Insider Secrets Podcast Episode #48
Featuring Guest: Kaylee McMahon
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Kaylee has purchased over 2 million in real estate as a key principle. She has sold over 3 million dollars in residential real estate before transitioning into her current full-time syndication role. Originally from Portland Oregon, host of InvestHERDallas. She has started a Podcast called #1 leading ladies where she interviews kick-ass women who are disrupting their industry and the REAL story of how they got where they are.
Kaylee has done home flipping, as she feels that to be truly confident in giving advice to clients about buying/selling/flipping/investing in Real Estate one should NEVER take advice from someone who has never gone through these things themselves. Kaylee has completed continuing education in home comparable, appraisals, real estate investor representation, investment and wealth creation, legal 1&2, broker responsibility, property management, marketing and web development for real estate companies. She continues to learn for fun constantly.
Some of her completed subjects/courses have been apartment value add strategies, syndication methods with Joe Fairless, apartment mastery boot camps with Rod Khleif, Rat-race to retirement seminars with the Sumrok group, she’s constantly reading on negotiation tactics (Chris Voss never split the difference), how to buy and flip business’ which are sick and much more. She has completed GRI Marketing for sellers, GRI is the graduate institute for realtors and is a distinction that shows Kaylee is committed to the success of getting you top dollar on your investments.
The entire backbone of what get Kaylee out of bed every day is her “why”. This is something she will share when asked personally about it, but at a 30,000-foot view it is to create independence and space for those experiencing codependency and toxic relationships which hamper their ability to visualize and then manifest what their amazing reality truly could be. Her company culture models this why and is “Changing the face of multifamily” to bring more women into the light as powerhouse operators, key principles, and commercial brokers. ”Kaylee McMahon “The Apartment Queen”
- Founder of The Apartment Queen-Founder of ReByKaylee LLC Real Estate Brokerage
- General partner/Key Principle of a 45 MM AUM TX, 17.1 MM AUM PHX
- Owner and Principal for Quail Run Apartments
- Owner and Principal for Lantana Apartments
- General partner in The Meadows Apartments
- General partner in Village East Apartments in Denton Texas
- General partner in Los Parados Apartments Houston Texas
- General Partner in The The Flats at 2030 in Phx AZ
- Bachelor’s Degree in Molecular and Experimental Nutrition Texas A&M University
- Licensed Real Estate Broker in the State of Texas – 3 Years
“It’s not where you get in business, it’s who you become along the way”. – [Mike]
“You have to check what you’re doing and why you’re doing it”. – [Kaylee]
“If you want to have success in this industry you have to have these people that know more than you, and you have to ask them ‘what is the best way to do this?’ and you’ve got to trust them”. – [Kaylee]
“Your Networth is equal to your Network”. – [Mike]
“Success leaves clues”. – [Mike]
- Kaylee describes herself as ‘Resilient’
- Her initial business was not Real Estate related.
- Kaylee shares that what she cares about the most is helping other women learn how to create Real Estate cash flow, realizing that how she was going to take care of herself and other people in her life was by being financially secure and empowered.
- She discusses an App that helps new investors figure out how to get started with Real Estate.
- Kaylee’s advice For new investors: Get educated, find out your learning style, figure out your profile, lean on professionals, “You need to have a very experienced attorney”.
- A major pitfall to look out for is ‘Over-leverage’, a situation where there is more or less no profit; anything over 75% is in the risky range of overleveraging.
[02:00] Today’s guest, “Kaylee Mcmahon”, is introduced, as she discusses “Understanding your ‘Why’ in business” and Investing currently in the Dallas-fort Worth market.
[03:00] In one word, what best describes you personally and professionally?
[03:50] Kaylee shares her background
[08:34] Where’s your company going this year?
[12:04] What would be your advice to a new investor today on how to get started?
[22:26] Do you manage your property or do you have third-party management?
[22:48] What pitfalls do you see today that other active investors should look out for?
