Going From 13 Deployments to Never Missing a Family Dinner Through Real Estate

0:00So, I started in in Stafford, Virginia. I I was stationed in Quanico, which is about 30 miles south of Washington DC. First first house I ever flipped was there in Stafford. And and so I would not recommend this, but my my first house was a huge $112,000 renovation. And I was I was supposed to make easy six figures on this. Kirby, I walked away with $2,000 — to the dollar. — I screwed up everything that could have possibly been screwed up.

0:36Like Murphy's Law had my ass with that. And and I I learned, you know, I I paid a little bit of stupid tax on that one as I got my degree from the School of Hard Knocks. So we started there. I did some condo conversions up in Washington DC in Maryland and then almost immediately left in 2017 I got stationed in Kaneo Bay which is on the island of Aahu in Hawaii and and that's when I started doing we did some some flips right off the bat but actually you live there you know as well as I Hawaii is a nuanced place — when it comes to the culture there because We as young white military men are the exact opposite of

1:24What that culture wants. Right? If I can just be really candid on this podcast, we took America took over Hawaii so that we could have control over the over the Pacific theater so that we can control the oceans and make sure that we're we're providing protection to the western front of the geographical United States. I didn't mean to say geographical. I meant to say continental is the word that I was looking for so that we can provide protection to the continental United States on our on our western side. And so they don't take too kindly to that.

1:57Young white men in the military is the exact opposite of what they want to do. And I got kicked out of hundreds of people's houses. — Wow. — They loved talking to me on the phone, but the moment I showed up at their house, I had the hardest time. — Yeah. — With that. And people thought that I was a scammer. People thought that I was taking advantage of them. People thought whatever you know like I literally we're called howies which means without breath — and kama is is local blood local people — so there's a little bit of it took some time for me to get over I lived there for 5 years I actually got out of the Marines and I continue to live there I have a huge special place in my heart for Hawaii a lot of our ohana is over there our family and I dug my roots in really deep with our church with our community I became the largest wholesaler

2:46I think that still to this day has ever existed in any of the islands of Aahu. I ran a mastermind there. People would fly in from other other islands from Maui, from Kauaii, from the big island of of Hawaii to come to the mastermind. It was fantastic. Had a blast. But man, I had such a hard time with with wholesaling and flipping there. So in 2019 going into 2020 I actually bankrupted my company. I was I was having a really really hard time.

3:16We were doing deal. We were doing a lot of deals. — But you know a wholesale might make you 20 or $25,000 there and my cost per acquisition was roughly $11,600. Wow. And so I was my sim my story is kind of similar to to you where when I was flipping Yeah. Technically I was making money but I was barely making enough money to make ends meet, you know, like much less market or scale or hire people. — And so in 2019, end of 2019, beginning of 2020, we we started doing things virtually.

3:50I opened up shop in San Antonio, Texas. Immediately did three deals. Wham bam. Thank you, ma'am. Right away in the very beginning in San Antonio, Texas. My cost per acquisition was about 2,600 bucks if I remember correctly. So, I was floored cuz we made we made like $50,000 and I only had to spend like $7,000 in in ads to do that. You — got your feet wet in the hardest market and so everything else felt real easy. — Man, I was like, man, this is so cheap. This is so this is exciting. I wonder if this is scalable.

4:21And so I I'm kind of crazy. I went from one market to 33 markets the very next month. We opened shop in 33 markets and immediately we went from like three deals to nine deals the very next month and my marketing budget stayed the same. — Wow. — And so I was like, "Oh snap, I'm on to something." We went from 33 to 66, 66 to 120, 120 to 250, 250 to 380. And and for the next five years, I scaled my business at a national level, I was marketing in all 50 states.

4:58However, I only did deals in 34. As you know, there's not a lot of population in in the middle of America. It's very rural and so there's not a lot of deals in the middle of, you know, Podunk, Idaho or or Iowa or something like that. — South Dakota. Yeah. Yeah. — Yeah. Exactly. South Dakota, North Dakota. Nobody lives in the Midwest. And so it's extremely difficult to to do deals there. And so I haven't done deals in whatever that is 16 states. But we we operated at a near national level up until I'd say about three years ago.

5:35We dialed that back from 380 to now I have 120 metropolitan cities, MSAs, metropolitan statistical areas that we operate in. And I feel like those are just some I call them a Goldilocks zone because I I wholesale, I wholesale, I retail, fix and flip, I wrap, I do no and lease options. I do rentals, short-term, midterm, long-term. I kind of do every entrance strategy, sub two, owner finance, a hybrid of both, DSCR, conventional, hard money, private money, you know, like I love every entrance strategy.

