Creating Wealth through Passive Apartment Investing

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EP# 111 Living in subsidized housing to $65mn RE portfolio with Edna Keep

by Rama Krishna
July 26th 2021
00:26:59
Description

Edna Keep’s journey from single mom at age 16 – living in subsidized housing with a daughter in subsidized daycare - to multi-millionaire Real Estate Entrepreneur and Coach inspires others. Her maj... More

Yeah. Welcome to creating wealth through pass your apartment investing podcast. In this show, we will discuss about best and worst experiences about pass you on at your apartment investing and I'm your host democracy. Now let's begin the show. Today is our guest is Edna keep Welcome. Edna thanks so much for having me. Sure. And a little bit about Edna. Edna keeps journey from single mom at age 16, living in subsidized housing with your daughter in subsidized decade to multimillion. Your real estate entrepreneur on coach inspires others. Her major operations or long term buy and hold rentals, apartment buildings or claim to fame is a 65 million real estate portfolio built with other people's money. A proponent of education and inspiration. Edna offers life training with her free real estate coaching, five days and mindset monday, live events on facebook each week. So with that I would like to share me your journey to multimillion real estate investor.

Sure. Do you want me to start with? Just kind of how I got introduced to? Really see. Yes. And also if you want to add anything to that interaction. Yeah. Uh well, you know what we, we got in, I used to be a financial advisor as a financial advisor for 15 years and how I ended up getting interested in real estate as I had clients that were coming in and wanting to redeem their mutual funds to get into real estate. And at the time the market that we live in in Saskatchewan, Canada had average about a 3% increase the year, inflationary for 50 years. And so my first thing to why would you want to invest in an asset class that only pays you 3% a year? And I really did not understand real estate. So, you know, a couple of clients took some time to educate me a little bit and uh basically told me I should get educated on it. So we ended up taking uh first of all, an evening introduction course through the robert, Kiyosaki group and then we took a three day weekend, which is really where we got our eyes opened To the possibilities in real estate.

And you know, even then my husband had a trucking company, I've been working as a financial advisor for 15 years, we had no intention of leaving, but once I got really involved in real estate, we ended up owning 50 doors in 18 months and we were cash flowing 5000 month and had built a net worth of a million dollars in just about 18 months. And it had taken me 15 years to build the network in mutual funds because it kept going up and down and up and down and kinda around the time we started looking at real estate, it was down just because of everything that was going on in the market. But you know, after getting to really understand real estate and our last purchase is the one that took us to 50 doors, we bought a 24 year department building, we really knew we had something and you know, I got to the point where I could not even sell mutual funds because once I understood real estate and in particular investing in apartment buildings and it made no sense to try to sell people in the mutual funds anymore. Good, thank you. Thanks for sharing that. And what is your thought process of getting into in stop single families?

Why would need to go straight into my family? Well, we actually started in single family, but people have asked me if you were to start over again today and what would you do different? I said, well we'd go straight into multi family. So we've kept our single family homes just because we can't qualify for any mortgages and they're doing decently and there's no point in selling and we have them property managed and stuff. But when we really started to realize that we were going to be able to scale this is when we start buying apartment buildings. Our first apartment building purchase in our city we live in was a 24 unit and you know, we've seen the exponential increase in um cash will we actually ended up condo converting that building. And uh we bought it for 75,000 door and we were selling them around $140,000 a door. And we never did sell all of them just because of the timing in the market and stuff. But my partner ended up keeping keeping a few of them and still has the miz rental properties and he has the other parts still as as condos mostly to investors.

People who had bought a single single condos and then rented them out. But it was when we got into multi family that first of all what I like about multi families, it's treated like a business, it's it's finance like a business and it's treated like a business. So the financing takes place based on income, less expenses. So net operating incomes what they're checking out to see if the building can support the mortgage and whatnot. And they also found that investors like department building investing because it did seem more like a business as opposed to single family homes. Plus with single family homes, we found that most people, once they got to three or four, they couldn't even qualify for mortgages anymore. You know. Back in the day when we started, because we started in 2000 and seven, we were actually able to qualify for like 15 mortgages for houses and some of them are duplexes, some of them are four clocks and stuff like that. But then when we got to that point we were cut right off, we couldn't even buy anymore houses. And at this point we still wouldn't even be able to point that we want to, we really like to investing in apartment buildings and we syndicate those mortgages and bring an investor capital.

