Currently, in control of 4,300 Multi-Family Units, Mark Kenney- a real estate investor, entrepreneur, and founder of ThinkMultifamily has an incredible amount of impact as an investor and businessman. Only starting to acquire larger deals five years ago, his ability to implement successful strategies when investing is apparent. With over twenty years in the real estate industry, his passion for the business has allowed him to gain an extensive amount of knowledge and insight into the valuation, acquisition, and operations behind a real estate deal.
In this episode of Multifamily Real Estate Investments with Don and Eden, Mark Kenney discusses his beginnings as an IT entrepreneur and what exactly led him to move into the real estate arena and assisting investors with buying multi-family units. He also discusses the importance of partnering on deals in order to bring different skill sets to the table to make a deal successful and a good investment. Lastly, Mark advocates for the importance of giving back to others through different methods such as coaching, mentoring, and charity.
Highlights:
- Mark’s Beginnings In Real Estate
- His IT Background (How It Is Applicable To The Real Estate World)
- How He Finds The Right Deal For Investors
- The Importance Of Giving Back
- Current Projects And Future Outlook
How to Connect with Mark
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Transcription
Hey guys, thank you for tuning in today. I’m going to host Mark Kenney. Mark is in control of forty-three hundred units. Think about that number for a second — the type of impact you have as an investor when you are affecting forty-three households. Well, not if you including vacancies. Okay, I think I’m losing it. So anyway what’s even more amazing about that is that Mark only started to buy bigger deals five years ago. Potential of becoming extremely wealthy in a very short time is more than possible when you’re dealing with multi-families, and that is what excites me so much about this. Also, Mark and I are going to talk about how important it is to partner up; especially on your first deal because people have different skill sets. You can’t be good at everything, and there is a lot to do. Now don’t get me wrong I’m not saying for a second it’s impossible to do this on your own. Everything is possible if you have the will and determination, but I’m just saying it’s probably easier to do it when you have the right partner or partners. Okay, so without further ado Mark Kenney.
Welcome to the real estate investing podcast with Don and Eden, where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies.
Hey Mark, how are you doing today? Welcome to the show.
I’m doing well, thanks for having me.
Yes, you’re welcome. I believe you deserve it. I heard that now you’re in control of forty-three hundred units, so that’s amazing.
Yeah, we didn’t do it by ourselves, but it’s been a journey. It’s been fairly quick overall, but it’s been fun.
So I know that you started buying multi-families. I would say five years ago was it right?
Yeah, I started buying a small multi-family twenty-five years ago, two to four units. Yeah. Then about five years ago started syndicating larger deals.
Okay. So you were buying properties ever since you were out of college? If I’m correct, right?
I was a senior in college, yes. Oh man. So tell us about that, that’s interesting. Yeah. people are like, was your dad in real estate or someone else you knew? The reality was, no we didn’t have anyone in our family or anyone that was an entrepreneur or anything. But I have an identical twin brother, and we were both like, man there has to be a better way for both. Kind of analytical, and I had no accounting background or I.T. background. At the time we were going to school for accounting, and we’re like everyone needs a place to live. So why don’t we look at real estate? We liked real estate ever since we were little, and just started buying small properties like two to four units, and it was a lot of properties. My dad kind of liked going on tours with us, and I don’t think there’s any property on the planet that my dad thought was a good enough deal to buy. So he kind of talked us out of a lot of deals and had a deal, talked us out of the contract. He talked us out of that deal. Quickly after that, I was getting a deal and didn’t include him till after we closed.
Don’t listen to your Dad, that’s it, you say.
I’d say well that your dad’s qualified. My dad, in this case, wasn’t qualified; he was doing whatever he thought to protect us. But the reality is, he’s eighty-two. He’s never bought a rental property his entire life and never will. So let’s listen in the wrong person.
Okay, so you were buying properties ever since you were very young. Did you continue doing that, or did you end up like just following your career of going to college and all that?
We have, both. I ended up graduating in the CPA for a while at I.T. consulting but continued to buy small properties. We were buying them on our own. We didn’t have any other people providing any equity to the deals; so my brother and I every couple of years would buy another property. We had several properties, but they were all a two to four-unit size.
Okay. So when was that moment that you decided that you wanted to focus primarily on real estate, and not do anything else besides that?
Yeah, so I had started an IT company in 2013. People where like, oh my gosh you started at the wrong time, but actually, it was all right, I mean 2008 ended up going well, but I had projects all over the place. I mean it was all of the world and things like that. I didn’t sleep much, and I’d ignore my wife a lot.
And again this is 2008 when I started doing it, and I just would take any project any deadline, didn’t matter, I would make it happen. It caused a lot of problems in marriage because I was never available, and I just figured well that’s the way I grew up. I just support the family that’s my job. And so it came to a head, where my life to me was kind of like, yeah this isn’t like working, something needs to change, and we both knew she liked real estate too. We got married young, and so she was pretty much there right after the first deal, where we bought over, twenty plus, twenty-two.
