The Iced Coffee Hour

Housing Expert: Everything You’ve Been Told About Real Estate Is WRONG! | Ken McElroy

Release Date: November 23, 2025
Hosts: Graham Stephan, Jack Selby
Guest: Ken McElroy (Real Estate Investor, Author, Syndicator)

Episode Overview

This candid episode explores the realities, misconceptions, and philosophies behind real estate investment with renowned investor Ken McElroy. The discussion dives into topics such as leveraging debt, the true meaning of risk, common myths about money, the changing housing market, affordable housing policy, property management, and the ethics of institutional real estate ownership. Ken shares practical lessons and insider wisdom from managing a $1.5–2 billion portfolio, navigating booms and busts, and passing on a legacy to the next generation.

Key Discussion Points & Insights

The Truth About Wealth, Debt, and Control (01:16–09:05)

• Leverage and Debt

  • Ken currently has about $1 billion in debt but feels no fear due to his focus on cash flow:
    “I get scared when it's not covered by somebody paying it. So, you know, I have 10,000 tenants, so they basically pay it off.” (02:39, Ken)
  • The journey to high leverage is gradual and built “one at a time.” Each property is its own project.

• Misconceptions About Money

  • Biggest myth: “That you need it.”
    “You just have to find an asset that has a tremendous amount of value, add to it, and then you need to go find the money, either debt or equity.” (01:32, Ken)
  • Advocates value creation first, raising capital second.

• Risk and Control

  • Ken distinguishes his strategy from paper assets like stocks:
    “You guys are paper and I'm not, I don’t love the paper asset world... I can control what debt I have. I can control the apartments. I can control the occupancy, the rents to a certain extent.” (05:40)
  • Real estate offers predictability when managed correctly.

Notable Quote

“Money goes where it's treated best.”
(02:02, Ken)

Navigating Real Estate Cycles & Market Conditions (09:13–16:03)

• Market Timing

  • Recent years saw McElroy buying less due to competition from new/naive syndicators overpaying for properties.
  • In 2025, vast oversupply in multifamily caused by construction cycles and rate hikes creates “blood in the streets”—a buying opportunity for seasoned investors.
    • “When rates repriced while they were under construction, their mortgage payments went up a lot... and now these new projects can’t get out fast enough.” (09:18)

• Future Predictions

  • Short-term: Renter’s market, incentives everywhere.
  • Medium-term: Shortage and rent growth expected by 2027–2029 as new building falls off.

The Realities of Property Management & Value Creation (16:03–27:25)

• High vs. Under-Market Rents

  • Ken prefers slightly below-market rents for higher occupancy and stable cash flow:
    “I actually believe that we should be under market...my occupancy is going to be higher. If I'm trying to get that extra $40 or $50...maybe higher vacancy...” (16:14)
  • Only maximizes rents for short periods—like when refinancing.

• Property Management as Key Differentiator

  • Success is rooted in operational expertise, not just buying or fundraising:
    “Property management. Operations is everything. It’s math: rents minus expenses.” (23:47)
  • Many failed “professional investors” are just marketers/“money raisers.”

• Ken’s Origin

  • Got his start managing apartments in college in exchange for free rent; learned maintenance skills from his father.
  • “You cannot manage your way out of a bad neighborhood.”

Relationships, Money, and Legacy (27:25–38:41)

• Relationship with Robert Kiyosaki
  • Met through mutual groups. Kiyosaki became an investor and mentor; they remain close friends, study together, and discuss investments regularly.
• Legacy Play
  • “Right now I'm rolling out a legacy play with my kids...handing over the reins. I don’t personally need more.” (07:17)

Homeownership, Affordability, and Policy (29:29–44:02)

• Is Homeownership Still Worth It?

  • Home prices in many markets not sustainable, particularly when disconnected from cash flow.
  • Prefers investing for cash flow, not for appreciation.

• Renting vs. Buying Today

  • “It’s far better to rent today than to buy. Far better from a cash flow standpoint.” (32:13)
  • Hidden costs of homeownership (insurance, maintenance, CapEx) often underestimated.

• Demographic Shift

  • Homeownership rate peaked at ~69% in early 2000s, dropped post-GFC; millions moved from owning to renting.
  • “The average home buyer right now is 40 years old. That's horrible. It's super concerning.” (35:00)

• Geographic Arbitrage

  • You can still buy affordable homes in select US regions, but it’s often not where people want jobs/lifestyle.

