MVP Real Estate Podcast

Kyle Stephenson

July 11, 2022 Season 3 Episode 24
MVP Real Estate Podcast
Kyle Stephenson
Show Notes Transcript

Come take a listen this week as Marcus Perleberg and Natasha Wedl sit down and have an eye-opening conversation with Kyle Stephenson, of KRS Holdings.  He explains to us easy ways to get into real estate, how the world of real estate isn't so scary, and how you can start out part-time if you are a little more cautious as he was!  

In 2007, after his search for a property management company that focused on his specific needs proved fruitless, our president, Kyle Stephenson, decided to create one himself. Since our inception, KRS has grown to manage over 1,300 single-family homes and 2,500 multi-family units across the commonwealth of Virginia. Even so, Kyle works hard to ensure that his team never loses their focus on delivering quality services to residents and landlords alike. Kyle Stephenson’s expertise in residential property management has been recognized by many. He was featured in a chapter of the book “Successful Property Managers, Advice and Winning Strategies from Industry Leaders” by Michael Levy. Besides being a licensed Realtor, he is a member of the National Association of Residential Property Managers as well as the Richmond Apartment Owners Association.

In his personal life, Kyle graduated from the University of Pennsylvania with a degree in Linear Programming. After university, he worked in medical device sales with Medtronic selling equipment for functional stereotactic neurosurgery. Outside of work, Kyle partners with the Relationship Foundation of Virginia. The program seeks to strengthen relationships for better families by providing education, tools, and experiences to the community. When he’s not coaching youth football, he enjoys spending quality time with his wife and three kids and watching the Philadelphia Eagles.

2000 West Club Lane
Richmond, VA 23226
P: 804-554-3197

10-B West Queens Way
Hampton, VA 23669
P: 757-349-7566
F: 804-282-4757

192 Ballard Ct,
Suite 103
Virginia Beach, VA 23462
P: 757-214-0480
F: 804-282-4757

1408 N. Fillmore St,
Suite 19
Arlington, VA 22201
P: 703-254-5812
F: 804-282-4757

2215 Jefferson Davis Hwy
Fredericksburg, VA 22401
P: 540-831-3717
F: 804-282-4757

Kyle Stephenson - YouTube

(00:00) well welcome back to uh friday edition of mvp real estate podcast we have kyle stevenson here and i apologize i didn't catch where you're from uh i am originally from the center of the universe which is new jersey but uh obviously right i mean you knew that uh but but but now i am in richmond virginia and i've been here for like 30 years and absolutely love it awesome i we actually did a basement renovation for someone who moved from virginia and he had two condos being rented out there and when he bought him there must have
(00:35) been a huge spike that went on in virginia in in pricing because he bought it on the low side and when he sold it he profited so much on just the appreciation of a condo and then obviously the cash flow was great out there but i'm going to let you talk more about that because he was one of the guys that um got out of the military had some extra cash bought a property but not really a prop property investor for life like wasn't that wasn't his passion it was just cash flow um so i got to talking to him and i was
(01:09) trying to pick his brain but he was like god he had the property manager and he's kind of hand up hands off with it um so i'm i'm interested in the virginia market and where where that's gone and where it's going so we'll make sure to touch on that absolutely um but so for our viewers listening and tuning in um kyle does uh long-term rentals uh we talked a little bit before the show about uh the short-term market and we were talking a little bit about that we have a lot of questions because we're
(01:41) both not in that short-term uh rental market but long-term rentals is where we'll stick today um you'll give us kind of a scope of that east coast so thank you for giving us the time um and uh i'm looking forward to seeing what you have going on in virginia so thanks for being here absolutely so um give you a little bit of background about myself i absolutely love the rental market the long-term rental market and i fell in love with it 30 years ago the reason i like it is because it allows the average individual
(02:30) who doesn't have a tremendous amount of dough to accumulate long-term wealth and you can do it safely so um right when i got out of school i was just absolutely mesmerized by the you know some of the big big monster landlords of the time and so the name i'm going to bring up is donald trump whether you like him or don't like him um in the 80s and 90s like he was just the man now what i didn't realize is the guy started his father fred trump kind of handed off 250 million dollars to him to kind of get the ball rolling
(03:15) i didn't i didn't have 250 million it would be nice if we could start out with that right right so what i tell everybody that gets ready to get in the business is um if you start off with that and even if you're worth like four billion it's not really that impressive um uh because you're really just in real estate you can do much better than that if you if you start with with it with a with a big bankroll so um i i didn't start with that i started by buying a duplex uh saying i was from new jersey i
