Insider Secrets Podcast Season 2, Episode 36

 Guest: Katie Kim

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Guest Bio:

I’m a real estate developer and educator with over 30 years of experience, specializing in transforming overlooked urban spaces into vibrant, community enhancing developments. My passion for real estate began early, growing up in a family deeply rooted in construction and development and spending weekends on the jobsites with my dad and school holidays in the office with my mom. I completed my first real estate deal at just 16 years old.

Before diving fully into real estate, I spent several years at Accenture Technology Labs in Chicago, working in the Research and Innovation Department. There, I crafted strategic solutions for corporations, traveling globally to implement profitable strategies for clients. This experience honed my ability to align a company’s mission with long-term financial growth—skills I now apply to real estate development by uncovering hidden opportunities and creating profitable projects.

In 2004, we founded The Kim Group for our own real estate investments and expanded to work with clients. In 2015, we relaunched the company to incorporate our unique “Developer for Fee” model, designed to help business owners and individuals navigate the complexities of real estate development. This model empowers clients to be fully involved in every step of the development process—from acquisition to design and financial structuring—while I provide the expert guidance needed to ensure success.

By 2021, we expanded into Austin and launched The Kim Group ATX, bringing my expertise in adaptive reuse, small-scale urban infill, and Public-Private Partnerships (P3). What sets me apart is my ability to see opportunities where others see obstacles. I’ve led major projects like the Trefzger’s Bakery, Keller Station, and many others transforming neglected properties into thriving community hubs. My expertise in leveraging economic incentives— like TIFs, BDDs, SSA, Historic Tax Credits, and many others — ensures that even the most challenging projects become financially viable and successful.

I am launching the Katie Kim Educational Platform to expand my mission of empowering individuals to achieve financial independence through real estate development. My platform provides the education and tools needed to confidently navigate real estate deals, build generational wealth, and make meaningful contributions to their communities.

I’m passionate about solving complex development challenges and turning ideas into reality. Whether you’re an aspiring developer or an experienced investor looking for new opportunities, I’m here to guide you every step of the way.

Real Developers, Real Results.

https://youtu.be/BuJzcff7fCo

SHOWNOTES

Key Takeaways

Tap into local government programs and economic incentives when approaching complex developments.

Get creative with deal structures—there’s no one-size-fits-all in real estate development.

Build alignment in values between partners, investors, and community stakeholders before moving forward.

Focus on legacy-driven development, not just profit—what you build should serve communities for generations.

Don’t underestimate the power of relationships with city officials, planners, and local decision-makers.

Keep pushing forward even when the timeline stretches—transformational projects often take years to execute.

Standout Quotes

“We’re developers, but we see ourselves more as problem solvers in broken markets.” — Katie Kim

“I’ve spent years working on projects that were once parking lots—now they’re thriving mixed-use communities.” — Katie Kim

“The most complex deals are where the real community transformation happens.” — Katie Kim

“Development is messy, layered, and often political—but it’s where real change starts.” — Katie Kim

“We think about generational impact—how will this building serve 20 years from now?” — Katie Kim

“You can’t build a development in a vacuum—it has to reflect the needs of the community.” — Katie Kim

Episode Timeline

[0:00 – 2:30] Mike introduces Katie Kim and previews the episode’s focus on creative development.

[2:31 – 5:30] Katie shares her early background and how she entered real estate.

[5:31 – 8:30] The Kim Group’s unique approach to development and community engagement.

[8:31 – 11:30] How to use TIFs, incentives, and P3 strategies for high-impact projects.

[11:31 – 15:00] The long game in development—why patience and politics matter.

[15:01 – 19:00] Aligning investor expectations with community needs.

[19:01 – 23:00] Real-life examples of transforming overlooked spaces into vibrant assets.

[23:01 – End] Katie’s advice for new developers and closing thoughts on legacy-focused investing.

Contact

Website: Kim Group

Social Handle: @katiekim

TRANSCRIPT

Kristen: [00:00:00] Welcome to this edition of Insider Secrets, the weekly podcast that turns real estate investing goals into reality. Each show we interview guests who are seasoned real estate professionals, actively closing and managing real estate deals. Mike is the founder of my Core intentions and would like to help you make your real estate investing dreams a reality.

