Today on Turnkey Saturday, Mercedes Torres speaks with Rob and Nancy Kim, a husband and wife team that lives in Minnesota and invests with Cash Flow Savvy. They share how they chose turnkey investing and passive income, how they overcame their hesitations, and the advice they’d give to new turnkey investors.
What You Will Learn About Cute Couple Cash Flows:
- How Rob and Nancy decided to leverage the money they made from their full-time jobs
- How they became a couple that cash flows
- Why they chose passive income strategies
- How they overcame their discomfort with real estate investing
- Their biggest challenge and how they overcame it
- All about their first two deals with Cash Flow Savvy
- How the property profiles helped Nancy overcome her real estate fears
- How accurate the figures in the profiles turned out to be
- The biggest challenge in embracing the turnkey portion of their real estate investing careers
- What pursuing turnkey investing with a spouse looks like
- What they are doing now with their delayed refinance
- The advice they would give new turnkey investors
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Speaker 1: This is Theriault Media.
So you want to be a real estate investor, but you don’t want to do the work. If there were only a way where someone else could do it for you. Now there is. Tune in here each and every Saturday on the Epic Real Estate Investing Show for Turn Key Saturdays, with your host Mercedes Torres.
Mercedes Torres: Ladies and gentlemen, I am honored to have you guys onboard. I am going to introduce to you Rob and Nancy Kim, husband and wife team that lives in Minnesota. Started investing with us and I’m just going to let them take it over and kind of tell us who they are and what they’re up to, what they’re doing and what this venture has brought them.
Mercedes: You know what? I’m going to start with ladies first Rob. So Miss Nancy, tell us a little bit about yourself, about the family, about who you are. Rob I’m going to extend the same courtesy to you.
Nancy Kim: Hi everyone. I’m NancyKim. Like Mercedes said, we live in Minnesota and I’m a working mom. So full-time job and have two boys that are active. 6 and 2. We really were just looking at first doing how we can make our money work for us and that’s how we originally got connected with Mercedes and Cash Flow. Again trying to figure out how we can make our lives just a little bit easier going forward in the future. As we’re both really busy parents, we are just looking for a way where we can actually enjoy ourselves and spend more time as a family.
Mercedes: Right. I so get that. Mr. Rob, tell us about yourself.
Rob Kim: So, my name is Rob Kim. Nancy’s other half. I’d like to say better half sometimes that doesn’t always work out right. We’re both busy working professionals, working full-time jobs. Like Nanc said, we really want to leverage what our money can do for us. Got hooked up with Matt’s podcast, the Cash Flow Savvy podcast and Epic Real Estate podcast and really just got intrigued. He was really influential in starting to think in a different strategic kind of way on how to put our money to work for us and that was really through real estate. It’s ultimately what lead us to Mercedes with Cash Flow Savvy and our first two turnkey properties that we purchased about a year ago.
Mercedes: I think I hear two. I’m so excited. We’ll jump into that. So you discovered us through the podcast. Why passive income? What made you decide specifically? Okay, we need passive income. You guys are both working parents. You do very well. You’ve got two kids. Why passive income?
Nancy: Again, we both do well in our careers and we’re at a point now where we’re looking at additional investments. We have income that we can start investing outside of a 401K or a typical IRA. We talked to people, we’ve encountered people that acquire real estate and it’s always been of interest but we just didn’t know how to do it. I think that was really the first kind of turning point for us to say if we have the money, how do we have it start working for us? How do we break the ice? How do we get over that level of discomfort and really just learning how to invest ourselves without, I would say, a typical financial broker and just what other options are out there besides what we’ve traditionally been doing over the last ten years.
Nancy: Just knowing that I’m already working, I’m already busy, it wasn’t necessarily taking on an additional job that was going to take and require additional hours away from my children. I wanted to be able to have something that was going to actually free up my time where we can spend, again, more time as a family and be able to travel. Or thinking 15 years down the road, of what does our life look like at that point in time and how do we potentially set ourselves up for success to retire in. In doing that, it was really through passive income that got us the most excited.
Rob: The idea of passive income to us really was this idea of creating streams of rent checks coming to us each month, right? And having that money work for us now and having somebody else pay for a mortgage and insurance and all those great things. At the end of the day, still walking away with some money in your pocket, right? It’s pretty exciting, we’ve finally crossed that hurdle where we’ve purchased a property and now two properties, and actually now three properties. It’s really starting to pick up some momentum and it’s really exciting and it’s really not as hard or as challenging as you might think it is when you’re first starting out. I think that was the biggest challenge for us, was getting over that initial hurdle and just doing it and stop thinking about it.
Mercedes: So hit the nail on the head. Nancy just mentioned we had to get out of this comfort level. It was uncomfortable. I have to say, it’s a big step to really think outside the box and you guys embraced it which is why you’re doing so well.