(03:51) always talk about it 142 patterson avenue patrick's in new jersey i had no i always remember that i remember it that's it you always do you do and so um and i made every mistake in the world i bought it for too much money um and i ran into the wrong people i did everything wrong but i knew in the long term right that that somebody paying down a note um you know i'd eventually learn how to get the right tenants i'd learn about the maintenance so um so i after a few more years was able to scrounge together a little bit more
(04:31) money so the first one i was able to kind of get in with three thousand dollar dollars and you know i did it the way a lot of people say i did it off of a credit card and had a you know yeah so i did it off of a credit card and somebody held a second and i mean everything that you kind of you know read about about kind of the no money down thing so that's how i got started um a few years late and i was a salesperson so i was selling at the time of selling toilet paper for scott paper company and then um uh got into a little bit of medical sales
(05:08) and and i ended up relocating to richmond virginia and was able to buy another property and it took me like five years to get there so this is kind of also talking about the magic of compounding interest so five years later or of just kind of but we'll we'll get to that in a second so i ended up being able to buy a triplex and um and so um after i bought the triplex things were going a lot better because i learned everything from the duplex so i bought the triplex and um and then that went really well and then instead of having to wait five
(05:50) years i think i had to wait like maybe one or two years and i bought a block of townhomes um and i say a block of townhomes or like eight town homes and again just still just kind of using cash living a very very frugal life okay never never really overdone it um matter of fact a lot a lot of people yeah they sound very frugal so anyway um and and then and then i was able to get into even a few more homes and so um you know over the next few years then i had some friends to say hey kyle you know you're doing okay with some of
(06:31) this stuff um how about if we invest some money with you and i was really really nervous about that because i didn't want to um create a cash failure for someone else and i just was very nervous but long story short we put together some money and we did some things called preferred return syndications and that's a whole nother side of the business and we ended up buying an apartment building 176 unit apartment building and um again very fortunate that was going okay um at the same time i was still selling
(07:09) medical equipment but it had made the decision um actually i needed like a coach to help me make the decision because i i was always terrified of failure and um that my life would come to an end and um and and then i had gotten married and so i had a and then you know i just it just i i just felt i had this added responsibility and it really freaked me out so this this coach was like look you really love what you're doing you need to like just you know i can talk about it now you know but and i still get terrified
(07:46) of failure but that that's why it's so good to have a um really these types of forums to talk about so we ended up buying a um so i i finally got out of corporate america and how many years from your start to that yes so you're gonna be like well dude this like took forever so i but understand i'm terrified of failure so it took me right yeah so it took me 15 years all right from my duplex that's security that's like the little bit of security and uh holding that w-2 isn't all bad if you
(08:28) can manage your time and in your mental health well right because having that w-2 does allow you to get some lending options that like myself i can't get because i don't hold a w-2 right um right so there are some pros and some some minuses to it all you're right all right but in terms of failure that is i want to touch on that after you're done with your your explanation but i just wanted to know for our audience of the time span there but all right so 15 years later so 15 years later now now
(08:58) now i'm now i'm kind of get getting i'm feeling more confident all right so we ended up again i have cash coming in um we're managing things well and so lenders are starting to respect me okay and respect yeah just respect my thoughts and and and and our operations and so and that's gonna be a mental breath of fresh air for you um yeah it probably was um you know i don't know i never i never think of anything as a as a breath of fresh air because i have like some anxiety issues but that's nervous
(09:41) over there i'm sensing maybe because i know i i i yeah yeah that's yeah so i i have anxiety issues right so that's a whole nother right that that that would be like a podcast right that's like a whole different podcast with like you know right so so anyway um um so we ended up doing even another apartment community it was 120 units and again i was able to syndicate that but i always put my skin in the game i always was putting money in so that's the other part the people who were like oh well you know everybody puts up money
(10:19) and i get equity but um i don't i i don't believe in that because i i want people to know i'm in it just like you like if i share this up right then then i'm i'm going down with you okay so um the other part that i will do is i will uh yeah we're getting way too deep into this conversation but i'll i'll also guarantee the note like i'll say look and and i'm i'm in the position to do that now like you know if if somebody wants to invest with me they don't have to sign on the note but these are things
