Clint Coons, Esq., interviews Kathy Fettke, founder of Real Wealth Network and a seasoned real estate expert with over 20 years of experience. They discuss current market conditions, with Kathy explaining how real estate’s slow-moving nature provides stability compared to the volatile stock market. She shares that recent decreases in mortgage rates have already increased pending sales and mortgage applications. Kathy reveals her top investment markets, emphasizing the Southeast (particularly Texas and Florida) for growth and appreciation, while the Midwest (parts of Ohio and Indianapolis) offers better cash flow. She explains the importance of property type selection, market dynamics, and long-term strategy, highlighting how newer properties in growth markets typically outperform older properties in stagnant markets, even if the latter initially show better cash flow. Kathy also discusses the current opportunity with builders offering rate buy-downs on new construction, property management considerations, and the importance of avoiding markets with unfavorable landlord laws. This episode provides valuable insights for both new and experienced real estate investors looking to build wealth through strategic property acquisition.
Kathy Fettke is Co-Founder of RealWealth.com, helping busy professionals acquire turnkey rental properties in fast-growing U.S. markets. She also leads RealWealthDevelopments.com, offering passive build-to-rent syndication opportunities. Kathy hosts The Real Wealth Show and Real Estate News for Investors podcasts, and co-hosts BiggerPockets: On the Market. She authored the bestsellers Retire Rich with Rentals and Scaling Smart with her husband, Rich Fettke. A frequent speaker and media guest, Kathy has appeared on CNN, CNBC, Fox News, NPR, and CBS MarketWatch.
Highlights/Topics:
- Current real estate market conditions and mortgage rate sensitivity
- Top investment markets: Southeast for growth vs. Midwest for cash flow
- Importance of property condition in investment returns (newer vs. older properties)
- The danger of focusing solely on cash flow without considering long-term appreciation
- Current opportunity with builders offering interest rate buy-downs
- Millennial demographic demand driving rental housing needs
- The importance of proper property management selection
- Avoiding markets with unfavorable landlord-tenant laws
- Long-term vs. short-term real estate investment strategies
- Closing comments, final words of advice
Resources:
https://www.instagram.com/realwealth/
https://www.instagram.com/kathyfettke/
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Full Episode Transcript:
This is the Anderson Business Advisors podcast, the show for real estate investors, stock traders, and business owners. We help you keep more of what you earn and protect what you’ve built. Let’s get started.
Clint: Hey, guys. In this video, I’m going to be interviewing Kathy Fettke from Real Wealth Network. Kathy’s a longtime friend and client of mine, and she specializes in working with out-of-state real estate. She’s going to be walking us through what to look for in the market right now, where she’s finding the deals for the people that she works for. We’re going to cover all that, and then we’re going to get into syndication, investings, what that market’s looking like currently, and what you should consider if you’re thinking about getting started in a syndication.
This is a great interview. You’re going to want to stick through the end to hear all of her insights about investing in real estate because I can tell you, with 20 years of experience, this is the gal to go to. All right, let’s get started. All right, Kathy, thanks for joining us. Let’s just start talking about the market. Tell us what’s going on out there.
Kathy: It has a lot of people concerned, certainly if you’re in the stock market, but that’s one of the reasons I love real estate. It’s a slower moving vehicle. We don’t see changes overnight, so that’s the good news.
With the housing market, we’ve actually seen how rate sensitive it is. I’ve heard certain gurus say, and it’s not, but it truly is, and as we’ve seen mortgage rates come down just over the past month we’ve seen pending sales increase. We’ve seen mortgage applications increase. That’s a mixed bag of good versus bad, because usually you get lower mortgage rates when the economy isn’t doing as well. There’s just a lot of fear out there, people not knowing. Anytime there’s uncertainty, investors get nervous, then they buy bonds and mortgage backed securities. That’s why rates are down, but that’s really good for the housing market.
Clint: Okay. With Real Wealth, you’re out there and you’re sourcing markets all the time. I’ve seen this shift over the past 15 years, 20 years since I’ve known you. Where are you looking right now? If you could tell people why you’re looking in those markets, what are you seeing that is making you want to go into these specific markets?
