Discussing debt freedom through real estate and real estate investment strategies with real estate investor, Kendra Barnes. Kendra is founder of The Key Resource and author of Acres. She created The Key Resource to inspire, empower and educate people about the power of home ownership and real estate investment. FB group: https://the-key-resource.ck.page/products/facebook-group-accessTravel nurse masterclass: https://the-key-resource.teachable.com/p/travel-nurse-rental-masterclassACRES coffee table book: https://getyouracres.com/
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Podcast Transcript
Dr. Sev
Today we have an exciting session, very informative session about real estate investing. I am discussing debt freedom through real estate with Kendra Barnes will also discuss some real estate investment strategies that I’m sure you’re going to want to know about. Kendra is a founder of a key resource and author of acres and we’re going to talk about that book too. She created the key resource to inspire, empower, and educate people about the power of home ownership and real estate investment. And I’m going to share some of the things I’m doing because of the knowledge that she’s been sharing. So Kendra, welcome to Dr. Savage talks money, YouTube, and podcast.
Kendra Barnes
Hey, thank you for having me. I’m super excited.
Dr. Sev
Oh, you are welcome. Before we dive in, I just want to remind everyone that this is educational entertainment, not advice. That’s your personal finance or realtor or whoever you’re wanting, contact your financial person, or legal person for advice specific to your situation. All right, before we jump in and see some comments in here, Neelam saying hello, from LinkedIn, we have some comments from LinkedIn watchers, and Dr. Adrienne saying it’s great to be here. I’m currently taking a course to sit the realtor exam. Beverly Harper joining from YouTube saying Hi everyone. And Neelam is saying I’ve been thinking about investing in real estate, you’re in the right place. About Kendra’s group, as I said before, I’m doing some things because of the knowledge that I have gained from her from following her over the years. All right, Kendra.
So the first thing is, I want you to tell us how you began your journey into real estate investing.
Kendra Barnes
It was actually super random. Hey, everybody, thanks for joining today. Like Dr. Sev said, I’m Kendra, founder of the key resource. I’ve been investing in real estate since 2015. But the crazy thing is before 2015, I never imagined I’d be an investor. And it’s not because I didn’t think I could do it. I just never considered it. I went to undergrad, I went to grad school, I got a government job, I got married, bought a house. You know, checking all the boxes that people say you should do. And I just assumed that would work until I was 70 years old, maybe and then I’d retire and then start living whatever life I wanted to live after that. But I really didn’t like my nine-to-five job. And this is not nine-to-five bashing at all. It just wasn’t for me, like the particular field that I was in, I really didn’t like it. And I was always trying to side-hustle my way out of my job, but it just wasn’t working. And then one day, my husband and I went to a game night and we played a game called cash flow. So cash flow was like Monopoly, but it’s a little different in that it really mimics life. And cash flow is trying to teach you the power of investing teach you the power of passive income. So passive income is basically money you’re making without exchanging time for it. And that’s when the light bulb went off, we’re making these good government salaries, we were living really well. But we were not building wealth, we weren’t taking that money and letting it work for us. And that’s how we got into real estate investing. That’s where the spark went off. And then we bought our first property a few months after playing that game, that random day.
Dr. Sev
Awesome, I believe my understanding about the nine-to-five. I know I said at the beginning that I have learned a lot from Kendra, and I’m using some of the strategies that she has shared. And we’ll talk a little bit more in detail about some of those. But how would you describe your overall real estate strategy?
Kendra Barnes
I’m a buy-and-hold investor mostly, I buy properties and rent them out. You know, you guys watching, you’ll see like HGTV where people are flipping properties and doing stuff like that. I’ve never flipped a property. I do want to one day I just haven’t. It’s a great strategy. But I’m a buy-and-hold investor. And I do a few other things too. Like we’ll talk about a little more like passive ways to invest as well.
Dr. Sev
All right. So with all this investment journey, you’ve had to have some doozies.What would be your worst investment? And what would you say is your best investment?
Kendra Barnes
All of the properties we’ve purchased have actually turned out to be good investments, but we’ve made really expensive mistakes buying them and I would say our first property was probably the one with the most mistakes because remember, this is 2015. People like you know, we didn’t have podcasts like yours or shows like yours. It was like back then it was very hard to even find out anything about real estate investing if you were not already in a wealthy circle. And so we were out here just making mistakes.
