Investing with Purpose
Kirby Atwell discusses real estate investing with intentionality, aligning your personal and real estate goals.
About Today’s Guest
After growing up in the south suburbs of Chicago, Kirby served 11 years on active duty in the US military. First attending the United States Military Academy at West Point, and then traveling the world as an officer in the Army. During his time in the service, he developed a strong interest in real estate entrepreneurship. Kirby began studying and reading as much as he possibly could on the topic and bought his first rental property in 2006 as a 2nd Lieutenant stationed in El Paso, TX. In 2011, Kirby left the service, returned to the suburbs of Chicago and started rehabbing properties, eventually building a portfolio of cash flowing rental properties with the goal of financial independence.
Kirby believes a business owner should build their business around the life they want, not build their life around their business. His current business, Green Vet Homes, is built around fundamental principles:
- Low overhead with no brick and mortar location and a small team
- Serves a higher mission that keeps him motivated
- Low volume with high equity and high cash flow
Kirby continuously meets people whose entire lives have been positively transformed by building a rental portfolio and becoming financially free. This is why he started Living Off Rentals.
Because he loves having the opportunity to share all that he has learned from over a decade, investing in cash flowing real estate, he shares what he has learned with others via social media groups, his website, and his course, 1st Vacation Rental Investment Blueprint.
Summary
Army veteran and real estate investor, Kirby Atwell, joins Nate and David to discuss his personal goals and how his intentional investing in real estate got him there successfully. For Kirby, investing with purpose has taken him from five years of flipping houses without building wealth to living off rentals and a life of financial freedom.
Kirby shares his story of how he got started in real estate, his years spent flipping houses, his work with the HUD-VASH program, his rapid growth in real estate investing, and how and when things changed for him. Kirby used goal setting and planning when choosing real estate properties, paying attention to how his purchases of one investment property per month for two years would impact his personal goal of financial freedom. Instead of purchasing properties and hoping to make money, Kirby set forth with the knowledge of the amount of money he would need to make each month to become a millionaire and reach his goal of financial freedom.
Kirby shares a few gems for pharmacists considering real estate investing or considering scaling their real estate investing businesses. Now, with a portfolio of short-term vacation rentals, Kirby’s properties cash flow is much higher than with long-term rentals, and he teaches others how to do the very same thing.
Mentioned on the Show
- Living Off Rentals Podcast
- VA Homeless Programs – HUD-VASH Eligibility
- Green Vet Homes
- National Real Estate Investors Association
- Traction: Get a Grip on Your Business by Gino Wickman
- Living Off Rentals
- Watch the Webinar: 3 Main Steps to Buying and Setting Up a High Cash Flowing Vacation Rental
- YFP Real Estate Investing
- Join the YFP Real Estate Investing Facebook Group
- Your Financial Pharmacist Disclaimer and Disclosures
Episode Transcript
Nate Hedrick: Hey, David, how’s it going?
David Bright: Hey, good, thanks. How are you doing, man?
Nate Hedrick: Good, man. It’s a late night. It’s been a busy day. But I’m good. I’m jazzed up talking about real estate like usual.
David Bright: Yeah because you said you were getting an offer written right before we hit record, right?
Nate Hedrick: Yeah, appreciate you being flexible on our schedule. I had to get this written up. So you know, you know how crazy the market is. If we’re ready to put in an offer, we’ve got to do it fast because there’s going to be five more tomorrow if I’m not quick on this. So late night offer-writing is a pastime of mine this past year.
David Bright: Yeah, we had one of those just recently here where we were doing all the DocuSign and everything like 10 o’clock. Same kind of thing, like it had to get in. It was just — but fortunately, we got it. So keeping project rolling, hoping to keep us busy into 2022 here.
Nate Hedrick: That’s great. Good. Yeah, and that’s a good kind of segue to our guest this week. We’re talking with Kirby. Kirby reached out to us, Kirby Atwell. He is basically the host of the Living Off Rentals podcast. He does a number of awesome enterprises. He is an investor from the Chicago area, served in the military, active duty military for a long time, went to the United States Military Academy at West Point, just a really awesome, influential guy doing some really incredible things in the real estate space. I don’t want to ruin some of the things that he gets into in this episode but just great stuff that he’s bringing to the table and really good purpose behind what he’s doing. You know, the reason that David and I talk about doing deals at 10 o’clock, 11 o’clock at night, recording this podcast late is that we actually like doing it. Like we have a purpose for doing it. And so when we talked to Kirby, I kind of have that same feel for him that he just, he likes doing these things because of the greater purpose behind it, which is — it just makes for a great person to interview.