So we said well if we’re going to try to do something, there’s no way we can replace my income at my own I.T. business. I can replace that with buying two to four-units every couple of years to happen. A friend of mine was syndicating in a deal. I didn’t know what syndication was at the time, I invest passively with him, and I’m like huh. This seems like a good way, maybe to kind of get involved in deals to start my larger deals. I just told my wife, Camille, if we’re going to do this, we can do it together. I was on little sleep, and three hours a night, consistently doing IT, it was kind of hard for me. I need to do something different now. Did it have to be multi-family? No. I looked at, invested more in the stock market. It didn’t do well there. I look at starting several different franchises, storage units, look at everything you possibly could think of pretty much and end up with multi-family. And that’s kind of where we’ve started. We’ve been doing that since 2013; I guess it is when we first started investing in a multi larger multi-family.
Okay, so let me see that I’m getting this right. So you’re graduating out of college, and then you’re starting to work in I.T. You’re an I.T. consultant, and you’re making, I know it’s good money. So then you work very hard, right? You barely sleep, and you keep buying multi-families, but just smaller multi-family like, duplexes and triplexes? Then there is the point where you decide that you want to go for the bigger apartment complexes, and so that’s when you choose to focus primarily on that using syndication. So I know your first big deal was sixty-four units. Am I right? That’s the number right? That’s correct. Yes. Yes, I did my homework. Good. So it was sixty-four units, and then that was syndication, right?
It was about a million-dollar raise on a three-point nine on a million-dollar purchase price.
Okay, So tell us more about that. How did you find a deal? Or did you bring the money? What was your part in the syndication?
Yeah. So there was one other guy and me that were sponsors or leads on the deal. There was nobody else involved from a general partnership sponsorship team. And we kind of both found the deal, I mean we were on a broker list, and it was listed, but it was two different thirty-two units, and one of the thirteen was listed in the other. One wasn’t even, though it’s like three hundred feet away — the same seller. So we looked at the property was in a nicer mid 80s construction, built as condos originally. So a little bit nicer for development as well. And kind of like the deal it didn’t require a lot of rehabs, it was maybe twenty-one hundred. Three thousand dollars a unit rehab, occupancy was in the low to mid-90s percentage-wise. It was just kind of a really good first deal, but it was really through broker relationships. My partner at the time had done more deals than I did, as far as larger. And really if I applied without him, I would’ve had a tough time getting that deal frankly.
Okay so let’s focus on that. So your partner he had done a lot of deals, but still he would take you onboard for a sixty-four-year deal which is very nice. So how did you create that relationship with that partner?
He didn’t do a lot. He had done two deals kind of before that, but I met him at a meetup. We kind of had similar goals. As far as what we’re trying to do and decided to kind of look at some deals together. We looked at a number of deals. Know from my perspective, I was bringing in more analytical. My background was decent analyzing deals, and then also I was raising most of the capital.
Okay. So how much time do you take from the moment that you decided you want to do real estate syndication and get into the bigger pool with the bigger properties to the moment that you ended up purchasing that property?
Yeah, unfortunately, it took us about a year. Oh wow, that’s a lot of time, and you get discouraged at that time. I still had my I.T. business. So it was, in fairness, I wasn’t able to devote as much as probably some other people that maybe work forty to fifty hours. I was working so much, but I made it work. I probably could’ve got something quicker, and I think in reality I was over-analyzing things to the point where I was nervous and scared to submit a letter of intent. I had every answer to every question, and at the end of the day, you’re never going to have ever answered every question. So I got more comfortable where I know you engage experts in certain areas in a letter of intent, is the beginning point. And if it moves forward from there, you’re going to gather more information. A deal might continue to work or it might not.
But I got more comfortable submitting a letter of intent to brokers for more deals and that’s the first, probably half a year I was nervous about doing that and didn’t submit very many. Now I don’t have a well-defined criterion. I looked at everything from say from eight units eight hundred units, and I wasn’t going to buy either of those number wise. So I don’t know if I wasted my time doing that. Frankly. It’s important to get a concrete defined criterion for what you’re looking for, and it can change over time, but when you’re talking to brokers and investors, it’s important to have that.
Yeah, I would agree, but what I think back in a day when you started doing these deals then, I think it would, it was, maybe a little bit easier to find a deal. Now for somebody to get started investing syndication and finding a deal, the first two I’m not talking about your second third, when you already have the relationship the connections, the expertise and the knowledge talking about the first deal now. I don’t think a year in today’s market is that much of a time to act and it’s not. Yeah, it’s in my first deal, right. It’s not a lot, right? It’s pretty reasonable; I think, right?