Kathy: Such a great question, and you’re right. I’ve been doing this for over 20 years. I’ve seen many different market cycles. I’ve seen fear through all of them, and I’ve seen people succeed through all of it because when there’s fear, there’s opportunity as well. We look at the data, we look at the dynamics behind a market, and we want to stay out of markets that are dependent on one particular industry that are not diversified, where there’s not job growth. These are the markets we avoid.
Today it’s different dynamics. Today we’re looking at things like insurance. Can you get it? That’s a big deal. That’s a huge deal where I live in California, where I’m not sure how it’s going to work out. People are going to be able to even get insurance, and how do you get a loan if you can’t get insurance?
California hasn’t been a market we focused on anyway for so many reasons. It’s really been Texas and Florida, the southeast, where any of our investors at Real Wealth who are looking for growth markets, they want some cash flow, but they mostly are investing for the future. They want to see growth. That’s the southeast, that’s where the demographic growth has been. That’s where businesses have been moving.
If you’re looking for cash flow, then you maybe want to be in more affordable markets that are growing enough. You’re not going to double the value of your property overnight unless you do a major rehab on it. That would be the Midwest. We still love parts of Ohio. Indianapolis has been growing. Just depending on your strategy. Of course your strategy’s going to change depending on what you’re trying to get out of it.
Clint: Yes. When you’re looking at the properties right now that you are sourcing for people who work with your group, what are you finding as far as prices? Are they still continuing to go up in these markets? Have they started to level off, or are they starting to go down?
Kathy: That’s what is so shocking to so many YouTube stars who’ve been predicting a housing crash for 14 years now, pretty much since the last one. The existing home sales numbers just came out for last month, and it shocked so many people. It didn’t shock me because I’ve been saying along with Barbara Corcoran, as soon as rates go down, you’re going to see people come off the sidelines because just a little bit of reduction in rates allows a few hundred thousand more people back into the market. We get down to 6%, it’s going to be millions, and they’ve been waiting for that moment.
Sure enough, as I said earlier, rates came down. We actually saw sales increase and we saw prices go up. I think it was about 4% or 5% year over year at a time when, again, there’s this talk on YouTube. Try not to get your information from YouTube unless you’re listening to an expert like you. Some of these people, I don’t know where they’re getting their information, but no housing crash in sight with those kinds of statistics.
Clint: When you’re looking at the properties, are you finding that there are certain types of properties that are doing better than others? Is it the three bedrooms or four bedrooms? What does that look like for the investor?
Kathy: In terms of investing? We like to stay around three bedroom, two bath, and any larger than that. Again, it depends on your strategy. Our strategy at Real Wealth is helping people acquire assets that will make them wealthy in the long run. As we talked about before the show, if you’re buying in an area where there isn’t necessarily growth, maybe you get some cash flow but not growth, you have one repair that’s needed and it wipes out your cash flow for the year, if not several years.
We had that on an older property. We paid $50,000 for it during the downturn in I think 2011 or something. It doubled in value. We’re very excited about that. It’s a hundred thousand dollar property and stayed rented for five years.
You know what, it was our highest cash flowing property, but then there was an issue with the plumbing, and it cost us $24,000. If you’re making $500 a month cash flow on these little houses, think about that, that’s five years of steady cash flow. I’m not sure if I got the math right but close. Just gone on the plumbing, and it’s not like the value of the house went up after we put that $24,000 and no one cares what’s happening underneath the house. That’s not going to increase the value.
What our investors are wanting is something that will cover the costs, but that will grow them wealth. Just a quick example is when we did a single family rental fund. We held it for five years. Half the properties were in Florida in a high growth area, and half the properties were in Ohio and Michigan, the Detroit area.
Sure, the Detroit Properties cash flowed better, and that’s why we had them in there to help us with cash flow. In the end, when we sold all the properties and we looked at the final IRR, the final return after you include cash flow, expenses and appreciation, the Florida properties ended up having about 28% IRR. That’s annual return on those properties when you counted how little maintenance was needed because they were newer, how much they went up in value, and how much the rents would go up over time.