David Bright: Yeah. I think that’s one of the things as you’re listening I would encourage you to try to pick out those points where he talks about purpose, not just in terms of how he wants his business to benefit vets but also just his purpose for his own investing and his own financial goals. And I mean, putting that all together is really cool because it’s one thing to just chase after money or chase after unit counts and things like that, but I just love how he’s got the bigger purpose as well with making sure that his business benefits veterans as well.
Nate Hedrick: Yeah, his comment in there about the unit count is a really good one. I’m glad you mentioned that because I liked how he talked about scaling and how everyone’s so excited to scale, we’re so excited for these kind of fake goals, right, where you just hear that it’s cool to have x, right, it’s cool to have $1 million, it’s cool to have 50 units. But instead of just having that factor of whatever, thinking about the goal behind what you’re deciding to do and what is driving you to get to that number and why that number — he just has really good insight there. So definitely encourage people to check that out. And again, just overall, really inspirational guy to listen to.
David Bright: Yeah, there’s one part in there toward the end of the interview where he talks about how depending on what your goal is, you may only want one rental property.
Nate Hedrick: Right.
David Bright: And I just love that because it felt so counterintuitive for a guy that’s done so much real estate investing as he has, but I just love that because I think that’s probably a great fit for a lot of people listening to this where you’re not trying to leave your pharmacy job to go be a full-time real estate investor like Kirby is.
Nate Hedrick: Yep.
David Bright: You’re trying to make this a part of your diversified financial plan. And so in that case, one property may be the perfect number. So again, there’s just a great nugget that he drops in there, so I would encourage you to stay tuned for when that comes.
Nate Hedrick: Awesome. Well, with that, we will take you over to the interview. Hope you guys enjoy.
Nate Hedrick: Hey, Kirby, welcome to the show.
Kirby Atwell: Hey, thanks for having me, guys.
Nate Hedrick: Really appreciate it. I know we’ve been working with each other. We were guests on each other’s podcast. This is nice to have you on and talk through real estate with you today. I appreciate it.
Kirby Atwell: Absolutely.
Nate Hedrick: So to get everybody started, maybe you can share briefly your story about how you got interested in real estate and what Living Off Rentals, your platform, means for everybody.
Kirby Atwell: Yeah. Yeah, I’ll try to give the condensed version. I went to West Point Military Academy, and when I graduated in 2005, I had always had sort of an entrepreneurial bug. You know, I knew I wanted to do something entrepreneurial long term. I wanted to serve in the military but then get out and do something on my own. And I know you, Nathan, said that you picked up “Rich Dad Poor Dad.” Same way. I picked up “Rich Dad Poor Dad” in — right after, I guess it was 2006 when I finally read that book. It was shortly after graduating from school. And read that book and just like you said, something clicked. And I actually just interviewed Robert Kiyosaki on my podcast for the 100th episode.
Nate Hedrick: That’s awesome.
Kirby Atwell: Yeah, and I asked him about that.
David Bright: Very nice.
Kirby Atwell: I was like, this is the No. 1 personal finance book of all time. Like there’s tens of thousands of business and finance books out there. Why is it that everyone states this is the book? And he’s like, when you figure it out, let me know because I don’t know. It’s been 25 years, and I can’t figure it out. So — but it did it for me, and it did it for the majority of my guests on my show too. But right after that, I decided this is what I’m going to do is real estate. And I bought a couple of rental properties in El Paso, Texas, where I was stationed, kind of experimented with some lower cost properties and then I was stationed in Hawaii next. And this was right after the crash, so in 2009. I was able to pick up a great rental property in Hawaii. And so I knew that when I got out of the Army, I had a five-year commitment. I wanted to do this full-time. So I ended up staying in six years and then I got out in 2011, and I no longer had W2 income. So I kind of was like, well, I want to do rentals. But it seems like flipping is my only option here. So I partnered with two friends and started flipping in Chicago, where I’m from. And so we flipped from 2011-2016. We flipped about 70 properties around the Chicagoland area. And we jumped in and did it full-time.
Nate Hedrick: Wow.
Kirby Atwell: And it started initially with very affordable properties in the south and west suburbs. And then we moved up to the north suburbs where it was a much higher price point, and we were doing more luxury, higher end properties. And about five years into it, like I said, it was 2011-2016, I looked at my balance sheet, I looked at my finances, and realized that I am not one bit better off financially speaking than I was when I started five years ago. So you know, obviously I had learned a lot, I had met some great people, I had made some connections, but from a financial standpoint, I basically lost five years of my life. And so I thought, there has to be a better way. So I totally changed directions at that point, and I think will get into some of that there. But that was an eye-opening experience for me and you know, I look back and I’m like, it was a great thing to do, but there was a lot of lessons learned.