We bought a duplex in Washington DC and the duplex had a tenant living in one side already. When you’re buying a property with a tenant already in it. There’s so many questions you need to ask. We asked none of them When you’re inheriting a tenant, you’re inheriting whatever lease agreement they signed with that previous owner. And so that’s a contract. That’s a binding contract that you’re also inheriting. So you should ask to look at it, we didn’t. And we also, I would say, with inheriting a tenant, and we didn’t talk to them, we didn’t ask all these questions. So that was a big mistake.
Also, because it was a duplex, I wish we had known about House hacking, which is basically when you buy a multi-unit property, you live in one unit, and you rent out the other unit, that would have saved us a lot of money, because let me give you all the numbers really quick. We bought the duplex for $228,000 in 2015. So it’s Washington DC, a duplex that has two units, and it was $228,000. The downpayment for that property was about $57,000, that’s a lot of money. When you’re buying a rental property, buying a property that you’re not going to live in the bank, when you get a mortgage, they’re going to ask you to put 20 or 25% down, but if we had just lived in one side of that duplex for one year, we could have used what’s called an FHA loan, and with FHA, we will only have to put down three and a half percent. So 25% versus three and a half percent. That’s almost a $50,000 difference in that case, because of not knowing because of lack of knowledge. I say we wasted about 50k. So I would say those were a couple of the mistakes we made in the beginning.
Dr. Sev
All right. And that leads me to you talked about House hacking, talk about, you know, renting one side of the duplex. Most times when you talk to people, they think real estate investment, they immediately think you have to buy a house somewhere, or have a renter, I know from discussions in your group and attending some of your sessions. That’s not the only way because right now I am having a part of my house set aside for travel nurse rental. And I also invested in this thing called Fundrise. Tell us some of the various ways that people can invest in a real estate
Kendra Barnes
First, if you own a house, you can rent out space in your house to travel nurses, you can rent out to a roommate who’s going to live there, once a year lease, you can even rent out like if you have a backyard that’s very picturesque or a basement you don’t use, you can rent it out for photoshoots on a site called peerspace, which is like an hourly rental site where people will come and take photo shoots or film content or whatever. And so there are ways to make money if you own a house.
But also, like you said, there’s passive in that like super passive investing like Fundrise, which is basically when you’re investing in large-scale real estate development, and you’re getting paid on a intermittent basis based on like the returns that those developments are making. But you don’t have to worry about any of the actual issues that happened with the properties you just invest your money in, you’re getting a check back.
Likewise, you could be a private investor like me, or like Dr. Sev who is looking to buy some properties. And we’re like, Hey, we’re looking for investors, will give you XYZ return on your money. I don’t do this by law, I’m not soliciting any private investors, for example. And I also invest in real estate investment trusts, which issimilar to Fundrise. But with Fundrise, you’re basically putting your money out there and they’re gonna invest it in whatever, you’re putting it in a pot, and they’re gonna put it in the different buckets. But with real estate investment trust, you have more control. So I do both. We will say Investment Trust is almost like investing in a stock that pays a dividend but you’re investing in large scale real estate developments like shopping malls, hotels, and then you’re getting paid out dividends. Those are some other ways.
I also want to say, if you don’t own a home yet, and you want to get into real estate investing, think about buying your first home as a future rental property, you could buy it for yourself now, live in it for one, two years, however many years you want. Later on, you could turn it into a rental property and you can build your portfolio that way because buying a house for yourself is just cheaper, you’ll get a lower down payment and better interest rate because you’re living in the property.
People build entire portfolios by buying a house for themselves, living in it for a while, and then eventually renting it out and then buying a new house for themselves living in it for a while and think about that in Seattle, it’s so expensive in Seattle, there’s actually this really cool company called loft TM, which they’re only in like the Pacific Northwest like Seattle, Portland and out there because the downpayment is so hard to save for out there because it’s so expensive. They are doing what they call host to own basically unless they’ve changed it up but Google lofty and you buy a house with like a basement apartment or a guest house to show Airbnb, they’ll cover your down payment and then as your Airbnb in that space out, they’re going to take a percentage of your profits and that pays off the down payment over time. So let’s say for instance, I don’t know you make 3000 a month Airbnb, they might take like 30% And that goes to paying back that down payment, you get the house the down payments covered and then you host own so eventually you’ll pay them back. Anyway I’ve talked too much.
Dr. Sev
That’s okay, there’s information and for those of you who are interested to learn more, we’re going to share the Facebook group that is filled with information and not only is Kendra in there sharing a lot of valuable, priceless information really great information. There are other people in there also investors and they’re sharing information. They’re sharing their journey. You’re sharing your experiences. I mean, this is invaluable. I’m telling you.
