KAYR (03:04):
But I mention that story because I remember I never want to be that broke again. And that’s when I had this burning desire to build a legacy and actually change the way my life was headed. And so what I did is I start working really, really hard. I went to public schools, bust my butt off, and got a full scholarship to go up to Bowdoin College, explored the finance food chain throughout college, took a job at Goldman Sachs and then, start doing investment banking, but really, really got into investing in real estate. By the age of 26, I bought my first rental property. And then by 2018, I was up to nine doors. 2019, I got up to 35 doors, and 2020, I got to 105 doors. So I bought 70 doors during the pandemic, and I was able to retire from a 9 to 5 job.

KAYR (03:52):
And so now, I basically manage my business. I do the consulting, KAYJAY Consulting, where I teach people about real estate. So, that is my quick rundown of my experience in the business from going from a poor kid to a pretty well-off guy now.

Robert Leonard (04:07):
You have a degree that had been very sought after for decades, and that’s an MBA, and you have it from a top business school, and that’s Dartmouth. How has education played a role in your real estate investing career? A lot of people wonder if it’s required to be a successful real estate investor. Is it?

KAYR (04:28):
One thing I would say is that it is not required to have a college degree or an MBA or a law degree or any type of degree. But what I will say is required is that you really understand what I like to call is the three Cs, which is one, is intellectual capital. And either you can get that through listening to the podcasts like this. You can read books. You can get a coach. You can go to take formal classes. That’s going to help you build that intellectual capital. The next one is financial capital. And what I mean by this, you can earn your own money or you can learn how to get access to money, understand how to interact with banks. And the third one is social capital and social capital mean that you build relationships to affect change in other people’s lives. Those relationships, you can join joint ventures. Those relationships, you can leverage for building out your business.

KAYR (05:17):
So I think it’s important to really understand the three Cs, but in order to be successful in real estate, to me, it comes down to basically having two out of three things. One is grit, meaning that you’re committed to a long-term goal and you have the passion to follow through. Two is knowledge, so you have that knowledge. And three is money. So if you have two out of these three things, I think you could be successful in real estate. That’s grit, knowledge, and having money. So when I first started, all I had was the grit and I had to get that knowledge. And now, I’m in a fortunate spot that now I have the money.

Robert Leonard (05:54):
You also have your real estate license. Is that to help with your investing? Or do you do that as part of your career?

KAYR (06:00):
Well, actually, I got my real estate license in about 2016 or 2017. I mean I’ve been an investor since 2009. So actually, I got my real estate license because I was always one of those people that think like a football owner of a team where I’m thinking about, number one, what is the vision for the franchise? Number two, how can I hire the best coach to be the GM and pick the players and do the day-to-day? And number three, how can I step back and watch it from afar? And so, my job is to get off the field and get into the owner’s suite. And I’m more focused on how can we sell seats? How can we get sponsorships? How does my franchise position relative to other ones?

KAYR (06:46):
So the reason why I got my real estate license eventually was because I knew I wanted to start with single families from 2009 to 2018. And then I knew that I wanted to be able to be in a position to have partnerships and also have that credibility to convince the banks that, hey, look, you got this poor kid. He has credentials. He has experience. He has a track record. You see him as an authority and a thought leader in real estate. So I’ve never used my real estate license to do my own deals. I convince other people to work with me that have real estate license and I let them do that because I’m more like an owner. That’s my perspective on the business.

Robert Leonard (07:22):
So have you found any cons of having your real estate license?

KAYR (07:26):
No, not necessarily. I haven’t found any cons that … I haven’t found any cons because like, for instance, my brother works on some of my deals, he has his real estate license. My business partner, Jodie, has his real estate license. We’ve never used it. We just want to basically understand what we’re getting ourselves into. And so I tell people if you test well, just go get your real estate license. You’ll understand all the terms. You’ll also look like you’re basically like, in America, an expert in that space, even though you don’t practice on a regular day, but we keep our licenses active. But I haven’t had any problems because I don’t think like a broker. I think like an investor. And so I’m always trying to figure out what the other side is thinking and what the other players are thinking, even though I’m just the owner.

Robert Leonard (08:04):
Other than just the lack of money, what limiting beliefs did you have about becoming a real estate investor before you got started? And how did you overcome those limiting beliefs?

