Kevin Dean: How he Built a Real Estate Empire in his 20's

On today's episode we get the privilege of learning about Kevin Dean's incredible journey from being a fresh college grad to managing a thriving real estate empire in less than a decade. Discover how Kevin balanced building relationships with brokers and investors while aggressively sourcing deals to grow his portfolio. Join us as we explore the strategies that helped him focus on quality over quantity and learn how to leverage these insights in your own investing journey. Welcome, Kevin, to The Gould Mine...

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Transcript

•  What's up gold miners. Today we welcome Kevin Dean to the show. Kevin is the management partner at Rockbridge Investment Group at 23 multif Family Properties and over 3,100 doors oh and did I mention Kevin's only 29 years old. Kevin started his real estate investing Journey fresh out of college while also working a 9 to-5 at the same time and early on. In the episode. We talk about how he was able to get started and grow a portfolio so quickly at such a young age. Later on in the episode we talk about some of the secrets to his success both as an asset manager and as a capital raiser Kevin really goes deep here and talks about some of the unscalable strategies that he uses to scale. His Real Estate Investment Group and finally we end the episode actually by going back in time and talking about his first partnership and some of the things that Kevin would recommend for anyone who is looking for either a partner or a mentor to start their investing. Journey with he really spends some time going over some of the questions and some of the things that you should be thinking about before agree to partner with anyone as a real estate. Investor. Kevin is such a relatable guy and Incredibly humble especially for the amount of success that he has managed to have at such a young age and I can't wait for all of you to really dig in and listen to some of these nuggets that he has to share so without further Ado everyone. Let's welcome to the show Kevin D Kevin welcome to the gold mine excited to be here thanks for having me. Danny yeah man this is great and and uh we're just chatting about golf a little bit before we uh before we started. Maybe we'll get there towards the end because I'm sure some of our listeners enjoy a good round of golf. But before you got into real estate. You were working a full 9 to5 and there's probably some listeners back at home who were kind of figuring out trying to figure out like how do I make that transition and so how did you initially balance the two working 9-5 also uh full-time or or or investing probably full-time hours into your investing career and then how did you break free of that yeah. It's a good conversation. I think a lot of people um either wait too long or don't wait long enough and then you end up causing unforeseen issues with your business. So I think it's definitely like something you want to be really strategic about um. But I don't think enough people give credit to people who are working the 9et to-5 that also you know have the side also going um. I think that you know when you have a W2 paycheck as long as you're not especi you know as long as it's reasonable and and manageable um. It can keep you from. Forcing deals right where if you lead your job and then you feel like you need to get deals done because you no longer have the steady paycheck can force you to make bad decisions um so yeah with that being. Said I I started Rockridge back in 2018 and I I had graduated college 2017. So I was about a year in quickly realized um I was on the rowing side of the table and I wanted to get on to the ownership side of the business uh but you know had to build up the savings and build the business out. Really l a ton before I made that chel so what I did was you know I was working a pretty intense job. It was kind of like a capital markets bond trading type job so basically from like 8 till 5:30. You know it was just work um none of the side hustle Rockbridge type stuff so basically you know before I would be on the phone sending emails text messages that sort of thing and then on myute home. I had a long commute. I'd call Brokers call potential investors. Potential. Partners um listen to podcast that sort of thing and it was really just about like making the most of being young you know not having kids yet not being married yet um and just grinding for a while until you know it made sense to make the jump. So. It's definitely a balancing act. But I think um depending on the stage of life. You're in you know there's different ways to go about it. I guess is what I would say yeah so you're super young then how how old are you today. See I'm 29 so wow that's incredible. I didn't even so what's funny is that you don't. I mean you you look young but and you have a youthful energy but like you talk like someone who's been doing this for like a very very long time and so that I didn't even I thought you were kind of like in your like mid to late 30s that's interesting wow so that that really begs the question for me because you know there's a lot of investors who kind of get started early and the I'm sure that you ran up against the age conversation a lot when you when you were starting right people not taking you seriously people doubting your ability to close uh you know sellers doubting your ability to close Brokers doubting your ability to like bring money to the table. So how did you go about kind of maneuvering or getting around those hurdles right like the the spe you know specifically when you were like fresh out. Like those first couple years. I'm sure after you built the track record. The track record spoke for itself but when you were first starting there was definitely some resistance I'm imagining there was probably less than you think to be honest with you. I think um a lot of times. People try to use their age either as like a crutch or like a benefit um and I don't think it's as important as people think um. So I think there's a lot of young guys out there who like want to Tout. The hey I'm young and look at me um or hey. I'm young you know people won't take me seriously and I think that for me just learn him as much as I possibly could as quickly as possible and then also just being very honest about what I do and don't know and the track record. I do have don't have um. I was aiming to establish rapport with investors and Brokers and that kind of thing so there wasn't any like fake it till you make it mentality. It was more just like hey. Here's who I am you know here's what I know here's what I don't know and then just doing what you say you're going to do but also not over promising right. So you know I had many conversations with sellers that would start off really well and you know they're were on the phone. So they can't see how young I am um and it's easier then once we start digging into hey. What's your track record what's your background. That's when the tough questions come up and I never tried to act like I was somebody who I wasn't um so you know getting started. I relied on Partners at because I really didn't have the balance sheet. The track record the investor Network and and I was very clear about that you know with Brokers and sellers and investors and whoever I was talking to and then obviously over time. It mored into being able to take all that stuff in house and really um being able to do more. But when I was first getting started. I think a lot of the people who were older in the business um saw somebody younger and they actually wanted to help me out more than they would have otherwise so that was uh that was a big thing and then the other thing is with the younger. Brokers and and people you know lenders whoever um who are around the same age. As me they saw the opportunity to kind of grow together where it's like hey you know we're we're for this for a long time. God willing we'll be in business together. So that also was helpful um. So I really didn't see it as a negative at all yeah and and I'm sure and you're right. There's a lot of people who are kind of like the vendors. The ancillary Services everything there's a there's a lot of people that that see that that youthful energy and they won't allat on to it. Because they're like dude. I could I could grow with this person for decades if they're smart they kind of understand that so that makes perfect sense to me.