6:11I love every exit strategy. In my eyes, there is no right or wrong. There's just right or left. And every deal is going to need something different. And I don't want to sit there and try to push a square peg into a round hole because they're not always going to fit, you know. — Yeah. — so that's what what we did. And now my primary market is Syracuse, New York. I'm really happy with that area. And you and I have a very similar strategy with with what we do there. — Wow. So you you basically set up the engine that drives leads in in all those markets.

6:47And then you just had different people who could field the leads and figure out the best exit strategy for for turn for monetizing those. — Exactly. — Got it. Wow. Okay. That's awesome. So, so it sounds like then so you you left. Are you still in all 34 markets or did you decide, okay, I'm just going to focus on Syracuse now? — Here's what I'll say. I will buy a deal anywhere. I was just talking to a lady in Chicago.

7:19Actually, I was on her podcast just earlier this week. She lives in Chicago. She's like, "Hey, I have six units." — A lot of good people in Chicago. Yeah. — Yeah. It's two this area is a rough area where but she she says I have two triplexes six unit six doors in total. Would you buy them? And I go here's what I'll tell you. The likelihood is is pretty low. I'm not a fan of where where these are. — however, if it makes money, I like making money. So, I have systems and processes in place to do that.

7:52So to answer your question truthfully, I no longer market in those 34 states or those 120 metropolitans within those 34 states. All of my marketing is actually people will lovingly say, you know, Keith smokes his own dope. He's high on his own supply because we, you know, I actually have created six different software companies that operate underneath my other company which is REI Automated. So I have my my real estate investing company and then I have my real estate investing education software and coaching company.

8:25— And so they kind of feed each other where the data and the software — feeds my real estate investing company primary market Syracuse New York and then the data and the processes and the needs of my real estate investing company go to feed future development within our own softwares. — Okay. Interesting. Okay. So can you walk me through maybe what a typical deal for you looks like then? Just to to provide some context because you said like your your philosophy is kind of similar to mine.

8:59Yeah. — so if you're going to if you're going to invest in another deal in or maybe your most recent deal in Syracuse, what what does that look like? — So So I only do single family. I don't do any multi I just dabble in multif family. [clears throat] so a typical deal there is going to be a sub $100,000 purchase. And there's actually been many I mean I people don't even believe it to me. I have to show them the HUD and it's like look I bought this house for $20,000 and I didn't even pay $20,000 upfront.

9:31You know I paid $8,000 upfront and then they held a note for $12,000 and there's zero payments. There's zero% there's zero dollars going to them until I sell. And they know full and well that my intention is to not sell this thing for at least 10 years. — It's literally written into the promisory note. You can't tell me you didn't know. There's a recorded call — where I'm going through paragraph by paragraph and explaining everything.

10:03And so so obviously I'd love if every one of our houses was a 20 or $30,000 purchase price. Oftent times they're more like 60 70 $80,000. That's usually what it's going to end up being. Somewhere between $40 and $80,000 allin purchase price plus rehab. Most of the time we're putting $10 to $25,000 into a rehab. We really try to stick with lowbudget rehabs. Kind of what I lovingly call lipstick on a pig. We're just trying to make it safe, livable, and financable.

10:34Those are the three words that we target. Safe, livable, financable. Why? Because we're going to do section eight. — Mhm. — We're We don't They don't need freaking quartz countertops, right? They don't need rose gold appliances. Let's just if it works and the countertops are flat, like we're good, you know? — That's it. And so what we do oftentimes mo actually all of our units are somewhere between 1,500 and $1,900 per month on section 8.

11:06And that's going to depend on how many bedrooms it is. We have two and threebedroom [clears throat] units. — And it depends on also the zip code that that it's in in Anondaga County, which is right around Syracuse, New York. And so so we know that it's going to rent let's just say on average it's about 16 1,600 bucks 16 to 1650 I think would probably be the the average or the median. — And u my debt service on that let's call it $50,000 is roughly going to be about $500 $600 per month.

11:38— Okay. So then I do 10% I subtract 10% for vacancy I subtract 10% for management 10% for maintenance 5% for cap capex capital expenditures and then after the debt service the $500 or $600 for the mortgage which is pity piti principal interest taxes and insurance we're usually true net cash flow is somewhere between $500 and $900 per door. Wow, that's great. That's great.