And so we have a lot of passive investment partners that again is all part of our scale and we can use their network and their ability to get more and more mortgages to scale and scale. And now we're at 778 doors guarded and thank you. Thanks for sharing that. So what is Financial freedom means to you and how we need to plan financial freedom within like five years in stuff going with 40 years or 30 years plants. You know my number one way that I like to think of financial freedom and it's way different than what we were taught to advise people on when I was a financial advisor. So that was the 40 year plan. You put your money away, you say that you put it in the stock market and you let it grow when you let it grow when you let it grow and your dollar cost average into the market and then you dollar cost average out of the market. Since then I actually love robert, Kiyosaki is definition of financial freedom and that is when your passive income coming in from your rental real estate is more than your day to day expenses because that's when you're officially out of the rat race.

And you know, have you ever played that game robert Kiyosaki is game called cash flow one on one? I think so, yeah, I played a time. Yeah. And you know that part where you flip the board and you're out of the rat race and you're playing in the big leagues and you're, it seems like every deal gets paying you 5000 months or 10,000 month or you know, different stuff like that. You know what, that's what it's like in the real world when you're struggling and running around, they're just trying to keep food on the table and you know, your car payment, your house payment, and your kids and all their programs and stuff. You know, you don't even have time to think and get around like minded people who can offer you the larger opportunities. So what we found is when we got out of the rat race, all of a sudden we were just like evaluated with different opportunities that we couldn't even see while we were still working on the financial freedom portion, you know, so if people can keep their expenses wot and and it's kind of funny in that game, I used to want to be the doctor or the lawyer, the ones who are making the big income because I was used to making a big income.

But what I learned is is actually easier for the janitor and the secretary to get out of the rat race because their expenses weren't so high. Like even if you had a child, if you had a child when you were in the game a janitor, your child cost you like getting 160 months, you had a child as a doctor, your child cost you $800 a month. And you know what, that is exactly what happens in real life. People get into death. They buy the nicest cars, they put their kids in the nicest programs and on and on and on. So the typical financial advisor and the typical wealth building strategy really focuses on keeping you in the depths of keeping you so that you have to go to work every day of your life. But if you can get past that, that's where the real freedom lies as far as I'm concerned, Awesome, awesome. And thank you. Thanks for sharing that. So how one can create 5000 per month or more passive income stream in 3-5 years. Head start process. Well, you know what I remember, I told you at the beginning we created our 1st 5000 a month in 18 months.

And it was because we were buying cash flowing real estate and you know some people buy properties for appreciation and they put money into it every month. You know kind of like your own personal home, it's really not classified as an asset like like robert Kiyosaki says your own personal homes, not actually an asset. What you want is you want an asset that other people are paying off for you and that was that's the power of real estate. Again you qualify for the financing and you own the building but your tenants really are paying the mortgage off. So that is really key part of that and you know as long as you concentrate on cash flowing real estate and I mean sometimes it takes a while to get there. Like the buildings we just bought in Memphis we paid 21,600 adore, it was highly vacant that people that it owned it, it just kind of lost interest and left it in charge with the property managers. And next thing you know it's you know 30% vacant really getting run down. So what we do is we go in and we renovate, upgrade and then we get new tenants in and take care of the building, take care of the tenants and that really gives you a good return on your investment initially, but also gives you really good long term cash flow.