•  The other thing too is like it sounds like you had a really good mindset going into your you know investing journey and you're right. Some people look at some people will look at whatever their skill set is situation is and they'll say is the reason why I'm going to succeed or. This is the reason why I'm going to fail and you get to decide right. That's kind of what I heard is. You you either make it a crutch or you make it a benefit to you. You obviously had a lot of time on your hands because you were younger and everything and you alluded to that earlier. But I'm curious what do you think some of the benefits are of getting into real estate investing so young right like what are some of the other benefits that these listeners back at home can listen to and say like okay well that you know that check that box check that box check that box outside of the time aspect yeah. I think a lot of things I mean I definitely see a lot of people who know a lot more than I do and have a lot more experience maybe from coming from like a commercial real estate background and then they want to Branch off and start their own business. You know later in life and I think the upside there is you know a ton. The downside is you feel like you need to squeeze a lot into a small time frame and it's almost like your time. Horizon is maybe 10 years or 15 years. So the way you structure your business plan for your. You know real estate assets or your acquisition strategy or whatever it may be you know it. It might not be what's best for your business but it fits your specific timeline right. So I think the benefit of getting started earlier is you have the ability to um stay flexible with those timelines perfect. Example would be hey you know I want to acquire $150 million in real estate and you know I want to do that in the next like five to s years. So. Then I can then execute on the business plan sell and then retire when 70 years old. Yep you know if you're younger um that five to seven years can be 10 to 20 years and you don't necessarily need to do deals just for the sake of getting deals. Done. You can really afford to be a lot more choosy about things. So I think one of the few that's one of the massive benefits of getting started younger as long as you don't feel like you have anything to prove which I think you know that should be an issue too. But you don't feel like you have anything approve and you need to just go out and be the the biggest and the best um you know you have a lot of your time on your to make good decisions. So that's a huge B and then obviously the time value of money. The sooner you get started the better so you don't think having a chip on your shoulder is a benefit. Then I think it can be a benefit for inspiring you to work really hard. But I don't think having a chip on your shoulder is good for making good financial decisions. I think it can help you exercise your risk muscle better than you would have otherwise if there is some sort of time crunch or chip on your shoulder or you have something to prove. But I know for me personally when I've been in the situation where it's like I need to win this deal because I want to win this deal um that's when you start you know maybe pencil whipping the deal a little bit more and stretching the other R writing here um you know counting on best case scenarios. So I think it can be good for for suck certain things and and but can also introduce risk uh you know on on the other side yeah. It's interesting and you even said this earlier right like you had a 9 to5 and so you didn't do deals just for the sake of doing deals where sometimes people make this to full-time career and then all of a sudden. They need to get the deal done or they're brim right and so that makes perfect sense to me. I also have heard other people say like hey you all you got to act with a sense of urgency. You got to act with a sense of urgency so how do you balance that right like how do you act with a sense of urgency yet still stay patient enough to not do deals just for the sake of doing deals yeah. So the way we look at. It is like we want to be extremely aggressive on bringing deals into the funnel and then once they're in the funnel that's where we get really concerned so like the the default is to be as aggressive as possible and like sourcing those opportunities underwriting as many deals as possible. You know making the phone call that you don't feel like making and then once you get it into the pipeline. Then that's when you go really deep and you are because you have so many deals you're looking at that you can afford to be more cheesy. So if you're only underwriting five deals a month right you're probably going to get a little bit more aggressive whereas if you have this massive deal funnel where you're just looking at so many deals and it's more of like an abundance mentality where you're like hey. If this one doesn't work. I have another eight that I need to underwrite by Friday anyways. I'm sure one of them will look better than this um. That's how I would say we bow that that makes a lot of sense to me so and by the way like it's just Mass right so like the more opportunities you have the more P the more full your pipeline is statistically speaking. The better deals you're going to do right completely. Age. You have more to choose from so that makes perfect sense to me and I like that frame of mind right. It's like hey act act urgent in the Gathering right but then be super diligent on the analysis and the underwriting that makes sense to me. How are you managing the Acquisitions and the the deal sourcing right so how do you structure your day-to-day managing all of that managing the systems. I'm sure that you've got team other team members and stuff that are that kind of like working those systems and everything but then also looking after asset you know looking after the assets managing the assets that sort of thing right how are you balancing filling the funnel but then also taking care of what you got yeah. That's a great question and probably not like a one-word answer. But I would say you know we we only try to grow as fast as we can grow to still while still executing on the business plans for the deals we've ever bought already bought. So like the first priority for our business is always take taking care of what we already have right in the beginning. It was way more about we need to get deals in contract. We need to close deals we need to underwrite. Deals. We're still under we underwrote 420 deals. Last year. We bought one so we're still underwriting and looking at a ton of deals um yeah.