12:09And you're and you're not managing those, then it's all outsourced to a manager. — Yeah. Yeah. — I you are self-managing things because it's in your backyard. I live in Florida. These are in New York. There's no way I could do it. I'd be dead in the water. Our property management company is fantastic. It's actually really, really small. The owner is and has been for many years in a mastermind with me. And so I I just trust him unequivocally. He is a way better investor than I am. He has managed thousands of his own rentals in this market and that and out of necessity he built his own property management company.

12:47— That's awesome. — And so the three of us are are kind of partnered together and it's kind of our it is our stated goal to own 1% of Syracuse by the end of two years from now. — Geez, that's amazing. Yeah. And and it's that's the hardest component, I think, to find. When I had long-term rentals, man, I I went through so many property managers cuz — everyone, it seems like, wants to be a property manager, but the goal is to do as little as possible to collect the fee, you know, so there's no proactivity. It's always just like, — oh, there was a huge thing that exploded or a major problem and and we responded to it.

13:23And I'm like, well, had you actually checked on the property ever, you would have seen that thing in advance and now I wouldn't be out a couple thousand bucks, like — you know. So, yeah, it's it's hard to find someone who's proactive. — It really is. I think that a property manager will will make or break it. You can have a great house in a great area, great deal, everything is wonderful, great tenants, but if you have a bad property manager, you will have a failing deal. — Yeah. Well, thanks for sharing that breakdown because that's super helpful to kind of get a picture of of the type of deal that that's actually making really good income right now, which a lot of people struggle to find.

13:59You know, you talk about the three pillars of deal execution and why, you know, just [clears throat] real estate education alone typically fails. And how, you know, pairing business fundamentals with smart software and and also some live coaching actually converts to close deals. So, — yeah. What is what does that look like? I guess what are those three pillars? Can you outline those? — Pillar number one is education. Pillar number two is systems software. Okay. — And pillar number three is going to be supportcoaching.

14:32And so first let's start with pillar number one. Pillar number one is education. I believe that you can have all the best intentions. You can be so excited and you know a lot of people we read the same book you know rich dad poor dad by Robert Kisaki. You read that book and you're pumped up. You're like, "My whole life is a lie. I'm going to go change the world. I'm going to be a millionaire by next year." Right? You're all excited. You have great intentions. But I'm here to tell you, if you have a piss poor education, you're going to fail. — You have to start with the six inches between your heads. It starts with your mindset.

15:02It starts with your education. If you do not have those things right, you're going to hit this this invisible ceiling, this glass ceiling, because your your business bank account is never going to exceed the level of your mindset. M — you have to have that mindset and that comes with education that comes with confidence and so so what we do in REI Automated is I actually have 14 different courses and I those 14 are super intentional. It can't be 13. It's not 15. It's 14. It will likely always be 14 because I think that there's 14 things that are absolutely essential that you have to be good at.

15:38Not mediocre. You have to be competent at in order to be a successful entrepreneur in the real estate investing sector. So you have to have a business, you have to know marketing fundamentals, you have to understand sales and negotiation, you need proper underwriting, you need to know how to raise private money, you need to know about tracking your KPIs and and hiring and training team members, so on and so forth, because these are the essential elements. You strip one of them out, you're going to fail or you're going to hit that glass ceiling that I was telling you about. One of the one of those two.

16:10And so we start everybody off with that education. That's pillar number one. However, all the education in the world, all the the book smarts ever doesn't mean that you're going to be successful. And so that's why we created pillar number two — because a lot of people they have a they don't have a education problem, they [clears throat] have an implementation problem. They fail when it comes to execution. They know how to do the thing. They have the book smarts, but they don't have the street smarts.

16:41Why? Because they never gone out and done the thing. — So, let's go out and take massive action. And so in doing that, I created all of these systems, you know, going going kind of back to my the problem in in my real estate investing business for the first four years was I lived in in Hawaii, which is 6 hours displaced from Eastern Standard Time. So right now, as we're recording this, it's 1:47 p.m. For them, it's — 5:47 p.m. In the morning.

17:13— AM. Yeah. — Oh, that that's I Yeah, thank you. Am in the morning. — It's a huge time difference. I was already getting up at 4 o'clock just for my regular job. — Yeah. — And and I could not sustain getting up at 3. I did it for 15 months. I actually made myself super super sick. So I was going to bed at midnight and then waking up at 3 to make phone calls — and it just wrecks your body. You can't do that while you're training. So I couldn't call before work. Can't call after work because I'm getting home around 6 p.m. That's midnight. You know, nobody's going to pick up the phone. Can't call during work.