Mike coaches you to buy investment real estate, creating short term cash flow and long term wealth. Your host and real estate coach, Mike Roski, has more than 30 years of real estate investing and property management experience. Here’s your host, Mike.

Mike Morawski: Hey, good morning. What’s up everybody? Welcome back to this week’s podcast. As I talk about often is intentionality. And what are you being intentional about? Whether it’s your weekend time with your family, or are you still focused on work from the week getting caught up?

But are you being intentional? I did a [00:01:00] session this week on my group coaching where I talked about time management, and, our time is valuable, isn’t it? Our time is what we spend and we don’t get back. There’s no refunds on it. And so I always try to encourage people to be intentional about what you’re doing.

Being intentional about the podcast and the guest and making sure that we’re focused in and being able to deliver great content to you. And I’m super excited about this morning’s guest. We already have had a few laughs this morning, so I think that this will be fun episode here this morning.

But if you’re new and somebody told you about the show, welcome. Glad that you’re here. Thank them. Grab your coffee, buckle up ’cause you’re in for hell of a ride this morning. And if you are following us on social media or not following us on social media, make sure you subscribe.

We’re always bringing out new content, some fresh, [00:02:00] valuable information. I don’t care how long I’ve been in the business, but I can learn something new from everybody that I talk to, and I hope it’s the same for you. So, listen in, buckle up. My guest this morning is Katie Kim. Katie’s in Austin, Texas this morning.

She’s with the Kim Group and they are a multifamily development firm, and we’re gonna talk a lot about that this morning. Hey Katie. Good morning.

Katie Kim: Hey Mike. How are you doing?

Mike Morawski: I’m good. I’m good. I’m excited you’re here. I know we’ve been trying to put this together for a while.

Katie Kim: Yeah. I know we were touching base, but I love when you say be intentional with your time. I have this thing I stress of the time, talent, treasure triangle where you only have so much time, you only have so much talent you have right now and there so much treasure and how do you balance that to stay in alignment.

So I love that you stress that, be intentional with your time because a lot of times when we get out of alignment, we cause more stress for ourselves and unintentionally, so I loved that.

Mike Morawski: For sure. Thanks. Hey, let me ask real quick when [00:03:00] you talk about treasure. Give some example around treasure.

Everybody knows what time is and what their talents are, or maybe some people don’t even know what their talents are and they need to discover that. I always talk to people about putting together a good team and figuring out what you’re good at, and then putting yourself with people who are good at the other stuff to help mold a good team. But what do you mean about treasure?

Katie Kim: So treasure is really a lot of the money you have. The capabilities you have as well. So treasure can also be exactly what you just said, like our network. How do we leverage that network? ’cause our network is our net worth.

And, I think I’m gonna coin this phrase. I was coaching, as you mentioned your coaching call, I was coaching a girl and she was like, I don’t know. Do I lean into my network? I’m like, honey, if you’re not leaning into your network, you are literally lighting cash on fire. Like, you’re just throwing away money.

And that is a big treasure that I [00:04:00] think people don’t value enough is it’s getting in the rooms with people like yourself that have leveling up. You mentioned always being able to learn something. I feel like if I’m not learning, I feel comfortable, and I hate that feeling. Like, I’m now uncomfortable with being comfortable and comfortable with being uncomfortable, if that makes sense.

Because. I don’t feel like I’m growing if I’m not pushing it. Not necessarily risk, but being able to grow my mind and how people put together deals. So treasure is my network. It’s also money and money in the bank that I can invest. And then it’s also in terms of that both of those combined, it’s what can I get as a leverage point for that treasure?

Can I go out and can I sign from loan liability or what is the aspect that I can bring that monetary treasure and or leverage of treasure into a deal? For example, sometimes people will put together a deal where they can’t take the loan liability on and they’ll have a partner come [00:05:00] on.

They don’t put any money in the deal, but they take on the liability of the loan. Like that would be an option to think differently on treasure.

Mike Morawski: That’s interesting. Yeah, I guess there’s a bunch of different ways you could look at that. Hey, before we wind up in some rabbit hole here.

Katie Kim: As we probably already have.

Mike Morawski: Yeah. Which is always good, I love that. So I always say, we’re gonna wind up in a rabbit hole, try to figure out how to get out.