Nate Hedrick: Yeah, wow.
David Bright: Yeah, and I think you’ve hit on something that I think a lot of people that watch house flipping on TV may not always understand. House flipping is a job, right? Like that is work. There’s no residual income off of that. You know, hopefully if it goes well, you do OK on the flip. But there’s a lot of work that can go into that without any of the residuals. So can you talk just a little bit about that transition into rentals and whether that be short-term, long-term, both, but kind of how that business model is just drastically different.
Kirby Atwell: Absolutely, yeah. Exactly like you said, it’s just so different. Like in my mind, it was kind of — I had just thought real estate investing is real estate investing, but the outcome that you’re left with is so different. And I challenge people all the time, I’m like, can you name somebody who is wealthy from flipping? And of course they’ll go to people who are like, they have an education company that teaches flipping that they got wealthy from. But I don’t know a single person that is truly wealthy from flipping. Now, people make money. I’m not saying that you don’t make money flipping. And I’ll do the occasional flip here and there. But it’s very different to do a flip because you have an opportune deal than to build a business around flipping where you have to do 4-5 flips per month to keep the lights on, to keep sending tens of thousands of dollars of marketing material to pay your staff. We had a staff of 13 people. And we had an office. And we had all these expenses, so we had to pay tens of thousands of dollars to break even every month. And then if we made something on top of that, then the owners took something home. And that is much, much different than owning a rental business. So in 2016, I switched and I had heard about this program that helps homeless vets where it’s sort of like a Section 8 program but it’s for homeless veterans where the government will give them a voucher to pay for their rent. And so it’s called HUD-VASH. And so I was really interested in this, being a veteran myself. And so I started to do the BRRRR model. And I kind of fell into it because I was like, I’ve got all this experience rehabbing. I know that the reason I got into real estate investing in the first place was financial freedom. It’s not, you know, the sexy before and after pictures of the flips that really aren’t making that much money in reality. And so I started buying these pretty affordable houses in the south suburbs of Chicago and rehabbing them, refinancing them, and then I’d rent them to homeless veterans through this voucher programs. And you know, the cash flow was great, and it was also a cause I was really excited about. And then also, I had sort of a leg up. I always talk to people about figuring out what your competitive advantage is and leveraging that. And so since I was a veteran, I managed these properties myself initially. And I had a rapport with the vets, you know? And I knew each of their names and they’re all going through something that caused homelessness. So they all have something going on in their life that caused them to become homeless. And so I think I had an advantage — obviously it’s a higher risk program, but the cash flow is very high too. What they’ll pay you as a landlord, you know, if you figure out the right area, and so it kind of compensated for that risk. And so I was able to regulate that risk by having the rapport and being more hands-on and get the higher cash flow at the same time. So it was just a great model for awhile.
David Bright: No, that’s great. I love that that has so many positives too with working with veterans. I do want to take a quick step back and if you could for our audience, can you define BRRRR? And also some of your thoughts on just calculating cash flow. Are you thinking just rent minus mortgage? Or what do you mean by that cash flow?
Kirby Atwell: Yeah, great question. So BRRRR is Buy, Renovate, Refinance, and then Repeat. I think that’s the R’s. I sometimes get those in the wrong order. But yeah, so basically you’re buying a property that’s crappy, fixing it up, putting some money into it, refinancing your money out of it, and then renting it — that was the other R that I forgot — and then repeating. So basically you have no money into the deal typically. You know, sometimes you leave a little bit of money in the deals. So I did the math, and you know, very elementary spreadsheet, and I pulled it up and I was like, OK, if I wanted to be a millionaire doing this, what do I need to do? And so I looked at the deals that were available, off-market deals, you know, a little more competitive too, not just like the run-of-the-mill MLS deal, but I realized OK, I’m finding deals where I can rehab in $40,000 of equity into these deals. And so if I do 25 deals that I rehab $40,000 of equity in and each one makes $500 of free-and-clear cash flow after I’m done, after 25 of these, I’m a millionaire and I have $12,000 of income the rest of my life from these deals. So I was like, this sounds pretty good to me. I can live on that. It was very basic, but I just kind of put my head down and started doing it. And my goal was to do one a month for two years. So that was basically 24. And that was my plan. And so I started doing that, and I did it with single-family homes up until I got to the point where I had 16 single-family houses and then I bought an 11-unit apartment. And it was a little bit after the two-year timeframe, but I was like, you know, it’s funny how when you put these goals down, all of a sudden they kind of come to fruition. You don’t know how it’s going to happen, but if you just like diligently start working toward it, things start to work themselves out. It kind of worked out kind of along those lines.