KAYR (08:14):
So for me, actually, becoming an investor was actually not the hardest thing for me because at one point, I was homeless a few times in my life. We were so poor that I remember some of my classmates in middle school, overheard them talking, saying, “Man, you know KAYR, his family was out there doing a cookout and it’s like 15 inches of snow outside.” So for me, I had a lot of bigger issues to worry about in terms of electricity, heat, and food. And for me was that if you could just get out of high school and get your high school degree and be able to be the first in your family go get on a plane and go to college. So for me, I was always overcoming odds. Just the idea of becoming an investor, I just used to see homeless people walk down the street and said they had to be replaced. They’re going to get old. Teachers, going to get old, they have to be replaced. Police officers have to be replaced. The landlord has to be replaced. I’m just going to figure out who I’m going to replace.

KAYR (09:03):
So the most important thing for me, in the beginning, was getting that knowledge and having grit because the money was not necessarily a big issue for me. I think the problem for a lot of investors is that some of them have never had to really change any real, overcome any real challenges. So, therefore, it makes them really, it makes them nervous about taking risks. But when your back is up against a wall your entire life, you had to swing no matter what the world throw at you, it’s a lot easier to take risk. ‘Cause I tell people if I’m homeless, I said, if I become homeless again, I’m going to do a better job this time around because I had that first go around. So I’m going to be ready.

KAYR (09:39):
So for me, I don’t think that was the biggest challenge for me. For me, it was just like, look, you already been dirt poor. Y’all used to live in a studio apartment, 15 people. You didn’t have a bathroom door, you had a bathroom sheet. You didn’t have a shower, you just had a bathtub. You didn’t have a stove, you had a hot plate. And you had roaches, and you had rats as your friends. So for me, everything just looked good. It couldn’t get any worse than that. So the hardest thing for me was getting that knowledge and just maintaining that grit and just being positive. And I think a lot of people, they just got to … Once you get that knowledge and you get someone to believe in you, I’m not self-made, I’m community made that will help you get over that hump.

Robert Leonard (10:15):
What have you done, whether it’s traditional education, getting your real estate license, reading a certain book, maybe attending a conference, whatever it may be, what is the one thing you’ve done that has had the biggest impact on your success in real estate?

KAYR (10:30):
I think the biggest, biggest impact that I’ve had in my success in my real estate experience was when I was like 13 or 14, and my stepdad had just sat me down. He was like, “Look, don’t be like me and some of your siblings and your mother,” and what he meant by that was that they had good hearts and good intentions, but they were poor money managers. They didn’t see stuff through. And so he said, “I can’t show you what to do, but I can tell you what to do. Believe in yourself and work hard.” And so for me, that was the biggest thing. Once I started to understand that it started with your mindset and having that growth mindset and that abundance mindset, then that pushed me to immerse myself in wealth management, real estate investing. So I start reading books like that at 14. And so that really started to open up my eyes.

Robert Leonard (11:24):
Was there one book, in particular, that might have really stood out?

KAYR (11:28):
Well, one of the first books I read was Intelligent Investor. That was one of the first books I read ’cause I was fascinated with stocks as well. And so that book really, really had a big impact on me. And also, the Bible had a big impact on me because I start to say that if I can believe and have faith the size of a mustard seed, I can really push through all these things. So I think that that really, really opened my eyes to just understanding positioning companies and then understanding branding and all the stuff like that.

Robert Leonard (11:55):
I actually have the Intelligent Investor on my bookshelf behind me. Do you take anything you learned from the Intelligent Investor and apply it to real estate? Even though that’s a stock book, do you apply anything from that book, any of the concepts, strategies to real estate?

KAYR (12:11):
Well, what I do try to is I try, what I try put forth a concerted effort to build out the brand and business of KAYR Management. So in many ways, some of my friends may say I’m very corporate in terms of how I like to put systems and processes in place. So when I first started in real estate, I used to run through the Home Depot and be at the site and be all excited. But then I start realizing that I want to take some of the principles that I learned from working on Wall Street and stuff like that and understand how do I operate so I have like a blue-chip company where I’m giving you like a champagne experience and you’re paying liquor prices and you’re starting to believe the strong brand.

KAYR (12:49):
So in my building, you’ll see their name is KAYR. I renamed my buildings. I have KAYJAY Consulting. I have KAYR Management, which is my property management business. I have [KAYR2 00:12:59]. I have also KAYR Consulting. So all of my brands, I have KAYR Motivates where I do motivational speaking and life coaching. And everything is tied to KAYR so it’s like this brand and I understand that that is like my bread and butter. And so I spend a lot of time about how do we protect that? How do we nourish it? How do we develop it? How do we leverage it?