But, I always start my shows with one question and I like to ask my guest because I’m gonna write a book. And we’re in the process of it, of putting this together, the one word. And, what’s the one word that best describes you personally and professionally?

Katie Kim: Tenacious.

Mike Morawski: Oh, what makes you tenacious, Katie?

Katie Kim: If I know where your heart is, I know where your passion is, and again, that alignment of that time, talent, and treasure triangle. I am tenacious with encouraging you, motivating you, giving you resources and making sure that you hit your goals.

And or a project goes together. Because [00:06:00] any project, whether it’s real estate investing, development, can die 20 or 30 deaths, sometimes 50 if it’s really complex. But very tenacious is how do we put together the project and then when we’re told no or there’s pushback. How do we change the game?

How do we change the opportunity to make it that win-win win that we strive for? And so I’m very tenacious and don’t give up. If I fully believe, again, it’s in alignment. It’s gonna make a positive impact for client community and, the overall being of what we wanna accomplish in our goals. I’m very, very tenacious.

Mike Morawski: Yeah. That’s awesome. I have a funny story about tenacity.

Katie Kim: Oh.

Mike Morawski: So I was selling residential real estate when I first got in the business, and I was probably, I don’t know, a couple years in and I walk into a client’s house one day and he says, man, Morawski, you’re the most tenacious person I know.

Hoping he was saying something good. I said, thank [00:07:00] you. And because I didn’t know what the word meant back then. And so I immediately, I take the listing, I was on a listing appointment, I took the listing, I go back home and I grab the dictionary and look it up and I go, that’s totally who I am. So that’s funny. ’cause that would be my word too.

Katie Kim: Yeah. And I feel like you have to be. At first, I had that same experience when somebody’s like, wow, you’re really tenacious. I think it was in a newspaper article and I was sitting there. Is that good or is that bad? Like, where are you coming from?

But I embrace it and that’s exactly, I think you have to be tenacious to figure out. Life’s gonna throw curve balls at you, it’s gonna hit you with things that you don’t know about. You’re not in your risk mitigation plan, and you gotta be tenacious to figure it out. You mentioned about your team members.

I also look in my partners and my investors, like who has different scars than me? Like who’s already learned that lesson that I could bring onto the team so I don’t have to pay to learn that lesson, if you will.

Mike Morawski: I love [00:08:00] that. I want people to really grasp what you just said. Say that again about people having different scars than you.

Katie Kim: Yeah. I’m kinda rewinding here ’cause. You’re writing a book, right? Why do people buy books from other people’s journeys? Right? We wanna pay that $19.95 or whatever the books cost lesson versus the million dollar lesson that’s probably in that book outline is we wanna learn from other people’s scars so that we have what I call like the new car syndrome.

Like you go out and buy a car and now all of a sudden you see it everywhere. We wanna have that new car syndrome radar when we go into our deals. So in order to do that, we need to like learn from everybody else’s scars and bringing those partners into your deals, whether they’re investors, whether they’re general partners or limited partners.

Anybody who has skin in the game, I would say as a partner. Having them have different scars [00:09:00] brings all those opportunities to learn and grow and to pivot when your deal may not be on the linear path that we plan at the beginning. Which, I mean, I say that with a little bit of like, there’s no linear path in real estate. I mean no ever really.

So, having people with those scars and those backgrounds and those lessons they’ve already learned, and what did they think about how to pivot, what did they think about how to get out of that deal, how to reverse deal flow. How do you change the game when tenants aren’t moving into the property, or it’s not a desirable cash flow or any of the myriad of issues that you have.

Having those people on your team that have those different scars and different experiences, strengthens your deal, strengthens your team. So really look at like not only who is coming into your deal in terms of like a financial standpoint, but who’s coming in, in terms of experience and depth and breadth of scars that [00:10:00] they’ve gone through, and how have they been tackled?

Because a lot of times I feel we want to say, yeah, we figured it out. We got it all together. Like, this is amazing. I’ve not had a bad deal in whatever. It’s like, okay. Then you haven’t like, been in the game long enough. If you don’t have a bad deal, you haven’t been in the game long enough.

Mike Morawski: Donald Trump used to say that if you’ve never been sued, you just haven’t been in business long enough.

Katie Kim: Yes. I think, yeah. Yes. Right. It’s because these days you can sue for anything.