David Bright: So I love the goal that you set and how crystal clear that was and how meaningful that was too because you just talked about doing 70 flips and your balance sheet was where it was.
Kirby Atwell: Yeah.
David Bright: You do 25 rental deals, and you’ve completely transformed your financial picture to the point where you’re a millionaire and you have $12,000 a month coming in. Like that’s — to me, that’s the power of goal-setting and defining that and setting a really clear plan for what do you want out of your real estate investing work. Can you just talk us through really fast 16 single-families and then suddenly an apartment building?
Kirby Atwell: Yeah.
David Bright: It feels a little bit like a shift of gears. Can you talk us through that for a minute please?
Kirby Atwell: Yeah. And I think that’s the thing that gets a lot of people in real estate investing is the shift of gears, is the shiny objects. And I think I lost probably a year of investing because you know, I started accumulating these single-family houses and things went really well in the beginning. As you start to scale, there’s challenges that come up with scaling. And I was managing them all myself, and so it just became more and more intensive. And at one point, I was like, you know, I feel like switching to multi-family is the next step. That’s what everyone is doing, and that’s what everyone says you should do to scale up. And so for about a year, I was like searching for a multi-family. I found this one kind of early on in that process and started rehabbing this one because I had a friend in Indianapolis who had been a realtor in Chicago. And he helped me find this one that was gutted — I mean, it needed a whole gut job. And I had done a lot of rehabs. I didn’t really get how much more intense of it would be to do a 11-unit full gut job than it would be a house and do it in Indianapolis, which was 3.5 hours from where I live. So it was a big, big project. And at the same time while I was doing that project, I was looking at other multi-family properties as well. And I realized that that just isn’t what I enjoy doing. It was just a different type of investing. It’s all about raising capital. You know, it’s not the hands-on stuff that I really liked about the single-family investing. And so I decided to get away from that. Actually, I just recently sold that property and I went back to single-family. But you know, at the same time, I had moved my personal residence from the south suburbs of Chicago to the northwest Indiana area, and that program, that HUD-VASH program with the homeless vets didn’t work in northwest Indiana. They just, the rent rates are super low and there’s just not as many homeless vets in northwest Indiana, which is good, I guess. But the program just didn’t work there. So I was kind of looking for a new strategy. I think that was kind of the impetus for starting to look at multi-family. And I realized multi-family wasn’t for me, but I kind of stumbled upon vacation rentals, Airbnb-type properties. I did one in our basement where we moved to in northwest Indiana, and it just worked out incredibly well. And so that actually became my new focus. So from 2016, I was buying the veteran properties. And then in about 2018, I transitioned to these vacation rental properties.
Nate Hedrick: I love that. There’s so many great things to unpack there. And I think one thing that — and correct me if I’m wrong — the theme throughout this, though, has been that the background passion is not just how do I make money as fast as I can, it’s how do I do this that is a business that also supports this cause that I’m super passionate about, right, helping other veterans. Because you’ve also got Green Vet Homes, so another way that you help out our veterans that’s been going on throughout this whole thing. Can you tell us a little bit about that? Because I just — I think that resonates with our audience so much more than just, you know, I did these things and I made a bunch of money. Like no, we actually were able to help out a lot of people. I think that to me is amazing.
Kirby Atwell: Yeah, so in 2016, my rental company that I started is called Green Vet Homes. So I started — it’s a for-profit company, but the purpose was to always have a veteran support mission attached to it. And I think that was what was missing when I was flipping properties. It was just like, you know, you’re almost like a drug addict where you’re like, you get your deal, you rehab it, you sell it, and it’s like immediately you need that next deal. And it’s like you’re just doing deals for the deal’s sake, you know, to make, like you said, a buck. But once I transitioned into Green Vet Homes, basically the mission that I set was either I was going to rehab a property for a homeless veteran to live in or I was going to donate 10% of the profit from any other deals to a veteran-related cause.
Nate Hedrick: Cool.
Kirby Atwell: And so you know, eventually I transitioned from the HUD-VASH program to doing vacation rentals in northwest Indiana, but I was able to keep that mission because I’m still donating. And so I’ve been able to donate to a lot of causes like there’s been scholarship funds for kids of veterans who are either in need or are fallen vets. There’s been a host of different opportunities that I didn’t really know what they were going to be. I just said, ‘I’m setting aside each time I do a deal 10% into a separate account that I can use then to support these causes.’ And there’s even one that came up with vacation rentals that’s called Vetcation where you can donate a week of your vacation rental to a veteran family who is in need and so they can take a vacation. So yeah, there’s just cool stuff like that. And so it really kind of — it’s that thing that gets you out of bed in the morning because you know, eventually the money — just doing it for money’s sake, it wears off.
