In this exciting (and very fun!) podcast, Construction Engineer and real estate investor Matt McKinney shares first-hand experience and passion for investing in real estate investing, from the ground up.
Originally from Harlan Iowa, Matt also touches on tips for success, and, of course, his love for the Nebraska Cornhusker football team (Go Cornhuskers!).
After graduating from Iowa State University with his Construction Engineering degree, Matt worked in construction for two years before moving up to Minneapolis. He has two children –and he and his wife, Michelle, have been investing in property for eight years.
In this episode, you’ll get some of Matt’s backstory and see how he first got his start!
During the recession years, Matt worked with a Realtor who’d flip about 100 houses a year. He’d walk through the house to see what the estimated costs for renovation would be and whether the property would be worth investing in. It was during that process that Matt first became interested in owning his own rentals. He had the right connections, and the right experience to make this happen. He had people he could work with, and people who could do the remodel work, if any was needed.
If you’re wondering how to get started with real estate investing yourself, and maybe don’t have the experience –that’s fine too. In fact, Matt emphasizes that he didn’t come from a family of investors; he was the first one to take this step towards rental property ownership.
In this episode, Matt and Kevin talk tips for real estate investing, including:
- Finding contractors and other professionals that you can trust
- Investing with a long-term mindset
- Overcoming challenges as a DIY landlord
Buying your first rental can be a challenge, but Kevin says that he’s found that for many investors, buying the second property presents a number of hurdles as well.
For Matt and Michelle, however, the first home was really what got the ball rolling...
In 2011, they purchased their first rental house, and then, amazingly, went on to purchase two more houses in the same year, escalating quickly! Soon he was able to add another two properties to his portfolio, for a total of five.
Why invest in rental property?
Like most people, Matt and his Michelle’s retirement and 401(k) was largely tied to the stock market. Investing in real estate gave them a chance to diversify.
In addition to diversification, Matt discusses how he appreciates the long-term financial stability that real estate offers. Matt and Michelle also like the idea of being able to generate an income from their assets during retirement, without having to sell the assets themselves.
They also discuss timing the real estate market.
“When’s the best time to buy?”
Ten years ago!
“When’s the second-best time?”
Now!
Of course, Matt highlights the fact that fifteen years from now, he’ll probably be wishing that he’d invested in more property today.
“What tips do you have for people who are looking to get into SFR investing? Or who are looking to grow their investments?”
Here are Matt’s tips:
- Don’t let fear rule your decision. Once you’ve assessed a potential deal, and have all of the facts that you need, you can go ahead and take that first step. Like anything, it’s a calculated risk, but it’s important to actually go ahead and take that crucial step. Being informed can make it a lot easier, giving you the information that you need to move forward.
- Find a model you can trust. Matt and Michelle had an original model for their ideal house. Initially, they were looking for: 4-bedroom, 2-bathroom houses with a 2-car garage. However, Matt also mentions the importance of being able to deviate from your original plan if another opportunity arises as well.
Matt’s a DIY landlord; he has two main tips for other landlords who are managing their properties on their own as well:
- Have people you can trust. Or find people you can trust. Work with an accountant, a real estate agent, or even a property management company. Know who you want on your team and build it before you jump in. Matt had a Realtor who he knew and worked with, and contractors he could trust. If you don’t know these key people, find them. This is especially the case if you’re going to remodel the house, in which case you’ll need a team that you can depend on.
- Find the right tenant. Find the right tenant. Matt starts by determining the true market value for his rental, and then pricing it just below that. This approach will give you a bigger pool of applicants to choose from, which will help you to find the most qualified tenants. Kevin agrees that long-term tenants make life so much easier, so it’s worth spending an extra two weeks to find the right one, rather than rushing to fill a vacancy and ending up with a challenging tenant.
- Budget. One final tip: run your rental like a business. This involves budgeting as well. What’s your income, what are your costs? You’ll need to know if you’re hoping to find success. Make sure you set aside money from the rent to cover emergency repairs, and unexpected costs that arise.
TUNE IN to see Matt’s long-term retirement strategy –and how rental property is helping him to achieve that goal!
If you’d like help with your investments or creating a real estate investment plan, visit Renters Warehouse. Live, invest, and rent –all under one roof! And if you have any questions please drop us a line and one of our Rent Estate™ advisors will get back to you.
Finally, if you liked today’s podcast, be sure to listen to our previous episodes:
- Episode 01: Getting Started With SFR, First-Hand Investor Experience (With special guest Jon Ortner)
- Episode 02: Future-Proofing Your Investments (With special guest Greg Rand)
- Episode 03: Tips for Hands-on Property Management (With special guest Josh Zupfer)
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