So the idea there is to get the cash flow. So I have students have actually beat my 18 months, I got students get to 8500 month within the first year working with me. Now, they bought four buildings and they had partners to so they get the whole thing but $8500 a month cash flow coming from the buildings and the sweet part there too is the cash flow like you can spend but you also have mortgage paid out every month which a lot of time is like 7678% a year. And you know I always think of that is kind of like my security or you know we never say guarantee but like the solid part of my investments, no matter no matter what happens in the market, the mortgage is always going to get paid well. Where else can you get 678% on your money, just your mortgage paid out and then you have cash flow and then you have appreciation and then you can force appreciation by increasing rents over time and and decreasing expenses and stuff like that. So the the idea is there is you know, you can be totally financially free 3 to 5 years but you can also get your cash flow like you know in one building, I have one of my students, her very first building, she bought it undervalued seven of the nine units were vacant and after she renovated and increase the value of the property, she was able to, I think she paid 1.14 put in 200,000 of renovations.

She refinanced it at 1.85 plus makes 5500 month in cash flow. So that made all the difference for her because one building, one little nine unit building is paying her $5500 a month and it's recurring. It's not like you have to go and work for it again and again and again, once that's coming in, it's coming in again and again, and then on top of that, she's probably making that much all over again. Just a mortgage paid out. Got it. Thank you. Thanks for sharing that and how to leverage other people's time, money and knowledge, you know what? I love that because like I a coach and train people now, but I had my biggest breakthrough even as a financial advisor when I first hired a coach. So that's a way to really leverage other people. You hire coach has already been there, done that. I mean, I've never hired a coach, just have a cheerleader. You can do that, you can do this, that I hire coaches who've been there done that. So people who have done what I want to do whatever that happens to be and that's been my biggest shortcut.

So that's leveraging other people's knowledge. Like I don't have enough hours in the day and time in my life to make every mistake out there and learn through trial and error, you know, and I see people do it all the time, They don't want to spend any money on coaching, they don't want to spend any money on training and the trial and error and they might buy a building, but you know, having a coach in your corner, they can show you and your blind spots because a lot of times we have blind spots that we're just not seeing and they can see that in you because they're generally dealing from a higher level than we are and that's so huge. So that's one way to leverage other people's knowledge and to leverage other people's time assistance, virtual assistance. I have an operations manager that looks after all the technical side for me because I'm not very effective and yet I do just put everything on the computer nowadays. But he's there for me, I can call him up and go, why was my facebook login not working? So we had to do a double authentication thing, you know what I mean? So they're having other people's knowledge in whatever it is that you're trying to do is so very crucial.

It cuts your timeframe way down. Like I'd say attempt just working with people who already have done what you want to do. And then the other thing is get around like minded people because you know, we're all going to make mistakes, we're gonna all going to have errors, we're all going to have challenges and being around like minded people who can say yeah, you know what I went through that, this is how I came out of it and yeah, it was challenging at the time, but don't think of it as devastating is just one of those things that, you know, learning curve, new level, new devil every time you go through something, it changes your business a lot of times. That failure or that challenge is the best thing that could happen to you because that's what pushes you on to the next level. So that's how I've really been able to leverage other people's, besides you're leveraging other people's money, which is a big thing in real estate and I think what you really need to do in order to be able to scale, but leveraging the time, the knowledge I've and I have a sales assistant now, I have operations manager, I have people that do all my, you know, read out on facebook and instagram and linkedin and it's amazing how much stuff can get done in a day and you're not the one doing it.

And all these people actively working on your business just allows you to grow faster and quicker and faster and better because you know what if I had to do those reach outs on facebook and Lincoln and stuff myself, I might get, you know, 23 maybe five done in a day if I'm working my buns off every day and they can do like the maximum in a day. And I just find that so amazing to be able to leverage other people's time and knowledge that way. That is so true and so powerful also and thank you, thanks for sharing that. You're welcome. Yeah. Would you share any of your best multi family real estate investing experience so far? Well, you know what, first of all I want to reiterate that you know, most of our deals are average deals. One of the very first mentors that I had, he wasn't actually a coach, but he ran a mentoring group where you could show up for meetings and they did monthly trainings and stuff like that. And I still remember and hold this in my heart at all times is most of your deals will be average deals. He said I built my biggest network just from average deals and long term blindfold and he said the biggest portion, he said I did have a few home runs but there's people out there that are shooting for the home run all the time.