•  But the first p priority of course is managing. What you already have not only like the assets but also the relationships you have with your investors because for us like it takes so much time to find a great deal. It takes so much time to find a great investor who trusts you and will actually put their harder money into your investment opportunity so once we have that like we want to treat like gold right um and um that you know takes a lot of time from like a you know systems and processes standpoint of like actually managing the assets but then also so on the investor side you know calling investors just randomly to check in shooting them a text when you're on site with a property and letting them know hey. This is going really well um so that does definitely take time and I would say for us you know we can get as like into of the we as you want on it. We we definitely lean into the tech side of the business because we have a pretty small team and our goal is to basically manage our assets super efficiently with as little amount of people as possible and again it goes back to the process of hey you know if you've got if you have to do the next deal. You're going to end up doing not as great deals right and I think if you grow your team too fast um and your overhead gets really high. You've got you know maybe a mortgage on a office building. You bought or whatever it may be um and then payroll. Etc. You know yes you have the machine rolling to where you're probably going to find more deals. If you have a better a bigger team right. But it's also about like matching okay. We want to grow as we need to grow but we don't want to grow our team so fast that we then are forced to do deals to pay for our overhead right. So like with that being said we've been very strategic about okay. What tech are we using across the various you know divisions of our company to make sure we're able to manage things effectively. So let's talk about the structure there then right at at Rockbridge and you've got three thou 3100 doors correct is that more or less okay so we got 3100 doors and you've got a a small team. You said so like what is the what does the infrastructure look like right now at Rockridge. So one of the benefits is the first dozen deals. We did we actually did through a joint venture partnership where nice you know we we were getting started so we weren't able to raise Capital. We weren't able to size on sign on debt. So we found a great partner who we were able to work with who was able to bring some stuff to the table that we weren't able to bring and we really focus more on like the Acquisitions and the finance side of the business um and over time you know we've been able to add value on all those things with them. But what that enabled us to do was keep the team really light to just three people essentially uh for the first you know 12 deals. We did um and that was that's a little bit. That's about half of our portfolio um. So since then you know we've started doing our own deals. We we're still open to joint venture Partnerships if it makes sense um you know on certain deals but for the most part you know. We're we're leading everything on the deal um and with that being said for our company. We've got uh three par right um. One who oversees all sort of Finance CFO. He's he's our CFO um functions but he also helps out with Asset Management because that kind of connects to the the you know Finance side of the business um one partner who oversees essentially Acquisitions in asset management and then I kind of span across all the different divisions from like gapper raising Asset Management Acquisitions CFO where I'm not as in the Weeds on each individual thing per se um but you know still have my hand in a little bit of that and eventually that will probably change but where we're at right now um in in kind of growth mode. You know the three partners are still in the weed and everything um and then we also have a sort of bookkeeper controller um who helps a lot with the CFO type stuff investor distribution. Um you know making sure invoice is paid that kind of thing and then we have a another woman who helps out with um sort of asset management. Marketing. U operations type tasks so all in all you know not including our on-site teams. Uh you know that the actual corporate structure is just five people nice yeah and that's and that's big enough to manage 3100 do so what I'm hearing then is like. It really doesn't take a massive team to to manage that you know that much real estate as long as you've got your system set up properly and you know. I I think it's I think it smart uh especially with the way things are right now with the economy to keep things as light as possible right because you you never know when things are going to shift or whatever and so it sounds like you guys were were well equipped then to kind of handle. The the storm how did you how have you been dealing with all of this stuff. You know that like the last year and a half two years turbulence in the market you said last year. You underwrote 420 deals you picked up one obviously. That's a testament right to to how difficult it was to just make deals happen or has been to make deals happen in like the last couple of years. So how have you weathered that storm and and do you see that the the structure of your team is kind of like uh like Nal enough to kind of avoid the the issues that a lot of other you know funds and whatnot kind of had to go through over the last couple of years yeah yes so we acquired one deal last year um luckily this year so far. We've had we've we've acquired. Four deals been great so a lot of the deals go under Road last year that didn't work out. You know are actually coming to fruition this year which is amazing um. But it was definitely a lot of spinning your wheels and not getting you know new opportunities on your contract um the way we've been thinking about it. Over the last two years is you kind of have to segment your mind and say okay we've got our existing portfolio like what needs attention what could potentially be an issue and if there are any issues like what are we doing there and then on the flip side recognizing that there are tons of opportunities right.