Yeah, I think we have a great coaching group and stuff like that too, but we have many people that have gotten in, six months or less into a deal. But in fairness, if they do try to do it on their own with no partner that has no track record, you go try to a broker with your experience and say well I’m just new, you’re trying to buy one hundred unit deal. It’s going to be challenging for someone to do that. If they can find someone that they partner with that they know they need to add value to each other and things like that, you’ll get quicker for sure. But you see a year it’s like you said it’s a long time. But once you get your first one, generally speaking, it does go faster to get future deals definitely, and you’ve already talked about that.
So you made your first deal five years ago six-four units, and now you’re holding forty-three hundred units, or you’re in control for three hundred units which are a lot. I don’t think I’ve ever heard about somebody that had, increased a portfolio that fast. So first of all, what I want to ask is, how did you do it so fast? I mean that’s very impressive.
And yeah, I mean there are. I think it’s, I tell people we didn’t do it alone and I believe there are a couple of key things. One, you have to have something you can offer people. So for me, I’ve analyzed twelve thousand deals, kind of just the way I’m wired I can analyze deals thoroughly, this is the way I’m built, and my background, and then I’ve raised a lot of capital. Those are two really good, kind of skill sets to have. As you see more deals, your net worth gets higher and higher, share more attractive people from signing loans and things like that. So I would tell people that you don’t have to be an expert in every area of the syndication. But for me, I was able to add value as I said, the partner I first had wasn’t as strong as I am in analyzing deals, and wasn’t as strong in raising capital. So that’s the value I brought. He had a lot higher net worth than I did at the time for sure. He had the experience with the agencies to Fannie and Freddie and things that help. Yeah, I mean easy to work with. Right. I mean if people want to work with people that they know, like, and trust, and people think that they underestimate the part about liking somebody just because somebody is smart. I’ve been I.T. for example, at a guy that he was like sixty-ninth employee at a company called S&P, which is a huge company; this was over 20 years ago, and yeah I mean, he knew a ton, but he really was brash, and people didn’t necessarily get along with well. So didn’t matter how smart he was, you still have to be comfortable with to work. Don’t be a pushover and getting deals as brokers learn that you’re for say a man or a woman of your word, and you’re going to do what you say you’re going to do, and do not change things up just for the sake of changing things. You get a reputation where you’re closer, and you get more and more deals, and that’s how we get a lot of off-market deal right now.
That’s nice. So tell me how it feels, to change your life thus drastically even though you were making good money before. If you were employed in I.T., and I know it’s a good career but still, I mean forty-three hundred units is a lot, and I could only imagine your life with your family. Everything changed so much in the past few years for you. I want to know how it feels. How does it feel to feel like you made it, look back, and you think like, oh my God I’ve made it in real estate? I became very successful as an investor. I’m in a position where most people would want to be. Yeah.
I mean I think we’ve done a decent amount. We don’t really, both my wife and I aren’t very good at celebrating if we want to have victories or anything like; that which we need to do a better job. But for me, it’s been life-changing in a lot of respect. So when I had my I.T. company, I slept three hours a night, I wasn’t working out, and I would eat maybe twelve to fifteen calories a day. I just sat separately, and you wouldn’t know it by looking at me at the time, but that’s not healthy. Now there are other aspects of my life that, I work out six days a week, I eat, five meals a day. So my health is a lot better now. I sleep more than three hours a night; I have more freedom, more time to spend with my wife and the kids. And saying, do you ever feel like I made it or not. No, probably not. You’re always striving to improve, not necessarily just financial, but to balance your life better in certain aspects. That’s the kind of ongoing type of thing where I’d tell you, you probably never balanced your scene.
One aspect of your life is going to be probably a bit short somewhere, but you just kind of put systems and processes in place, and a business process in place. You are having people help you where you can and look after your entire life, and get your brain back. We would love to get back to, orphanages, and the sex trafficking industry. So those we’ve been able to donate to charities way more than we ever had before. We get people to help you get started in orphanages, and that to me is way more important than anything else. Because I never knew how I would react as they did get more income because growing up, we didn’t have any real income, and sometimes people the more they get, the greedier they get, and that’s a sad state frankly. So I love the fact that we’ve been able to change from the time we spend with each other from flexibility, I don’t travel all the time anymore. I don’t have people working, and people working in Australia and this is I.T. Australia, India, Switzerland, all over the world. I don’t have to contend with that anymore. So I would say yeah if you look at, and say life is so much better than what it was before, but we’re always striving to make it better. Better not just for us but our kids and for people that we coach, and for less fortunate people. That’s more my focus now than I get. I like closing deals, but I’d much rather see someone close or first hundred-year deal than the close another hundred unit deal.
We’re going to talk more about that soon. So yeah I want to say that I could sympathize with what you’re saying because I felt the same when I first started making good money in life, then it was, I felt euphoric.