(10:54) that down the line you can do so um i and again it's just me saying hey listen i'm gonna put the weight on my back and i'm i'm gonna do this so uh so um fast forward now we're like managing call it 500 units it's something like that and the crash happens in 2008 and um like you couldn't borrow money for like a stick of gum like it was really bad so um right so and then so but but here's the deal right a lot of people couldn't pay their mortgages so i'm a salesperson i can't borrow anybody so i can't grow
(11:35) all right and so i'm like all right well what what are we gonna do and actually there's a woman who's been hanging out with me for the past 15 years she's awesome um and she was like um and she she she she kind of lets me know her thoughts when she you know she's like hey kyle like we got to do something because we have this infrastructure and we have no dough to feed it so a lot long story short um i went out and i started calling on banks and saying like mr banker i know that like you have a bunch of clients that
(12:08) can't pay their notes how about if we manage property their property try to get it to perform well enough so that they can pay their mortgage and and so we that's a good lead generation that was lead generation right so we're knocking on doors of banks and that kind of got us through a couple years of really like scary scary scary times um and then uh from there we were able to start buying things again and then i felt like after all this time i never wanted to go out and third party manage because i didn't think i i was
(12:47) honestly i didn't think i was bright enough right i didn't think i didn't have the confidence to manage for somebody else how many properties at that point are you managing yeah like 720 plus years or so but but i i just didn't have the i didn't have the self-confidence i just didn't right so so by that time so this is again like whatever 15 years ago yeah yeah or maybe like 12 13 years ago it was finally like okay i know how to manage train wrecks i've been through you know a banking cycle i've been
(13:23) through you know a real estate recession like i i feel confident that we can provide help and guidance to others so it was at that point that we really started to work on third party management and then we felt good working with lenders in different capacities but all of this was rental if you if you if you you know kind of hear my whole theme is i focused on rental stuff and so um now our firm manages over four thousand units in virginia uh we have a small office in raleigh north carolina but you know we're in
(14:01) virginia we're in arlington we're in virginia beach hampton and we do single family we do single families apartment buildings communities small apartment buildings um and i absolutely love it you know we work for a lot of clients we we manage a lot of our own book and i think that again real estate is the absolute best business to accrue and accumulate wealth for every american i really do so um uh so that's kind of my story that's a wild story and man you've had that grow um and if you didn't tell me that you
(14:44) weren't confident in your early years i would have never guessed it with how how you grew what you grew yeah i'm still panicky i still have i still need like someone to say hey man it's it's i mean you're talking you are also you're on the show today with the uh the guy who couldn't fall asleep until three because i was laying in bed and i just could not turn my brain off because i'm like all right so tomorrow i have this and i need all this stuff and then monday we're here the tuesday we're here
(15:16) we're wednesday we're over here we should be finishing that thursday so i'm like in the next week and i'm like you have to turn your brain off and just go to bed all right so i'm gonna tell you monday's gonna be monday regardless so i'm gonna tell you like i mean and i hope this isn't weird or creepy and i'm not trying out do you so when i first when i first got going in the business i was so obsessed with it that i could read i would like read it was like uh robert allen no money down
(15:45) like i could read like real estate investing books i'm not lying to you all night long i would come home start reading the books and literally it would be light out the next day and i would go back to work and i did that a couple times and i'm like dude you got you got some hang-ups man you got some hang-ups yeah so i i get about no not turning the brain off yeah it's real and it's a struggle it's now 9 30 where we're at and i'm still feeling the five hours of sleep well yeah that i got
(16:23) but hopefully that goes away midday um um yeah i've got my uh my energy drink right here that i'm trying to drink slowly um that whole uh anxious feeling and um nervousness like that there has to be something because there's always a positive and a negative to whatever you're getting as a person so uh i think that little bit of anxiousness you had or nervousness in their own 2009 2008 crash is what led you to like okay i've got to get new leads in i got to try something different uh whereas other people who may not be
(17:12) as nervous okay we have enough cash flow to make it through this little part let's just keep the ship afloat and then once we get to the other side we'll see what damages we'll try to recoup where you went more on the offense and we're like no we're not going to sit back we're going to try and push and you actually push through where i mean everybody that i read or listen to they talk about when when the market is scared that's when you buy that's when you push because it's going to benefit you on the
