Podcast Summary: The Entrepreneur DNA
Episode: The Human Connections Behind a $2 Billion Real Estate Portfolio | Kris Krohn
Host: Justin Colby, Bleav
Release Date: September 9, 2024
Introduction: Welcoming Kris Krohn
In this episode of The Entrepreneur DNA, host Justin Colby welcomes seasoned real estate expert Kris Krohn, a personal friend with over 20 years in the industry and more than $2 billion in real estate transactions. Justin sets the stage by sharing a transformative quote from Tony Robbins:
“You’re one person away from lifetimes of income.”
— Justin Colby (00:47)
This sentiment underscores the episode’s theme of the pivotal role human connections play in entrepreneurial success.
Current Real Estate Market Insights
Kris Krohn shares his optimistic perspective on the current real estate market, contrasting it with the downturns experienced during the 2008 financial crisis. He highlights his strategic investments in top markets like Phoenix and Las Vegas during their low phases, which yielded substantial profits as these markets rebounded.
“Right now I'm actually more excited than I've ever been.”
— Kris Krohn (01:51)
He emphasizes a robust average return on investment (ROI) of 60.6% over the past nine years in single-family home investments, a figure that astonishes Kris:
“60.6%. That's insane.”
— Kris Krohn (02:40)
Investment Strategies: Nationwide Play and ROI Diversification
Justin delves into the mechanics behind such impressive ROI figures, explaining that Kris focuses on nationwide investments rather than local markets. This approach allows Kris to capitalize on high-growth areas with extenuating circumstances, such as significant corporate investments driving up property values.
“Where do we have extenuating circumstances? Especially where it was already a great market but then a large corporation moved in and they're actually going to alter that entire subframe of that market.”
— Kris Krohn (06:03)
Justin further breaks down ROI into four components:
- Appreciation: Long-term value increase of property.
- Cash Flow: Income generated from the property.
- Principal Reduction: Equity built as tenants effectively purchase the home through rent.
- Tax Advantages: Benefits that enhance overall returns.
“And when you add up all four of those, that's how I get to that 60% number.”
— Justin Colby (04:40)
Financial Philosophy: Challenging Conventional Wisdom
The discussion pivots to contrasting traditional financial advice, particularly that of Dave Ramsey, with Kris and Justin’s real estate-centric approach. They argue that focusing solely on debt elimination and conservative investments like 401(k)s pales in comparison to the exponential growth possible through strategic real estate investments.
“Why follow Dave's program when you can make up to 108 times your money through real estate?”
— Justin Colby (10:40)
Justin criticizes the limited growth of traditional retirement accounts, presenting real estate as a superior alternative for wealth accumulation.
“50 grand sitting in a 401(k), making me 6%. If I put it in real estate, that same 50 grand turns into $17.3 million.”
— Justin Colby (10:40)
Importance of Networking and Mentorship
A significant portion of the episode emphasizes the critical role of human connections in achieving financial success. Justin recounts personal anecdotes where meeting influential individuals transformed his career trajectory.
“The $2 billion real estate transacted does not happen without that man.”
— Justin Colby (24:54)
Kris reinforces this by highlighting the value of events like the Clever Summit, where entrepreneurs can forge meaningful partnerships and gain invaluable knowledge.
“There's going to be 3,000 incredible entrepreneurs, real estate investors, real estate enthusiasts.”
— Kris Krohn (22:22)
Scaling and Diversifying ROIs: Justin's Blueprint for Wealth
Justin discusses his book, Have It All, outlining a multi-tiered ROI strategy to achieve financial independence:
- Pay Yourself First (PYF): Prioritizing savings to invest.
- Life Insurance Investments: Earning stable returns while leveraging assets.
- Double-Dipping in Real Estate: Ensuring investments yield high returns.
- Private Equity: Investing in high-growth companies for triple-digit returns.
- Infinite ROI: Utilizing other people’s money (OPM) to amplify investments.
“It's not just putting all your money in real estate, it's actually diversifying your ROIs.”
— Justin Colby (28:00)
Impact on Society and the Value Chain
Kris elaborates on the broader societal impact of real estate investments, noting that each transaction involves a vast network of professionals and contributes to economic growth.
“A house moves all of society.”
— Justin Colby (20:13)
He highlights the ongoing single-family home shortage, emphasizing the long-term sustainability and necessity of his investment strategy.
Upcoming Events: Clever Summit
Both Justin and Kris promote the upcoming Clever Summit, positioning it as a pivotal event for entrepreneurs and real estate investors to gain insights, network, and capitalize on emerging opportunities.
“Make sure you are there.”
— Kris Krohn (23:36)
Justin underscores the event’s potential to transform attendees' financial futures through intensive learning and strategic partnerships.
Conclusion: The Power of Connections
Closing the episode, Justin reiterates the profound impact that one meaningful connection can have on an entrepreneur’s journey, reinforcing the episode's central theme.
“You’re one person away from lifetimes of income.”
— Justin Colby (23:44)
Kris and Justin encourage listeners to actively seek out and engage with mentors, peers, and opportunities that can catalyze their success.
Notable Quotes:
- “You're one person away from lifetimes of income.” — Justin Colby (00:47)
- “60.6%. That's insane.” — Kris Krohn (02:40)
- “50 grand turns into $17.3 million.” — Justin Colby (10:40)
- “A house moves all of society.” — Justin Colby (20:13)
- “Make sure you are there.” — Kris Krohn (23:36)
Key Takeaways:
- Strategic Investing: Focusing on nationwide real estate markets with high growth potential can yield substantial returns.
- Diversified ROI: Combining appreciation, cash flow, principal reduction, and tax advantages maximizes investment profitability.
- Challenging Norms: Traditional financial advice may limit wealth potential; leveraging real estate offers exponential growth opportunities.
- Networking: Building and maintaining meaningful connections is crucial for entrepreneurial success.
- Continuous Learning: Events like the Clever Summit provide invaluable opportunities for growth, learning, and networking.
For entrepreneurs seeking to scale their businesses and achieve financial independence, this episode offers actionable insights and emphasizes the indispensable value of human connections in the journey toward success.