It was amazing, it was an amazing feeling, but after a while when you get used to it, there comes the void of feeling like your life is not complete, that there is something that is missing.
And I talked to a lot of people; you could only assume I have a podcast. I have investors and a lot of successful people, and sometimes I stay on the line with people after we’ve done a recording and they all say the same thing. That once they make it, then they figure out there is something more to it than success in a financial way. So people are looking for the impact on other people helping other people, donating to charities, volunteering to do some good things, becoming good people, and there is this stereotype.
On this successful real estate investor or developer or whatever the successful person that, all we think about is money, and we’re greedy, but it’s not true because I see it firsthand. The minute we become successful all human beings, we start thinking about what we can do for others.
It’s okay that you talk about that. I just had a conversation with my partner, exactly on that, that’s why I’m trying to get better. So I find that amazing. So first off I want to ask you regarding that subject. How is it you would like to improve your life on that aspect in the future, and what are your plans for the future as well?
As far as the financial way, I think you’re getting more people in our group that we can help and set in making sure that we still always have a strong group. People are always able to gain access to the right people to get deals and things like that. I think other aspects that are, as you start a business and you’re doing it, you get consumed, and there are a lot of things that you do that is a low value, and activities, that’s the way everyone kind of starts out. So I need to get better frankly with my time management. I’m very accessible. I get through everything I need daily, but I haven’t done a very good job with time management. We just hired a business coach two weeks ago who is pinning me downright and making me do things that I should be doing, and putting things on paper and just living, going on vacation, a lot of the time we travel, usually for events we attend and that’s okay but a little bit more of the travel, that’s not just work-related. The more money you make you initially think you do. In fairness for me, it was about the money, and when I first started, I didn’t know how he’s going to react. But like you mentioned as you start getting better with finances things are like that. Now I look at other ways to be generous frankly there are a lot of things I do right now, and I’m going all the details or people available to help on certain aspects that I didn’t know if I was going to be the person that would be generous. And it’s nice to be able to feel like hey, and I’m not looking for credit, and we donate a lot of things, and people say, oh we’re going to put your name on this. I’m like I don’t want my name on it, not because whatever I just put my name on it. I’m doing it because I want to give to the cause. I can do that and be able to change people’s lives. Friends of ours live in the Philippines, they just started an orphanage. We were their significant contributors to that last year. They have ten, at least ten kids there now, that they’re these kids’ lives are going to change forever because we’re playing a small part of that.
So the more things I can find like that to help in orphanages in like I said sex trafficking industry, the two in general, that we gravitate too. And then just giving back to the kids more.
I have a big desire, and we haven’t done anything with it. Keep talking about it. We need to do something about trying to help educate kids about entrepreneurship and doesn’t have to be real estate but trying to allow them to know there are other avenues. You don’t have to follow the typical path.
Now with that said, you shouldn’t be lazy either like a lot of the people here right now, frankly. Right, you still need to work but you can work in different ways and smarter, and I underestimated the whole thing around networking, and that’s so critical. So I think for me it’s more giving back. When people do their deal in the first deal or second deal or it might be a big deal, in helping them change your life and then spend more time with family, whether it’s a vacation or different aspects like that.
So I have a hard time shutting things off sometimes, or I’m always kind of on or thinking about work, and that’s something I just need to work on.
So are you when you’re saying you’re trying to help people to make their first deal? Are you mentoring? Do you have any mentorship program?
We do, we have a coaching program. We started eighteen months ago. Never would’ve thought we’d even be doing education. We kind of fell into some circumstances, and both my wife and I fell in love with it. We did twenty deals in our first year, which was like one hundred and eighty million dollars. It was a good first year and this year is going well too. And we have a big desire to help people and some people have different mixed messages about coaches and mentors and things like that, and that’s fine.
I understand that, but the reality is we’ve had a lot of successes, and whether you need a coach or not, you need a partner probably if you’re going to be in the business. If you’re starting, you need a partner that has been there, done it. It doesn’t have to be a coach but you need somebody to help you get through it and people that think they can listen to a podcast, read books, which is great. Don’t get me wrong that knowledge, you don’t have any credibility yet. So find somebody that has credibility, provide some value to them, and that’s how it starts so much faster, and you get bigger.
Yeah, I agree. So Mark, what best ways to connect with you for anybody that wants to get started or wants to hear more about your coaching program.
My email is Mark@thinkmulti-family.com. More than happy to the people who reach out to me and chat and help any way I can.
Alright sounds good. So I want to thank you very much for participating in the show today. I know you’re a busy man and I thank you. Keep on doing these great things that you’re doing, contributing, donating, teaching other people how to be successful. That’s very inspirational. So thank you very much.
Thank you for having me. I appreciate it and enjoyed it. Of course. Thank you have a great day. You too.
Thanks for listening to the real estate investing podcast with Don and Eden. Stay tuned for more episodes, till next time.