[29:05] Your favorite book?
“Rich Dad Poor Dad” by Robert Kiyosaki
“Women Don’t Ask” by Linda Babcock
“The Perfect Investment” by Paul Moore
[30:30] How to contact Kaylee
Website – www.theapartmentqueen.com
[00:00:10]Mike: Hey everybody good afternoon. It’s Mike with Insider Secrets. And I’m joined today by Kaylee McMahonn. Kaylee, tell our listeners a couple of things that they’re going to hear today on the show.
[00:00:20] Kaylee McMahon: All right guys, you’re going to listen to a little bit about understanding your why in business and making sure you’re clear on that.
[00:00:26] Another thing you’re going to learn about is investing currently in the Dallas Fort worth market. And then another thing you’re going to learn about is some really important moments to me as a human.
[00:00:37] Mike: Excellent. And you’ll have to listen into this show to hear the rest.
[00:00:40] Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management experience.
[00:01:02] Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.
[00:01:18] Mike: Hey, good afternoon, everybody. And welcome back. It’s Mike, your host of Insider Secrets. And you know, insider secrets is brought to you by My Core Intentions. And like, I always ask if you’ve been thinking about your intentions and what you’re trying to accomplish, where you’re trying to go, because that really is what matters not only in business, but in life. And, you know, what I always say to people is it’s not where you get in business, but it’s who you become along the way. And I know that today, our guest is somebody who’s become different along the way and things that really helped her in her life. I’m joined today by Kaylee McMahon.
[00:01:51] Kaylee, you want to say hi real quick.
[00:01:53] Kaylee McMahon: Hi there, What’s going on?
[00:01:55] Mike: Hey, glad you’re here. I’m excited today to have you here. Kaylee caught my attention because on LinkedIn, her tagline says the apartment queen. And when I read a little bit more, I was really impressed about the things that she has done along the way.
[00:02:10] You know, she’s purchased over $2 million real estate as a key principle, and she sold over 3 million in residential real estate before transitioning into her full-time career or syndication role. Originally she’s from Portland, Oregon. And she’s the host of the podcast called number one leading ladies where she interviews, kick ass women who are disrupting their industry and the real story of how they got to where they’re at. Kaylee split houses, been in the syndication business, raised money, done apartment deals, and continues to educate her investors and the people around her. Kaylee. I’m glad that you’re here today. And one question that I always ask my guests on this show are, in one word, what best describes you personally and professionally?
[00:03:04] Kaylee McMahon: Resilient.
[00:03:06] Mike: Resilient. Wow. Why do you say resilient?
[00:03:09]Kaylee McMahon: It would take five hours to explain, but essentially you kind of lean on what you have and I’m not going anywhere.
[00:03:19] Mike: Good for you. I think that’s a great quality to have is resilience because you know what, what happens if you stumble or stub your toe, you get back up.
[00:03:27] And I think that makes a lot of sense in people’s lives. Right? Hey listen. So your bio only tells a little bit of the story and usually always does about people. How about sharing some of your backstory with us, how you got to where you’re at today?
[00:03:41] Kaylee McMahon: Sure. So to update everybody on the portfolio, we have I think it’s like 65 million assets under management total as a team.
[00:03:49] We just closed on another two and a half million dollar complex right behind me that you can see in Fort worth, Texas right before Christmas. So we’ve got a few assets and two are for sales. If anyone’s looking in Texas to purchase 50 units, you can always reach out to me. So a little bit of the background of how I got into real estate in general.
[00:04:07] Total accident. I had my own first business as a solopreneur or like people have funny names from now. But as a self-employed S type business. So if you don’t get up and make some money, you’re not making any money. So that business me to go, Oh, I don’t have a business degree by the way, I have a nutrition degree.
[00:04:25]So I didn’t understand that you have to have people advertising systems several different parts of your business to be able to scale. And so a friend of mine taught me that and I realized that I needed cash to grow and cause growth sucks cash. And he said, well, why don’t you get into real estate, sell a couple houses a year, use that cash to fund this business, which was a personal concierge business.