But you know, we we had a couple early really good success story. So one was we bought a 24 year department building that was very under rented like in our area at the time, the average transfer about 800 a month. And we were able to take possession of the property, renovate every one of the units because it hadn't been renovated since it was built in 1964. We've been had an original tenant from 1964 is still living in the building, but we renovated and increase the rents across the board. We re finance that property had our investors fully paid out in 18 months and we had a nice cash loan property I think four or 5000 month each from myself, my managing partner and then the investors. So there was a lot, a lot of cash flow coming out of that building. And then, so that was one and that was very sweet and that was probably about the quickest. We turned around a larger building like that. And then in 2012 we actually bought 144 units in small town Saskatchewan in Northern Saskatchewan.

And at the time, I was also involved in exempt market in the except market world and I was selling except market products. So first of all, I went to different people who owned reads and I was thinking, oh, this is probably something that really would like to be part of and we wanted to partner with them. But in most cases I got shut down saying, oh, that's too small of an area. We like to concentrate on the, on the larger areas. But you know, we ended up just getting local people to invest. And we raised $1.2 million in 36 months from the time that we bought that property till the time we were able to refinance 36 months. We pulled out all the capital, paid all the investors back. Managing partner and I each took a $400,000 paid a tax free because it was alone. And the building to this day is paying that loan off and cash flowing around $6000 a month. Our share. So the managing partners about the same. And then the investors just a little bit less. But those two, I would consider kind of home runs for us. We did really well. We still own them to this day or one of them.

We sold out, but the other one we still own to this day, the 144 unit, we're just actually going through a refinance 10 years out, right? And then and another one that we feel is really going to be home run for us is these units, we just want Memphis Tennessee, you know in Canada and some of the major cities here right now retail by parking spot like in Toronto or Vancouver for 20,000. And we're buying apartment building doors at 21,600. Now our plan is to put about 16,000 indoor into them for renovations and upgrades and stuff. But you know that we think is going to be at home run for us because if we were to sell it and we don't think we're going to buy or sell or refinance, we're probably going to do that between 55 60,000 door. So that's a pretty good return on the money will get all the investors paid out and just have a cash flowing asset, awesome. So would you also share any of you are challenging or what some multi family experience so far? Sure we had a building that we had a managing partner on, so they had actually brought the building to us and if they were in the construction industry so they said oh we can do all the work in the building and and we can manage it and we can do all the renovations and stuff like that.

Well you know I'm not even 100% sure because generally with our managing partners we let them run it. But the managing partner broad and caretaker that was gang related and are building ended up being full of gang members. I still remember like we finally got them out and got a new property manager in but that took a really big tool on us because they you know we had police raiding the apartment building for drugs and guns and all this kind of stuff and I was even scared for my property manager to be in there. You know we wouldn't even walk through the building. So with that, what I would recommend people is be very careful the area that you buy in. Be very careful the managing partners you bring in because sometimes people talked a good game and can't deliver and then be very cool your property managers are because you let it property manager manager building and bring in gang members while though they're hard to get out of there because they're like squatters almost, you know?

Yeah, awesome. Thank you. Thanks for sharing that. And what is the current focus and share something dictated about now? You know what my biggest focus from it and I love doing this is working with my students. Like I'm buying all the time by curiously through my students, I helped them, you know, analyze their deals and and put the executive summaries together, potential investors and stuff like that. So that's my favorite part. But at the same time I have a partner that is actively looking for multi family investments in the U. S. Because that's kind of our market right now. And we're looking in Jacksonville florida still around Memphis Tennessee because there's some good markets are our target is really workforce housing. So we like to go where the jobs are. And and the workforce housing tenants are. We don't like to deal with social services tenants either in Canada or the US. We just find that there's that many more issues. But the good solid work force people to people that we want to provide that clean safe affordable housing for.

