. And so I, I haven't lost yet. The appraisal came back far less than what I spent on it. Total, all in. But you know, it's a waiting game in real estate. I haven't lost yet, you know.
- [48:32]
Joe Jensen
Well, that's what's cool about the long hold. It's like, yeah, it might have been, it might be tying up more cash than I preferred, but like, let's run this thing to the ninth inning and see who's ahead, you know, and you're, you're probably going to be ahead, you know what I mean? As long as you can not lose the asset. Like how are you going to lose in 20 years, you know what I mean?
- [48:51]
Lame Kenny Kinney
Exactly.
- [48:52]
Joe Jensen
So I love about it. Yeah, yeah. Rehabs are always a tricky, crazy thing. I just got to share the story because I'm in the middle of. I just got this offer on this four plex and we're doing some due diligence and the contractor goes, oh yeah, I know this area. All these homes now, if it's being remodeled or built in this area are requiring a sprinkler system, like a commercial fire suppression sprinkler system. But there's no water lines that can hold that capacity on that side of the street. So you're gonna have to trench across the freeway. And it's like a two hundred thousand dollar project just to add the sprinklers. And the whole property we have under contract for 181. And so I'm like, well that's probably not gonna work. And I'm just like, man, if I hadn't found that out during my due diligence period. I could have been hosed, like, could have been screwed, you know. So, yeah, rehabs are always. You got to know what you're doing. Like when we talk a lot about real estate, like, yeah, just take action, get in there. Take action. Get in there. Like, that's true when you're just like buying something, but when it gets into like rehabbing, like 90% of the stories I hear of people actually getting burned is rehab stuff.
- [50:09]
Lame Kenny Kinney
Yep.
- [50:09]
Joe Jensen
Now that's also the most powerful tool for people to grow crazy wealth and recycle their money and scale. So there's a. It's worth learning that game if that's what you want to do. But it's. Yeah, it can be a tricky world out there.
- [50:24]
Lame Kenny Kinney
Serious and likewise. I mean, what it did for me was I. Now I don't buy anything that has any more renovations needed other than like light cosmetic, which is floors and paint. If I see plumbing, electrical, roof, if I see any of that in the inspection. Yeah, it's just not. I'm not gonna touch it. So.
- [50:42]
Joe Jensen
I love that, dude. I love that. I feel like that's not the norm. That's kind of been my go to in the past. It was just more turnkey. But most people are always doing these value add stuff and I'm like, I get a little like, oh man, there's so much value in that. That's awesome. I should do that. But it's. It's easier to. To run the numbers.
- [50:59]
Lame Kenny Kinney
The roh return on headache.
- [51:02]
Joe Jensen
Turn on headache. I keep looking how to add that metric to my deal calculator, man. I'm like, where is the return on headache on this? There needs to be a number for that. Well, this is great, man. Well, we'll let you go. I did want to ask you, you know, what do you just do for, you know, non real estate related? Just fun to enjoy life to make the most of, you know, this, this world you're building because, you know, yeah, we're buying real estate. We're building lives of freedom and flexibility. But you know, to what end? Right? So like, what's the, the passion behind it? What do you like to do?
- [51:31]
Lame Kenny Kinney
Yeah, I think for me, and this might be not your typical answer, but I, I'm at a point in my life where I'm just constantly seeking authentic relationships. I've built a career and I think that's, you know, that's a cross that people don't realize you carry when you start to build the name. And a brand that reaches a certain level is like There's a huge sense of lack of authenticity, people wanting things from you, this, that, the other. And I've just found, like, being able to really lean in onto people. Like, one, helping people because you get the most authentic version of somebody when you can help them and they really needed it. But then two, just leaning into the right people that, you know, that are. Are just wanting, you know, to. To. To have a real authentic relationship. And so obviously, that's narrowed my circle down to, like, you know, my family and, you know, close friends and then people that just, you know, again, just want to have authentic connection. So that's kind of where I'm at in life right now. And obviously, I. I love doing what I do because it kind of feeds that beast, but. But that's kind of where. Where my. Where my head's at nowadays and what I like to do, so.
- [52:37]
Joe Jensen
Dude, I actually love that. I love that answer. I feel a very. Fill a common thread with one of my focuses in life right now, too. It's like, you know, because you can't. You can't buy that. Right? You know what I mean? You can make a lot of money and you can buy a lot of cool experiences and you. But you know what? You can't buy authentic friendships. And it's such a powerful part of a fulfilling life is the people in your life. You know what I mean? And that's just something you got to earn, you got to work for, and you got to, like, attract. You know what I mean? You can't just go out and buy it. So I feel what you're saying. I love that, man. Well, sweet. Well, we'll let you go. I appreciate your time. Thanks so much for being on the show and for taking the time out to share your story with us.
- [53:20]
Lame Kenny Kinney
Hey, Joe. Thanks for having me, brother. Appreciate you. This is awesome.
- [53:23]
Joe Jensen
Absolutely. This is Joe Jensen signing off for the Real Estate Investing School podcast, reminding you to get creative.