•  Now there's a lot of people who are afraid to take action and actually get deals under contract so like we want to make sure we take advantage of right so you know we've. We're we're not aing to the issues that other people have had with. Rising interest rates. We've had a few deals that we've put floating rate debt on where we've had to buy new interest rate caps. You know size new refinances every single month and just kind of plan ahead um you know so far. We're doing okay. We haven't had to do any Capital calls at all we haven't uh had to sell any assets we haven't had any like you know refinances that that were unplanned that that were forced so for now you know we're managing everything just fine um. There are certain deals that are not performing as well as we thought they were because the interest payment has gone up significantly on that deal and we've hit our interest rate cap apps which we didn't think we would um so you know we're not immune to any of the challenges that people have had. I think we've definitely fared better than a lot of people. We've heard um you know but in hindsight. Obviously. We've learned a ton about floating rate debt versus fix rate debt how you're using interest rate caps you know how much operating reserves you have that sort of thing um. But I guess like the high Lev answer to your question is you know looking at it segmenting it in your mind dealing with your existing issues but not letting that cause fear and cause you to get stuck and and and actually still being aggressive on the acquisition side because we have found the four deals we've closed on this year have been amazing opportunities and we would not have been able to acquire any of these for the prices that we're buying in at uh just two years ago so yeah and that you said something super interesting there that I want to spend some time on so. Some of the deals that you found then or that. Some of the deals that you've closed on this year were actually deals that you found last year sounds like you may have even well kind of walk me through that like because I know that a lot of people are doing. This right now are kind of going through this where sellers are coming back to them. They may maybe they made an offer like six months ago 12 months ago or they were talking to the broker 6 months ago 12 months ago. Now the broker's kind of coming back and being like hey are you guys. Still interested is that more or less what happened to you on some of these deals yeah um I think for two of them that's the case the other two. It was actually more you know um deals that were either being shopped off. Market or they were marketed and they either fell out of contract or the asking price was way too high. So a lot of people just looked the deal and said we're not going to pay that and they didn't even underwrite it. We said hey asking price is you know 33 million um. We think it's worth 23 million. Let's just submit a 23 and see what happens right um. So we've had a few opportunities like that where you know. Brokers are doing the absolute best. They can because it's really tough for them and and sometimes sellers want a certain price and they need to kind of go out and see if they can get it um. But at the end of the day you know their mission is to execute and sell the deal you know they're not going to get paid if they don't so. Sometimes these deals do work out where the asking price is unreasonably high and if you kind of just stay in the game long enough. It ends up coming your way even if you're at 70% of asking price yeah. So it's it's definitely important to be in the game right now and I think that a lot of people are scared to even enter the market. So it's it's good to hear that you feel the same way right like we we got to stay aggressive in our deal sourcing right now especially over the next 12 18 months. While so many people sit on the sidelines yet so many sellers are in some form of distress. I mean it's it's really I mean. It's not rocket science right when everyone else goes left you go right seems to work pretty well for the people that do that um in in real estate investing so Kev why do you think that is man like why do you think so many people like they know what the recipe for success is. It's been. It's history right. It repeats itself over and over and over again. It's like look at the financial crisis look at what happened in 0809 when everyone was hurting the big institutions. The guys that made billions of dollars came in bought all that real estate and now we're kind of going through the same thing all over again. But people just don't get it. They're they're like afraid to like. Why is that I I mean. I think it's definitely easier said than done and numerous times. We've deals and we say oh gosh where did we mess up right because when you're the one who pays the most you know you you inherently think that you made it mistake right. You know everybody likes to sell well. We got this relationship and like sometimes that's the case like we've got a deal right now um that it's purely a relationship deal. We're buying it significantly lower than what other offers have come in at. But that's pretty rare yeah. Most of the time you just pay more than everybody else right um right. So I think that when you're in a uh a time like right now. It's especially when you're when you are working at another company. So you think about like all these. Acquisitions guys who work at this huge company. They're not getting like a giant promote probably if they buy this deal but if they recommend buying a deal and it goes bad and everybody else is not buying deals. Then they're going to get fired right. So it's like the upside of getting aggressive and sticking your neck out. A little bit doesn't really compare to the downside if you stick your neck out and you're raw right and I think that's how a lot of people think about it. So they wait for like Blackstone to enter the market again to get the all clear sign and they say all right blackstone's back in they're very smart if they're going in on deals that we should get aggressive again well then all of a sudden you're competing against everybody again and then you know you got hard money day one um you're in a bidding war. So I definitely think it's easier said than done to get you know. It's like that saying from Warren Buffett be greedy when others are fearful and fearful when others are greedy. It's a lot easier it makes sense but when you're in it and you're afraid of being wrong and especially when you're dealing with other people's money um. I totally understand why people are they default to just seeing what everybody else is going to do and waiting until they get the all clear sign before they pull the trigger yeah. There's definitely I mean I see both sides of it. It's just there's been so many times in history where this has happened to the point where it like it feels it. It feels like almost like common sense right uh to to to go and do the thing when everyone else