Mercedes: Now, Rob, you’ve already mentioned two properties and we’ll talk about the third one you’ve got going on. It’s super exciting. But tell me about your first property that you acquired through us. Actually, if memory serves me correctly, you guys went gung-ho and did two at the same time, right?
Rob: We did.
Mercedes: I love it, I love it. So Rob, tell me about the two properties, to begin with.
Rob: Sure. Essentially we made the commitment with you and the Cash Flow Savvy team that we wanted to move forward. Essentially you started sending us property profiles on a pretty regular basis. There were two in St. Louis and we were kind of going back and forth which one we might be interested in. We’re like, “What the heck. Let’s just do it.” We went with both. So we made that decision really easy. That was about a year ago last May. So May of 2017. So we’re a little over a year now. Again, it was just making that commitment to ourselves to make that initial jump in. You held our hands along the way, every step of the way and we couldn’t have done it without you guys. Like I said before, it really actually was a much easier process than anticipated. Again, that was with the teamwork with you guys and just all the great communication and the teams that you guys work with that you put us in contact with as well through your referrals.
Mercedes: Thank you. I take great pride in holding people’s hands because when I started guys, nobody held my hand. I made so many mistakes because there was nobody there to turn to. I just went gung-ho and so, I love that you said that we held your hand Rob, so thank you for that.
Nancy, I remember when you were going through the profiles. You had a lot of great questions. Tell me about the profiles. Did they help you, did they not help you? For our listeners, a profile is really like an electronic file of the property that you’re going to be purchasing. That has tabs on the top and it has everything from the property address to all of its numbers, to summaries, to graphs and a description of the property. So Nancy, tell me about the profiles.
Nancy: Yes, I will definitely say Rob was all in. I was primarily one foot in and I think really just looking at the property profiles and truly putting the numbers behind the logic and really understanding what was the initial investment. What was the return on our investment? What were the coms? What is the long-term strategy to look like? I think just being able to have the numbers, analyze it, ask those questions. Is it truly a five-year investment, a ten-year investment, 30-year investment because depending on how you look at it, the numbers came in [00:08:04]. That’s where I was able to really start analyzing it and I think better just understanding the strategy and what we’re going after. That’s where you really helped us to say is it a short-term strategy? Is it a long-term strategy? What are you really looking to do and the choices and decisions that you make and where you choose to invest is going to be different based on what your long-term goal is as a family, what we’re looking to accomplish.
That helped me because it’s one of those things that if it was easy everybody would do it and we just didn’t know how to do it. That was the misconception that it was if it was easy everybody would do it. It is easy, you just have to be connected to the right people and really learn how to do it. Then once you learn how to do it, you become comfortable and it becomes a lot less different. That’s where the property profiles I think built my confidence that we were making a good investment.
Again, as Rob said through collecting the rent checks and being able to jump in with both properties to where they cycle at different times. So as we’re out of one tenant, the one that is occupied was able to fund the other property so it was less of a financial risk for us to go in and invest in two properties at the same time, versus just one.
Mercedes: Yeah. You guys certainly did it right. Not everybody has the luxury of being able to do that. Honestly, thinking outside the box for them to say, “I’m going to get two properties instead of one.” You guys did it right.
So now that you guys have had the property for a year, Nancy I’m going to ask you specifically because you did a lot more work on the profiles. How are the profiles in comparison to real life now? Were the figures accurate?
Nancy: Yeah, they were accurate. The coms and what the property appraised at. Everything was in line so there wasn’t a disconnect between what actualized versus what was the profiles. Actually, what we were able to go in from rent increase was actually higher than what was on the profiles so it worked in our favor in that sense. Then again, being able to, if it’s something you want to choose to manage your own property or if you want to have a property management company. Those fees are all accounted for so there wasn’t any hidden expenses or any hidden fees or unplanned fees that wasn’t a part of the profile. So we were aware of every expense going into the properties.
Mercedes: Yeah. I think that’s very important. I’m a big believer of, what is it? Under promised, over deliver. So I’d rather be a big fan of being super conservative on the profiles and I hear that a lot. That there aren’t any hidden fees. Yeah. There are no hidden fees. The numbers are the numbers and I disclose them to you.
Mercedes: So Rob, I’m going to go back to you because I know, as Nancy said, you were the one that leads the troops to this whole ordeal of real estate investment. Did you interview other turnkey operations?
Rob: To be honest no we didn’t. I was hooked with you guys once I started listening to the podcast. I really was hooked quickly and was listening to other people that you guys have worked with. Interviews. Just a level of integrity and honesty, and really just face value that you bring to what you guys do every day and how you partner with investors and entrepreneurs. It was something I wanted to be a part of. So we kind of took baby steps and in fact, I think the first time we met actually face to face was a property tour with you guys in St. Louis a few months, I don’t know, maybe about a year and a half ago. I think that was really what solidified that we wanted to move forward and partnership with you guys in purchasing turnkey properties.
