Seyla (00:00):

Thank you everyone for joining us on today’s episode of the, How Did They Do It? Real Estate podcast. I am your host Seyla [Inaudible]. Today’s guest is Kyle Mitchell. Kyle is a real estate entrepreneur who has a focus on multifamily syndication and currently has $17 million of assets under management. He is the managing partners and co-founder of APT capital group. Carl is also the co-host of the weekly real estate podcast, passive income through multifamily real estate, where he speaks with various experts in real estate industry to help educate and create clarity for passive investors. With a background in operations management and logistics, he has always in multimillion dollars basically says, and has a passion in doing the same in the multifamily syndication space. Welcome to the show, Kyle.

Kyle (00:48):

Hey Seyla. Thanks for having me here. I’m excited to be on.

Seyla (00:51):

Thank you so much for your time out to talk to me today. So can you please tell our listeners a little bit about your background and how did you get started with real estate?

Kyle (01:00):

Yeah, sure. So my background is like you mentioned the management operations. I came up through the ranks of the golf industry and played golf my whole life and got started with a high school job at the golf course. And then what just happened that year over year, I would continue to get a promotion here and there and got into the management of golf courses, which is much like property management for apartment buildings, but just for a different asset class. So our company went in and worked with cities who own golf courses and we would own, and, or we would go in and operate and manage them for them. So I did that for 15 years in Southern California, and I loved every minute of it, but at the, at the end of my career, I just got a little bit burnt out and that’s when I was looking for something else to do at that time.

Kyle (01:45):

I invested in some single family homes and some single family homes in the Midwest and also in California where I live, I started doing that in 2010, but it quickly, I learned that you cannot scale with single family homes. And so at a certain point I stopped investing and that’s when I wanted to leave my job and looking for an alternative way to make a living, something that I was passionate about. And it took me two years to find really what I wanted to do. And in 2017 I found multifamily. I just came across it, randomly searching for different things to do over the internet. And they said, you can buy apartments. And in my first, my first thought was, there’s no way someone like me can buy an apartment building, but the more and more I looked into it, the more and more real it became. And I bought a coaching class and a coaching program and did one-on-one coaching with my wife and 11 months after I found multifamily, I left my full-time job and to pursue it full-time. And so that’s how I got into this space.

Seyla (02:46):

Oh, wow. It’s a really great background. So you mentioned that in 2017, you discovered the multi-families and you start educating yourself and finding your mentors. And how do you know during that time that motif family was the right fit for you?

Kyle (03:02):

Yeah, because I completely understood the business plan and the business model and the execution of it. Now I did not understand the capital raising side of it, which we can talk about and happy to, but as far as the operational and management side of it is exactly what I did in the day to day business of golf courses. And a lot of people don’t see that connection, but essentially I was in charge of over $20 million in revenue, over 250 employees. And every day was about hiring people, training people, motivating people, implementing systems to create better efficiencies within our business, customer service, things like that, managing budgets, managing cap, ex projects, all those same things that I do in the asset management side of the apartment business is what I was doing for 15 years. And so it just spoke to me as soon as I, I read about it and learned about it. I said, I know I can do this. I really love this business model. And I, and the rest is kind of history. I just fell in love with it.

Seyla (04:00):

Okay. So, and you mentioned that 11 months in and you decided to quit your job. Can you walk us through your mind set of how did you transition from a full-time job to a full-time syndicator?

Kyle (04:11):

Yeah, it wasn’t easy because like I said, I had been in the golf business for, actually in the golf business for over 20 years and management operations for 15, 16 years. So I was a W2 employee. I was trained to get up in the morning, go to work, come home and do it all over again and really work for a pay check trade my, my time for money. And so it was definitely scary, but we hired a mentor who helped us put a plan together. And that plan definitely took longer than we had hoped, but looking back at it now, it probably happened quick and just looking at it. But yeah, it was just about putting a plan together and executing on that plan and sticking to that plan, trusting the plan and really being on the same page as my wife as well was a big step. And when it came time where we were really close to knowing that we were going to be making legitimate offers and closing on our first properties, when I decided to leave,

Seyla (05:06):

Can you walk us through how you found your first deal and what challenges that you face along the way you did mention earlier is about the capital raising. So possibly we can talk a little bit about that as well.

Kyle (05:15):

Yeah. It was the capital raising and the lender side of things that were the biggest challenges for me, but the way we found that deal was the same way we find deals now is just persistence and consistency with staying on top of reaching out to brokers and really making offers on everything that comes across our desk, whether it’s a low ball offer or one that’s competitive, but it’s just about being consistent. So I’ve got a list of 60 different brokers for the two markets that we invest in. And we invest in Phoenix and Tucson, and I call those brokers every three weeks. And some of them don’t answer some of them. I leave a message and they call me back. Some of them have only answered one out of 10 times, but regardless I still call them, I leave a message and I want to touch base them, follow up with an email.