Mike Morawski: Yeah. Right. But yeah, that’s so important. I think a lot of times people shy away from people that have had challenges or problems in their life and, I had a guy say to me one time, he said, and I have a colorful history in the business.

I’ve been in the business 30 years and I had a guy say to me one time, well, Morawski, I wouldn’t want to invest with anybody other than you because you’ve made all the mistakes. You know what to look out for. And that’s exactly what you’re saying. It’s so true. It’s so true.

But hey, listen, talk a little bit about you and your [00:11:00] background and, I know you’re from central Illinois. You actually live where my partner lives, and it’s kind of a small world. But talk about your background, your history a little bit, and how you got into doing what you’re doing today.

Katie Kim: Yeah, thank you for that opportunity. So I grew up in a construction, real estate development family. So I was born and bred into the business. Went away to college, thought like I don’t want anything to do with the family business, but I did like investing in real estate. So I bought my first condo as soon as I graduated. But I did technical consulting, so I would go into companies. And really look for their problems and issues and implement technology three to five years to market and then find that strategic solution.

And I loved it. That’s as fast I can tell you without putting you to sleep probably. But, I loved going in and figuring out how to fix things, how to fix the deals, how to fix given advantage. I worked for a small startup company. It got bought out by Oracle, and then my family was like, do you wanna come back and run the family business?

I was like, no. No, I don’t. But [00:12:00] God has a way of guiding you to those places he wants you in your life. And so we made a deal to learn the development side and so we moved back. We ran the construction company for a couple years, and then something was on my heart is really there were so many people that kept coming in and wanting to get in the real estate game.

They wanted to learn how to develop. They wanted to learn how to invest, but they just didn’t wanna take that first step. And they don’t want to take it alone. So I launched in 2015, our developer for fee service, where we help people put together their developments, structure their deals, guide ’em, but they own a hundred percent of it.

Or if they bring investors in, whatever that structure is, they own the project. And I saw that there was a need because so many people wanna say, yeah, I’ll help you, but I’m gonna take 50% and da da da. And I’m like. No, just pay me to put it together and you prosper and you do it and go forward.

And so I loved it because it helps me really give back that knowledge that I’ve fought to learn. And again, those scars [00:13:00] that I’ve built up over time. And I still get to play and do my own development. So it’s a great way for me to give back to all the mentors and the people who have really helped guide me all the way through the years and into the process.

And recently I launched our Real Estate Development Academy to be able to do it at a higher scale with more people. And it has been so fulfilling, just amazing.

Mike Morawski: Yeah. That’s awesome. And, in your academy, are you teaching people to do developments or are you teaching people how to package it up to help others? What side of the line are you working on there?

Katie Kim: Yeah, so in the academy we teach the development process. We teach the seven stages of development, the different mixes. We lean into some multifamily neighborhoods, commercial mixed use everything, but really help them where they’re at with what they wanna do.

So whether they wanna syndicate the deals or whether they wanna do the deals themselves. However they want, they have their own private portal that we talk [00:14:00] strategically about their project in the Level Up Lounge within the academy. And they can ask any question any time. We look at site plans, like everything, we hold their hand all the way through the process.

So if somebody was saying, Hey, I wanna do a multi-family development, I don’t know where to start, or I have this land. The worst is when people, and you know this, if you’ve been in the business long enough, they buy land. They don’t know if it’s zoned properly for what they want, da, da, da. And then usually they come to us and it’s like from a real estate side and say like, how do I fix this?

And so again, kind of stepping into wherever they’re at in the process, helping them get to where they want to be, and if that’s a syndication, if it’s just putting together the deal, really the whole gamut. We go from beginning to end.

Mike Morawski: Yeah. Awesome. And so what are you working on today?

Katie Kim: So we have a couple of what we call P three, well, is what’s called P three Public-Private-Partnerships, where we’re working with municipalities on land they own to activate their downtown. So [00:15:00] it’ll be first floor commercial and then up above it will be residential, multifamily component to it. So we like to merge. Combine those different uses so that it helps with our risk mitigation plan.

Mike Morawski: Is that why you’re in Austin?

Katie Kim: Yeah. Yeah.

Mike Morawski: Are you doing downtown development at all or?