Nate Hedrick: Yeah, I absolutely love that. I think that’s so important. Like anything we do, the career is — whatever you’ve chosen as your career, whether that’s real estate, whether that’s pharmacy, whether that’s anything in between, there has to be a passion behind it. And I think that’s the thing that keeps you going. I think that’s awesome. I’m really glad you shared that with us.
David Bright: One of the things you mentioned about this more recent pivot to the short-term rentals is one of the things that scares me about getting into that space personally is that that’s a very — or at least can be — time-intensive model because you’ve got cleaning, you’ve got just kind of care for the person that’s staying in that place and helping to understand the surroundings and how to maximize their vacation and all of those kind of things. You’ve got WiFi passwords and like all kinds of things that come up in vacation rentals. And I know for me as someone that’s trying to do real estate investing very passively, that’s been frightening to me, in all honesty. Your podcast, “Living Off Rentals,” focuses on this as a career. That’s what you’ve done as your career and full-time. Do you have suggestions or any thoughts on for people that really do love their W2 job and are trying to find outlets of real estate investing without sacrificing that time so that they can do their W2 job and still have time with their family and other things?
Kirby Atwell: Yeah. It’s a great question. I think it goes back to there’s so many times where I’ve seen people start investing, similar to what I did — and I lost five years by doing this — and not having clarity up front as to exactly what the outcome is you want from this. So you know, I think that will take you down the wrong path. So if your outcome is to leave your job and financial freedom, you’re going to do totally different types of deals than if your outcome is to stay with your job or stay in your job and you’re just doing this more for retirement. So I think you’re right. I think it can’t — like vacation rentals can be more time-consuming. I think it also has a unique ability to be something that you can build systems around much easier because it’s — Airbnb is an online platform. Everyone who uses it is expecting online interaction and there’s so many different tools that you can work in to where it’s actually way lower lift than it was when I had the long-term rentals. But again, it’s all how you set it up. But I think being super clear on that outcome up front and if I was to say — like personally, if I wanted to stay in a W2 that I was really passionate about, I’d be focused on finding those deals that are more turnkey, as close to 1% as possible, using my self-directed IRA to accumulate as many as I can, and just letting those cash flow and accumulate in retirement protected accounts because I know I’m going to be supporting myself, you know, through my day job up until that point. But my outcome was substantially different. And so initially, I thought it was flips. Then I got into the long-term rentals. And you know, I got to my goal, but it was still — there was some challenges that came with that. And I wanted to find this new strategy that where I could own less properties that cash flowed much higher and then get to financial freedom much quicker so that I could just live off rentals. So I think it starts with that clarity around exactly what it is that you’re looking to have as an outcome.
David Bright: No, I think that that’s absolutely true. The clarity around goal-setting and just defining exactly what you want is huge. You also brought up the word “systems,” which is one of my favorite words in this as far as making things passive and making things consistent and making these predictable, which again, for pharmacists that are risk-averse and all those kind of things, like systems I think are a great way to look at that. So since you’ve managed your own properties and presumably have worked with property managers as well, can you talk about those systems and how you do that and kind of that balance between when it might make sense to manage your own properties or to hire a property manager?
Kirby Atwell: I actually work with a lot of people. I have a program where I help people get their first vacation, so how to find it, how to set it up, and how to manage it, automate the process of management going forward. And this comes up a lot, this question. Like you know, and I think most people expect me to advise them to get a property manager because the normal path is people try to manage at the beginning and then they realize the value of a property manager. And I think that can be smart in some situations, but I’m a huge advocate in the vacation rental space to manage the property yourself, at least for a time, because the going rate for property managers with vacation rentals is about 20-30%. And so once you start building a portfolio and you look at the amount of income that you can make from vacation rentals, typically it’s about three times as much as a long-term rental, and you start to calculate, especially in your high season, what 20-30% of that gross income looks like, I mean, you can hire an entire staff to run your business for the amount that you’re paying to a property manager. So I teach a process around getting these two key individuals on your team. And I love the idea of bringing people in and building your own systems that allow them to operate. So the two key people that I have are obviously a great cleaner to clean between guests and then a handyman. But it’s not like I went to a cleaning company and said, ‘I’m hiring Molly Maid Cleaners,’ and they’re going to send a different person each time to my property and they’re getting paid a very low wage and their job is to just get the property clean. That’s very different than hiring an individual on a 1099 basis, they’re not employees, and training them into a system that you created and say, “Here’s my cleaning checklist. You’re the one I’m reaching out to or you’re the one my guest relations person is reaching out to when there’s a guest turnover and you’re following the checklist,” and you know, they have a much bigger vested interest than you hiring a company that you’re kind of just a number then. And so I’ve noticed the detail is much, much better. The results are much, much better. And the cost is much lower. So you know, like I said, if somebody’s working 80-hour weeks, then you know, doing anything is going to be a big lift probably beyond working 80-hour weeks. But if you have a little bit of time to put toward it, you can start to get a little bit creative I think around maybe thinking outside the box with some of these things like management, and it can save you quite a bit of money, especially with vacation rentals.