Ethical & Policy Debates: Who Should Own Real Estate? (44:02–59:27)

• Impact of Regulation

  • Government policy (rent control, tax, insurance) “affects everything.”
  • Investment dollars move where they’re treated best:
    “When you cap your ability to profit and you are exposed to cost increases...the money leaves.” (44:02)

• Ethics of Large-Scale Ownership

  • Ken: “Who should own it?...We have a supply problem. Somebody has to build these houses and apartments.”
  • Wall Street/institutional buyers have minor direct impact on prices:
    “They have very little to no impact on housing prices at all. It's really hard for people to accept.” (54:52, Graham)

• Paths for New Investors

  • “To live in would be very difficult. To invest in? Not so difficult. Find something valuable, raise money from others, split cash flow.” (58:26)

Notable Quote

“It's not about money...People like to hang on to 'I need money before I can do something.' It's just not true.”
(58:26, Ken)

Geographic Avoidance, Risks, and HOAs (59:27–70:11)

• Markets Ken Avoids

  • Avoids heavily regulated areas (ex: California, some parts of Florida/Texas with high taxes or insurance)
  • Cautions on poorly managed HOAs and condos—warns about large, surprise assessments.

• Personal HOA Stories

  • Graham and Jack share comical, painful HOA/condo stories about bureaucracy, inefficiency, and arbitrary enforcement.

The 50-Year Mortgage, Inflation, and the Dollar (74:41–82:03)

• 50-Year Mortgage
  • Exists elsewhere; lowers monthly payment, may get more buyers in but extends debt.
  • US still far from shifting away from dollar as global reserve.
• Inflation’s Impact
  • Large part of Ken’s wealth growth attributed to inflation.
  • Leverage with inflation multiplies gains; “compound interest, low leverage” are the keys.

Investing Wisdom, Legacy, and the Limits of Wealth (82:03–108:08)

• What Ken Would Tell His Younger Self

  • “Compound interest...look at how money works. It’s actually quite simple.” (82:09)

• Best Investment

  • “Best by far has been into myself—personal development, books, mentorship.” (84:38)
  • From a property: bought a senior housing project for $9.7m, worth $40m today.

• Worst Investment

  • A gold mine that disappeared with his money after a year.

• The Dangers of Wealth

  • “More money makes life more complicated, not necessarily happier.” (108:11)
  • Warns of health risks, ego, and loss of perspective.
  • Finds purpose in time, family, relationships—not money.

Notable Quotes & Memorable Moments by Timestamp

• On Debt:

  “The rich owe nothing and you should too. I'm a cash flow guy...we get millions a month coming in cash flow.”
  (01:48, Ken)

• On Real Estate vs. Stocks:

  “I don't like the volatility...I can control what debt I have, can control occupancy, rents, expenses...The paper asset market—I don't understand it to where I can control it.”
  (05:40, Ken)

• On Market Cycles:

  “There’s blood in the streets right now because people started building with 3% or 4% construction debt and it got repriced while under construction...”
  (09:18, Ken)

• On Ownership:

  “Who should own it?...Somebody has to build them. We have, depending on the study, 4–6 million under-supplied right now.”
  (48:03, Ken)

• On Time and Happiness:

  “I don't equate money to happiness—I equate money to time. That’s it.”
  (108:30, Ken)

• On Compound Interest:

  “Compound interest. I think it is an incredible thing and I think leverage—low leverage—[are keys].”
  (82:09, Ken)

Practical Takeaways & Advice

• Getting Started Without Capital: Find a property with value-add potential, raise funds from investors, provide them with a share of the cash flow.
• Beware of Bad Markets: Heavy regulation, insurance, taxes, and underfunded HOAs can destroy returns.
• Wealth’s Purpose: True wealth is about buying back time, not complicating your life or chasing endless numbers.
• Legacy: Focus on stable, sustainable businesses that can be passed to the next generation.

Timestamps for Important Segments

• 01:16 — Ken’s background, myth about needing money, love for debt
• 05:00 — Warren Buffett quote on leverage, Ken’s response
• 09:13 — Why Ken is buying now (market conditions, oversupply, interest rates)
• 16:14 — Philosophy on maximizing rents, value of long-term occupancy
• 23:47 — Why others failed: operations expertise
• 35:00 — Homebuying unaffordability, shifting demographics
• 44:02 — Impact of government policy and rent control
• 54:52 — Wall Street’s actual impact on housing prices debated
• 58:26 — How to invest with little/no money: syndication, finding value
• 74:41 — Thoughts on 50-year mortgages, impact of inflation
• 82:09 — Advice to younger self: compound interest, money mechanics
• 84:38 — Best (senior property) & worst (gold mine) investments
• 108:08 — Does money buy happiness? No—time does

Tone & Style

The conversation is unfiltered, insightful, pragmatic, and at times humorous—with Ken providing a calm, seasoned presence, countering misconceptions and market hype. Graham and Jack push for actionable detail, balancing data with lively anecdotes. Tone is conversational yet packed with hard-earned wisdom and occasional tough love for would-be investors.

For Listeners Who Haven't Tuned In

This episode offers a masterclass in the pragmatic realities of wealth-building through real estate—dispelling myths, highlighting the dangers of hype, and emphasizing the importance of fundamentals, operational expertise, and financial humility. Whether you're a new investor, seasoned landlord, or just real estate-curious, Ken McElroy’s grounded philosophy and the hosts’ sharp questions deliver a blueprint for long-term wealth and life satisfaction.