Kendra Barnes
I love my group. I think outside of my book, my Facebook group is one of my proudest accomplishments as far as the key resources concerned because the vibe in there is just hard to find in a Facebook group where there’s positivity like there’s so much just camaraderie, advice and support and very little negativity. We did have an instance a few weeks ago that got a little spicy. Besides that, about seven years it’s been out, I’m just really proud of like, everybody in there is really cool.
Dr. Sev
They’re really more givers and takers in that group. And it’s really, really, really great. You’re saying you don’t have Facebook, you can also follow Kendra on Instagram. And we’re gonna pair that in a little bit. We have some questions about investing any tips that you would like to give any first-time investors, what is maybe one or two things that they really, really need to consider?
Kendra Barnes
The two biggest tips I have is to first always start with a specific money goal in mind, because you might hear this today, and you might see what Dr. Sev is doing or what I’m doing and think, I need to do that. And you might not need to do exactly what we’re doing. Because everybody has different goals. And so when you start out with a specific money goal, it’s easy for you to back into what that looks like for you.
You might not need 12 rental properties like you see somebody on Facebook or Instagram having like, maybe two could get to your goal and maybe one, maybe none, maybe you invest in other ways, right? Start with a specific money goal in mind. I want to make an extra $500 a month with real estate investing. Okay, if I’m in Detroit, what does that mean for me in Detroit? Can I buy a property? Can I afford the kind of property it takes to make $500? If not what else I need to do?
The second tip is always put yourself in a position to pivot people will see a property why, because you see a property and you’re like, oh my gosh, this is like right downtown. I’m gonna put it on Airbnb and make all this money. And you might make a lot of money because Airbnb is very lucrative. But what if the city that you’re in puts a whole bunch of different restrictions on Airbnb all of a sudden, and now lot of cities are doing where it’s so hard to be an Airbnb host because the hotel industry is lobbying and making it harder for people to host on Airbnb. And so then what happens if that first idea doesn’t work out? Can you still be profitable in other ways. My advice is, when you identify a property, run multiple scenarios and say, If Airbnb doesn’t work out, then I know I can do travel nurses and still be profitable, it’s not gonna be the same profits, right? It’s gonna be a little different. But you can still reach your money goal, or travellers just doesn’t work out, then I know I can rent on peerspace. Or I know I can rent to military tenants or students or section eight, those are my two tips.
Dr. Sev
Awesome. Always have backup plan. Because things can change. I mean, a lot of cities have you said, my city has put in something, you have to pay a lot of money to become an Airbnb host, you have to jump through a lot of hoops to become an Airbnb host. How would you determine that an investment is a good deal? What are some of the things that you want to look at?
And guys, if you have any other questions, just post them in the chat, whether you’re on YouTube, LinkedIn or Facebook, post your questions in the chat, don’t be shy.
Kendra Barnes
A good deal, CMS, that thing to like a good deal is different for everybody. I think a good deal is one that meets your money goal. And that also allows room for pivoting. I also like to look what the city has planned. If you’re buying a property, kind of looking on the city planning website and seeing like, Okay, the next five years, they’re doing a lot in this area. That’s always a good sign. Every city has different websites, but just google the name of your city, and then city planning, or housing development, or whatever, and just see what they have going on.
I would say a good deal is one that really works for how much time you have. That’s a big thing with real estate investing, what happens is, I think a lot of first-time investors, they’ll end up going towards properties that are most affordable, which are usually like older properties, which is understandable, right? When you’re first starting out, you’re making your money stretch as far as possible. So you might find this really cute house that was built in 1950. And it’s going to be great for whatever kind of rental, but those older houses sometimes have a lot of issues. I think like also trying to assess how much time and work am I going to have to put into this? And does it align with how much time I have I mentioned I started investing while I worked a nine-to-five job, I forgot to mention that I did retire at the age of 32. So that was four years ago, thanks to real estate investing, but I was working full time for a few years at first you can do it and work a nine-to-five but you got to be really realistic about like how much time that’s gonna take and if you have the capacity.
Dr. Sev
I agree. Because I know that with my schedule and all that I’m going on, I’m more until passive ties in real estate. Again, I don’t have the time. I don’t even have the time now to do what I do.
Kendra Barnes
Same with me, I have a three year old now. My time is so different from when I started a few years ago, and that’s why I love investments like real estate investment trusts. The thing is, it’s almost like a sliding scale because the most passive investments usually have the lowest return but the ones that are so time intensive. For me, flipping is the most time intensive. It’s hard. It’s a lot of work. but flipping is way up there as far as work, but the return you make is going to be huge. You can make 10, 20 $30,000 In a few months with flipping, but you’re gonna work your butt off, you’re gonna be stressed out, and then you look at real estate investment trust or Fundrise, where you’re not doing anything at all, but the return is just not. So you have to really trying to figure out where on the scale you want to be. Do you want to deal with tenants? Do you not want to deal with tenants? So it’s just like a balance trying to figure it out?