David Bright: Oh, absolutely. When you’re talking those 20-30% figures, yeah, that adds up very quickly. One of the things that’s been on my mind about that is some of that redundancy versus consistency because you brought up hiring an individual versus hiring a company. One of the things that’s concerned me about hiring an individual in those kind of situations is what if that individual quits or they get sick or they get something where they can’t be there? How do you balance that redundancy of a company that has 50 people working there that could all go do the job versus relying on one or two people? How do you balance that, especially for us risk-averse folks?
Kirby Atwell: Yeah, that’s a really great observation, something we’ve thought about a lot. And a great example is my handyman is somebody who’s in the Army National Guard, and he’s a 20-year-old — I call him a kid because I just turned 40 yesterday.
David Bright: Happy birthday.
Kirby Atwell: Thank you. Thank you. But you know, he’s somebody who’s a really hard worker, really motivated. He’s done small construction stuff in the past. And so he’s a jack of all trades. And I pay him $15 an hour, and he can handle so much. He cuts the grass, he does snow removal, he restocks the supplies, he fixes stuff between guests. But he also is in the Army National Guard and right now, he is working in a hospital doing the extra cleanup protocol and stuff because they’re shorthanded. So he was activated. So my dad and I were restocking places today. So you know, it doesn’t always work with redundancy, but with cleaners, you know, we have multiple cleaners. So it started with us cleaning our first one, then we hired my mother-in-law because she said, “I’ve got some time.” She’s retired. And so she was cleaning, then our babysitter said, “Hey, I’m not always babysitting for you guys. I can clean too.” And so then they would introduce us to other people. So we have built in multiple backups with the cleaners because that’s something that you have to have for sure. I mean, it’s — you have a very short time window, and so I think you definitely need to think through, especially on something like that. With the handyman, we’re working on redundancy with that as well right now. Luckily, you know, this is what I do full-time, so we can step in and handle some of those things here and there. But you know, it’s not ideal, that’s for sure.
Nate Hedrick: Great tips. And obviously, Kirby, you’ve got a lot of experience in this space. You know, a lot of our listeners might be a little bit newer or maybe are just getting started or contemplating getting started, so what are some things that those individuals might be able to do now to start down that process to take them from where they are today toward working toward where you’ve gotten to at this point?
Kirby Atwell: Yeah, and I don’t want to beat a dead horse around getting clarity on exactly the outcome, but one exercise that I think is super important that if people would do before they start in anything real estate, you know — it has nothing to do with real estate — but what does your ideal life look like? You know? That’s something that a lot of people are like, well, that’s touchy-feely stuff, I just need to know the tactics of how to flip a house or do a deal. And I literally spent five years doing deals that I shouldn’t have done, if I had just done this exercise initially. So you start with what does my ideal life look like 5-10 years down the road? Then you back that out to what are my real estate goals that kind of align with this that will lead to that? And now, what’s the next step that I need to take? And what’s the transformation that I need to make right now that aligns with my real estate goals, that aligns with my ideal life? And if you will do that, it is crazy how things start to work themselves out. That’s the main first step. And that’s going to eliminate 90% of the things you shouldn’t be doing because that’s the hardest thing. You know, you’re not going to have any shortage of opportunities when you get into real estate investing. But by definition, when you pursue one deal, you are giving up a million other deals that you could have been doing. And so I can’t tell you how many people I meet at REAs that I ask them, so what are you doing in real estate? ‘Well, I’m just looking for a deal.’ And I say, ‘OK, what type of deal?’ ‘Well, anything that’s going to make me money. I need a deal.’ And I’m like, you’re never going to get a deal. Get specific, and then people know, you know, how to work with you, what the wholesalers can send you deals, it opens up doors and then, you know, if — like how to make decisions. I mean, if you don’t have an outcome in mind, how do you make a decision of even like what to do when you get out of bed in the morning? I’m always working toward a specific outcome, and so I think that’s the piece that most people miss right up front. And it’s almost like not even real estate-related, but it’s so key before you get going with this.