(17:40) other side and i don't even know if you knew that you were doing that at the time but it turns out that's kind of what happened you push during that down period and then you gain so much out of it yeah so you know it's funny because we talk about it even now in this kind of tumultuous time you know you know i say you know warren buffett you know his quote right be be fearful when everyone is greedy be greedy when everyone is fearful so yeah so i definitely you you went on mute marcus the benefit of working on the job site
(18:19) they had a question of where a tool was so i'd go and be here for a second sorry about that okay um but that is where i first heard it was warren buffett um and then i think other people took it from him and they made their little edits on on the same main theme um but yeah it's and it's hard because you don't know if you're doing it correctly like you want to push and you're like okay well the the gurus tell me to push but am i pushing in the right places is this gonna is this gonna pan out
(18:51) and for for people that are anxious that's a real thought that keeps you up till 3am that's right that's right um i i would say i mean the other part that i really try to look at and why i like the rental business um is i'm always kind of like all right what's the downside so when you're when you're doing development or flips i mean the dollars are just so big in and out you have no revenue coming in um you know the worst case scenario for me was just a lot and still for me is just a lot bigger when you're doing
(19:30) development you know the rental thing man it's just you're just it's nickel and dime i'm paying down a note um trying to make a few shekels up top and so but a lot but it's not sexy it is it is it's not sexy and um from a real estate standpoint you know we i define it as the armpit of the business everything else gary indiana bro it is the armpit of the business it's all good it's all i like the armpit of the business this is like a half geography show because we've got the center of the
(20:02) universe's new jersey we got gary indiana there we go we gotta move more west i'm gonna leave that for natasha she's the west coast person so you gotta create your analogy for that portland area up there the best place um yeah no we can't do that that's too far that's oconomowoc that's a good lens oh go um so kyle i was going to ask you and i wanted to go back to this you seem like a and you've kind of alluded to you being a very cautious person when you start something is that okay yeah i i would say that that that i
(20:42) am cautious yes i would say in the real estate world you know some people say oh you know you're a risk taker but i mean in the real estate world i'm a pretty cautious person which is great because this next question i think is going to be very impactful for the viewers because what we want to do here with the show is inspire those people that are on the fringe that are like okay i've heard all these things about real estate investing i heard it's going to be successful i heard it could be for anybody
(21:09) i'm everybody but me like i don't have money and i don't have time what i heard from your story is you're working a full-time job you didn't use your own money to start you put on a credit card so you overcame the two biggest and first two obstacles that anybody will bring when you talk to about real estate investing so your personal experience what would you tell somebody that came to you today that was like hey i'm thinking about real estate i work a full-time job and i have absolutely no
(21:42) money and i am so terrified to fail at this could you give them any it doesn't have two words of encouragement but something to to get them over that hump of just their mental fear even if they don't jump into real estate just something yeah so and i know it's a tough question yeah so i would say um that's a great question so number one we do edit the show so if you want to absolutely no no no so so so number one you know i love what i do and i will tell everyone and i love it i don't love it if i i work a lot so let's just pretend i
(22:30) only work 20 at 20 days out of the out of the month so i know that's not true yeah yeah yeah so but if if that were the case i love it like 17 days out of the 20 right there are three days that i'm gonna be like oh this just sucks right i just i get bad news or whatever so so so i absolutely love it right so um i would say this you have to figure out whether or not you're gonna love something okay so that would be my my first thing um and then if true and then so you have to try it out right so you have to commit it so you
(23:11) have to block out time you have to um you have to figure that out and you got to get support from i mean if you're in a relationship you got to get support out of that relationship because you know if they're 100 and is it 68 hours in the week or 64 whatever it is and you're you're making you're you're working 40 50 60 hours with somebody else you know you're you're gonna have to commit some of the time that you may be doing leisure work or leisure work enjoying your leisure time you're gonna