is shying away from it but again. I think that's what makes guys like you guys like myself. More dangerous is because we have the ability to see that and While others see it we act on it and that's the difference. I think the other part of that too is uh whether or not you have the capital to actually do it because if you're dealing with a portfolio that's not doing well and then you're going to go ask. The same investors to invest with you on this new opportunity when they don't have the all clear sign yet. It's a lot more difficult to have confidence and put that deal in a contract. So I think like it also ties into having great investor relationships and making sure that you're keeping your investors updated you understand like where they're at in terms of their appetite to invest because if if you believe in an investment thesis and you believe it makes sense to buy right now and but you're not really sure if you can fund it. You're not going to do it right right. So I think we're far it 100% 100%. And that begs the question right so how did you go about cultivating those relationships because now you've got a track record right. So you I'm sure that you have some repeat. Investors guys that come back to the table. H how did you initially create those relationships and then what have you done to obviously outside of like you know. Obviously you guys have been doing a good job for them. But what what what strategies have you used to kind of like keep them engaged and keep them coming back and reinvesting in your in your future deals yeah. The number one thing for getting repeat investor was is just doing what you're say you're going to do so delivering k1s. On time. You know is like one of the most underrated things ever because you investors don't think about it until it's late and they have to to lay their taxes um so that's like an easy one like making sure if you say we're going to sign out a communication. On the 25th of the month. Every single month you do it. By the 25th of month. There's no excuses for sending it on the 26th right um and then same the actual returns like you say you're going to pay 7% by year two and you're at 5.2%. You know as long. I really do believe as long as you're communicating and there's a reason for it. It's okay but ideally you can meet expector. Uh you know invest your expectations based on what you originally promised and and projected in your underwriting um. So I think that's a big thing and then in terms of like actually building. Those investor relationships start with for us. It's we've not done it in a very scalable way. I think a lot of groups and I'm not against this at all are big on like sending out automated text messages and email marketing and mailing Yeahs. I'm not opposed to that at all. You know I don't know much about that we have not gone about it that way um for us what we've done is. It's been not as scalable. It's just been literally like one-on-one meetings coffee uh lunch dinner stuff like that going.
•  Eng golfing with investors um our largest inv. I actually met at the gym and he uh. He has a a bourbon night like once every two weeks at his house and I just started going to that you know 10 years ago when I was in like college and um basically you know over time turns out. He wants to invest in real estate. We're now friends. Now. He invests in every single one of our deals. He's he's by far a largest investor. He's just somebody and I met at the gym. You know doing bicep curls. So that's so cool man and and I think that kind of speaks to the idea that like you never really know how when and where you're going to meet your your next investor and so kind of having your antenna up all the time and and it really makes a big difference obviously like it takes two seconds for me to kind of gather Kevin that you're like a super personable dude right. So I'm sure that you have no problem making friends uh even in the wild right when like you don't even know who they are and doing curls. But it's but it's but it's important right. It's like important to be able to like have those conversations and and I would imagine that you know that kind of reminds me of a quote. Uh I don't know if you follow Gary ve at all I I used to watch a lot of his stuff. I don't really do anymore but just to say this thing is like hey like I want to scale the unscalable right like scale. The unscalable kind of this idea where um you know like unscalable things help you scale very nicely you know and and so I think it's important right like okay yeah. You do the automated and and the and you do all the you kind of check all those like marketing boxes. But at the end of the day marketing doesn't really build relationships right. So I think that's something that I'm just taken away right now is like hey like you can have all the great you have best Marketing in the world. But if you're not putting in the effort to really get to know your people you're probably not going to have as much success A or B the success that you have is going to be limited. Cuz I would imagine your average check size is probably a lot higher than it would be if you just did the drip campaigns. Yes yeah. I mean we're I from people out he who are kind of in the industry. For this space you know average Investments usually between 100 and 200 and we're you know more than double that so we get a lot of people who are writing you know relatively large of checks um for sure and I love the point on the the Gary V point. I am definitely a fan of him and I think yeah somebody who he reminds me too of with that mentality is Andy Trella. He talks about you know he's got a whole in-house team where if they have issues like it's not being outsourced to other country. You know they're writing handwritten notes and they're calling you directly um and that just creates that loyalty with your clientele that you can't replace with an email marketing campaign um. So like some very practical things we do um after we close a deal. You know people get enough backpacks and pens and booklets to where they just trash so what we've come to is like one. We want to do event uh investor events on site at the property. Six months after we close so they can see the progress that we've made and also get to meet. Other investors see us that kind of thing but two other easy things we do after we close a deal um we write. Handwritten thank you notes to our investors to let them know we're thankful for your hard-earned dollar being invested in our deal. You know we're going to do everything. We possibly can to execute and protect your chapel and grow it and then we block out a day after uh closing usually a week or two after to just call every single investor individually and thank them so. It's such a small thing that typically leads to more referrals um more repeat investors and you know even when a deal goes goes not as according to plan you know deal goes sideways um. You're able to pick up the phone and call the investor and give them a heads up before