Mercedes: That’s awesome. I had totally forgotten that I met you there. I felt like I’d known you forever you guys. That’s awesome.
So Rob, what do you think has been the biggest challenge in embracing the turnkey portion of your real estate investing career? Now you’re off on your own and I love it. So we’ll talk about that. What would you say was your biggest challenge through this whole turnkey process?
Rob: Yeah, our biggest challenge one was just taking that initial jump in. Like we’re going to do this. I think the other kind of mental block that we were faced with was this idea of buying a property that wasn’t near us. So we live in Minneapolis, Minnesota and we bought properties in St. Louis, Missouri. So there was a lot of trust that we’re going to have to put into place that our partners, specifically property management, was going to be taking care of our property, taking care of the tenants, making sure the upkeep on the house is there and all these things are happening. That was a big challenge for us.
I think the other challenges, when people think of property management is going to take care of everything, it’s passive income, it’s not really passive involvement. In fact, you do have to be pretty involved. You have to stay on top of things and you got to watch your own back. It is necessary that you work with property managers of course. They’re there to support you but you also have to manage the property managers themselves. That was a little bit of a challenge too. Again, being remote that also creates some dynamics that you’ve got to work through and work within as well.
Mercedes: Yeah. I couldn’t have said that better. Nancy, what do you want to add to that? I know that you had different types of challenges? So share your challenges with me.
Nancy: I think one, too, outside of the property is the learning between the husband and wife and how you’re embarking on this journey together. And how we, I would say trust within each other because we’re both going through the learning curve together. We both feel comfortable and confident in different aspects of the process and so how do we leverage each other. Then really just figuring out the dynamics of how involved is Rob within the property management company? Where is my place in that? We both can’t be involved, we both can’t be pinging and calling these individuals. So really, just the coordination between the two of us to figure out how we can support each other through this process. That was definitely I would say a learning experience. [00:14:35]
Then, just not, again, always knowing. So how long does it actually take to source a tenant? How long should it take for your property to be up and running because they can take pictures and post it and advertise it? There are just some of those things that you just don’t know what or how long it should take if you’re in transition between tenants. So again, we just have to go through those experiences and just learn what we feel is acceptable. What’s not acceptable. How you work with the property management company. How you have those expectations up front and aligned. It was a great learning experience and it builds confidence in yourself and who those individuals are that are managing your property on your behalf.
It was a really good experience. You do have to go through some challenges or ask a lot of questions, just to be able to understand and learn when it’s a new experience.
Mercedes: Yeah. No, you have said that so perfectly. One of the reasons I wanted to invite both of you at the same time on the podcast is because I have found that our most successful individuals are those husband and wife teams, or those partnerships, not necessarily husband and wife. But those people that are on the same page to begin with. I know Nancy you started with one foot in but Rob, just a little bit to show you, it looks like you took off running relatively quickly. But it’s so important that a partnership is on the same page. That’s why you guys had so much success is because you clearly defined your roles in this partnership. Like you said, not both of you are pinging property manager because trust me, they get a lot of work without both you pinging them. So, I love that you define that and that’s what made you guys really successful. I love it.
So, Rob I’m going to ask you, what would you do differently next time. Now that you’re working on your own properties and projects now. What would you do differently? What are you do differently?
Rob: I think one of the biggest lessons I learned is the support in a network that I’ve built with working with Epic Real Estate. There’s so many great people and so many people that are willing to help. We were faced with a lot of questions along the way when we’re first starting out and to this day, still always have a lot of questions about new opportunities and questions about our property, or how to analyze something. What we really need to understand and one thing I learned was that I need to reach out more. Use that network that I’m associated with now and really make life easier. I don’t need to make all the mistakes or we don’t need to make all the mistakes on our own. We can leverage the mistakes that others made and learn from them and take their advice. We’ve got a really, really great network of people to do that.
Mercedes: Yeah you know I will say the Epic community is epic. I don’t know how else to say it. [00:17:45] Our followers, our Facebook group blows up. [00:17:50] badass … The amount of knowledge that you get from just the people in the community is mind-blowing. Sometimes when someone posts something on our Facebook page and asks for help, we get 40 comments from just our Epic community members. So Rob, you’re absolutely right.
Mercedes: I’m going to ask the same question to you, Miss Nancy. What would you do differently from this point on?
Nancy: Yeah. We would have acted faster. I would say we would have acquired properties sooner and we probably would have acquired more properties. When I reflect back just some of the concerns and the unknown, it really again wasn’t that big of a deal in hindsight. It’s just being able to trust the people that you’re around and again, I know Rob obviously has spoken very highly of you during this podcast but I would say that you guys practiced your own philosophy and live by your own principles that in itself is so comforting and to know that you were there and to be able to trust you to know that you have our goals in mind and you’re really going to help us and to guide us. Just would have trusted more so in that process.