(23:49) have to commit it to finding out whether you have this love so um and then i would just say you know you can always spend less money right you know you don't need a new car you don't need you know um you just don't need a lot right so um so then there's this what's that what are you saying yeah no it is right so um kind of that dave ramsey theory on just you know if you go out a few nights out of the week to eat i mean you know how do you cut that back my mom his job a couple years ago it's crazy i
(24:32) look back at what we had to live on then versus what we have to live on now and we probably lived on a quarter to a third of what we have currently what we bring in currently and it's just like wow we did it it wasn't fun but we did it and we could do it again if we had to right so i haven't even thought about this till now is when i bought that dude duplex i remember relocating into the nastiest freaking house i have ever lived in in my life and on top of that i had no cable i didn't have a tv i didn't have anything and i just um
(25:18) and the bathtub i remember the bathroom not working so i would work out at the gym and then i would shower at the gym and do what right and and i mean you know everybody so um and i and really didn't even i just thought about it right now after whatever 30 years because it really wasn't a big deal but that allowed me to focus my efforts on understanding real estate more and not just watching tv or doing things and so and i'll say this and this this this is a big step you know my wife who was at the time my girlfriend when we bought
(25:52) when i bought the town homes in fredericksburg virginia my gosh i'm you know gosh you'll probably kick my butt first but like our dates were hey honey let's go like turn that turn the town home for rent so like we would go up and i would paint and she would clean and i was so cheap that i wouldn't even turn the electric on in the house and we're in richmond virginia in the summertime and i mean we would just be sweating freaking bullets right but that was kind of the that was how we got rolling how i got you know so um
(26:34) so what i would recommend i got a little bit off track um so you were right on track i love that explanation so so here's the the other part right so um you do it you do it for a year go out don't you dip your toe you know dip your toe in the water i don't i don't say go out and buy a huge apartment building either buy a single family home or a duplex work your numbers make sure that you can make ends meet and do it for a year and see if you love it see if you really like it right and and and if you do
(27:10) do it again you know if you like some parts of it maybe you get a property manager if you believe in the theory you know if you if you look at your mortgage statement and you see that you now have paid down your note by a couple thousand dollars for the year and you you know have an extra thousand dollars in your pocket and on your tax return you get to write off some of the depreciation so your tax situation it looks a little better and then you get to put a few more shekels in your pocket um and you're okay with the tenant calling
(27:44) you saying the rent may be late this month or hey you know the house has ants and you're like you're kidding me right like you can figure out ants like um like if you if you if you're okay with it huh that's what my attendant said to me in a couple a couple months ago and i was like go get an ant trap i don't know what to tell you right right so you got to get you got to get through but but but but it's emotional and we talk about and this is money and i everybody in my office knows because we talk about it
(28:20) money is personal and emotional it's always always always personal and emotional so you gotta see what that and i see do it for a year see if you love it and if you love it keep doing it um so that that's my that is my long response to that question because i want people to at least try it and see if they love it yeah there were so many similarities to your starting and mine uh i've become a person that doesn't turn lights on like i like at night i'll turn maybe one light on the house and that's as much light as i
(29:00) need uh one just because when i started i was very conscious of when i used the lights and when i didn't i went to the gym i worked out i showered there because my gym membership per month in my water bill like i'd rather just go there and use the shower over there um your grocery shopping you get smarter with you don't buy the extras you buy what you need um it's not a glamorous life uh many trips to goodwill to get all my work clothes because i don't want to damage my good ones um so many i didn't have a tv i still don't
(29:36) have a tv plan i do have a tv now but um all i had was this little projector i found at a rummage sale that i hooked up and projected onto my wall whenever we wanted to watch netflix and i got one of those little amazon prime sticks yeah when i signed up for amazon prime and that's what i used um yeah people would not describe me as glamorous when i started they probably still wouldn't call me glamorous so um yeah but those little those little things you did to save money here and there and put it back in the business those
(30:12) dates you did to put it back in the business is why you're here you're here now but it's that little bit of sacrifice but going back to what you started with the sacrifices that i made didn't seem big because i loved the real estate more so some call it sacrifice i just called it living to get to where i want to go right it wasn't like this big obstacle i did to learn how to live this way it just kind of was it was natural as much as shall bring it home would have been way more convenient that's