Katie Kim: We’re doing a couple of downtown developments in more of the suburbs around Austin. So we’re looking at some northern suburbs that we are activating their downtown, and when I say activating, it’s more than just putting a property online. And I feel that a lot of times when people do developments, that’s what they do. Like we’ll build it and they’ll come. Bring people along for the experience you wanna create.

As you’re doing the development, how do you build the brand and build the essence, if you will, the community you want. ’cause with multifamily, you have that community and you either have it for you or against you, if you will. So if you’re the landlord, you wanna build this community that you’re helpful.

What’s your brand, [00:16:00] the services you wanna put down, how are you building that prior to the building being built. Or are you not building it and now you can have everybody against you and you create this, I would say like, it’s like a toxic downward spiral. So we strive from the second we put a shovel on the ground to create that experience and create and really engage the community around it.

Mike Morawski: Yeah. And so when you are working with the municipalities, are you getting tiffs or tax credits or, you’re able to bring them in to participate or help the developer on the process?

Katie Kim: Yeah. So I love any and all economic incentives. I put as many as I can into the project because those are really, I would say like the unknown tools for a lot of either developers and or investors. And when I started launching our developer for fee service, our first [00:17:00] project that we did was actually, it wasn’t a multifamily, it was a commercial mixed use for a bakery. And they didn’t have a lot of money to put down.

They didn’t have the 20%. So we structured it in a way that we brought in four different economic incentives into the project to create an eight source capital stack to do the deal. And so they were able to get into that project for $50,000 down into like a $5.5 million deal. And now today they own a hundred percent of that and it’s producing nice cash flow returns for them.

Mike Morawski: So talk about those incentives a little bit if you would. Give an idea of what they were and how they fell in the capital stack.

Katie Kim: Yes. So you mentioned tiff, so tax incremental financing. That was definitely one. There’s multiple ways to use Tiff that people don’t necessarily know. One way is to ask the municipality to bond it, so pay it up front and which is what we [00:18:00] did in this case.

And then the other is a pay as you go model in there. And so we used Tiff, we bought it up front. Sales tax. So we did a business development district, which added a 1% sales tax on the business, and then we actually negotiated with the municipality to get a portion of the sales tax back. We also did a special service area, which is another, they can be used different ways in communities as well, but that’s another one.

We used historic tax credits as well. And then a lot of communities have what’s called, like a macro development loan or, EDA loan is what they’ll do, where they can loan out at a very low interest rate for projects that they want in their commute happen. And I say that because we use that fund for the bakery for sure, but we’ve also used that for neighborhood renovations, for multifamily, for condo projects that we’ve done further down the line too.

[00:19:00] So it’s a great way to get some cost effective funding in that. And then, we also used investors, we used an SBA 504, and then a traditional loan.

Mike Morawski: Nice. When you packaged that tiff up and they created a bond, did you go sell the bond?

Katie Kim: So we did not. So what we did on that is the municipality teamed with a local bank and they financed it for the municipality. And so then we drew down on it from a construction standpoint. So it was in our initial construction capital stack.

Mike Morawski: Wow. Interesting. Historically I’m a multifamily guy and, I have a very good friend of mine who’s been in the solar business since like 2004, and he’s been like, Hey, you know, let’s do this on multifamily.

And it doesn’t work on multifamily, but we did develop a plan to do light industrial or warehouse manufacturing facilities. And so we’re doing a light industrial [00:20:00] building and we’re putting solar on it. But here’s the point of this. Through the solar, you now become the power company.

And you’re creating more revenue. So multiple streams of income on the deal. But we took the ITC credits, which are the tax credits for solar for coming off of the grid. And we’re taking those and we sold those. So there was like $700,000 of tax credits. We sold them for like 75 cents in the dollar, which gave us like almost $400,000 that we were able to put into the deal and use that for cashflow to pay a higher preferred return to our investors.

Katie Kim: Love that.

Mike Morawski: Here’s what I like about real estate in saying this, is there’s not one way, is the only way to do a deal.

Katie Kim: Oh yeah. Say that again. ’cause that I think is where people get paralysis by analysis, right? It’s like gimme the linear path. And then, I remember when I first started like really [00:21:00] researching how to put together deals and I think I overthought it ’cause my computer science brain. Because my attorney who had done investments and syndications and he was in investment groups and is, he does a lot, lot of multi-family development. And, I said, I’m need to buy an hour of your time. And he goes, okay. I’m like, I’m gonna pick your brain for like development.