The Detroit properties, on the other hand, in order to sell them, we had to fix up some things. They took longer to sell and they ended up having about 6% annual return. We’re talking about a pretty major four time difference in value. That’s what our investors are looking for. They tend to be busy professionals. They don’t want to deal with constant repairs. They just want something newer that’s going to keep a tenant happy, and the tenant’s going to stay there. Over time the value’s going to go up because it’s a hot market, a hot area.
Clint: Yeah, and I think that happens a lot with investors. When they see deals in certain states, oh, look how inexpensive that property is relative to California or where I live, and they don’t factor in that, hey, as we were talking about earlier, those rents that you’re bringing in, the cash flow, if you have one turn or you have one issue like the plumbing, that wipes out that cash flow for that year plus maybe possible other years, and you don’t get that growth. That’s something that you’ve always hit on, which I find is unique because I run into investors in what we do all the time when we’re out teaching our events. They’re always looking for those properties in those inexpensive markets, but there’s no growth. Then they find out once they get involved in them and they have issues with their properties, they have no profit as well and they’re actually going backwards.
What I’m hearing and what I’ve seen you do is now your sourcing properties and you’re looking for those deals that have been recently renovated, and they’ve upgraded everything, or are you doing buildups new properties? What are you finding?
Kathy: Yeah. One of the greatest opportunities over the last couple of years is interest rates have gone up and prices have gone up, but demand for housing is also up. We have the largest generation in US History, the millennials who are at a household formation age. They’re creating families, they have pets, they went through the pandemic. They want to have their own space. They’re not so happy living in downtown little apartments anymore because they’re growing up. The millennial generation is hitting 40 now, the oldest of them.
These are people who are not kids anymore. They’re grown up, starting families, and they want to have a home, yet they maybe can’t afford one but would like to still rent one. Coming back to your question about what to buy, it just really depends on your strategy, and most people don’t have one. They just say, wow, look at this property that I could pay a hundred thousand dollars for and it rents for a thousand dollars. How do you know it’s really going to rent for that? Have you talked to a property manager? Have you looked at the books of the person who’s selling it? Are they really getting that rent? What kind of repairs are you not calculating? Have you not considered?
This is a question I get all the time on my podcast. What do you think of this property? It’s like, I can’t give you any information on a property without more information. Has it been renovated? If it hasn’t, you better calculate the cost of those future renovations in the price of the property.
At Real Wealth, I’m from California. We have a lot of members. I started with a radio show in San Francisco, so a lot of Californians who just don’t even know the meaning of cash flow because it’s nearly impossible to get in California. I had to learn really early on what cash flow even met and how you get it. That means you have to invest somewhere else, probably out of state. How do you do that when you live thousands of miles away?
I found out the hard way a lot of times, maybe trusting the wrong people or going out there, flying out, trying to put together contractor teams, trying to self-manage, all of these things really didn’t work out for me until I learned, you know what, maybe I can just find a team who is well established in the area, boots on the street, they’re experienced investors. They could find the property at a discount for me. They can fix it up to rent ready conditions, and they can manage it because that’s what they do. That’s the turnkey real estate investing that we specialize in.
Over the years, we saw that people were using turnkey incorrectly, and it actually has no defined meaning. We gave it a meaning. The roof has to have a certain amount of years left in order for us to consider a turnkey. It can’t just be paint and a new carpet. We need to know the HVAC and the expensive moving parts of a home or not moving, the foundation that these things need to be in good shape so that we don’t have that capital expenditure in the future.
Today, you could even go beyond that and just get a brand new house. Builders have had a hard time selling their inventory because of the high rates. They don’t like discounting their properties because they have more houses to sell, and now they’ve lowered their comps. They’re going to have to sell their next house for less because it has to match whatever their last sale was. They want to keep their prices elevated and they usually just give incentives like upgrades for the home.
Today you can go to them and say, instead of an upgrade, I just want you to pay my rate down. That will make this brand new home cash flow in a growing area and the market I want to be in, I could make it cash flow. That’s what we’ve been able to do and that’s been the opportunity still is today to get a brand new house that you’re not going to have to worry about maintenance for a while and get it at a three or 4% interest rate, so it cash flows. That’s the opportunity.