you just put into a marketing communication you know in your investor portal because you actually have a relationship and you know them um and it's investing so everything's not going to go perfect. Right and our investors know that um yeah. These are just some of the Practical things we do that are definitely not scalable yeah and it I'm I'm so glad to hear that my intuition uh was at least somewhat. Right like I I have to imagine had to have imagin that like your check sizes were a lot higher just hearing what you said and and so um. I guess that begs a question though right because obviously you're a big thinker. You're you're thinking long term right so like in the I don't know if you've given any thought right like how how does that translate at a at a larger scale. Like are are we um look at that and just lights just keep going out on me dude. There it goes again uh I'm just gonna keep talking it might eventually. Come back on who knows um but future plans right so how how does Rockbridge scale. This in the future are because are you bringing on more people.
•  Associates. Then they man the personal relationships are you get like how how would you obviously you don't like I'm not going to hold you to this. But I'm wondering. If you've given any thought yeah. We just had a partner uh meeting last week actually where of course we played a buch of golf um. But we're discussing this exact topic and kind of the thought process for us is we definitely want to do we. We want to continue to grow right um but we don't need to be the biggest company in the world so for us. If we can do two to four Great Deals a year one a quarter which is basically what we've averaged um you know that's an amazing business and we'd rather do like less deals but to have them be very high quality right. So with that being said we don't need to build out a 50 man you know team um. It doesn't need to be more than you know maybe a dozen people over time to manage this portfolio and then in terms of like making sure all right how are we growing ex out. The business plans you know maintaining the assets well all of that but also keeping the Personal Touch. I think that there's certain things in the business that give us competitive Advantage because we are the principles and we're actually the ones you know. We're the decision makers so like for example when we're talking to a broker one deal we're buying right. Now we um. I actually met the owner at a pizza restaurant and we struck up a conversation end up going to see his property. Then we negotiate the the deal right there in a vacant unit right and because I'm the decision maker on the deal I can have build that relationship to actually speak from a positional Authority rather than if it was you know a new analyst who maybe doesn't have all the answers and he's gonna have to run it through investment nothing against that right. But you know there is a competitive Advantage if you're able to do that right so things like that on the acquisition side. We want to make sure that like us as the partners are still heavily involved in that doesn't mean we need to underwrite a single deal but we want to make sure we have our finger on the pulse every deal to where if we're you know in in the vacant unit with the owner we can actually speak to the deal um and then same thing on the investor side right so tasks such as sending out investor distributions putting together like a marketing piece um doing the monthly financial reporting that we send out you know things like that. We don't necessarily be need to be the ones doing it um but you know when it comes to communicating that one-on-one to our investors we want to make sure that we're still involved so I think it's like Outsourcing not Outsourcing but delegating the right things and then freeing yourself up to do the things that are maybe not as scalable but are a way you know higher dollar per hour type of task that's kind of how we look at it yeah that makes I mean obviously that makes sense right like you're you're going to you're going to delegate to things that are lower dollar producing and or Le require less skill less aptitude less whatever shifting gears here a little bit Kevin because I'm actually quite curious and we we totally skipped over this part and that's just on me cuz. I was like so excited getting meat and potatoes. But like you were what like 22 right. When you started all right and and you found 23. I would imagine kind of like in that ag ag you started you found a partner to JV with what did that how did that come about right because I'm sure that there's some young listeners right now that want to find a mentor that want to find a partner want to find someone to kind of Coach them through through the first couple of deals. How did you go about doing that and then what did that first deal look like yeah great question. So the way I met that partner was I actually just cold called him off of a podcast so he left his phone number um. At the end of the podcast and nice. He was one of the maybe 20th or 30th person that I called you know from a podcast or research and try to find on LinkedIn and we just hit it off. We connected on a lot of different levels. We share similar faith. We um you have a lot of the same goals same backgrounds so we connected really well um and just said hey yeah. Let's start looking at deals together um so that's how it happened s of a podcast um and then the first deal we did together was actually you know. I had a few Target markets that I was interested in that I thought made sense from an investment standpoint and I kind of pitched those to that group um and then one of the markets that we had picked. I ended up finding a deal maybe six months after you know starting to work together um. It was 166 unit apartment complex in lexs in Kentucky and you know the deal pencell really well um. I was able to uh present that to the to this partner uh get it under Loi and then we closed on that deal together and then we ended up building a portfolio in that town together. So that was the first deal kind of how it came about that's awesome and obviously you hit it up. You. You share the same faith and everything but like I I feel like there's also the risk of getting into a partnership where things look Rosy and awesome at the beginning and then it turns out to be not so much like not so great so what advice would you give it to someone. That's looking for a mentor like what are some of the I would say green flags and maybe some things to look out for in terms of like red flags. Yeah I feel like we could do a full podcast. On this um. I mean I'll just spout out some things that come to mind I think one like you want to take your time like getting to know that person ideally get to know you know if they're married their spouse um and just understanding like who they are as a person and then also understanding what do they want over the next five years. What do they want over the next 30 Years right and you don't have to