And he goes, alright. And so we did, it was a Friday afternoon and he was like, this is the most fun time I’ve ever had with a client. And it was, tell me about your deals. How do you put it together? How do you go into it? And he laid everything out. It was great. But one thing I realized, and I actually said to him, I said, so like this is not a checkbox, this is not a step by process.

This is a color outside the lines. And the more you can color outside the lines, the prettier the picture of the project will be. And he goes, yes.

Mike Morawski: Yeah. And just make sure when you color outside the lines, you’re still using black and white and it’s not gray.

Katie Kim: True. Yes. Yes. Let’s backtrack that. Let’s put some prefaces on that. [00:22:00] Make sure you have your legal team and all that stuff. But thinking more so thinking outside the box is I know, that’s a good part. You don’t wanna do anything illegal. You wanna make sure your tax and your accountant all have that in play. But what I mean is like, I can offer you double the depreciation allocation for your share.

And I was like, wait, what? And they’re like, yeah. And if they own 5%, instead of giving them 5% of the depreciation allocation, I can give ’em 10.

Mike Morawski: Right.

Katie Kim: Like that to me is coloring outside. Like, wait, what? Cause people think very linearly, like, I have to have a one-to-one, not so much. So when you look at multifamily, one of the developments we proposed with some commercial on it was that some of that sales tax goes to creating a housing fund for people to be able to live in the apartments, to help subsidize.

So it’s not a low income housing tax credit, it’s a subsidy program that we’re creating with the development. So that’s what I mean is [00:23:00] like color outside the lines, like think outside the box. So what do you have to work with? I think a lot of times we don’t get creative enough when we start those developments because again, we just don’t have that exposure.

Mike Morawski: So I need to ask a question. Going back to municipalities and incentives. Are those incentives only available if you’re doing new construction, or are they available like if I go buy an existing multifamily project, are there tax incentives out there or are there any municipality incentives that I can go try to chase even after I bought the deal?

Katie Kim: Yes. So always wanna try and go for incentives before you buy the deal because that’s the more the motivation for the municipality to say, okay, you wanna invest in our community, we’re gonna help you get this deal across the finish line. So that’s the best case scenario when you wanna go look for and ask for [00:24:00] incentives.

And I always make our offers contingent on that. So I wanna definitely like pro tip that for your listeners is make sure you’re putting that in your offer that your closing timeframe is contingent upon you receiving successful and mutually agreeable conditions for those. But like a tif, for example, a tax incremental financing, it’s actually better if it’s an existing building.

So what a lot of people don’t understand with TIFs is really, those are four existing projects, and how it works. And so we can definitely go down a rabbit hole with Tiffs because there is a thing, and I’m gonna try and keep this high level, it’s called QREs, Qualified Reimbursable Expenses. So you’re only able to get reimbursed from the TIFF as much as you have accepted and approved QREs.

So, what does A QRE, what it qualifies for a QRE? It can vary with municipality in your [00:25:00] program, but usually, it’s more for that existing structure, renovation and site work. I’m big, big picture here. There’s a lot of of details with it, but that is actually the best when you have an existing property, and especially if you’re taking, let’s say, a multi-family that’s not really performing, but I can go in there, I can freshen it up, I can get my right rents up.

But I know now if I do that, I’m gonna now kick out my property taxes. Which is hopefully what you’re projecting going in. Now, you can go to the municipality and say, I want some of that back because how the TIFF works and again, trying to stay high level, Mike, but like how the TIFF works is say you buy that multi-family existing property and your property taxes are, say it’s a hundred thousand simple math, you’re paying $10,000 a year in property taxes.

Now you’ve increased those rents and increased the property and now it’s $500,000. Okay, so now you’re paying [00:26:00] 50,000 in property taxes. So what the TIF looks at is what’s the increments? So 10,000, 50,000, your increment is 40,000. And then in the development of what you need is how much of that 40,000 do I get back?

And that’s huge. That may be a bomb that just got dropped on somebody’s like, wait a second, what? Now you have to be in addition, there’s a lot of details within that, but that’s the deal. So with the bakery project, as I mentioned, we bought it as like almost a tear down building state.