Clint: Yeah. I see a lot of people, when they get started in real estate investing and they’re considering it, they assume, hey, I got to do this on my own, I need to find these deals. How do I go about it? They invest in education and they work with various companies that are going to teach them this stuff. Having worked with you and a lot of your clients as well, there’s this recurring thing that they realize, yeah, I went down that road.
Why do all the legwork myself when you’re doing that and you’re analyzing these deals? It’s more than just property. Sourcing the property is one thing, but you’ve got the management team that you have to come in on the backside. If you could speak a little bit about the importance of who’s going to manage those properties as well and what that means to the investor.
Kathy: Yeah. Again, it comes back to strategy. What are you wanting from these properties? If you’re wanting money today, you probably need to be in the flipping business. I say business because it’s a job. You’re buying a property, you’re fixing it, and then putting it back on the market to sell. Very hard to be a buyer and a seller at the same time because very often you’re either in a buyer’s market or a seller’s market, not both. You might buy it cheap, fix it up, but now you got to sell it, and maybe there’s no buyer. It’s work. It is a job.
For a lot of people, they already have a job. Trying to create a second job. How a lot of people think of real estate investing is, I’m going to flip a house. It’s really hard to have a second job and do it well. It takes 10,000 hours, they say to do anything with mastery. It’s going to take a while to be really good at it versus focus on the job that you’ve got, that you’re good at, that you studied for, that you make money, that is your passion, and invest in real estate as a more passive investment that treats you well over the years.
That means you have to be thinking long term. What is this property going to be like in 10 years, five years, or 15 years? Whatever your game plan is, how is this property going to serve me over that long period of time versus a quick flip? With a quick flip, maybe you don’t care so much about the quality of the flip because you’re just selling it to someone else who’s going to care, but you care if you’re holding it.
The renovation has to be extremely high end in quality, or like I said, just buy a brand new home. The next step is you better have someone who’s willing to take care of that property for you for the next five, 10, 15 years, whatever it is that you’re holding it for. People often get that part wrong. I know I did in the beginning, and it takes a lot of management of your manager. We provide that service at Real Wealth, I don’t want to say overseeing, but the minute we get a complaint from one of our 80,000 members, we go to that property manager and find out what’s going on. This a trend, and is it something we need to dig in a little bit more? Do they not have enough staff?
One of the biggest mistakes property managers make is just not having enough staff. Our property managers that we work with tell us they want one person to manage 50 properties. I’ve met property managers who have one person managing several hundred properties. You could see where that’s going to be a lot harder to manage. That’s just one of the 20 questions or 30 questions we ask property managers. How much staff do you have per property or per group of properties?
Clint: Yeah. Have you seen any problems in the last several months with properties in general managers, the market that have impacted investors that you’re running into?
Kathy: Yeah. First of all, we’re going to choose a landscape that works for our business plan and strategy. Another reason I don’t like to invest in California, it’s expensive, it’s negative cash flow, and the laws are really in favor of the tenant. Great to be a tenant in California, not as good to be the landlord.
First and foremost, we want to own the asset in areas where the laws are fair. Tenants have and should have rights, so should landlords. An example is in California, tenants were able to stay in their property without paying rent during Covid. What about the landlord? How are they supposed to handle that? Very difficult to be able to hold the asset that you have expenses on if you’re not getting income from your tenant.
Overall, that’s one of the reasons we love Texas, we love Florida. The southeast in general is a little bit more fair and perhaps even leaning towards landlord friendly. For example, in Texas, it’s just very clear. If you don’t pay your rent, you can’t live there. After the property manager posts the three-day notice, you go through the process, and there’s an eviction within 45 days. If the person hasn’t left, the sheriff comes and makes sure.
That’s not how it works in California. I know it sounds harsh, and I think a lot of landlords might say if this person really is struggling. Let’s see if we can help them. Is there some way to help them? You get the point. If you’re owning an asset, you’ve got expenses, you’ve got a mortgage, and you’ve got to pay those, you need the income from the property to do that.
As far as issues with property management today, I haven’t seen anything really that different than the past except, like I said, some property managers are smaller, they’re newer, they haven’t really learned the hard lessons yet. Sometimes they try to grow too quickly before they know what they’re doing, and they get over their skis, so to speak. They start to have more expenses than they have income.