[00:04:49] And that made sense to me at the time. So I got into being a residential agent. But actually first, because I was too afraid to even do legal contracts. I got into apartment leasing and in Texas you have to be a licensed agent to do it. So it’s called apartment locating. And so I learned about the apartment industry there pretty much and then got into all the different aspects.
[00:05:12] Single family condos, flipping what not. And then I was in an environment where it taught individuals how to invest in real estate. And there’s so many different ways. Note buying, flipping houses, arbitrage, Airbnb, I mean, RV parks, storage, and it goes on and on and on apartments ended up being the one thing though that really caught my attention.
[00:05:37] So apartments, it was because of the person behind the presentation, where they were just extremely humble and very almost embarrassed to be speaking in front of people. And that was somebody who didn’t need to necessarily show off, you know, it wasn’t for that person. It was obvious that what they were doing was not about the end game.
[00:05:58] It was about the journey. So I know that sounds cheesy, but I mean, enjoying your life is really important. It’s not just all about your facets, inner management or what you do business-wise goal-wise for the year, but you know, what are you doing along the way? So I identified with that person very much and wanted to be that person.
[00:06:16] And so I reached out to that person and was able to get enough information to meet somebody who was more active in the apartment, flipping a business. And that person became like a brother to me. And even now, when I’m going through these face plants and things that I never saw coming, but things happen and they happen for a reason. They happen to teach you lessons, regardless, that person is still there. So anyway I guess the question was a little bit about my backstory, but now what I’ve been very clear about realizing did you have to check. What you’re doing and why you’re doing it.
[00:06:52] What is your why? One thing that I read from reading the alchemists and several other things is, what is that thing in your life that brings you to tears? What is that thing that you care the most about? And for me, it is serving what I call my sisters, other women and helping them to learn how to create real estate cashflow, because that was what got me out of abuse.
[00:07:12] And so that was what made my mind very clear on how it was going to be able to take care of myself, how I was going to be taking care of other people in my life is to build myself up by being financially secure and being empowered.
[00:07:24] Mike: Where you thought we could spend five hours on the resilient question? Holy cow. We could spend two days on this now. You said a couple of really important things though. The first thing is you mentioned all of these different things about real estate and the different spaces that you can spend your time in. And I think that’s why I love real estate as much as I do, because there’s so much, right?
[00:07:46] And when you dive into just multifamily, right? There’s student housing, there’s self storage, there’s affordable living tax credit deals and market rate rent. So you really got to find a place that is your passion. You talked about why, and I think that’s great that once you discover your why, and you can develop your why, if it really helps you a lot.
[00:08:09]So where’s your company going at this point? What are you guys doing this year?
[00:08:16] Kaylee McMahon: So this year is the journey to scale to 1 million net revenue. There’s a couple of different ways that we’re going to do that. So one is continuing to focus on new acquisitions. But that used to be our sole focus and that’s something that there needs to be its own team built out to handle those things.
[00:08:32] So continuing to focus on new acquisitions. But in addition to that, there’s a couple of different avenues that we’re using to bring in more income and also be able to create more female investors. Every single thing that we do, our vision 2030 is to have 1 billion female investors created. So that’s going to be happening through several different avenues and everything that we do though, however, it needs to be pushing us in that direction.
[00:08:55] Otherwise we don’t need to be doing it. So, one for example, I had some successes last year, bringing in a woman and another woman into a deal as an active deal sponsor. One had a 10 31 exchange. So we created a 10 31 exchange program. If you’re a female that has money in a smaller asset, she was doing, you know, four units, things like that in Seattle, and they want to roll it into something bigger in Texas, and that’s what we’re doing.
[00:09:17] So that’s the way that we’re able to create more female investors. In addition to the 10 31 exchange program, we also have an underwriting software that my partner she used to be my underwriter, but now she’s our partner Carolina. She developed on her own. It’s on our website and you can learn how to underwrite deals using her software.