So if you’re buying that multifamily that is rundown, boarded up, et cetera, and you increase it, you definitely wanna make sure you’re putting tiff on the table because that’s coming back to your pocket as revenue.

Mike Morawski: We’re all a function of capital and we only can do what we can raise. So obviously you’re a capital raiser as well. Where, through some of these [00:27:00] incentives, does that give you the ability to pay a higher pref to your investors or give back more to your investors? How does that work in that aspect?

Katie Kim: So it depends on the project. I mean, that’s probably always the answer, but it depends on your other financial sources. So you can use the TIFF as either revenue in your projections, if you’re saying, Hey, I have my capital stack. Good, it’s great, and I was getting this much of return. Now if I add the tiff in, I’m getting this much more at go, like, that can be a better return.

You can even have it in your waterfall as like, here’s your return on cash flow. Here’s the return on your tiff because you’re gonna get that out usually as a one time a year payment. You can use it that way or you can reduce your capital stack on the front end. Cause if you bond it, for example, because you’re gonna be paying for it in your revenue anyways. Or your operations because you’re paying property taxes [00:28:00] no matter what. Now you’re just getting some of it back.

Mike Morawski: Do you suggest going to a tax attorney to help look at this stuff? And would that tax attorney need to be local to where that deal is? Or, is there some source, and it could be you. I mean, you’re knowledgeable enough. Could somebody come to you and say, Hey, I’m trying to do this deal here. What could I get out? What could we structure?

Katie Kim: Yeah, we can definitely consult on their deal for sure. We’re not an attorney and we’re not a CPA, so those are my disclosures. Any of this is, there’s no legal advice. There’s no CPA check with your professionals. But you can definitely, I would highly, highly, highly recommend that you have a attorney. And or a tax attorney or a CPA review your projections, regardless of TIF or not is in them. But for sure with TIF in there, you wanna make sure that you’re not projecting something that is outside that program.

You don’t wanna project that you can get this [00:29:00] many, this much qualified reimbursable expenses if you can’t with their regulations. Now, again, projects change and they still have to approve it. And that’s where you don’t wanna even put down that projection unless it’s within the program. Because we’ve had deals where they say, Nope, we’re not approving that QRE, but we’ll approve this QRE.

And it’s qualified for sure, but they just won’t approve it. So there’s always that risk in there and you wanna make sure that’s locked down as much as you can. And those professionals are great. And having somebody local so they know the local program or even at the state level is definitely recommended for sure.

Mike Morawski: Yeah. Interesting. I ask these questions ’cause I have a couple deals that if there was something we could go in and structure could be helpful, so.

Katie Kim: Well, Mike, you mentioned solar, one of the programs, and not every state has this, but one of the programs is called Pace or other states call it different, where if you get it, the property more energy efficient a lot of times and or you’re using [00:30:00] solar or different things, you can capitalize that on the front end and then pay for it as you go. So it’s a different tool in the tool belt, if you will.

Mike Morawski: Yeah, yeah. And hindsight’s always 2020. I have a deal in Tulsa, Oklahoma that if we would’ve known how many air conditioners we were gonna change and how many windows and the roofs we were gonna put on upfront, before the storms and before the theft and before the homeless issue, we could have went to PACE and gotten $200,000 or $300,000 and paid for that over time, which we could have added to the capital stack to lessen the raise.

Katie Kim: Yeah. That’s the scar you’re bringing to your team for the next deal, right?

Mike Morawski: Right. Exactly.

Katie Kim: Oh, yeah. Yeah. Tulsa’s pretty hot for a multifamily right now. We have a couple people in the academy that’s looking at different deals in Tulsa right now.

Mike Morawski: Yeah. I’ve been talking about Tulsa for a long time, for about a year and a half. And we own a bunch of deals there. And it is a good market, there’s no doubt, economically, economic growth wise. So it’s pretty good. [00:31:00] Hey, I wanna just circle back a little bit to what we were talking about before.

I think in general, people get stuck in this box. And they stay, they don’t know how to get out. And one of the things I always talk about, and we touched on this this morning, is that being creative. Coloring outside the lines and being creative. And I want people to walk away this morning with that point is that it’s not, just ’cause you wear a seven and a half size shoe doesn’t mean you have to stay in that box.