know exactly what you want to do for the next 30 years. But it's good to just ask those questions up front and make sure before you form something together like you are going to you're putting something together that ideally will last for a very long time. You know everything isn't going to last forever but um you know if you're going into it with the thought process of hey. We'll do like two or two to four deals together and then we'll form our own things like you're going to be um you're going to be in trouble just from the start um. I think another big thing is like making sure that you have an alignment of interest in in the deals that you're putting together the partnership that you're structuring so like for me. One of the most important things is is you know you ever body wants to see people putting their own money into these deals. You know siding on the debt is of course helpful but for me like the number one way to align interest if you're putting together like a real estate syndication deal. For example is do you actually have friends and family who are investing in the deal because if you're going out and you're raising money from like your father-in-law and then you're going to see him at Thanksgiving um you're going to be that much more inclined to make sure you're doing. Everything you possibly can to make sure that deal is successful right so like I think that is something that is very underrated like. I'm we've done you know institutional. Equity deals. We've actually just done one so I shouldn't say deals and it was great um but like if you're going down the syndication route and you want to. I think a lot of people will say all right. I I want to focus on. Acquisitions and asset management or I want to focus on Capital rais. My personal opinion is if you're forming a partnership with everybody with with somebody you both should be raising. Capital doesn't mean you need to be raising the most amount of capital but that aligns interest better in my opinion.
•  No I I love that man and and that actually makes a lot of sense you know obviously with the the caveat of like as long as they're not a total piece of you know and I can say that because it's my podcast you can but as long as they're not yeah as long as they're not a total piece of and and like actively looking to screw over their family members. Their friends. They're whatever right people they have personal relationships with you're right because like yeah putting your own skin in the game. There's something to be said for having your money in the game. But like I also hear what you're saying and that's actually way more painful right like losing a friend's money for me would be infinitely more painful than losing my own absolutely and I think that's true. I think that's true for like most entrepreneurs to be honest. Yes. You you're not gonna lose I mean for me personally. I will lose sleep over like an investment that I made with my own money that I have nobody else involved with but if I'm taking a single dollar from anybody you know for me. That's that's what causes a lack of sleep as if that deal goes bad. So I completely agree with and the the kind of the the framework that you just provided right now is pretty similar to the way that like I I hire new employees and and hire you know I used to run a real estate team and so we you know had a kind of a three-part interview and so the first part of the interview was like just make sure they're not crazy right just like make sure that they like have a PSE can fog air and and that they're not like bad insanee. The second part was the three-year picture conversation and so that's where we would kind of go over you know what their next three years look like what our next three years would look like and see if those Visions are in alignment and it sounds like that's exactly what you were doing right. Let's see let's make sure that our Visions are in alignment 30 years is a long time out but even making sure that like the next five to 10 years our Visions are in alignment because truly one cycle like that's that's a decade you know that's five to 10 years so you're right like if your Visions aren't in alignment for at least that for at least one cycle then you probably shouldn't get into a partnership with one you know with with someone and then lastly is is the details right. So like first we go over the visions and then if at that point like our Visions are in alignment. Then we can talk about you know Equity splits and you know all that good stuff but like until we make sure the Visions are in alignment. Then we shouldn't really move on to anything else sounds like that's exactly what you did right you make sure that we're in alignment and then we kind of work out the details and then lastly you're also making sure like. Everyone has some sort of skin in the game. Whether it be our your own or your your. You know friends family everything and ideally probably both right like make sure you have a little bit of skin in the game and you also have raised enough Capital to kind of have other people that you care about skin in the game yeah and to be clear the first partnership that I had we did not do that right. It was more like you know we did maybe five out of the 20 boxes were checked but I was so excited to just get deals on and I think they were as well and we didn't really think as much about about the big picture and you know we're still in we're still working on deals together that we've bought and are currently managing um. We're not doing New Deals together just because the Visions kind of went in a different direction so luckily we're all still great friends. There's no you know animosity or issues like that but it was one of those kind of Partnerships that didn't stand the test of time because there we didn't do that work up front right and I think in the end it's going to work out for the best um. Just terms of you know they're growing their business. In one direction. We're growing our business in a different direction and that's amazing um but yeah you know. I think it's easy to get really excited about hey. I met this person. They compliment me. At these ways we can get together and and do these deals together that you just skip over X Y and Z uh to just to get the deal done um yeah. So. It's easy to fall into that yeah. 100%. And and I I can see that in the same line of sight as hey don't do deals just to do deals. It's also like hey don't don't find a mentor don't find a partner just to find a mentor or a partner and and I've seen other friends of mine get into bad. Partnerships before sounds like yours was a good partnership but you know it's. It's. It's provided you with with what you needed right which to start. You got. Some deals under of your belt and it kind of gave you the the um. The activation energy that you needed to keep going and maybe and maybe that's cool you know like there's something to be said for that too and and and something for listeners to learn as well is like. Hey.