Got it. Thank you. So anyone advised that impacted you right now. The parting advice, you know what? Don't be scared to invest in yourself because any knowledge that you get is only going to help you help you move ahead and, and I know myself the best money we've ever spent. I've never been without a coach and since 1999 I got my first coach when I was still a financial advisor. I've never been without one because there's just things that they see that you're blind to opportunities, challenges and I love having somebody in my corner who's who I can brainstorm with and stuff like that as well, awesome. Thank you. And so any personal habits that are helping you to be successful? Yes, I'm a big proponent of mindset. I believe that mindset is 90% of our success and it doesn't matter where you are in life, whether you're, you know, making 100,000 year and you want to go to 200,000 year or back in the day. Like I was making $1200 a month and get that much from one tenant.

You know, wherever you're moving from one level to another, it's new level. New devil, you have to think differently, You have to change as a person. And again, the best way to do that is to get around like minded people. But I study mindset a lot, like I have a mindset coach, one that just teaches about minus mindset, really getting to understand how the universe and how I co create with universe. All that kind of stuff is really, really helped me keep growing over the years and you know, goals when you set goals and I think that happens, people are challenged by that over the years, they get to a certain level of success, They stop setting goals and then they think they're going to just stay in that position, but in reality they go backwards, because if you're not moving forward you're moving backwards, and so I'm always setting new goals, new goals and challenging myself whatever it happens to be, and that is something that people should really wrap their heads around is uh we are goals are meant for us to grow not to get, and so always be setting new goals, and I also find that the happiest people out there, the happiest and the most successful are ones that are continually setting new goals perfect, and anyone book that impacted while I find what way, you know, my favorite book of All times was a book by robert Kiyosaki, and it was called Why Do a student's work for C students?

And the students work for the government? And, you know, the reason why I liked that book so much, I was a C student all through school and you know, in school you get no credit for being a C student like everybody wants here and and nowadays is starting to change that. I had a teacher in my in my training right now who said, you know, we teach a lot different nowadays and I said yeah, but the majority of us going through what we're going through now, we're taught the old school way, oh you should get all A's and don't fail and get all A's and and all this kind of stuff. What I realized after reading that book is the recent reason a student's work for C. Students is because see students a lot of times are the visionaries we couldn't, you know, excel in learning because, you know, first of all, if it's not an interest, how do you really excel at that? And yet students would just they a students, they could just learn whatever, but they're also limited by that learning ability I find. So what got them there aids in high school is not what's going to make them multi millionaire real estate investor in the future.

And when I really understood that after reading that book, it may be realized that everything that I've been taught in school that was supposed to be a negative is actually my strength. And you know, that's something that I work with my students on to is, you know, we can't all be good at everything. That's why partners are so valuable and your team members are so valuable. So you have to be able to build relationships with people and have it be win win for everybody. And that book was a real life changer for me, awesome. So how are you giving back to community right now? You know what? My number one way is by sharing with people what we did. You know, we were able to build our portfolio to 50 doors and 5000 a month in 18 months and we did that through some trial and error and starting a single family home. So in my program when I teach people, That's what I teach now is how to get into apartment building investing and how to be building that 1st 5000 a month in cash flow so that you can potentially get out of the rat race and start doing what you really love to do and do it on an ongoing full time basis.

Cool. Thank you. So how can listeners can connect with you? The best way is through my website and it's just Edna keep dot com. I'm on facebook instagram, twitter, every, every platform out there. My assistants do most of it, but all under Edna keep and it's so easy to remember just uh you'll have this Boeing of my name in your show notes. But E D N A K E P and they can find me very, very easily just by googling. I'm on Youtube and I want, like I said on all these social media platforms as well. Awesome, awesome. And thank you very much and I really enjoyed the conversation. Okay, you're, you're most welcome. It was my pleasure. Yeah. Thank you. If you like the show, please subscribe, share, read and reviewed and if you want to connect with me, please send me a message info at Bouchard capital dot com. Thank you for listening. Creating wealth through pass through apartment investing podcast. I hope you learned something from the show. See you in the next absorb.

Thank you. Any information provided from these shows or educational purposes only. As always, please consult with your own C. P. A legal and financial advisor before investing

EP# 111 Living in subsidized housing to $65mn RE portfolio with Edna Keep
EP# 111 Living in subsidized housing to $65mn RE portfolio with Edna Keep
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