Rich and I actually wrote a book on this called Scaling Smart. Managing your cash flow in a business is everything. You don’t want to go in debt. We’ve seen that happen time after time with property managers who try to grow too quickly and don’t have the income to support that growth or just don’t manage it well.
We like to see years of experience. We want to make sure if we see any sign. If your rent is late by just a few days, you should be aware. You should know your portfolio well enough to be aware. Wow, my rent is late. I’ve had people come to me and say, I haven’t received my rent in three months. Why are you telling us this now? There’s probably a problem.
Sure enough, that’s the case where we’ve seen property managers start to tap into the deposits that they’ve received. It can just all implode very quickly. I hate to say it, but owning rental property isn’t completely passive. It is passive, but you still need to pay attention to your books and know what’s coming in and what’s going out, and also pay attention to the quality of the management.
Clint: The reason why I hit on that again, and I wanted you to address it, is because a lot of people who look at this opportunity to invest out of state, which is I invest out of state, you do as well, and your clients do, the thing is is that those property managers can destroy your investment if they’re not properly managing your investment.
What you hit on there, if I were just to synthesize it down, is it’s called communication. If they’re not communicating with you and letting you know this stuff, and you’re finding out on your owner statement that they’re holding back $150 for a visit to do something, but they don’t itemize it, all of those are red flags. In my experience, that start to add up and that’s what starts to eat into your cash flow. As you pointed out, we have property taxes, we have insurance, we have mortgage interest, and a mortgage that we have to pay. Before you know it, you could be upside down in that deal.
Kathy: Yeah, absolutely. Feeding your property. Rich and I have done that 20 years ago. We don’t do it anymore, but we have had negative cash flow properties and. Let me tell you, it’s no fun. It’s no fun to be feeding the property unless the value’s going up so substantially that it offsets. That was a strategy for Californians for years. Hey, I’ll take the negative cash flow because I know it’s going up in value about a hundred thousand a year or sometimes more. That isn’t always the case. There was 10 years after the great recession that California prices tanked, and it took 10 years for the values to come back to the purchase price.
Clint: Yeah, and people forget that. Investing directly into property is one avenue that you can go down. One of the things I started getting involved with more and more in the last couple of years has been syndications. At first I was avoiding those because I thought, wow, do I really want to turn over that much control to someone else where they’re selecting the management, they’re handling the investments, they’re doing everything, and they’re evaluating the deal as well. Other than, I’m just on the outside looking in. Could you share your thoughts on syndications and where you see them right now going forward, especially in the multifamily space? Is it still a worthy investment?
Kathy: Yeah, it’s such a great question. For those who don’t know what a syndication is, that’s a group investment where you have a manager, basically a general partner who’s that group has found the deal. They’re going to asset manage that deal, they’re going to sell that deal at the end, and they’re presenting to investors. Investors come in as totally passive. They sometimes have voting rights, they sometimes don’t. Basically, the GP, the general partners are making the decisions and hopefully making the decisions according to the business plan that was presented, and that is not always the case.
You are investing in a stock, but it’s a private placement. You have very little, if any, control in a syndication. That is why a lot of people don’t want to do it, but it’s also a reason why people want to do it. It’s like if you’re a busy doctor, dentist, attorney, or any professional athlete, how on earth are you going to manage your own stuff? It’s really hard. You could be the general partner in your deals and be the worst one ever if you don’t have the time, expertise, money, or energy.
In a syndication, you can have somebody really experienced do the deal for you, get the great price, do the asset management that they understand and they’ve done for years. That’s the key, is, if you do a syndication, track record is everything. If this team is maybe just been around a couple of years and they have a great track record over the couple of years, good for them. That’s what we saw in 2020-2021 when you almost couldn’t mess it up, so people were like, look at my track record, I bought this apartment, I sold it for twice the price. I’m good, let’s do it again.
They just hadn’t been through seasons, they hadn’t been through cycles. They just got lucky the market moved with them. Unfortunately, the second, third, or fourth deal with those brand new syndicators didn’t go as well. That’s what people are experiencing today that are like, wow, I invested with this person, I doubled my money, and now I don’t think I’m going to get my money back on the next deal we did. That’s because the market changed dramatically.
