6 Rental Properties (in 2 Years!) While Working 9-5

Summary

Real Estate Rookie – Episode 6: 6 Rental Properties (in 2 Years!) While Working 9-5

Release Date: June 9, 2025

In Episode 6 of the Real Estate Rookie Podcast, hosts Ashley Kerr and Tony J. Robinson delve into the inspiring journey of Kwai, a dedicated real estate investor from Oklahoma City who successfully built a portfolio of six rental properties in just two years—all while maintaining a demanding 9-5 job. This episode is a treasure trove of practical insights, lessons learned from early mistakes, and strategic approaches tailored for novice investors aiming to establish a stable and growing real estate portfolio.

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1. Guest Introduction & Background

Ashley Kerr opens the discussion by highlighting the common hurdles new investors face, such as unexpected property issues and hastily made decisions driven by FOMO (Fear of Missing Out). Tony J. Robinson emphasizes Kwai’s resilience and strategic mindset, setting the stage for a candid exploration of his real estate journey.

Kwai shares his compelling background, detailing his family's immigration from Vietnam in 1995. He recounts the challenges his family faced, including his father's decade-long imprisonment by the South Vietnamese army, and their subsequent move to the United States. Balancing a career as a Physician Assistant (PA) with his passion for real estate, Kwai underscores the pivotal moment influenced by reading classics like "Rich Dad, Poor Dad" and "The Richest Man in Babylon," which ignited his desire to make his money work for him rather than being confined to the traditional 9-5 grind.

Kwai [01:13]: "They say to make your money work for you while you sleep. And so I just didn't want to get caught in the rat race working that 8 to 5, 9 to 5, retire at, you know, what, 75, not be able to enjoy it."

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2. Gaining Spousal Support

A significant hurdle for many new investors is securing support from their spouses. Initially, Kwai's wife was hesitant about diving into real estate. Through persistent dedication—reading extensively, listening to educational podcasts, and demonstrating tangible progress—Kwai gradually won her confidence and involvement in the investment process.

Tony J. Robinson [05:54]: "If you've never seen anything in your entire life all the way through, why would this be any different? So I appreciate you sharing that because I think that's something that a lot of folks miss."

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3. Building the Portfolio: From First Deal to Six Properties

Kwai outlines the evolution of his portfolio, currently boasting 12 doors comprising four single-family homes and two quad plexes, with one undergoing renovation. This growth was achieved over a two-year period, demonstrating a methodical and patient approach rather than rapid, unsustainable expansion.

First Deal: A Learning Experience

Kwai’s inaugural investment was a half duplex in Northwest Oklahoma City, purchased for $150,000. Despite encountering initial setbacks like a plumbing disaster and issues with the retaining wall, the property provided a gross cash flow of approximately $350 monthly. While Kwai considers this his "worst deal," it served as an essential stepping stone, instilling the confidence needed to pursue subsequent investments.

Tony J. Robinson [06:38]: "The first deal wasn't a massive home run, but it was exactly what you needed to get your second deal."

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4. Transitioning to the BRRRR Strategy

After learning about the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy from resources like David Green’s book, Kwai shifted his investment approach to maximize scalability and leverage.

Kwai [14:06]: "The more I learned about it, the more it just intrigued me. And I said, this is the way to go. I mean, why would you not want to do this?"

Implementing BRRRR allowed Kwai to purchase distressed properties, add value through renovations, and refinance to extract equity for future investments. This strategy significantly accelerated his portfolio growth compared to his initial investment methods.

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5. Sourcing and Negotiating Deals on the MLS

Contrary to the belief that lucrative deals are scarce on the Multiple Listing Service (MLS), Kwai successfully sourced his first two deals from there. His approach combines rapid response to new listings and thorough evaluation to identify undervalued properties.

Kwai [17:37]: "Both of our first deals were actually on the MLS. I just kept looking and looking and looking and like I said, we just happened to come across them on the MLS and we got to looking right away because those deals go quick."

Kwai emphasizes the importance of timing and preparation, suggesting that having a pre-approval in hand and being ready to act swiftly can secure deals below the asking price, as demonstrated in his first purchase at $130,000 against a listing of $145,000.

Tony J. Robinson [18:14]: "So, like, what do you think it was about your approach, about your offer, about your strategy that allowed you to find multiple deals below market value?"

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6. Financing and Refinancing Strategies

Kwai initially financed his properties through conventional loans obtained from a local bank, leveraging pre-approval letters to streamline the purchasing process. As he adopted the BRRRR method, he utilized commercial loans for subsequent properties, followed by refinements into conventional loans during the refinancing phase. This approach not only facilitated cash flow but also optimized his investment returns.