Dr. Sev
I’ve been thinking about flipping properties, but it can be stressful. Yes, as I said, the higher the risk, the higher the reward, pretty much anything. All right, anybody else has any questions, post them in the chat again. But in the meantime, any tips and tools that you can share with us for finding a good deal, I know that you’ve shared some that I’ve used to look for, you know, comparing rental property prices to compare travel, Nurse pricing, that sort of thing. I mean, specific ones that come to mind tips and tools that they can use to find a good deal, or to price a good deal.
Kendra Barnes
One of my favourite tools, once you’ve identified a property you think is a good deal, you need to figure out how much rental income you can make. And so I use a site called a rental metre or rent ometer, like thermometer, but rent ometer. That’s a really easy site to use, you put the address in, and it tells you here’s what other landlords in that area are charging. Basically, the other tool that I love is avail, A-V-A-I-L.co. On the avail site, there’s a free resource where it shows you landlord-tenant laws by state. That’s so important because people are getting into this landlording thing, and not even understanding what the laws are in their state. For instance, in Washington DC, you have to put your security deposit in an interest-bearing savings account. And when your tenant moves out, you owe them that security deposit back plus interest, which usually isn’t a lot, It’s like eight cents. But legally, they can be there for like eight years and have eight cents of interest, which tells you a lot about savings accounts. That’s a whole other conversation for another day. But it’s really important to understand the landlord-tenant laws in your state before you get into investing. Also, for travel nurse rentals, I have a free course it’s 100% free, I’m not pitching you anything at the end, I’m not trying to sell you anything. And it tells you start to finish what you need to do to rent to travel nurses. And I guess we can share that link later or, but also I know that Dr. Sev you started doing that too. So I’m interested in hearing your experience.
Dr. Sev
I started, I actually had two persons contact me directly about my place that I have for a truck rental. For those who are listening my home, I have a downstairs area. And I have designated that as a rental for travel nurses. I may put it on Airbnb, I don’t know, I’m debating but it’s mostly for travelling nurses, because you have less people walking through your house, you got somebody there for three months or four months or wherever, maybe you have two or three people in your house for the entire year. If you have a basement or something like that you can consider now the two persons that contacted me, I didn’t go through with it. Because one of them wanting to go do some backdoor thing. No, I’m not doing that. And the second one, she was talking with me at the same time, she was talking to somebody else and she went with the other person. But then a week later, I saw that she went back asking again for coming back for travel nurses, but I just did not respond because i don’t know what their game was so Yeah,
Kendra Barnes
Cuz you’re like, why didn’t it work out with the other person. And that’s the thing too, you really have to go with your gut, especially when you’re renting out the home you live in, because I’ve done that before too. And you really gotta go with your gut and just know that the perfect person for you will come along. That’s really good. And I think a big thing is making sure you’re calling their previous landlords and making sure they were actually good tenants before letting them stay. I didn’t answer that question. Does investing require a big bank balance? Yes and no.
I will say yes and no, like technically you can buy properties. If you’re a first-time homebuyer, there are programs out there where you can buy properties with zero money down like NACA naca.com. That is a first-time homebuyer program where there’s no down payment, and no closing costs. There are some other stipulations, but it’s a really great program. There are other programs like USDA has a program with 0% down USDA, the Department of Agriculture, if you’re a veteran, you can get a home with 0% down, there’s 3% down programs. You don’t need a lot of money per se for that part. But personally, I wouldn’t do it if I didn’t have at least three to six months of savings in my account, because anything could happen. You could get that house with 0% down and then you need a new roof. You know, you’ll have insurance and stuff too. But just things happen. You might get laid off. And so do you have enough to sustain any kind of absence and flows with expense is the big thing.
Dr. Sev
Ask lots of questions when you go to whoever you’re talking to your real estate banker or whoever asked all kinds of questions and ask them is there anything I’m not thinking about that? I should know? Research, research research. Don’t just take the first answer if they’re giving you one option and selling you one option without giving you others then you might want to run you want to have different options. I’m going to put the link in for what do we say we’re going to put the link for the travel nurse course.
Kendra Barnes
I can send it to you.