[00:09:33] There’s a mini courses attached to that as well. And then we also have an app slash website. So depending on if you’re a mobile or if you’re a desktop user, most of our users are actually desktop users. But being able to have somebody see a way to be very clear on one, getting into this industry, some people aren’t clear if they want to be active or passive.
[00:09:52] But a lot of it starts with the mindset and then the available time and energy that you have. So the app teaches you about the mindset and limiting beliefs that we have that you kind of need get over before you at least get going. Cause it will keep resurfacing, but it can’t control you. It can just be like a little voice, but not control you moving forward. The app covers all the different cashflowing real estate assets that exist. And then there are interviews that are attached to the assets, whether it’s RV mobile home self storage, hotels that you’re developing, Airbnbs all the different ways that we make cashflow. Office condos, I mean, there’s so many different interviews that I’ve gotten. So the women on these interviews are talking about the pros and cons of each. So that you’re kind of familiar with those. Also individuals that I interviewed that are in the multi-family industry or commercial industry in general, talking about insurance pros and cons.
[00:10:42] What to look out for, terms you need to know. So kind of giving you a grasp on risks and rewards of what you’re interested in. Obviously, if you want to do a deep dive into that industry, that’s kind of on you, but this is just giving you some exposure. And then if that is enough information for you to be at least be interested as at least a passive investor or a limited partner, then the app also walks you through what offering documents typically look like.
[00:11:04] They’re huge. There’s a lot of details. There’s a couple of cheat sheets in there and some videos from my attorneys going through. Some suggestions that they have, so it’s not so scary. And then once you exit the app, it’s basically getting you to live platforms out there in the industry, whether it’s a crowdfunding platform, whether it’s somebody’s private offering that they have and you happen to know them, but you just got the education through my app, then you exit the app and you go invest.
[00:11:27] Mike: Wow. Interesting. It sounds like you really have spent the time to put that entire process together just to really be more beneficial to the investor. Listen, what would you tell a new investor today coming into this space? What to watch out for or what to look for, how to get started?
[00:11:48] What would be your advice for somebody new coming into the space today?
[00:11:53] Kaylee McMahon: Someone new just really get educated. Like I’m trying to teach myself another industry right now tech, so artificial intelligence, and I’m having to go back to what I did in multifamily to get ramped up pretty quick.
[00:12:07] I love learning. And so luckily for me, that’s just a natural thing that I possess, not everybody does, but at least finding out your learning style that’s the first place to go. And then for me, it’s tactile, it’s touching it, it’s seeing it, it’s experiencing it in person. So luckily real estate, as you can see behind me is a tangible asset.
[00:12:25] So it’s something that you can go onto someone’s property. Like I offer this, we’ll have a tour with a bunch of women coming out to this property. Once we get going on the renovations to show them what we’re doing, why we’re doing it, how we’re creating income. But getting educated and whatever your learning style is, be clear on that.
[00:12:40] Also in multifamily, in this industry specifically, what helped me and maybe different for everybody else was to figure out kind of how everybody else is doing what they’re doing. So all the other syndication groups, what they do, where they buy. And in realizing that it’s about your deal criteria, whether you’re the active partner or passive partner, knowing what area you want to invest in.
[00:12:59] What age of the building, what class of the building, what kind of returns you expect? What’s your risk profile, all those kinds of things. So I’m very clear when I’m buying, knowing exactly what my profile is. So that will also help you to look at other offerings. If you’re passive now, if you’re active, same thing, you kind of need to understand why you would want to go get into that kind of deal.
[00:13:19] But the education behind underwriting, that’s why we offer that on our website. So if you want to learn how to underwrite, there’s a mini course that walks you through it. And if you need personalized sessions, Carolina will do that with you as well. Really just truly getting educated and then leaning on professionals is huge.