(30:47) right i will look admit that um so you know i really appreciate that that answer to that one because i know a lot of people jumping in are fearful in in the whole test philosophy try it out for a year i i mean i in essence did that when i started uh i went and looked at a duplex the person who showed me the duplex was a little broker here in oconomowoc and i jumped on and worked for him for free for the first six seven eight months of just like i was in outside sales so i'd have a gap in my day here and there i'd stop in the
(31:22) office do some paperwork talk to him um and then i eventually got my real estate license when i was like yeah this is something that i want to do and then it started to become okay now this is a mainstay in my life but i still didn't get rid of that w-2 i was scared of failure i was scared of taking everything as i have a little kid at home and saying like all right i'm getting rid of my consistent paycheck my benefits and i'm just jumping in because i like it right i had to hold on and it was it was uh march 6th of
(31:58) uh 2019 no 2020 no 2019 when i came to the realization that i'm i'm doing two things that i love but i'm not doing them well because i'm spending 50 of my time here and 50 of my time here and i had to cut one but i cut the one because i knew where i was going was there and it was it was real it was secure enough but it wasn't like i hated the other job i loved that job that was my favorite job i would still go back if this failed and they took me back like i i love the people i love the culture i love my
(32:37) clients it was just i had to make the decision so um but that's everybody's different everybody's timing's different everybody's comfortability is different when they make that decision so i wish i could have waited as long as you did that would have been that would have been great that that remember though that the reason i waited so long also was based out of fear so don't don't don't don't don't don't don't wish that there needs to be it's a weird it's a
(33:09) teeter-totter you need to have that comfort you need to have that fear like i think if you can play with those because i think once you lose fear you're gonna lose your your caution and you're gonna you're gonna start getting a little bit too wild and too crazy and it that could just be a personal i have no studies to back that up that's purely anecdotal of what i'm what i believe but um just like anxiety uh in the psychology background in school i studied psychology i wanted to get into sports psychology so i studied like
(33:42) performance anxiety and what i've found is like anxiety's on a bell curve so too much anxiety and you yourself not enough anxiety and you don't get even up to where your peak performance is so as we go through and as we challenge ourselves as we have those successes as we have those failures we're constantly moving on the anxiety bell curve to find out where our like middle comfort zone is where we can get elevated to our key performance whether that's physical training whether that's athletics whether that's
(34:20) work whether that's in your relationship you always have like those little bell curves of where is that anxiety in a manageable spot but it's still there right because if you get if you don't have enough anxiety in your relationship you're not gonna do those little extras for your partner you're not gonna come home and and see like okay they're having a stressful day i'm gonna take something off their plate because you're gonna be like it's carefree we're good what i need to give jason more
(34:47) anxiety damage have him listen to the show and he'll get some anxiety um but you come home and you you feel that and that's the thing that kind of pushes you up to like all right i gotta i gotta be there for this person um and the same thing in in real estate if you're not aware of of the the pitfalls and the things that could go wrong and everything's good and we're golden you don't get up to that peak performance where you're you're pushing in mentally in that in that good spot
(35:18) i don't know if that kind of makes sense it was kind of a rabbit hole no i get it i hear you that's how i think of anxiety at least i like it again purely anecdotal so you are you're not in virginia anymore correct no no i'm not in new jersey anymore i'm in virginia you're in virginia i mean with with virginia uh obviously right now things are uh i'll say chaotic from the covid three percent where we now as a nation felt like three percent was normal and we're up towards six here
(35:59) um where i still think like yes it's high but it's not outrageous at this point the infection infection rates and stuff yeah the inflation where the market's going so where are you seen in terms of your business like what are you seeing in virginia or in the places you're investing in what do you see now and where do you see this going towards the end of the year um obviously we don't have a crystal ball but right so it's fun where you're at it's funny i i know this isn't uh is actually
(36:34) so so i do have a crystal ball you do have the crystal ball i want that thing you need to pull that out in meetings where they're like so what can we expect pull out the crystal ball and just like start humming like you're getting the answer um [Music] so here here's what what i think and i and i'm not you know a year ago so i do a newsletter and a year ago i was like look you know we get this wage inflation and so i'm a really um that that wage inflation you know if you're paying somebody a bunch of dough