KAYR (13:18):
And then I also put in systems and processes in place so that I’m not necessarily always just doing. You basically, as the owner, you’re doing, you’re deciding, you’re delegating and you’re designing. And so what I do is I try to take all these principles and form my companies around these principles so that I have somewhat of a competitive advantage. I don’t like to focus on a number of different things. I’m not trying to be a Jack of all trades and a master of none. I try to focus on a few and do them extraordinarily well.

KAYR (13:46):
And I think that was some of the principles that I picked up from the book about how do you differentiate yourself from other people and how do you position your company over time. And so those are things that, that’s what I was looking for. I didn’t want to be like a cheap, a company that we just sell you real estate products. You take our courses, the cheapest one out there. No, I want to give you this brand. So when you go to my houses, my apartment buildings, and you see the apartments, you see they all look alike. It’s like you go into an Apple store.

Robert Leonard (14:10):
A lot of people seem to be in a rush to grow their portfolio as fast as they can, but you took a little bit of a different approach. I know you’ve scaled really fast lately, but at the beginning, you took your time in building your portfolio. So why is that?

KAYR (14:25):
So the reason why I did that is because I believe that things done well are done soon enough. And so I like to focus on the three Rs, which is number one is track record. Number two is relationships. And number three is reputation. So what I wanted to do is I wanted to focus on single-family homes that were three bedrooms, one and a half baths, not on the end of the block, on a corner because you have more concrete, you also have more windows. So I said, that’s going to cost me more. So I want to make sure and also, you’re more likely to have access if you buy a property on the corner.

KAYR (14:58):
So I said let me get a property in the middle of a block, [little 00:15:01] homes that are primarily the same size and these zip codes. And I want to master the whole process from A to Z, from property management to interacting with the banks, to refi, get the cash-out. And I want to take my time. So if you’re the security guard, you have 100 cameras in front of you that you have to pay attention to, someone’s likely to get by you. If you only had that one computer screen to pay attention to your security guard, you’re going to do really well.

KAYR (15:24):
So my thing was that over the first nine years, I need to focus because as an investor, the number one rule is return of investment. So whatever I put out, I need to come back to me. And then later, I can focus on the return on investment. And so when I said this, I’m going to keep the 9 to 5 job, live off of that. Buy these properties that are distressed, fix them up, rent them out, refi, cash out, all the rental income can go into a bank account.

KAYR (15:48):
And so I’m building up a cash reserve or building up a pot of gold that when I get to year nine or year 10, you first start with $10,000 a year in rental income, by 2018, I was making $85,000 a year in rental income, had my 9 to 5 job. Now I make close to a hundred grand, a hundred thousand dollars per month because I was able to really master my whole process. So when I go to meet with a bank, I give them a list of my entire team and say, “I’ve been working with these people for a lot of years.” Boom, boom, boom, boom, boom. I have the whole process. Here go my portfolio. I did all these refi cashouts and all of them have been home runs.

KAYR (16:23):
Now everybody won’t hit home runs and you don’t have to. But for me, I wanted to focus to impress these people to say, “Look, I spent all my time doing this extraordinarily well. And you also can see all my deposits are going to your bank over the past couple of years. You can see I’m a very serious, honest, methodical type of business guy.” So that’s why I decided to take my time to build my portfolio.

KAYR (16:43):
And the other reason I tell people it probably takes time to build your portfolio if you want to be thoughtful is like, for me, I will buy from a credit union. I will get money from a credit union, put down 15% on the property that already has a tenant in there, and saves $40,000. I got to go to closing at $8,000 because let’s say 5% for closing, 15% for the down payment, you could easily save 500 to $700 per month over course of a year and buy another property. Because you’re 9 to 5, you may be helping family members and all these different.

KAYR (17:12):
So for me, I had a big picture view that if you do what’s necessary, then do what’s possible, you’ll find yourself doing the impossible. And you can’t rush greatness. It takes time to become great.

Robert Leonard (17:24):
Across your hundreds of units and through your property management, what have you found to be the most important things you’re looking for when you’re screening potential tenants?

KAYR (17:31):
I think what’s so fascinating is that I consider my rental units my children. And so, I’m not willing to leave my children with anybody. So what we do in the beginning is we’ll do the background check. We’ll do the credit check. We’ll actually call your former landlords, two of them. We’ll call your current employer. We’ll get three times the rent through your income, that’s nice and gravy, but I said, I’m going to do what they do at the top schools. I’m going to invite you to the final rounds.