[00:13:34]There’s a big mind problem. I don’t know how to say it, I mean, I still kind of deal with it sometimes. I’m a little bit over it now after being in for three years. But for the first couple of years I was fighting it hard because being in single family you kind of do everything yourself, you know, when you’re flipping a house or whatever, you hire your own people, you make your own stuff up, whatever.
[00:13:54] Unless you’re like a large company that’s doing 10 to a hundred flips a month or whatever it is, that’s already scaled. Right? So before you get to that point, you’re kind of, self-sufficient doing your own thing. Here it’s very much so you need to have an experienced, like a very experienced attorney you need to have.
[00:14:11] And so, for example, if you’re in this industry, if you’re doing syndications, having an experienced syndication attorney right in your pocket, all the time is really important. Even having somebody that is like a litigation attorney and have that person available, it kind of as your corporate attorney, when you need them, you may not, I don’t know, but I’ve gotten stuck in a situation where I didn’t have the person and there was an immediate need and I just picked somebody and that turns something completely sour, just because I picked someone cheap and I picked someone wrong.
[00:14:39] So also having your CPAs that are specifically trained in this industry. So I’ve got two that I use that like, this is all they do is multifamily accounting. They don’t do rent, like all the real estate, they just do this. Having your contractors again, your team, they just need to be people that are only doing this.
[00:14:57] All the time and high volume and having to let go of those single family contacts that took you years to make is really hard to do, but you kind of you have to do it, period. If you want to have success in this industry, you have to have these people that know more than you and you go to them and you even ask them, what is the best way to do this?
[00:15:14] Like your property managers, you got to ask them what is the best way to do this? And you got to trust them.
[00:15:19] Mike: Yeah. Boy there again, you said a lot, but I really think that you’re right about the team building and networking thing. And I always tell people, you can’t just have one person, right? You need to have a couple of accountants, a couple of attorneys.
[00:15:31]You might have an attorney that’s good on evictions and one that’s good on real estate closets, right? And they both have to be great in what they’re doing.
[00:15:39] Kaylee McMahon: But, yeah, you’re right. Like I’ve got a litigation attorney, a trademark attorney, a regular real estate attorney, a syndication attorney.
[00:15:48]You just have to have someone that is specialized in that area, because if you ever get into a pickle, those are the people that are going to be able to you go, Hey, I need a good idea. And they will have like these crazy good ideas that will save your deal. Save your butt, save your families.
[00:16:01] I mean, you know what I mean? You gotta have specialists.
[00:16:03] Mike: Yeah, for sure. And I saw a comment the other day that said your net worth is equal to your network. So, you know, who do you have around you? Right. If you look at a lot of times, when people look at the five closest people to them, that’s typically where they might be in five years from now. So who are you hanging around with? Right?
[00:16:20] Kaylee McMahon: Yup.
[00:16:21] Mike: Who do you have in your ballpark? Hey, do you want to talk about this deal behind you a little bit? How many units when you close down and what are you going to do to it? What’d you pay per unit?
[00:16:32] Kaylee McMahon: It was really small. It’s 22 units it’s in Fort worth, Texas. So I kind of went backwards.
[00:16:39] But it was because the deal is in a minus B plus class area Fort worth. And then what’s living in there who was living there, excuse me, is that all medical doctors or coders or people that are at there’s like four or five hospitals right nearby. So there’s a ton of people that make eight times what they need to make to live there.
[00:16:58] So they just like the kind of, I call it hippy vibe atmosphere. I mean, even on the backside of, I’m not going to be able to show you from here, but it’s here, but keep going backwards. And then over that fence.
[00:17:13] Mike: Okay.
[00:17:14] Kaylee McMahon: Right now, it’s Crimson developers they are building a three story, all studio, brand new, I guess a minus class, cause there’s no amenities type property.