Kwai [16:03]: "If you look strictly at the numbers, our first BRRRR, we bought it for 130 and we put about $30,000 into it and it appraised for 189. So we're all in for what, 160. And we're able to pull out about 141 and some change."

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7. Building and Managing a Reliable Team

A cornerstone of Kwai’s success is his ability to assemble a trustworthy team, particularly contractors. Initially relying on his brother and then transitioning to professionals recommended by his realtor, Kwai learned the importance of vetting and maintaining flexible relationships with his contractors.

Kwai [22:37]: "So my other contractor I actually met from another Realtor... she was very personable. She eased my anxiety and concerns about how big of a massive rehab it was for a rookie."

Reflecting on early challenges, Kwai acknowledges the difficulty in managing family relationships in business and the necessity of making tough decisions when contractors fail to meet expectations.

Ashley Kerr [23:51]: "If you can start small and give them smaller projects first, just to see like, do we even like working together?"

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8. Navigating Challenges and Red Flags

Kwai candidly shares a harrowing experience involving a plumbing disaster that escalated into tenant lawsuits. This situation underscored the critical importance of thorough inspections, verifying contractor credentials, and having robust insurance policies.

Kwai [33:04]: "Red flag number one. Always verify your references. But I was desperately in to get somebody in there to pay the rent."

When a tenant discovered faulty plumbing and subsequently threatened legal action, Kwai had to navigate a complex legal and financial predicament. Leveraging a Home Equity Line of Credit (HELOC), he managed to cover the substantial repair costs, highlighting the necessity of having financial reserves to handle unforeseen issues.

Kwai [37:14]: "So we got a HELOC at the beginning of the year, and so we were able to leverage that and pay for the costs on that one."

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9. Balancing Full-Time Employment with Real Estate Investing

Maintaining a full-time job while building a real estate portfolio demands exceptional time management and dedication. Kwai optimizes his available time by utilizing lunch breaks and dedicating after-work hours to property research and management. Involving his family, particularly his children, in the investment process fosters a collaborative environment and instills financial acumen from a young age.

Kwai [30:38]: "So we try to make use of that time as well. So we try to make it a whole family affair. We take the boys, and not only are we, you know, hanging out together, but I'm teaching them the real estate side of the business."

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10. Expanding into Multifamily Investments

Initially focused on single-family homes, Kwai transitioned to small multifamily properties to enhance scalability and mitigate risk. Inspired by industry trends and driven by a fear of missing out, he targeted quad plexes, allowing for diversified income streams and more efficient property management.

Kwai [32:12]: "...there's scalability. And just part of it was FOMO. Everywhere you look or hear on the podcast, people are saying, oh, get into small multifamily."

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11. Practical Advice for Aspiring Investors

As the conversation wraps up, Kwai offers actionable steps for listeners looking to replicate his success in Oklahoma City:

1. Leverage the MLS: Act swiftly on new listings and perform quick, effective analyses to identify undervalued opportunities.
2. Network Actively: Join local Facebook groups, attend meetups, and immerse yourself in the community to uncover insider deals and build a support system.
3. Focus on Up-and-Coming Areas: Invest in neighborhoods like the Paseo district, which show signs of growth and increased property values.

Kwai [38:16]: "I see a lot of deals on the MLS that I actually pass because I either have too many projects going on or I don't have time to go look at. So I would definitely start there."

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Conclusion

Kwai's story is a testament to the power of perseverance, strategic planning, and continuous learning in real estate investing. Despite facing significant obstacles, including property issues and legal challenges, his methodical approach and willingness to adapt have enabled him to build a robust and diversified portfolio. For newbie investors, Kwai's journey offers invaluable lessons on overcoming initial setbacks, the importance of building a reliable team, and the effectiveness of the BRRRR strategy in accelerating portfolio growth.

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Notable Quotes:

• Kwai [01:13]: "They say to make your money work for you while you sleep. And so I just didn't want to get caught in the rat race working that 8 to 5, 9 to 5, retire at, you know, what, 75, not be able to enjoy it."

• Kwai [05:54]: "She was not on board like most spouses initially. I just kind of did my thing."

• Tony J. Robinson [06:38]: "The first deal wasn't a massive home run, but it was exactly what you needed to get your second deal."

• Kwai [14:06]: "The more I learned about it, the more it just intrigued me. And I said, this is the way to go. I mean, why would you not want to do this?"

• Kwai [17:37]: "Both of our first deals were actually on the MLS. I just kept looking and looking and looking and like I said, we just happened to come across them on the MLS and we got to looking right away because those deals go quick."

• Kwai [33:04]: "Red flag number one. Always verify your references. But I was desperately in to get somebody in there to pay the rent."

• Kwai [38:16]: "I see a lot of deals on the MLS that I actually pass because I either have too many projects going on or I don't have time to go look at. So I would definitely start there."