KAYR (18:01):
And when we invite you to final rounds, what we do is we invite you to an interview. And the interview has to take place where you live based on your ID. Well, we’ll not meet you at a coffee shop. We want a personal take. So someone on my team will go to your apartment or your house and sit with you for 15 to 20 minutes and meet your dog, meet your wife, meet your husband, meet everybody, use your bathroom, get a nice little tour because we want to make sure that there’s a real connection here. And we go through all our expectations. And we ask you, “Do you think that this is something you can uphold?” Because the owner, as me, would not want to leave his children with anybody. So if the porch, when we go see your house, we go do a visit, the home visit and the porch is messed up, it’s the porch for me. We just leave. It’s not even, we don’t even want to go inside.

KAYR (18:44):
So I think that is the most important thing. [It] is that interview aspect of screening tenants. And it’s not cost sufficient for a lot of people because they’re these big corporations. They don’t have staff that will go out and meet with people. But for me, the first thing is return of investment. So I need you to make sure that you return my property back in the same condition and then I’m focused on return on investment. I’m just not going after return on investment.

Robert Leonard (19:08):
Yeah, I was going to say that seems like a very manual and time-intensive process.

KAYR (19:14):
Yes, it is. Yes, but it has served me very well.

Robert Leonard (19:19):
Is there anything that instantly disqualifies someone? You just mentioned a dirty porch, right? But what else?

KAYR (19:25):
Yes, if the porch is absolutely messed up, it’s not going to work. If we go in and you are combative like it’s a fight, like we’re boxing you, like you’re Tyson. We’re just trying to get to know you, it’s not going to work for us. If we think that someone comes across as like shady, dishonest or they’re trying to like push up with you, we get a bad feel, then we will not let you move into our property. So it’s all about that interview. We’re trying to assess the type of person you are and if you’ll be a good fit because we just don’t trust anybody taking advantage of living in our properties. We’re not a charity or a church, and I respect those institutions, I’m a Christian, but that’s not my calling to just be, just let anybody live in my property.

Robert Leonard (20:04):
When I first got into real estate, I didn’t realize how much of a team sport it actually is. And I think a lot of new investors are probably in a similar boat. What have you found to be the most important aspects of building a strong real estate team?

KAYR (20:16):
Actually, I think that is so important that you consider not necessarily the short term, but think about the long term. And so when I think about the long term, what we like to say at KAYJAY Consulting is we’re focused on transformational wealth. And what I mean by that, you think about generational wealth, which is from north to south. I buy a property, in 30 years, my children, they’ll be able to inherit a house and now they have generation wealth. I think that’s all good.

KAYR (20:42):
But what I need, especially growing up poor, is I need transformational wealth. So once I got myself a nice foothold in real estate, I convinced some of my family members to come work with me. So when I do a million-dollar deal, my brother, Christian, he’ll serve as the real estate agent. He’ll get a 3% commission. He gets $30,000. He’s able to use that commission to buy a house for him and his wife and his five children. And now they’re in the [inaudible 00:21:08] PA, which is a good school system. So now he has transformational wealth. He’s no longer renting. He owns a property.

KAYR (21:13):
Not only that, he works on another deal for me. He’s able to give his in-laws, his mother- and father-in-law $8,000. They’re able to move out of an apartment and now they own a duplex. And now they’re landlords and they have wealth. So you transform their wealth. My business partner, Jodie, in 2018, didn’t have any rental units. He was at zero. Now he has 60 doors. And so he was not a millionaire, now he’s a millionaire.

KAYR (21:37):
So the transformational wealth is that you’re trying to figure out as you build your team, you want to make sure everybody’s eating. So I don’t do my own LLCs. I don’t create my own LLCs. I call my real estate lawyer and he creates the LLCs. It’s because everybody on the team in the food chain should be eating and growing and benefiting. Even my real estate lawyer, one of them is going to take my boot camp course this upcoming Saturday, which we do. That’s going to be in September, but we do it every two months. He’s going to take that course.

KAYR (22:06):
So my main point is, as you build the team up, we want to think about transformational experiences and wealth. So I have my niece, my nephew were interns. What I’m trying to do is get the team motivated and invested. So like my stepmom, my brother, I’ll start an LLC. I’ll give them equity. You don’t have to put any money in because that’s how I like to approach it. So KAYJAY Consulting, my business partner, Jodie, he has equity. It’s not like you’re just getting a paycheck. It’s a one-time experience, a one-night stand, I don’t play that. I believe in the long term. So as I built my team up, I’m not necessarily hiring you based on your past experience. I’m hiring you based on your qualities, your values, and your traits, and if that matched the role I’m looking for.