17:44Not allowed to have my phone on me. So, I had my lunch break, right? I had cow. Cow is the only time that the US government cannot tell me what to do. And I get 59 minutes to myself and I can go to my car and I could call sellers. So, I just had that one hour per day. And man, Kirby, that one hour needed to be as effective and as efficient and as automated as I could possibly make it. And so, what I did is I turned, you know, Mickey D's method like we were talking about earlier. I just wanted SOPs for everything. And as soon as I had an SOP, we would automate it.

18:15And if we couldn't automate it, then we I delegated it because the the business got to run. Like I got to come home to my kids. — Yeah. — And so I just created all of these systems. And it started off with systems with kind of, not going to lie, jerryrigged integrations with Zapier and and Podio and all of this stuff, but eventually it turned into a full huge software company where now we own six different software companies within REI Automated. Wow. — So, I have deal labs, Deal Stream, Deal Feed, Dealbase, Deal Bots, and Deal GBT. You'll notice they all start with the word deal because it's a deal operating system.

18:48So, Deal Labs is our onmarket lead generation software. Deal stream is our off-market lead generation software. Deal feed is our inbound PPL lead generation software. Deal Base is Homebase for all your deals. That's our CRM. Has 389 automations built into it from day one. And by the way, we actually own this. This isn't some crappy white labelled version of go high level or Salesforce like we own it. And control every line of code has been built from the ground up. It's our network. It's our servers.

19:18It's our database. It's our everything. I'm really really proud of it. It's it's fantastic. Anyway, then we get into Dealbots. Dealbots is our AI agents that handle both inbound and outbound phone calls. And then lastly, we have DLG GPT, which is the most advanced to my knowledge. It's the most advanced artificial intelligence ever created. It's a rag model for real estate investors. So that is that's pillar number two which is software or systems because I don't want you to just learn the thing. I want you to implement the thing.

19:52So now I'm going to give you the tool and the resource in which you can go and execute the thing that I've just taught you. So that's pillar number one. Pillar number two. Pillar number three now is coaching. Because I'm here to tell you, you can have all the knowledge. You can even have all the software in order to execute it. But you go out, you you know this to be true. You go out there, real estate's kind of a wild, wild west still, right? — Yeah. Yeah. — You're going to have somebody who asks you a question, you don't know the answer to, somebody who raises a problem or an objection that you don't know how to overcome their objection. Some contractors going to try to steal your money during a renovation.

20:25You're going to have dirty title that you have to cure, whatever it is. And it's nice to have somebody that you can turn around and say, "How do I navigate this treacherous water?" And they say, "You know what? Not only have I successfully navigated this exact thing, I've helped 1,200 other people also do it. — This is the plan. Here is the process." It's really helpful to have somebody in your corner when you're in that time of need. And so, that's where we have the coaching and the mentorship and the community aspect of it as well. And it's not just me, by the I have people who are way more qualified than me coaching and training and teaching and mentoring our clients as well.

21:03We have an awesome community of a couple hundred real estate investors who are active in all 50 states. They don't just talk about doing deals. — Yeah. — We are operating a successful real estate investing business. So, I'm really proud of that. Those are the three pillars. And and on this last one on the coaching and the mentorship, here's what I'll I'll tell you. You know, if you were paying attention to the very beginning of this story, I mentioned how I had my first flip where I was supposed to clear about$120 $130,000 and I instead I netted exactly to to the scent $2,000 basically because I begged for it.

21:37I'm not going to lie. — You didn't lose money. So that's — I didn't lose money. That's correct. But I said I paid the stupid tax as my tuition as I graduated through the school of hard knocks. And so here's what I'll tell you because a lot of people, you've heard this many times as we both coach people. U you know, mentorship is so expensive and coaching is is you guys are asking for so much. I'm here to tell you, you're going to pay the same amount either way. You're either going to pay a mentor to learn from their mistakes or [clears throat] you're going to pay your tuition through the school of hard knocks and you're going to end up paying some stupid tax along the way.

22:13The the difference between these two things is with a mentor, you don't have to go through the emotional pain and anguish of losing money and you get to cut the learning curve. You get to skip the line, if you will, and accelerate that learning process. So, it may cost the same. Hopefully, it costs a lot less with the mentor. But the the here's the thing for sure. You're definitely gonna save a lot of time. — Yes. — Yeah.