An experienced syndicator would’ve known we’re not going to have interest rates at 2% forever, and they would have calculated that into the possibility. There was too much positive thinking. I’m an optimist, but I have learned not to be in real estate because it will be the one killer of your deals if you’re too optimistic. Unfortunately, many of these syndicators presented their deals to me, some really well-known ones, but I’ve been doing syndication since 2009, so I was one of the first after the housing crash.
We figured it out and I made my mistakes along the way, but I was perhaps the more experienced. People would send me their deals and there wasn’t one that we would approve. It’s like, no, you’re assuming rents are going to continue to go up at the rate they’ve been going. You’re assuming rates are going to stay low. These assumptions are just guesses, and that’s what you have to note. A syndication is just a business plan. It may or may not go to plan, but the chances of a more experienced indicator pulling it off is better than a new one who hasn’t been through the cycles or the what ifs.
I just had a very famous professional athlete look at one of our deals. He was like, well, this doesn’t look as good as some of the other ones out there. I’m like, well, you know, it’s on paper. By the way, I’ve learned through the years to be ultra conservative and under promise, over deliver. Maybe the ones you’re in aren’t going to turn out the way you think. He’s like, yeah, you’re right, it hasn’t really gone to plan. People still have this idea that what’s on paper is reality, and it’s just not.
What I did learn from him is that I should have sensitivity. I should have several different potential outcomes. If everything went better than expected, here’s what we could get. That would be 22%-25% IRR. If things went terrible, this is what it would be. This is how we would protect ourselves from loss. Here’s where we think it will go if there’s some issues in the future. Stumbling blocks, but we’ll still probably hit this number no matter what. I hadn’t thought of that, so that will be in our next syndication as the three different potential outcomes versus my ultra conservative that just maybe looks boring to everybody.
Clint: What’s hot with the syndications? Is it still multifamily or is it single family?
Kathy: What we’re doing is build to rent because there is a desperate need for housing. There is a bit of an oversupply of multifamily, so it’s a strange place that we’re in real estate market. There’s a need for housing and there’s oversupply of apartments. Why don’t people just live there in the apartments?
I think it comes back to what I was saying. You’ve got a millennial generation that they loved apartments. Maybe when the apartment plan came into somebody’s dream and then it took five, 10 years to get there, the millennials have grown up. They’re not really into these downtown, high-end apartments the way they maybe would’ve been in their twenties. They’re in their thirties now. Life is different and it’s a little bit harder to raise a family in an apartment.
Right now there is a bit of an oversupply and an undersupply of single family or one to four unit homes with backyards and the things that this generation would like, the millennials. We are providing the build to rent. They are little houses, little duplexes with yards, and nobody above you. You can have your privacy, but it’s still a rental and it’s cheaper. We’re building these built to rent communities near class A apartments, so people could see our rents are the same or better, but you get a yard, and you get to feel like you’re living in a home. You have a garage. You don’t have to go up an elevator and all that. You could open the door and let your dog out. That’s been our business plan or just subdivisions where we’re building and selling those homes. Tax benefits aren’t as good on those, but still desperately needed.
I think you could probably find a good deal in an apartment. We’re looking. We haven’t found it yet. I’m starting to see people get back into the game, who stayed out for the last few years because it absolutely didn’t make sense. Insurance rates went up, costs have gone up for renovation. Of course, mortgage rates have gone up dramatically, and yet multifamily investors were not willing to reduce the price on their property. It just was like a stock market because it’s like, well, we can’t buy it at the price you’re offering.
With all these increased expenses, we can’t make that work. You have to lower your price. There’s a lot of stubbornness there. I think now, some of those multifamily operators are realizing they have to refi into the higher rates and they can’t make it work. There may be more on the market we’re looking, but right now we’re really comfortable in the build to rent space or in our single family rental funds.
Clint: In the next two to three years, we have this same conversation two years from now. What are you going to tell me has occurred, do you think?