[00:17:23] And there’s an underground garage going in right behind us. And their rent started at $415 higher. So there’s a large gap, and all we’re doing really is just getting rid of this ugly green color making the outside look nice going to the units and adding nice bathrooms, kitchen contiguous or contiguous flooring so it’s all the same. And making sure that it’s nicer with little things like the GFC outlets. We put little USB plugs in there, automatic door locks and just little things to make it nice and convenient, little yards, in the front there’s a few units that have their own porch.
[00:17:56] And so making it a private area, little things like that. So on this one like I said, it was 22 units, we pay I think 113 a door, which is the most I’ve ever paid for a property in my life. But again, like I said, I was very confident, like I’m underwriting deals all the time that we are going into second best and final that were 60 a door, 68 or 72 a door or whatever.
[00:18:20] But these are deals that are in C class environment and we’re buying C class deals or they’re in maybe a C plus class. And when we have the impending, either recession or whatever, that’s going to happen in the next like four months here happening, these are the tenants that are not going to leave.
[00:18:35] These are the tenants that I’m not gonna be banging my head through a wall going, why won’t they pay the rent? Why won’t they pay the rent? You know, no one throughout COVID has said that they’re not paying. And even right now where we haven’t gotten one of the new notices, either on the new memorandums or moratoriums, excuse me.
[00:18:51] So, I was just really confident that this deal would do really well. And then the other thing is, as I’m trying to change my plan of attack a little bit more, because if we do look at these big buildings, there’s a ton of competition from the institutional players on a listed deal. That’s the other part is it’s listed and we’re going after a new technique this year.
[00:19:09] But the list of deals on this one, for example, I think there was only like seven offers total versus like another one I did, it was like 32 offers. You know what I mean? So I can always usually get to like second, best and final. And then who will beat me as someone that has like, Oh, I’ve got 6 million cash, no big deal.
[00:19:23] I can close in a week. I don’t even care the condition of the property. And I just, we can’t do that because I’m not buying it all myself. It’s all of us partners together. So I just knew this one would perform really well. And then the other tactic, like I was mentioning is that now this is in Fort worth, Texas.
[00:19:37] So it’s a great area. And every time I go there, I drive the block just to see what else I can kind of like start picking on. And I’m working with certain brokers to tell them I want to go after this asset specifically, continuously go after this asset. And then also knowing that if we’re in within 30 minutes of a property, then you kind of still have economies of scale.
[00:19:57] If you’ve got 45 units over here, 52 units over here, they’re all within the same area. We can still have the economies of scale, like I mentioned so. And those deals always have not always, but typically always have more meat on the bone, so better return. So for my investors, if I was going in on this deal versus another one that I almost did and another one that I almost did those other ones.
[00:20:19] Yeah, they’re getting like 9%. So point is when someone has 50 K to put into a deal and they put it into smaller deal versus a bigger deal. This one is in an area where our property management is still the same cost basis because they have properties nearby. So they’re not charging more like a smaller property far away.
[00:20:38] And then in addition to that, on the properties we’ll also be able to basically, like I said, just economies of scale. So we’re looking at stuff within 30 minutes of other properties which has more meat on the bone. So investors for their 50 K will get, 10, 11, 12, 13% cash on cash and closer to 20% annualized versus a lower return in a larger property because it’s been picked through.
[00:21:02] Mike: Yeah. Interesting. Hey one of the things that you said early on was, it’s small, it’s 22 units, I think there’s great opportunity in small multi-families today. When you look at that whole sweet spot between, three units or 15, 20, 25 units.
[00:21:18] There’s great opportunity out there for the flip business right? In and out 15, 18 months. And I think that the profitability margin is long as you’re in the right market. And I know Fort worth, I know Fort worth is a good market. It is a good place to be with that. Do you manage your own stuff or do you have a third-party management?
[00:21:40] Kaylee McMahon: Yeah, third party.
[00:21:41] Mike: Okay. That works better for you than being hands-on or trying to hold it on yourself.