Nate Hedrick: That’s such great advice. And we get so many people that come to us and say, you know, we’ll ask them like, ‘What’s the thing that’s holding you back?’ And they’ll say, ‘I don’t know how to get started,’ or, ‘I don’t know where to start,’ and I’m going to throw them to that advice. Like I’m just going to hit that snippet of that from this podcast and just throw them that every time now because that’s exactly it. Like you have to step back because you’re right, there’s 1,000 opportunities out there. And you need to figure out what the right opportunity is for you so that you can hone in on that and make decisions that lead toward what that life looks like for you. I think that’s awesome advice. Again, I’m going to steal that snippet and send it out.
Kirby Atwell: Yeah, and I mean, not so that it’s not a cop-out so that I can give you something tactical as well. Also if — for pharmacists, I think this is a great tactic, especially if you’re interested in vacation rentals, which I think once you get into them, you’re never going to go back, but you’re able to get a conventional loan for a second house and a third house that’s not the same location as the second house. It’s called either a second home or a vacation home, and all you have to put down on it is 10%. So you can buy your first one with an FHA loan or a conventional loan with 3% down typically, 3-5% down. Then you’re allowed — everyone’s allowed as long as you qualify for it a second conventional loan that has almost the same rate as the first one that only requires 10% down on a vacation home. And you can use it as an investment property. It doesn’t have to be used as your personal vacation home. It’s not like it’s restricted. You just can’t count the income on that vacation home toward qualifying for it. You have to qualify for it based on your own personal income. So I think as a first step, if you own a personal residence and you’re interested in getting into investing, look at using that loan because that’s going to be the cheapest. No other business type of loan, there’s no other loan that exists in the world that you can point to like, you know, you can’t go out and find a 30-year loan for stocks or for a business or anything like that at the 2.5-3% that they’re at now. So you know, 10% down is super cheap. Use that second home loan to buy your first rental property.
Nate Hedrick: That’s a great tip.
David Bright: Like Nate said, we have several people that are just diving into getting started. And then we also have people that are trying to scale up. They’ve done one, they’ve got that vacation rental, they’ve got that long-term rental, they’re trying to figure out what’s next and how do I scale to that. Do you have any advice for people trying to go that have one or two properties and they’re trying to grow from there and finding those kind of growing pains of that early season of investing?
Kirby Atwell: Yeah. I would say No. 1, answer the question for yourself, why do you want to scale? I do talk to a lot of people who say, ‘My goal is 100 properties or 100 doors.’ And I know people, I’ve had a few people on my podcast who have achieved financial independence from one property and a few other people who have achieved that with three properties. And they did it by buying a house hack, 3-4 unit property, you know, they lived in one, rented the other three units out as vacation rental property, high cash flow, maybe rented to a roommate as well in theirs, and it offset their mortgage plus paid all their bills. So they were financially free with that one property. I also know people who have 100 doors, and their life is absolutely misery because they’ve got 100 tenants that suck and they’ve got, you know, they calculated they were going to get $100 dollars per door of cash flow, but they’ve got all these maintenance issues that keep popping up and it’s just constant headache after headache. And so it seems sexy, the 100 doors and to be big and to tell your friends that you own 100 doors, but what was your outcome? What was the goal that you were after? Because you know, I realized that I wasn’t going after all the vanity metrics that I thought I was. Really what I wanted was financial freedom. And so I think getting, again, getting clear on that up front. And then if you do want to scale, make sure your systems match the size. So initially if you want to — I recommend being willing to do all the things initially to just try them for the first time. I used to go out on Friday nights and put up Bandit signs. And my wife would drive me around. Then I hired somebody after that to put up Bandit signs. But I was willing to do it myself. And so being willing to do those things changes the way you look at them. And so do those things initially on your first couple, then you’re not always going to be able to put up Bandit signs yourself. You’re not always going to be able to manage the property yourself possibly. So you know, start to match the size of the system with the size of your business.
Nate Hedrick: Great tips. Love that. Well, Kirby, this has been awesome. I want to make sure we transition over to our final infusion questions. These are three questions we ask every guest on the show. And question one is what’s one tangible strategy, something you physically tactical, tangible strategy you do to work on the business and not work in the business.
Kirby Atwell: Yeah, I think — I don’t know if you’ve read the book “Traction?”
Nate Hedrick: No.