This episode serves as an essential guide for aspiring real estate investors, offering both inspiration and practical strategies to navigate the complexities of building a successful property portfolio while maintaining other professional commitments.

Transcript

[Ashley Kerr]

You've probably heard it before, but real estate investing is all about location, timing and strategy. But what happens when your first few deals come with unexpected plumbing disaster, contractor headaches, and a case of FOMO fueled decision making? Today's guest went through it all and still came out on top.

[Tony J. Robinson]

Yeah, that's right. He didn't have a perfect start, but he kept showing up, learned from every mistake, and built a strategy that works. If you've ever second guessed a deal or felt overwhelmed figuring out where to begin, this episode's going to hit home. You'll walk away with practical steps and maybe a few hard lessons you won't have to learn the hard way.

[Ashley Kerr]

Welcome to the Real Estate Rookie Podcast. I'm Ashley Kerr.

[Tony J. Robinson]

And I'm Tony J. Robinson. And today we're talking to why an investor who got started in Oklahoma City and has since grown a rental portfolio through grit, smart pivots, and a whole lot of problem solving. Kwai, welcome to the Real Estate Rookie Podcast. Super excited to have you, man.

[Kwai]

Thank you guys for having me. I'm so honored to be here.

[Ashley Kerr]

Well, let's get started. With your background before real estate investing, what was going on in your life and what actually sparked an interest in real estate?

[Kwai]

So I have a story that's very similar to a lot of the guests, I think. You know, my family and I, we immigrated to the states in 95 for Vietnam. My dad, he served in the South Vietnamese army with the Americans, and so that he got put in prison for about 10 years. And after that they allowed him to come to the States and he was able to take seven of us siblings. So my parents had 10 total. But only seven of us were able to come because the others were older than 21. So two parents, seven siblings. We all came over in 95. I actually found out from my mom a few weeks ago that we had to borrow money to come to the States because we didn't have any money. So came here in 95. You know, all you know is go to school, get a good job, take a, you know, take advantage of the opportunity that the states has to offer. And so that's exactly what I did. Went to college, you know, made good grades, went to PA school. Now I've been practicing as a PA for nine years now. Got married, you know, built a house, have two beautiful children. And then we're like, what next? And so because of COVID my wife, you know, she was able to save about $30,000, give or take, because of the loan deferment. And so we Have a couple of sisters that own a few rental properties who have done a few flips. And we just decided, well, let's just, you know, take that next step. But I think what really did it for me was, you know, the whole purple book, you know, rich dad, poor dad that everybody references to. After I read that and reading the Richest man in Babylon, it just struck something in me and, you know, how to grow my seeds. Let it grow. They say to, you know, make your money work for you while you sleep. And so I just didn't want to get caught in the rat race working that 8 to 5, 9 to 5, retire at, you know, what, 75, you know, not be able to enjoy it.

[Ashley Kerr]

I think it's been a long time since someone's actually mentioned rich dad, poor dad for the longest time. Like every guest would bring it up. So it has been a while. And yes, that is a great book to recommend to anyone if you have not read it. But also it's a great book to give to family and friends to get a spouse on board. And I think that also brings me to my first point is were you both fully on board right away? You know, you mentioned your wife, you know, saved a lot of money during COVID and your nurse, your wife is a nurse practitioner. Correct. And then you're a pa. How did you kind of balance going into real estate, investing, having full time jobs?

[Kwai]

She was not on board like most spouses initially. I just kind of did my thing. You know, I, I read a bunch of books, I put in the work, listen to podcasts, listen to you guys, the Bigger Pockets Broke podcast. So I just kind of just kept doing my own thing. And I think from her just kind of seeing me so dedicated and learning, and I kind of, you know, I sent her the book Rich Dad, Poor dad. And I, I don't know, she might have gotten through a couple chapters, but I think just her seeing me, you know, put in all the work, seeing the results, and slowly and surely, you know, I kind of just asked her little things like, hey, what do you think about this? Paint color or design tips? And almost two years later, I think we've got her on board.

[Tony J. Robinson]

But you said something super important that I, and I appreciate you sharing this because Ash and I have talked about this so much on the Ricky podcast was the way that you got her on board, quote unquote, was you put in the work yourself first. And you said that you were, you were reading the books, you were listening to the podcast, you were engrossing yourself in all things real estate investing. And it sounds like you've already had a lot of success in your career life. So I'm sure that your wife maybe just already has a certain level of trust in you and your abilities and when you say something, you're going to do something. But those are the things that we have to do to get that buy in from our spouse. And I think the advice that Ashley and I often have when folks have challenges around getting their spouse on board, like the first thing you have to do is look in the mirror and say, have I earned that respect and trust of my spouse to get on board with me? You know, and if you've never seen anything in your entire life all the way through, why would this be any different? So I appreciate you sharing that because I think that's something that a lot of folks miss. I want to talk about the first deal, but just really quickly for folks, what is your overall portfolio look like today? Why?