[00:21:45] Kaylee McMahon: I can’t scale if I do it myself, straight up.
[00:21:48] Mike: Well, good. That’s good to know your limitations. I know when I was in the syndication business, we also had our own property management, where managing 7,500 units and it is tough to do. What pitfalls do you see out there today that other investors should look out for?
[00:22:06] Kaylee McMahon: Pitfalls. In what sense? If you’re an active or passive investor one and pitfalls, yeah. Are you active or passive, I guess?
[00:22:14] Mike: Yeah, I guess I would say on the active side, more so than the passive side, because yeah, just on the active side.
[00:22:23] Kaylee McMahon: On the active side, it depends on if you’re acquiring something that like, if you’re doing a loan assumption or if you’re doing something that’s fresh new debt with its fresh new debt, obviously, you know, get a good loan.
[00:22:34] If it’s doing an assumption, I guess sometimes there could actually be opportunities depending on what you’re assuming and what the terms are left and things like that too I think. So someone that most people want fresh new debt. Right? But sometimes you can get some kind of a discount or you can negotiate something.
[00:22:54] If it isn’t an assumption, especially if they have like a prepayment penalty, that’s kind of ridiculous. That’s an opportunity or also something else I’ve seen that is a pitfall because I always look for opportunities. So it’s a pitfall for the current owner, but not for you. So if you’re looking at something like I’ve seen some, I’ve been bugging people, bugging lenders the last so many months about what slow pay, no pay 90 days past due, what do you got? That’s pre-foreclosure and the best I’ve seen until this last week now I’m actually seeing some distress, but had been basically overleveraged.
[00:23:25] So situations where something is like a hundred percent. You their capital stack is a hundred percent of the debt, so there’s no cash flow. Those are the properties that I’ve made a list of because moving forward, what they were asking for was, Oh yeah, we’ll sell, but we’ll sell for full market price.
[00:23:40] And I’m like, now we’re not doing that, there’s no cash flow. You have to reduce the price for me to have some profit, right? And they’re like, no. So I’m like, well you’re the person I need to call it six months. You know, when you guys are realizing that there is no cashflow, you probably don’t have adequate reserves because before COVID there weren’t required, well, there were required reserves, but not nearly as large as they were there are now because of COVID when you’re talking like agency.
[00:24:04] So another thing I guess to look out for this is an interesting perspective, and I’m going to give advice from somebody else’s shoes. It’s much more experienced and older than I am. Because those are a lot of people that are in my honestly board of advisors. Like just when you’re scaling a company, any other kind of venture, usually you have some kind of board of advisors that own Point two, five to 1% of the company and they have no voting, but they’re able to give you advice. So these individuals who’ve been doing it for a lot longer than myself. One guy’s name is Doug and so what he’s done is he’s actually gone to a small community banks, little financial institutions, and instead of maxing out the amount of leverage that you can get titrating it down a little bit safe. You can get 80% get 75 something. By the way, so many other lenders have told me that kind of when you’re in the risky range of over leverage, that’s pretty much anything over 75%. So if you’re 75% and under, usually that’s pretty safe depending on some other stuff.
[00:24:58] The point is that what he’s done is bought assets. Like you can see behind me where it is a value play, where you do have the ability to get in there and tweak a bunch of things that are going to create more value, more income and improve the value of the property. So cool thing about multifamily is that it’s a business.
[00:25:15] So, you increase the income decrease expenses. That’s one way to up the value and then also making it look and function very nice is another way. So we force all that normally in four years point is that if you can really shove it in like a year’s time, what we try to do and then you have this increased value.
[00:25:31] And then if you’ve gotten bank debt going into the loan, usually you have a higher interest rate. And then at that point you’re going to refi out and it makes them more money. And then like right now, for an example I believe again, I’m not an expert, I’m not an economist. But I believe that at least for the next year, if not two, that our interest rates are gonna stay pretty low.