Kirby Atwell: By Gino Wickman. Great, great book. I worked with a nonprofit for awhile that operated on the Traction system. And it’s one thing to read the book too, like you’ll get some tidbits from it. But then once you start to implement it, that’s where the magic happens. But it’s all set up, it’s basically a giant accountability system. But it forces you to on a quarterly basis and then there’s one annual a year meeting as well really define what it is you’re going to accomplish. They call them “rocks.” So these are the big things. And it’s all based on that visualization where if you try to put the sand in first, you can’t fit the rock. So first, you define these 3-4 big rocks that you’re going to accomplish each quarter. And so you sit down every quarter and do this. And then you can fit in all the other things around it. And there’s a whole system of weekly meetings and the other things that fit in around your rocks. But you’re always checking in on your rocks, what’s the progress you made on your rocks? And then there’s weekly to-do’s as well to kind of fit in around those. But I think that’s been a game-changer for me once I figured out that system because it forces you to step back and look at the business, work on the business, at least once a quarter. And Gino Wickman who wrote it kind of said that for some reason, it’s like 90 days is that mark where when you set your goals, they start to fall off the rails, you start to lose clarity or communication with others on the team around what it is that you’re working for, so it kind of forces you to pull them back on target and re-establish those targets.
David Bright: I love that. That’s really good. What’s one resource that’s been most helpful to you in your real estate journey, whether that’s a book, a podcast, a person, author, website, whatever that would be?
Kirby Atwell: Man, I just shared it. Now what am I going to do? No. I mean, obviously “Traction” is a great one. I mentioned, you know, “Rich Dad Poor Dad.” That was the impetus for getting started, so I think that obviously changed my life. Once I discovered Airbnb, I kind of joked around about this before, I never looked back after that. I think a lot of people, they start with long-term rentals and they’ll dabble in vacation rentals. And that’s been the biggest game-changer for me is figuring out vacation rentals and Airbnb. It’s — the demand right now compared to the supply, there’s just this massive imbalance. And I’m in working-class areas, I’m buying $100,000 houses, and in the summer, I’m making $6,000-7,000 per month on a property that would rent for $1,000 a month. Now, in the winter, it’s slower. But it’s still like $1,500 compared to the $1,000. So — and there’s more costs, again. So it’s not all net. You’ve got to pay cleaners out of that, you’ve got to pay the utilities that I wouldn’t have if it was a long-term rental, but the cash flow is mind-boggling in some situations, in the ROI and cash-on-cash returns. So you know, to be honest with your question, really it’s discovering Airbnb and the power that it has on financial freedom.
Nate Hedrick: Great. And then No. 3, what’s one piece of advice that you’d give to a pharmacist that is contemplating a start in real estate investing? And I know you’ve given a lot already, but if you could boil it down to one thing to kind of tell anybody about to have that start, what would you tell them?
Kirby Atwell: It’s clarity. I mean, I know it’s a broken record, but I think it’s so important. And I think people have to hear it seven times I’ve heard to really soak in. So yeah. So I think if somebody’s just getting started, that’s really the place to start is clarity around what you want as a result. And once you have that, it’s off to the races. I mean, I think you can’t become a pharmacist without having some motivation and without having some work ethic. So that’s not the issue. I mean, I heard someone say if lack of information was the issue, everyone would be billionaires with six-pack abs right now because you can just Google “how to become a billionaire,” “how to become a six-pack ab” — or “how to get six-pack abs” and it’s right there. So it’s not lack of information. I think it’s lack of clarity. What’s the next step? So start with that.
Nate Hedrick: Love it. Absolutely.
David Bright: Yeah, that’s so good. And if there is a topic that’s worth coming back to repeatedly, I think that’s such a good one of clarity in your goals, clarity in your direction, clarity in your business, clarity in your investing. That’s just so helpful. Love what you’re talking about, and you’ve got me definitely more interested in short-term rentals than I was before. I’ve been scared, and you’re making this feel more achievable. So for those that are interested in learning more about you, about what you teach and how you coach people through that, where can people find you?
Kirby Atwell: Yeah, so I obviously have the podcast, Living Off Rentals. There’s also a website, so if you go to LivingOffRentals.com/webinar, I actually created a webinar where I share my process for how I do vacation rentals, how I — sort of a three-step process around finding them, buying them, and setting them up for long-term success. So I go over it there, so you can check that out and hopefully that resonates.
Nate Hedrick: Awesome, Kirby. Really appreciate you coming on the show and just sharing anything that you have with our audience. You’ve got a ton of experience, and I think it just, it really comes forward when you get to look back on what you’ve done and then can share that moving forward. So again, really appreciate your time.
Kirby Atwell: Absolutely. It was great being here. Thanks.
David Bright: Thanks so much.
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