[Kwai]

So today we just acquired a fixer upper quad plex in one of the up and coming districts called the Paseo district in Oklahoma City. But I believe that brings us up to 12 doors. We have, we have four single family and two quad plexes now, the one quadplex being under renovation. So yeah, 12 doors.

[Ashley Kerr]

And this is over the time period of two years, right?

[Kwai]

Yes, it'll be two years this August actually.

[Tony J. Robinson]

When I bought my first rental, I thought collecting rent will be the hardest part. Was I wrong? The admin never stops. Expenses, receipts, tax forms, tenant issues. I didn't expect the behind the scenes work to take up so much of my time and headspace. Every night was another round of paperwork and I started thinking, if it's like.

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[Tony J. Robinson]

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[Ashley Kerr]

We're back from our short break and we're going to go through the first deal. So, so let's kind of like go through what that deal actually looked like. What were, what was the moment in time where you said I'm ready to make an offer?

[Kwai]

So yeah, we said we're ready to make an offer because we got tired of looking and I think my Realtor got tired of showing homes and we've, we've gone through several Realtors now. But you know, Max, he was our first realtor that showed us home. He was great, he was patient. But honestly, again, we just got tired of looking at homes and we got tired of I think making them mad, honestly. Because you know, you know, as realtors, when you keep looking and you don't want to buy, then that can Turn them off. So we came across this half duplex in northwest Oklahoma City. It was pretty turnkey. It was listed for about 150. I think we bought it for 150, may have put less than $1,000 in it. Just fixing up some little things. It wasn't the perfect deal, but. But it got us in the game. Right. So we bought it for, again, 150. We PITI. We put 20% down PITI about 1150. We were able to get it rented pretty quickly for about $1,500, so about $350 gross cash flow. But again, like I said, it was our first deal. It was probably our worst deal. But the most important thing was that I took action and that gave me the confidence to be able to roll it into the next deal.

[Ashley Kerr]

I love that you said that. And we didn't even need to say it.

[Tony J. Robinson]

I was going to say you're like the. You're like the poster child right now for all the things we want rookies to internalize. So you said it the right way. It's like the first deal wasn't a massive home run, but it was exactly what you needed to get your second deal. And now, like you just said, you know, two years later, you've got, would you say, 12 doors. But it doesn't happen without that first deal. And I think that's the part that Rickies really need to understand when. When it comes to getting started is that the first deal is meant to give you the confidence to do the second deal and nothing else. And if you can reframe it that way, then it takes a lot of that pressure off of making that first deal perfect. Right. It's there to help you learn.

[Baselane]

Now, one question.

[Tony J. Robinson]

Where. What city are you based in? Hawaii. Where. Where do you live?

[Kwai]

Currently we actually live in Yukon, kind of near Mustang, Yukon area. But we invest a lot in the Oklahoma City metro.

[Tony J. Robinson]

Gotcha. I have no idea where Yukon is. What state is that State.

[Kwai]

So it's a suburb about 15 minutes west of Oklahoma City.

[Tony J. Robinson]

Gotcha. Okay, cool. So Oklahoma City is kind of your backyard already. I was going to ask because, you know, Oklahoma City has come up in quite a few rookie episodes for different reasons. And I've actually got a flight booked out to Oklahoma City later next month to go look at some properties because it's one of the places that we want to start buying some real estate, man. So it's cool to see that you're having some. Having some success there. But going back to the first year, why so you're tired of looking at these houses. You find the deal that actually finally pencils out. And you said it wasn't a home run, but it set you up for the next one. I'm just curious like if we, if we focus on that first deal, purchase price said about 150. How did you finance that property?

[Kwai]

So we put 20% down for a conventional loan.

[Tony J. Robinson]

And where did you go to get the financing?

[Kwai]

To a local bank.

[Tony J. Robinson]

And why, why local?

[Kwai]

So I actually talked to my realtor that helped us build our first home and she recommended this bank. And I just called them up. You know, they gave me a pre approval letter for up to 200 I think, and we just got it rolling.

[Ashley Kerr]

You make it sound so simple and like, and, and really it is. It's just like making that phone call and contacting a lender to get that pre approval. Like obviously there's documents you have to submit, information you have to give them to get that pre approval letter. But once you have that letter, it's valid. Do you remember how many days yours was valid for like 30 days, 60 days. And then you're ready to make offers. And I mean that's just one step to taking action is getting that pre approval done. So now that you've got that done, you find a property. How does the negotiation go? Are you in a bidding war? Do you get it under asking? Let's go into the numbers on this deal.