(37:13) um or you know the wages are up let's say 20 right the weight the wages aren't gonna go back down okay that's i just i don't see that so um i think we still have a lot of pressure on wages that allows people to pay more rent right that's just it does and so i think that that rents will continue to rise until wages start to um level off and we've you know we find out what that number is now i think you know what what i look at also are um so we still have job growth in the economy so every month you hear
(38:02) hey we've created another 250 000 jobs until that number goes down because we have still many more jobs than people until that reverses direction there should be no reason to think that wages will go down and so with all that being said i just think we're gonna have these inflationary pressures for at least another year and uh and then and then at that point i mean things should should level out that that is my opinion things always take longer than we anticipate you know things don't happen overnight that's
(38:42) really what i believe um so you know we're still bullish on the rental market um doesn't necessarily mean we're going to go out and buy a bunch of rentals right now because it's still hard to find great deals but at some point you know um things are going to level out so i just think the markets are going to be strong for rents the other part is that because kovit is coming to an end in virginia and by that i mean the court systems are now functioning the way that they were pre-covered um it just allowed it allows
(39:18) more stability i think in the markets so for virginia i mean i'm really big on the rental market the other part is is it supply we're still hamstrung by supply issues so until all of this kind of straightens out over the next year to two years i just i think we're gonna be um i think the rental market's gonna be pretty pretty good and that's why that's what i'm focused on is the rental market not necessarily development yeah and it sounds like you're not on the hunt to buy during this
(39:50) uh we'll call it a correction so during this little stint you're not it sounds like you're not out there buying what are you doing in the interim for your business in terms of either are you maintaining are you i mean is this a good time for you to go in and renovate some vacants for those price increases like where do you guys kind of take this middle period of right unsure so two things i i define myself either as a bottom feeder or opportunistic um and so uh there's just less bottom feeding and
(40:26) less opportunity for us to buy right now and i'm in a different point in my life so i i you know so just um uh so i just i always want to just make sure that the returns are at certain levels for me um so one of the things that we're looking at because we do have strong rents coming in i have on my whiteboard so i have it's called the 2022 focus and you know we are really trying to take advantage of there are two things that are going on that will end at the end of this year um uh bonus depreciation slash section one seven uh section 179
(41:10) so these are ways that investors that have a little bit of cash can can take opportunities they can expense again not to get too into the weeds you can expense certain things that you're going to have to amortize or depreciate everyone look um starting in january so a great example to let me i i am i call it because i'm not i'm not super uh what's the word i'm looking i don't want to get super deep so i call like i call it peppa pigging it so i'm going to peppa pig down a little bit so if i if i get a um
(41:50) um if i buy an appliance this year right i can expense it so i um so if the appliance is a thousand dollars i can take a thousand dollar expense or deduction on my tax return next year if i buy that same flipping appliance i can only take a 200 deduction for five years so we're taking advantage of like you said really i'm just giving you the long response renovations improving improving the properties where we can take advantage of some of the the the tax opportunities that are going to happen in the final six months of this
(42:40) year that go away next year yep does that help yeah yeah no absolutely and and that's a super cool point because before i got into real estate um i didn't fully believe it but i didn't know what to believe on the whole um well that the rich are going to use the tax loopholes and they've got the attorneys and all this stuff to take advantage of all the loopholes um and as i got into this and as i grew up i was like i don't really think they're loopholes because anybody can start a business and
(43:12) take advantage of these they're just the ones that do it and they're not they're not jerks for doing it they're not breaking the rules so like that's a very good example of um you're you're not like this uh highly publicized real estate guru um who's looked down upon for for taking those loopholes you're just you're using the tax laws for your advantage and and using them to to move your business in the right direction so kudos for you to have the education on it and to implement it so that's that's big and
(43:47) and i think here's the deal right i i'm hoping that the code was designed to create a certain behavior and so i'm i'm spending that money now right and so i've been incentivized to spend money now versus next year i don't i don't think it's um if they if they wanted me to not spend the money now then don't give me the don't provide the the opportunity you know so um anyway yeah yeah and it's i mean it is a big opportunity because you're talking on this the low scale of you buy