[00:25:49] So following that plan for at least the next year if you can buy multiple assets and be able to do that flip out refi to a lower, there’s some types of 2.9% long-term loans, 2.9% interest long-term loans out there and be able to take that cash and do good things with it, or what we do is just give it to our investors, so that that’s normally seen as a pitfall I guess, doing non-agency debt.
[00:26:15] But that’s one way that Doug has made millions. I mean, the guy’s got five houses, a jet and that’s all he does is multifamily. So I’m just looking at somebody who’s gone through the Oh eight crisis. Yeah, anyway been doing it a long time.
[00:26:29] Mike: Good, yeah. I always believe success leaves clues, right?
[00:26:33] So people like that, we can really learn a lot from and one thing is the knowledge, but it’s the wisdom that goes with it because there’s a lot to be said for the wisdom. And I tie that back to the resilience thing right. So once you stub your toe, you kind of gain all this knowledge and wisdom.
[00:26:50] Hey, let’s start to talk about some lighter things right now. So a couple of questions that I always like to ask my guests are you’re from the Dallas Fort worth market. What’s your favorite tourist attraction in that area?
[00:27:03]Kaylee McMahon: I guess Dealey Plaza 64 museum where JFK was shot.
[00:27:10] Mike: Okay. Wow interesting. I’ve been there. That’s a great place too. How about favorite restaurant?
[00:27:15] Kaylee McMahon: I would say a lot of them have been closed. That’s the sad part. Wolfgang puck had a restaurant up at the ball so like it was called, it’s not 360, but the ball is around circle and then the restaurant’s called like five 80 or something. But anyway, I heard last night it was closed, which stinks. It was an Asian fusion. It was awesome. And then the other favorite that I did have was Dolce Riviera, which was in the Harwood district in Dallas, and then that’s closed as well. So, yeah.
[00:27:41]Mike: You mentioned something earlier about the next four months and the risk pending recession. It’s just kinda crazy everything that’s going on, but you know, hopefully this is all gonna get better here soon. Favorite book?
[00:27:58] Kaylee McMahon: Well the one that changed my life first was “Rich Dad Poor Dad”, “Cashflow Quadrant”. When you’re talking about understanding how women and men work together and how gender biases are really holding women back in the working world, “Women Don’t Ask” is a great one. And then if you’re interested in getting into multi-family as an investor or the first one, at least to read, to get a concept of how it compares to stocks bonds, mutual funds, and all the other different investment avenues is “The Perfect Investment” by Paul Moore.
[00:28:30] Mike: Great, good book. I’ve had Paul and when he showed it to me. Most memorable moment in the last six months?
[00:28:36] Kaylee McMahon: Well, honestly when I was home with my grandma and I realized that, she’s my mom, basically. I realized that after having a couple more visits to the hospital, it’s been becoming more often and more often. And I gave her the longest tug of my life before I had to leave to the airport and just lost it on the way the airport, because I realized probably the next time I see her she won’t be in the same condition she is right now.
[00:29:06] So that was probably the most memorable moment in the last six months.
[00:29:11] Mike: I’m sorry. Hey, If people want to get ahold of you, listeners want to get ahold of you, pick your brain, find out about your apps and things like that. How do they do that?
[00:29:22] Kaylee McMahon: Go to my website, www.theapartmentqueen.com.
[00:29:25] And I believe my contact info is on there. But it’s just firstname.lastname@example.org if you have any questions,
[00:29:31] Mike: Yeah. And we’ll have all your information in the show notes too. So, Hey Kaylee, really thank you for being on. I know we’ve kind of had some challenges hooking up and getting together, but boy, you’re a wealth of information and I appreciate what you’ve been able to share with my listeners.
[00:29:45] And everybody, hey, thanks for being here. And we look forward to seeing you all next week.
[00:29:50] Kristen: Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always insider secrets is brought to you by My Core Intensions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, multifamily investing and property management.
[00:30:08] We’re looking forward to having you back again next week for more Insider Secrets.