[Kwai]

So we got it inspected and a few things came up. I think the H vac, it was leaking some sand or something because it was on a slab. There were some issues in the backyard with retaining wall. And so we were able to negotiate, I believe $5,000 down and $7,500 credit at closing. We didn't use all the credit, we just fixed up some things and like I said, got a rent ready with in under a thousand dollars.

[Tony J. Robinson]

You say it wasn't your, your best deal, but it was potentially your, your worst deal. So I guess I'm curious why. I mean the numbers sound decent. Seems that there's a little bit of margin there. What, what made this potentially your, your worst deal.

[Kwai]

So I say it's my worst deal because we put $40,000 down roughly and we got one house out of it. Now that we learned about the BRRRR strategy and how it can really accelerate.

[Ashley Kerr]

Your growth, what are you doing different now? And you mentioned the BRRRR strategy. What is difference with the purchase piece of it? So you're not putting 25% down. Walk through what you Learned and what you're doing different to actually do the BRRRR and to implement it.

[Kwai]

Right. So we. I started reading about the BRRRR strategy, you know, with David Green's book, the Burr book. I actually used to think it was a scam when I see all these Facebook moguls, you know, like, oh, hey, you can use your heloc, buy a property and take money out tax free. And so the more I learned about it, the more it just intrigued me. And I said, this is the way to go. I mean, why would you not want to do this? So we just started looking at distressed properties where you can force equity. And that kind of rolls us into the second and third deal.

[Ashley Kerr]

And on those properties, how were you purchasing them?

[Kwai]

So on the second and third property, we got a commercial loan through another local bank.

[Ashley Kerr]

So you did a commercial loan on these two properties and then you rehabbed them and fixed them up and then you went and refinanced. What type of loan did you get when you refinanced on the properties?

[Kwai]

We actually tried to sell one of the properties. One of them's out in El Reno, kind of a smallest town, about 30 minutes west of OkC. It was actually supposed to be a flip. It fell off twice the week of closing. So we ended up just keeping it and renting it out because I got tired of paying the interest on it. But we refi them into two, into both conventional loans, and just now we deeded them to our llc.

[Ashley Kerr]

I think there's always like this misconception of like, oh, don't. You can't fund a Burr with a loan because you're paying closing costs twice. But explain to us in your situation why it made sense to go and buy the properties with a commercial loan and then go and pay more closing costs to refinance into a better longer term loan and to pull your money back out.

[Kwai]

So if you look strictly at the numbers, our first Burr, we bought it for 130 and we put about $30,000 into it and it appraised for 189. So we're all in for what, 160. And we're able to pull out about 141 and some change. And so we got this brand new renovated, you know, 3, 2, 1500, around 1500 square feet for, you know, under $20,000 in. Whereas our first deal we put $40,000 in and we got this half duplex, you know, in a not so great area. And so the math just made sense. On the second deal, we were actually able to cash out about $10,000 tax free.

[Tony J. Robinson]

Why? I think the two biggest challenges right now with the BRRRR strategy is finding good deals. Actually, that's probably the biggest one right now. Right. It's just like making sure that you can find good deals to pencil out and then maybe like a secondary concern for re rookies are financing slash finding good contractors. Right. Like those are probably the two biggest things. But if you can nail, hey, you find a really killer deal, you've got the right financing, you've got a good crew lined up, then yeah, the Burr strategy can really reach the potential that, that it, that it has. So I guess maybe that biggest challenge first for the deals that you're finding, like you said, the one where you guys were able to get back 10,000 at closing, that's more than a perfect burr. Right? Like that's, that's exactly what people are hoping to be able to do. You're getting paid to buy cash flowing assets. How did you find that deal?

[Kwai]

So both of our first deals were actually on the mls. I just kept looking and looking and looking and like I said, we just happened to come across them on the MLS and we got to, you know, looking right away because those deals go quick. So if you don't jump on it, you know.

[Tony J. Robinson]

Well, that was my next question. Why? Right. Like, I mean, on the mls, right. You know, there's a very strong misconception amongst rookie investors that you can't find good deals on the mls. So I guess a couple of questions here or number one, did you end up closing at above or below the initial asking price?

[Kwai]

So we actually closed both of them below. On the first deal, it was listed at 145. But he was in a rush to sell, so that's always a good thing. Right. We offered 130 and he counted at 138, but then ended up just taking it at 130 because he needed to get out. The house was a hoarder house. It probably needed to be a wholesale house, but it was on the market. The second deal I actually offered above asking, it was listed at 55. I believe we offered 60 just based on the pictures. But when we actually went to go look at it, it was worse than what we thought it was. So we ended up settling for about 47,500.