Kathy: Oh, my goodness. No one has asked me that before. There is so much unknown, but my guess is that we have a president who is creating a bit of chaos out there, but I think it is controlled chaos, potentially, just knowing how things went in Trump’s first term. He’s all about real estate, all about growth, doing some whack-a-mole things right now. Overall, I do believe that in two years we will have seen growth. We are bullish on not so much the stock market, but on real estate because we know that the demand is there.
There’s been questions of, well, if there’s this mass deportation, how is there going to be so much demand for real estate? The real estate that we build, like I said, the build to rent isn’t so affected by deportation. Also in the grand scheme of things, it’s a small percentage of our population. I do see growth after this chaos settles. That’s my hope.
Clint: Yeah. Hopefully with the tariffs and everything he’s talking about, it’s going to bring back more manufacturing and businesses back to the US. If you just look at the trends, businesses are going to certain states, like you mentioned. They’re more favorable because they have less regulation in those states and lower taxes, so it only makes sense to open your business there.
Kathy: Yeah. Coming from California, a lot of these areas are safer too. We were dealing with a lot of crime. I think some of that is changing here. I think voters got fed up with all the crime in the sanctuary states. There are states where it’s just safer for a business. You know that a lot of businesses left San Francisco because, why would you be there? Theft is allowed, it doesn’t make sense.
We follow the jobs. We follow which states are welcoming those jobs and are business friendly. You do have a lot of reshoring happening and staying on top of that is the opportunity. Our last single family rental fund, we knew that Biden had passed the CHIPS Act trying to bring chip manufacturing back to the US in a little tiny town in north Texas called Sherman, Texas, is getting billions and billions of those dollars in new factories for chip manufacturing. We jumped on that right away and bought little houses for $50,000-$100,000 all around where all this chip manufacturing’s coming in. We renovated them to be beautiful for the workers there, and that fund is doing really well.
There’s always opportunity. You’ve just got to look for it. People made money during the Obama administration. They made it during the Biden administration. They made it through the Trump administration. You just have to look for the opportunity and go after it.
Clint: With that being said, just to wrap this up then, you help people, as we’ve been talking about, find these deals, get involved in investments. You educate as well. If someone that’s been watching this wants to reach out, get to know you more, and understand real wealth and what it can do for them, what would you recommend they do?
Kathy: Yeah, just go to realwealth.com. Real like real estate and wealth like your future, your money. We really focus on working with high-end or high net worth professionals who want to invest in real estate but just don’t have the time to do it on their own. We’re not a guru teaching, flipping, wholesaling, or anything like that. Realwealth.com and then my podcast is The Real Wealth Show.
Clint: I’ll just say this. You’re a client. We’ve worked together for going on 18 years, and I worked with a lot of your students. I’ve seen the successes that they’ve had. If somebody is considering getting started in real estate, they want to invest outside of their state, and they want to work with someone who understands this, you’re my first go-to. That’s where I would send them.
The thing about it is that I’ve seen what Rich has done. You’re licensed. You do everything by the book. There are so many people out there that do the same stuff or offer similar types of services. As you hit it out a little earlier, they fly by night. They don’t dot the Is cross the Ts to make sure things are done properly.
One way I think you can always identify this is that whether or not that property that you’re looking to purchase, whether or not it qualifies for financing, because that tells you somebody else is looking at and saying, yeah, this is the deal, it’s a great deal. You can finance it because banks aren’t willing to loan on deals that are not good deals for them, so they know their investment is going to be protected.
One of the things that I’ve seen with all your offerings is that they check all the boxes. That’s a testament of 20 years of being in the industry and learning the hard way, as you stated at the very beginning, and growing it. I would highly encourage people that are watching this right now to reach out. Is there anything else you’d want to say to the viewers?
Kathy: I want to thank you so much for that. It helps to have someone like you guiding us in the accounting and the legal work. We come to you a lot with questions to make sure we’re being compliant. Thank you for being such a great professional, helping so many investors do things right.
Clint: Thanks for coming on and we’re not going to wait two years to bring you back.
Kathy: Thanks for having me.
Clint: We’ll hold you to it all.
Kathy: All right.
Clint: All right. Take care.
Kathy: Thank you.
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