Again, you have to be ready to take on the risks as well. I would push a little bit faster, but it’d just been further along in the game.
Mercedes: Yeah. You absolutely have to be ready and you have to make a decision. When you make the decision you can’t look back. Nancy, I can’t tell you how many people say, “I wish I would have started sooner.” So, thank you for saying that. I even say the same thing and I’ve been doing this for minutes. Awesome, thank you for sharing that.
So I know you guys are now doing a delayed refi. Our Epic community doesn’t know a whole lot about a delayed refi because it’s something that doesn’t happen every day. So Rob, your words, tell me what you’re now with your delayed refinance.
Rob: Sure. We kind of stumbled upon an opportunity with another Epic member, family member if you will. Local guy here in Minnesota. Russell, Russell Tapper. He had an opportunity for us to go in on a deal with him to purchase a property. We had the unique opportunity to present an all-cash offer for the property to acquire it. Then we actually went back to the lender that we worked with for our two turnkey properties. We had such a good experience with them that we decided to go back and work with Caeli Ridge at Ridge Lending.
Essentially, we are going to be 100% leveraged with everything that we put into it to purchase it. We’re actually going to get that out, minus a few closing costs but that’s unavoidable. We’re now going to have a third property we’re going to add to our profiles and it’s actually here in Minneapolis so we do have the luxury of it being in our backyard. It’s a great rental, a long-term tenant that’s there, really great tenant. We foresee this being a really great long-term buy and hold rental property.
Mercedes: Awesome. We did a whole episode on the delayed refinance and we will rip that episode again. [00:21:10] We still do delayed refinance in our office. It’s a little bit different because you have to go all-in in cash first. Then you do a cash-out refinance but like Rob says, you’re able to pull out everything that you invested if you do it right.
Awesome, so what advice from this point on to our turnkey family, would you give to a new investor? I’m going to start with Nancy first because Nancy gives good advice.
Mercedes: Nancy what advice would you give a new investor considering turnkey?
Nancy: I would say ask questions. Ask a lot of questions. I think don’t be afraid to ask the questions, the hards ones, that says tell me about a time that it didn’t go right. What were the mistakes? What were the learnings? What are the risks? And fully understanding that there are risks, but how do you minimize those risks. That’s really by surrounding yourself with a great network that can guide you and walk you through and help you and teach and train you.
But I remember having a call with another couple and understanding what was the impact to their family, how much time does it take away from the kids, what can you expect. Just really understanding the decisions that we’re making short term and long term for our family. So ask questions. Connect with people. The more people you can connect with you’re going to get all different types of stories, experiences, and really just tailoring and figuring out which one is the best for you because there isn’t one right way, there isn’t one right strategy so it’s really just figuring out what is right for you and for your family.
Mercedes: So well said. Mr. Rob. What are your thoughts? Or what was your advice to a new investor considering turnkey?
Rob: Yeah, just I guess going back to my own experience is I just sat on it too long, right, before actually just doing it. It’s so critical to take action and not just think about it or analyze. It’s taking the action and understanding that you need to start taking those first steps you’re going to learn and learn and learn and build that confidence.
I would say the other thing too is, we kind of touched on before, was whether it’s your spouse, partner, business partner whatever it may be, making sure that you guys are all on the same page and what your goals and strategies are going to be. What role each is going to take in the process. I know that I couldn’t have done this probably on my own without being able to lean on Nancy in different capacities. So to have that partnership there in place was really what got us through hard times, difficult times. What’s great is we get to celebrate everything together, too. We have a lot to celebrate, what we’ve accomplished in the last 12 to 14 months and we just plan on continuing to go forward and growing bigger and stronger.
Mercedes: That blows my mind. 12 to 14 months and you guys started with knowing absolutely nothing. Now you guys own three properties. That’s priceless guys. Thank you for sharing your story. Thank you.
Rob: Thank you.
Mercedes: My favorite part of my job is talking to somebody, of course, I’m a great talker as you know, but talking to someone on the phone and just leading them through the process. Then fast forward sometimes it’s six months, sometimes it’s twelve, sometimes it’s two years. Then I get to see the portfolio that they’re building. Oh, it makes me so excited! I feel like you guys are my children.
Guys, thank you so much for sharing candidly your story, your growth, your trials, your tribulations. Really more so your advice because I know there are people out there listening that are thinking the same exact things that you guys shared. I know you’re going to make a difference for someone and thank you for taking the time.
Rob: Thank you.
Mercedes: Have a good day guys, love you both and I’m sure I’ll see you at the next Epic event.
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