[Tony J. Robinson]

Wow. What do you think it was about your. The first one? I guess that makes sense, right? You had speed of being able to close, which was important to that seller. But for that second deal, what do you think it was about your offer that made them accept it. And the reason why I'm asking this why is because there's a lot of folks who are listening right now who are just aren't even paying attention to the MLS because they don't believe they can get good deals there. But you've obviously figured something out in your market that's allowing you to leverage one of the most plentiful sources of deal flow for rookie real estate investors to successfully burn property. So again, going back to the question, what do you think it was about your approach, about your offer, about your strategy that allowed you to find multiple deals below market value?

[Kwai]

Like I said, we just kind of ran rough numbers in our head, you know, on what it would, the RV looks like, how much rehab would be. And then we just came in with an offer. Like I said, on the second property, we offered above asking because initially with our calculated rehab, it made sense based on the photos, but when we actually got into it, inspected it, it was way worse. So we just negotiated and I think the sellers knew what they had, which was not a very good house. It was a 1920s home. And so like I said, we were able to negotiate that down.

[Tony J. Robinson]

One, just one last question on the acquisition from the mls. Why are you targeting properties like as soon as they get listed? Like, hey, it was listed at 12 o' clock, like, I'm getting my offer at 1205. Or are you taking the opposite approach where you're looking for properties that have already been on market for 90 plus days? Like which strategy do you find yourself focusing on more?

[Kwai]

I usually tend to lean towards the first strategy. I'm more of the early bird gets the worm guy. So we have a realtor that sends us an automated list of criteria under a certain amount, three bed, three bath, whatever, and it gets sent to our email. But I also browse Zillow pretty often and as soon as I see something that I haven't seen the day before, then I'll click on it, try to run some quick numbers in my head, get my realtor out there.

[Ashley Kerr]

That's a great point too, is that yes, you can get those automated listings sent to your inbox, but. But oftentimes listings aren't always correct. Where there could be a three bed, two bath home with like a huge square footage and it ends up having an additional room that is currently a second living room, but could make another bedroom, which is exactly what you wanted, four bedrooms, two baths, something like that. So that's great advice is to also peruse Zillow as much as we don't want you guys just constantly scrolling and scrolling and actually taking actionable steps, stubs, there are oftentimes, you know, information that someone else may miss because they're just reading what the listing says as far as bed bath count and, you know, missing those opportunities where there's value add, such as it's a larger lot, so maybe you could put an adu on it, things like that. So that's a. That's a great point on that end.

[Tony J. Robinson]

And Asher, it reminds me of that episode that we had with Ariel Herrera where her entire strategy and, you know, she took it to, like, the. The nth degree where she had, like, scripts running and stuff like that, but she was basically looking for properties that were undervalued by every other investor, like you said, looking for properties with proportionately or disproportionately large lot sizes or where the square footage seemed really large for the bedroom count. So I love that idea of trying to find the hidden value. That's the first challenge why. But I think the second challenge for rookie investors when it comes to the burr, like I said, is finding a good crew. How did you find a trustworthy rehab crew to actually execute on these rehabs? Because even if you find the best deal, if you can't find the right people to do the rehab, the, you know, the deal could quickly fall apart. So what steps did you take to find the right people to do the rehab work for you?

[Kwai]

So actually, the first two deals, my brother was actually my contractor, but as you know, that doesn't always work out family. So my other contractor I actually met from another Realtor, one of those Zillow Realtors that, you know, initially when we were trying to look for homes, I just used one of those Zillow Realtors. And she introduced me to this contractor that was in her office. And so I kind of saved her contact, and I didn't, you know, reach out for months. And then when I found that house in El Reno where it was kind of, you know, a bigger rehab than I anticipated, she came out. She was very personable. She eased my anxiety and concerns about how big of a massive rehab it was for a rookie. And, you know, she was able to take it to the finish line within the budget that we talked about, within the timeline. And so I just, like said, kept using her for my next few deals.

[Ashley Kerr]

Along that process of, like, you know, you hired your family and you found contractors and different team members, what would you say was, like, the hardest conversation that you had to have with finding someone. And was that the actual of like moving on to someone else, or was that the vetting process of trying to find new team members?

[Kwai]

Yeah, being that it was my brother, that was a little more difficult just because you don't want to disappoint family. But I just kind of told him, you know, it's not going to work out. But also, as we will learn later, the contract is not easy in itself. And I actually got burned twice from the same contractor. So I think both, I mean, are difficult conversations to have.