(44:22) a stove for a thousand dollars and this year you can either deduct the 1 000 as opposed to the 2000 which is regular but now we talk about on the whole scope of what you're doing you're managing 700 units so even if half of those units get a new stove that is a huge difference in the final end books of what you'd write off as opposed to what you'd appreciate in any of the years so like that is for the listeners who are not in this that is a huge huge difference absolutely but even if it's a
(44:52) single family home i mean the benefit yeah so if you just have one house and you have the ability to buy that stove this year that that and you made i'm really keeping it simple that created a one thousand dollar that expense um it's hard to actually i can't make it that complicated that expense plus kind of the depreciation creates this 1 000 loss for you right that that loss gets offset against some of the income off of your w-2 coming in so you really get this really nice net benefit for spending some money
(45:37) and and really investing in the property i mean that's what the government's saying you say listen we want to excuse me we want to incentivize you for investing in the property yeah that's that's what the government's saying so i'm i'm i'm good it's great for you because you're like i'm going to invest in my property anyways but thanks for the extra bonus that's right and where did you where did you come across this information like that kind of yes yeah so if you just google so um
(46:08) again i'm weird right so i just i read and read a lot so i think but if you pull up i mean google bonus depreciation or section 179 you can you can read about it it's not that was yeah that's all you got to do and i will tell the listeners i did not set that question up but you answered it perfectly because the information you want to find is on the internet for free you don't need a high-powered tax attorney you don't need a business coach you don't need any of that maybe the most you'd
(46:41) spend is like a tax book that was literally just written because this is a new thing but like other than that like the information's on the internet for free go to google look up what you're looking like what you want and you're gonna find information right so again free it just takes you have to spend your time to go look for it and you gotta love it right so yes that's the main thing you love it in what is that old saying like love what you do and you won't work a day in your life yeah something like that
(47:14) uh not true because i still consider it work but i do love it so that quote was so close but so you still have those like you said those three days where you're like this is definitely work right the other seven days not working but those three days at work yep and that was yesterday for me which is the the no sleep anxiety written laying in bed type night but man it is it was so cool we're coming up to an hour and i don't want to keep you any longer so you can get going through friday well thank you so much to an hour
(47:52) yeah but man a wealth of knowledge thank you so much for for your intel in in sharing your story with how you got started because so impactful um for some of the new listeners and i i know that i talk to people that want to get into real estate and i i don't want to talk anymore because i'm just going to put your your podcast on and say listen to him like he's got all the fears you're having right now and he did it and it all worked out hopefully again you know my goal especially you know and it's not like
(48:26) i'm 90 million years old but my goal just right kind of in the this next part of my life is really to help others and make a positive difference in in their lives so if if this conversation you know impacts a few people you know we've done our job exactly and if if people want to get a hold of you how and what is the best way for them to reach out to you yep so um the easiest way so my company is krsholdings.
(48:59) com and my name is kyle stevenson um it's my email is kate stevenson at krs but no one can remember if you remember you go there you can click on me and email me and that that's that's uh that's an easy way and i have someone who i get a lot of emails so i'm but but someone will uh respond as well as myself but just somehow you know we will respond well that's awesome we'll put that email what's that i think we're gonna have to have you back on again well if if this
(49:32) helped i mean we can talk about all different types of um investments investment strategies financing i'd love to share anything that you think would be helpful to to your your uh your viewers yes absolutely i loved it i'd love to get into that talk with you because um i mean with your beginning story it was so robust that i wanted to dive into that one but i know that you've got more wealth and knowledge to share with others so i think coming back um i think we're booked out to 23 already but let's let's
(50:09) let's do it awesome if we can get you back in the beginning of next year maybe that's set up some some guidelines for someone's next year as they enter into real estate and how they can take it i'd love to talk about goal planning they'd be great yeah anything all right guys that would be awesome love you guys thank you very much we will talk to you soon appreciate it keep pushing alrighty sounds good see ya take care guys bye