You can go test out an 11 size shoe. It might not fit, but test it out because you can be creative. And I’ve told people. I’ve done all kinds of creative deals, everything from four units to 450 units across the board. So there’s a lot of opportunity out there if you just think differently.

Katie Kim: Well, and those opportunities you’ve done, I’m sure you haven’t structured every single one of ’em the exact same way.

Mike Morawski: Right, exactly.

Katie Kim: Each one has that unique [00:32:00] like setting, and I always look at it as like, we always talk about like the sales funnel. Like you’re looking at so many deals to get it all the way down. I look at that same funnel when you’re putting together deals, your sources and uses if you will. So what do I have in the community that I can work with on this deal and do I want to work with it?

Again, it goes back to that time talent, treasure triangle, because that may take a lot more time to get those incentives in and in your deal that it’s not worth it. You can go get another investor if you’re in a great market. You may be in a market where it’s harder to get the numbers to work and or you’re in a distressed property situation or pick one where it’s just not coming together. And you’re gonna need to bring those incentives in and get creative.

And I think the best advice to ask is get your or to say is to get your team together and then play the what if game. Well, what if we structure it this way? Or what if we present it that way? Or what if we bring in this incentive? What does that look [00:33:00] like? And that’s kinda how I go into those deals.

Like what do I have to work with? What’s in the toolbox? And then like, what do we want to bring into this deal? Because those give you a really good guide to start to check the list if you’re a checklist person. Like when you’re evaluating your deals, that’s a great way to go into it as well.

Mike Morawski: Yeah. Interesting. Hey Katie, I appreciate you being here this morning.

Katie Kim: Likewise.

Mike Morawski: This conversation went in a totally different direction than I thought it was gonna, and so what I’d like to say is I’d love to have you back.

Katie Kim: I would love to be back.

Mike Morawski: And, have a different conversation maybe. But this has been great this morning and I hope that the information that the listeners get is big for them this morning.

Hey, what would you leave listeners with this morning about? I think you have an event coming up. You want to chat about that real quick and give some tips, some point that you want investors to walk away with this morning?

Katie Kim: Yes, thank you. So I’m [00:34:00] doing a free live masterclass on the 25th and we’re actually doing something we haven’t done before, which I’m super excited about, is you can submit your project for us to do a live review on. And, so that’s coming up the 25th and, I kind of feel like we’re gonna incorporate into our masterclass going forward ’cause I think it’s gonna be great.

And, really if somebody is on just the edge of jumping into the game and starting their first project. Definitely wanna encourage them to follow us on our social media sites. Our handle is @thekatiekim or katiekim.com. And we give out knowledge nuggets, which we start talking about the lingo and the definition and money math, like why do these equations and stuff matter? So if they’re just beginning their journey, those would be great.

What I would say is really start to learn the lingo, get in the game, and my one biggest piece of advice I stress to everybody is get in the room with people that have different scars and different experiences than [00:35:00] you and ask questions.

Mike Morawski: I love that.

Katie Kim: Be a sponge.

Mike Morawski: That’s so great. So awesome.

Hey, I appreciate you being here this morning. I’m going to move you out. Say goodbye if you hang out with me in the back room for a minute. And all your information will be in the show notes so people know how to get ahold of you and connect with you. So thank you again. I appreciate you.

Katie Kim: Likewise.

Mike Morawski: Hey everybody, that was great episode this morning, and as I said, we totally went in a different direction, not where I thought we were gonna go. I had some other questions laid out that we were gonna talk about. So we’re definitely gonna have Katie back again for sure. But I hope that you walked away this morning being able to maybe step outside the box a little bit.

I love what Katie said about coloring outside the lines and I think that real estate gives us the opportunity to do that. So, hey, thanks for being here this morning. If you got something out of this morning, smash the like button, the subscribe button. Stay in touch with us. Let us know how we can continue to provide value [00:36:00] for you, help you. And everybody, have a great week.

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 Intentions. Wherever you hang out on social media, you will find Mike and My Core Intentions. Please like and follow us to get the most up to date real estate investing trends. Visit mycoreintentions.com where you can get expert coaching on all things real estate investing and property management.

If you are looking to become an expert, Mike’s coaching will help you scale your real estate investment business. We’re looking forward to having you back again next week for more Insider Secrets.