[Ashley Kerr]

Yeah, I. And I think that, like, there's this saying that goes like, fire fast, hire slower, hire slow, fire faster, something like that. And it's basically the concept of you want to hire slow. So taking your time vetting someone, bringing them on board, hiring them, making sure it's the right person, and then fire someone fast, like get rid of them before more bad things happen and move on. And so that can kind of go with team members and like, people that you hire as to like, take your time vetting someone. Do have them do one small task for you, one small project or one deal for you at a time to kind of date this person and see how that relationship goes instead of going, oh, okay, great, I'm gonna hire you super fast. And here's three projects I want you to work on. Three different remodels. Go ahead, go. And then, oh, it's not working out. Well, I'm going to give them another chance. I'm going to give them another chance. Maybe they need to do this instead. Blah, blah, and, you know, dragging it on forever. But it's like, if things aren't working, it's better to cut your ties faster. And I think that, you know, that concept is used more as an employer employee term in business, but I think that is very much the same when you're working with contractors, you're working with lenders, you're working with agents. Like, you know, when it's time to move on and actually take your time vetting different people to actually fulfill that role. Because that turnover can take so much time to get used to how someone else works, what their process is, what your process is, and things like that.

[Tony J. Robinson]

So I had a very similar experience in my portfolio as well, where we were doing a lot of rehabs. My original crew was like, tapped out, so we brought in this other crew and we ended up bringing them in on two jobs simultaneously and didn't work out. And we had to fire them from both jobs, and we ended up losing some additional money on both of those deals because we had already paid them a percentage to start, had to come and pay someone else to like pick up where they left off and it just cost us more. So I couldn't agree more with the notion of if you can start small and give them smaller projects first, just to see like, do we even like working together? Are there someone who follows through on their word, like are they actually going to show up and do the job as opposed to just kind of giving them a bunch to a bunch to start with?

[Kwai]

And that's the issue I have is I'm kind of impatient at heart. I kind of like to get things done right away. Same thing with vetting tenants, right? You want to get them in as quick as you can to decrease that vacancy. And so yeah, you're absolutely correct. Definitely hire slow fire fat.

[Ashley Kerr]

We have to take a quick ad break, but when we come back, let's go over some red flags that rookie investors should be aware of. We'll be right back.

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[Ashley Kerr]

Welcome back. Before we get into red flags, I do want to ask how do you balance your full time job and being a real estate investor?

[Kwai]

So I'm lucky Enough to have a job that allows me to have a little extra time during the day. So I work 8 to 5, and so I spend my time after work looking at properties if I have to. And I get a lunch now from 12 to 1, where at my last job, I didn't. So I, you know, try to make use of that time as well. So we try to make it a whole family affair. We take the boys, and not only are we, you know, hanging out together, but I'm teaching them the real estate side of the business.

[Ashley Kerr]

Yeah. That's awesome. My youngest, he's like my little protege of, like, in a sense, you know, he's very smart about real estate investing and knows that that's what he wants to do. But the reasoning driven behind him being a real estate investor, I'm still working on, because he just wants to rent out houses so he can stay home and play video games all day and not have to go to a job. So, like, he's got half of the concept. Like, I'm glad he, like, realizes this is, like, he has the potential to, like, make money this way and what to do. But for the reasoning why, I'm. I'm still kind of working on that as him, you know, and don't really need to play video games all day.

[Kwai]

Yeah, mine wants to play video games and buy a Ferrari.

[Ashley Kerr]

Yeah. Yeah, Mine's literally the same. Yep.

[Tony J. Robinson]

Well, so I want to talk about the red flags, but before we make that transition, you. You also transitioned from single family to small multifamily. And just for the rookies that are listening, I'm curious, what was it that prompted the desire to jump from single family to small multifamily?

[Kwai]

So I think it had something to do with, you know, the scalability. And just part of it was fomo. Everywhere you look or hear on the podcast, people are saying, oh, get into small multifamily. And I actually looked into larger multifamily, but that's a whole nother ball game. So I just stuck to the four units or less. And so I just happened to come across a Facebook post about somebody, a wholesaler trying to sell a quadplex, And I just jumped on it right away and went to look at it the next day.

[Ashley Kerr]

So let's get into some of the red flags that a rookie investor may come into. Is there anything that happened in your properties that, looking back, you thought, you know what, there was this red flag, and I didn't see it, and then this circumstance happened.