•  Maybe the next 10 years aren't in alignment but like maybe we're in alignment for like our first couple of deals and then we move our separate ways right like that that's also a possibility but that's also you know could potentially lead to some. Some bigger issues down the road. But it sounds like you guys were able to to you. Guys are like doing awesome things and you kind of moved your separate ways. But you're still working on those projects together so clearly you guys are still in good terms. We're uh we're running up on time. Kevin want to make sure that we uh are respectful here of your time but had a couple last questions here for you. Things are changing right now in the investing space. I'm wondering what kind of changes you're seeing in in real estate in general and what you're doing to prepare yourself for that yeah. So I think starting from like the just business standpoint going back to the utilizing Tech standpoint you know we're really big on just do we keep the team as small as possible but as efficient as possible. So we keep saying. We want to be a small. But Mighty team right so how do we do that effectively. So that's a big thing for us is just not being anti-technology because we're real estate people but really focusing what kind of like Tech can we use so one. We don't get passed over and two we can you know make sure that we're running a great business um in terms of just like the market. Today I mean I think for us we're we we're trying to keep things as simple as possible. So where we've gotten into trouble in the past is where we over complicate where we try to be. We we try to be too smart you know I always say like don't be smart because when you start getting into interesting hedging strategies and using floating rate debt with this extension option which we've done all that we can speak that language you just introduce more um opportunity for things to go wrong. So for us right now. It's all about like default aggressive on underwriting deals but default conservative on actually pulling the treaser on those deals and then keeping things as simple as possible and making sure we have the right team to actually execute on the business plan so for example you know if there's some very unique deal where if you're if you can you can do some sort of strategy that will drive irr an extra 10 points. But we don't have the capacity or the knowledge to do it. You know just because it could be a great deal if we don't really believe that we can execute on it without distracting from other things. We do it love it man no. I think there's there's there's a lot there and and especially you know kind of coming back to that technology piece. Obviously. Things are changing very rapidly right now and with with technology and and whatnot and so it it's interesting to hear. You say that as well because I think that even though we don't really fully understand how you know things like AI are going to really impact investing I it's going to impact everything. But I think as if we're like thinking about about that and trying to stay ahead of it um. That's going to really bode well for anyone. That's able to kind of like adopt that technology sooner rather than later Kevin you've been awesome man and in traditional gold M fashion. We're going to have you lead the audience with one final gold nugget. One final gold nugget so basically just one uh piece of advice or thing. I've learned to lead the audience with precisely all right. I might have to. I might need a second to think about that um. I think my my uh gold. It's a gold nugget is what you call it right yep. So I think my gold nugget for the audience would be just to have a Eternal mindset right so whenever you're making decisions about things if you're if you're thinking about it as to like how will this affect me in the next day or the next month or the next year. You know that's one perspective but if you're thinking about it all right how will this affect me for like forever or for the long term like whether it's your legacy or you know based on your your spiritual beliefs. Whatever it gives you the right perspective to make a decision that's not rushed and that's not based on you know a making a quick Bo or something like that um. So I think like zooming out on these day-to-day decisions um can help you really make good long-term decisions for your business for your life for your family and it also helps you weed out the noise right. Like often times I know for me I get so frustrated about things that are not going to be not going to matter in 10 years. You know what I mean so when I have that like Eternal mindset and that Eternal perspective I feel like I make better decisions so that would be my goal night wise words from a young man. Kevin you've been awesome. Brother appreciate your time I appreciate being on man. This this was fun. This was a lot of fun.