Robert Leonard (22:50):
We have a segment of the show called the action plan where I ask the guest three questions that give everybody listening three steps to take when they’re done listening to this episode. One is a habit or principle that they should apply in their life. One is a book they should go read. And the third one is a, a step they should take. So for the first question, what is a habit or principle that you follow in your life that has a big impact on your success that not enough people do, but should?

KAYR (23:16):
One thing I would really stress is the K-I-S-S method, which is keep it simple, smart. You’re a smart person so keep it simple. Every day, I come up with a list of two to four things or tasks that I need to do. Everything else is icing on a cake. So keep it simple, smart, two or four things you should do every day. So, that’s the number one thing I do that makes my days extraordinarily effective.

Robert Leonard (23:46):
What has been the most influential book in your life? It doesn’t necessarily have to be your favorite ’cause I think influential and favorite can be different, but what is your most influential book?

KAYR (23:56):
For me, it is the Bible, the New International Version. So that book just, the Bible just has changed my life in so many ways of being creative and being practical, to help me with faith and inspiration. That’s been a book that has been the most influential.

Robert Leonard (24:11):
When this episode is over, before somebody jumps to the next episode in their podcast player, what is one action they should take that can help improve their life, career, or business?

KAYR (24:24):
I would, and I always tell people this, the number one thing that I really encouraged and I like people to realize is that you may be out there and you have raw talent. You know how to run. You know how to catch. You know how to throw. And a lot of people are out there like that. Whether you are Michael Vick or you are Tiger Woods or you are Tom Brady, what tends to happen is sometimes you’re running without a coach. And so you have these ups and downs where you’re like Michael Vick where you were doing really well, then you go to jail, then you get a second chance, but you never reach your full potential.

KAYR (24:56):
But then if you want to become a great investor or a great professional or a great person, you can have a coach and that coach is going to help you. If you want to be great at something, you have to join a great team. That coach is going to teach you values, teach you principles. That could be a minister, a pastor, or a coach, or a teacher. You got to have someone that’s invested in your development. And so what I do, what we do at KAYJAY Consulting is our job is to teach you how to be a better runner, a better thinker, a better thrower.

KAYR (25:24):
So I would tell everybody, go out there, Serena Williams, all these people, they have a coach and sometimes, you evolve and you got to get a coach that can take you to the next level, but do not feel as though you have to do everything on your own and do not think that you can see everything on your own. Otherwise, we would not have mirrors ’cause then we can see everything on our face, but we can’t so we always need that. So to me, it’s like go out there and make sure you get a coach with a growth mindset that has a track record that is willing to invest in you and not willing to hold you back because of their own ego.

Robert Leonard (25:54):
Before we give a handoff to where people can find you, I like to wrap up the show by turning the tables and letting the guest ask me a question. So KAYR, what question do you have for me?

KAYR (26:06):
So what actually made you want to start this podcast? What was the motivation? When did it really happen? Was it like you were 10 and you’re like, “One day, I’m going to do something. I want to entertain people and educate people?”

Robert Leonard (26:19):
No, I didn’t really ever have a plan to start a podcast. Basically, my favorite podcast that I used to listen to and I still do to this day, but the first and only podcast I used to listen to that was my favorite was looking to expand. They were looking to add a second show. They were looking to leverage their brand, add a second show and it was about real estate. And I was really interested in it. I wanted to learn more. I wanted to help teach other people. And so I just kind of went through the process to partner with the guys to launch a new show about real estate and the rest is kind of history. KAYR, where can everybody who’s interested in connecting with you go to find you?

KAYR (26:52):
Yes. So the number one spot you can find us is on Instagram and it’s @K-A-Y-J-A-Y-C-O-N-S-U-L-T-I-N-G. That is KAYJAY Consulting on IG. Also, the website is www.K-A-Y-J-A-Y-C-O-N-S-U-L-T-I-N-G.N-E-T. So that’s www.kayjayconsulting.net. And those are the two places, the best places to find me. And we respond to all DMs and we’re always hitting people up, Monday Motivations, Tuesday Tips, and Tuesdays, we go live, Wednesday Workout Tips, Financial Literacy Fridays, and catch us with our educational programming where we do Zoom every two [weeks 00:27:40].

Robert Leonard (27:40):
Awesome. I will be sure to put links to those different resources in the show notes for anybody that’s interested in checking them out. KAYR, thanks so much for joining me.

KAYR (27:48):
Well, thanks for having me. It was a blast.

Robert Leonard (27:51):
All right, guys, that’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (27:57):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin, and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.