[Kwai]

Yeah. So going back to that quadplex that I was referencing to we got it inspected for the commercial loan, not because it was required, but the lender needed a little bit more confidence. Usually it's just an appraisal to make sure that the building is going to appraise as much as we think it's going to be, or at least the cost of the purchase price. So during the inspection, for some reason, the inspector said, oh, I can't reach the sewer line or something. I couldn't go through the. The roof. And he couldn't find a drain. He said he had to pull a toilet. So I said, okay, well, that's fine. We'll just do it during the rehab process. Fast forward, we close on the property. My contractor's in there, she's doing her thing. And I said, hey, let's scope it. She said, no, you know, it's fine. I had my guys run the snake. Everything is draining. And so I just left it at that. Fast forward again a few months. Once we get it all rented out, one of my tenants send me a video and there's water coming from the ground. And so we get a plumber out there and he's saying, you know, it's going to need to be repaired. The. The p trap underground is going to need repair. Well, we get him out there, he starts the work. One thing leads to another. We go from one unit, is now into all four units. One of my tenants actually tried to sue me during the process because he said that the plumber left the lines uncapped and it smelled like sewer. So during the repair, one of the tenants tried to sue me because he said that the plumber left the lines uncapped and it started to smell in his units. And come to find out, in his unit it was a nine. This is like a 600 square foot unit, mind you, and not in the best area, but he had these $2,500 end tables, $5,000 paintings on the wall. So I don't know if he was a scam artist, but on paper, he looked great at the tent. He had a 750 credit score. He gave me the references. Did I verify that? No. So red flag number one. Always verify your references. But I was desperately in to get somebody in there to pay the rent. So here we go. He's in. He gets mad because the plumber left the lines uncapped and it smells. He called the city and the city actually came out. And come to find out, my plumber did not pull a permit. So he had already finished one of the units and concreted all. And so we had to bust out all that concrete, redo the lines in that one. We're into all four units now. Again, the tenant contacts his renter's insurance, instructs him to come after my insurance and the plumber's insurance. And so I have to go talk to a lawyer. But he also threatened to call the city health department as well as the news station. So here I am trying to juggle all this. I have them all in extended stays because the plumbing took like a month or longer. So we did put a claim with the insurance, but I was not hopeful that it would cover because I heard, you know, plumbing issues are impossible to get coverage. Lucky for us, they did end up covering the majority of the cost, which was about $50,000.

[Ashley Kerr]

I mean, I feel like you would be able to go after the plumber. Like, this was the. I mean, was it like a miscommunication where the plumber thought that you were pulling the permits?

[Kwai]

This. So I had my contractor kind of hire out the plumber. And so it was kind of a he said, she said. Again, as a rookie investor, you're not verifying all of these things because I'm over here with a full time job, you know.

[Ashley Kerr]

Yeah, I totally get it. I had that happen with a sump pump inspection like everyone else. That everyone else was doing it and nobody did it. And yeah, like, they're. It is definitely, like, especially as you don't know certain things or certain things are assumed as you're going along being an investor, things like this can come up, I think. I guess like you said that you worked with your insurance to get them to cover some of it. How were you able to cover the rest of this large expense? Was it your reserves? Did you, you know, just take money from your paycheck each week to put towards this? How were you able to. To come up with money to cover those costs?

[Kwai]

So we got a HELOC at the beginning of the year, and so we were able to leverage that and pay for the costs on that one.

[Tony J. Robinson]

Oh, I mean, I appreciate you sharing that story with us. And you know, Ash, I think of our. Our friend James Stainer, part of the on the Market podcast. But James is probably one of the smartest real estate investors that I know, and oftentimes he credits his vast real estate knowledge to the mistakes and lessons that he's learned along the way. So even when we have these moments that feel like setbacks, they're just part of the arc of becoming a great real estate investor. Kwai I really appreciate you sharing your story. And before we let you go, I guess just one last question for me. For someone who's listening, they want to follow maybe your footsteps and invest in Oklahoma City using the Burr strategy. And I'm raising my hand because I, you know, I shared before we started recording that I'm actually going out to OKC in about a month or so. What are maybe like three steps that you'd recommend they slash I take as we look to get started in that city.

[Kwai]

I see a lot of deals on the MLS that I actually pass because I either have too many projects going on or I don't have time to go look at. So I would definitely start there. Network. They say your network is your net worth, right? So definitely go out, join the Facebook groups, go to the meetups. So the Plaza district and the Paseo, you know, those are up and cominging areas. I'm sure you've heard about it, you've done your research, but those are definitely areas you should check out.

[Ashley Kerr]

Well, thank you so much for joining us today. We really appreciated having you on the podcast today. Can you let everyone know where they can reach out to you and find out more information?

[Kwai]

Thanks for having me guys. I'm actually not a big social media guy, so you just find me on Facebook. Why tin win.

[Ashley Kerr]

Well, thank you so much for taking the time to join us for this episode of Real Estate Rookie.

[Tony J. Robinson]

Thanks again to our sponsor, Baseline.

[Ashley Kerr]

Thank you everyone for listening. If you're not already, make sure you are subscribed to our podcast from your favorite podcast platform. I'm Ashley and he's Tony and we'll see you guys on the next episode of Real Estate Rookie.