Dr. Sev
Now one of the things I want to talk about is Kendra’s book, which has been very successful. And the book is called acres. And I’m gonna share here the link to the website to get the book. And it’s get your acres.com Tell us about the book. And I know that there’s a compilation of stories of five different black real estate investors that are doing great things in the real estate field. So tell us more about that book
Kendra Barnes
Acres is a beautiful coffee table book. It’s not just words on pages, which I love, a good book. There’s nothing wrong with a good book like that. But there’s lots of pictures in there, too. It’s a beautiful piece of art. And basically, it’s telling the stories of 25 young black investors who have built wealth from the ground up with real estate, I created this book to really be the representation that I wish I had had years ago. There’s a link for the masterclass. Acres, tells these stories. And my goal is to really make sure that people see themselves represented, I believe that these stories deserve to be told in a beautiful way. And so the name acres is basically paying homage to that idea of 40 acres and a mule that you hear about as reparations that black people never did get, you know, back in the day when slavery ended, were supposedly supposed to get this 40 acres and a mule. Never got it. But here we are still building wealth, still owning homes, still buying land, still buying real estate, despite all the systematic oppression that’s been put in place to keep us from doing it. We’re still doing it and doing it so beautifully. And so in the book, you’ll hear stories, everybody in the book started from zero, no one hit the lottery. No one was born into a wealthy family, they all started from zero, we all started from zero and all made mistakes along the way.
Dr. Sev
This is so key, because a lot of times we think we have to have money, and hear what Kendra is saying, you’re 25 for doing really well. But she all started with zero. It is possible for us to do the same.
Kendra Barnes
I’m not saying they literally had $0 in their account. But I’m saying they were just a regular nine to five worker just living a normal life like everybody else. And that’s started from there from ground zero for care and build. I want to say one more thing about the book, too. I’m really proud that $10,000 from sales of the book is going to fund to scholarships at an HBCU. I plan to do more if possible. But this book is self-published. This is my first book. And so the plan is to eventually do more scholarships. But I’m really excited that a book about black wealth is funding scholarships for students at a historically black college and university. So it’s just kind of like a full circle kind of thing.
Dr. Sev
Now, and again, we have website there on the screen, get your acres.com, please make a note and know you guys are going to come back and listen to this video again. Because there are a lot of things that Kendra shared that you probably want to listen again and absorb. And I had shared the class for the travel nurse, but I’m also wanting to share here, her Facebook group, and I put it in the chat. Also in the comments, you can copy and go to that website. This is where you can go to her Facebook group. And that’s the group that really can’t pay for the information that’s in there. So tell us a little bit more about this Facebook group, Kendra.
Kendra Barnes
Yeah, the Facebook group is full of experienced investors and aspiring investors alike. You don’t have to be a mega-millionaire to be in the Facebook group. You can be just starting out, you don’t even know when you’re gonna start. People post their questions in there. They post their journey. They’re asking questions, and usually I respond to like every single question. People are always, How can I pick your brain? Do you have mentorship? I’m not doing any mentorship. I don’t do coaching right now. I’m fully focused on the book, but the Facebook group if you want my undivided attention, that’s the place to be. I love the group. Honestly, the way social media has been lately, especially Instagram. I don’t know, it seems so loud. It seems so overwhelming these days that I’ve made a commitment to really focus more on the Facebook group than anything. So y’all are hearing it here first. So you definitely want to get in the group.
Dr. Sev
Yes, I can attest to that. So is there anything else? I don’t see any other questions unless I’m missing any? Oh, neelam is asking what do I need to know before starting the flipping project? I don’t know where to start. That’s a very involved question.
Kendra Barnes
Get a mentor for sure. Because I am not a flipper. I’ve never flipped I would love to help you but I’m not even going to lead you astray.
Dr. Sev
As Kendra says flipping is not part of her investment strategy. But if you come join the Facebook group or follow her on Instagram, she’s associated with a lot of other real estate investors who have programs actually have mentorship programs, so you can follow her and you can learn about them and join their group. I know there’s somebody, that can’t just think of your names right now and I don’t want to even try to start but please follow her on Instagram and again, that at the key resource, and then for the Facebook group called join her here and I put the live link inside of The chat so you can copy that and go back to it later. So Kendra, anything else that you would like to share? And we could go on because there’s so much.
Kendra Barnes
This is great, a great questions. Thank you for everyone who participated. If you’re seeing the replay and you do have questions you can find me at the key resource just DM me and told me that you saw me on Dr. Sev talks money. And if you have any follow-up questions, let me know. Thank you for having me on. It’s been such a pleasure. You’re really good at this.
Dr. Sev
I’ve had some practice.
Kendra Barnes
I’m just really appreciative. Thank you so much for sharing your platform.