Kyle (05:58):

If you have to. And along with those conversations, we were driving out to our markets once a month. And this is while we still had a full-time job, the leader, and I would take a day off. Lee is my wife. We take a day off during the week. We’d leave at two in the morning. We drive to Tucson, to our properties all day, meet with our property management company and drive back at home at 1:00 AM the next day and go to work. And so on, one of those drives the broker called me and said, Hey, Kyle, I literally just got this listing sign this morning, just got the keys. Do you want to come take a look? And it was perfect timing because our property management company was going to spend three hours with us in the morning. So we said, yeah, sure. Let’s, let’s meet there. Our property management company met us there. We railed the chores, some comps after with our property Management Company and they instil confidence in the property. And so we got to see it three weeks early. We were the first investors to see it. And three weeks later, when it did go to market, we were able to wrap it up very quickly, without much competition.

Seyla (06:56):

Awesome. So I want to ask if it’s okay with you a personal questions. So when I talked to a lot of syndicators, if they either do it by themselves or doing with partners, but you’ve got your wives to be working with you as well in desk, how how’s that conversation go to be on the same page?

Kyle (07:14):

Yeah. I just think it’s about being open and transparent about what you both want. I think I wanted to be in multifamily and investing in real estate more than she did, but she wanted to support me in what I did. And just looking back at it now, I don’t, I would not be where I am without her support back then, because in our journey, we started a meetup. We started a podcast. We started, I started speaking at other conferences and things like that. And three years ago, I could not speak in front of five people. And if she wasn’t by my side, starting the meetup and being there for my support, I just wouldn’t have done it. And whether that’s good or bad, I’m over that hurdle now, thanks to her. But she helped me really push through, but it was about painting the bigger picture.

Kyle (07:56):

And beginning with the end in mind, this is where we want to be in five or 10 years. This is what it’s going to take to get there. There’s going to be some struggles and just laying it out all out on the table and understanding that you want the same things. I mean, hopefully you want the same things, but you know, that’s how we got there is where do we want to be in five, five years? Okay. This is the platform and the vehicle that we’re going to use to get there. And then we laid out a plan and we did it together and things don’t always go perfectly. We don’t always agree and there’s bumps in the road, but ultimately it comes back to those long-term goals where we remember, hey, that’s what we wanted. That’s why we did this. And that’s what pushes us through.

Seyla (08:34):

Thank you for sharing that. I will appreciate that. So having a supporting spouse, Stephanie supporting each other and pushing along in the business. So after your first deal, and will you be able to share of how you were able to scale up so quickly from that 1.6, $5 million to $17 million of assets under management now?

Kyle (08:56):

Yeah. So our first deal was 1.6 and our second deal was 15 million and it was quite a jump. And I learned a lot in that process as well. The biggest thing, and the biggest reason why I was able to do that was because the team around me, if I was trying to do this all by myself, there would have been no possible way. I would have been able to take down that $15 million deal. It’s just impossible. And so through our networking and building relationships, we had built a strong team around us and the same group that took down the first deal, even though we didn’t need that full group to do it, ended up finding a second deal and bringing it to us. And then we ended up getting under contract actually three weeks after we closed on our first deal. And because of the, like I said, because of the networking and just getting out there and knowing people and talking to people about what we’re doing, we were able to partner up again and close on that second deal. And the way a syndication deal works is you just got to kind of work backwards into what you can handle as a group, whether it’s your net worth and liquidity, how much money you can raise, you know, the experience on the management operation side. And this one was certainly a stretch for this group, but we knew just combined together that we had the network to get it done. And by the skin of our teeth, we were able to get it done.

Seyla (10:13):

Awesome. And three weeks after the first day, that’s really awesome. Can you walk us through what happens after the deal is closed and what an operator should know about overseeing the asset and managing the property manager?

Kyle (10:25):

Yeah. So this is one I’m really passionate about. And we put on the asset management summit a few weeks ago, and it’s something that we love talking about because we feel there’s this huge gap in the market right now, where there’s a lot of people that are being educated on how to get your first deal, how to get started in multifamily, how to raise capital and you need to learn all those things. And those are great programs, but what they’re missing is teaching you what to do after you close on the deal. And essentially that is where you make your money, or you lose your money, right? Because you need to manage the property and manage and execute your business plan. A lot of people think, Oh, I’m just going to hire a third party property management company. They’re the experts. I’m going to let them run with it.

Kyle (11:05):

And they’re going to do everything and everything will be fine. Well, over the last 12 years, 10 years, yeah. Maybe he could have done that because the market has been so high. And so the market has taken us to where we are today and not the property management companies. That’s what you have to understand it. And so when you’re riding a hot market, everything seems great, but when it’s not, it’s not. And you do not want to have to learn how to manage properly. After the fact managing and asset management is all about being proactive and not reactive. And so I think a lot of people right now are set up to be reactive, where they’re just hoping from the property management to know the right moves to make. And no property management company is perfect. None are created equal, and there’s a human element to this, right?

Kyle (11:50):

I mean, I was in the property management business for the golf business and is different. And so you may have one great measurable manager within that organization who does well. And another one who struggles and depending on who you have, your property could struggle. But essentially if you’re going to hand the keys over to the property management company, you are trusting them with your investors’ money and to execute your full business plan. And that is a huge mistake. Now that doesn’t mean you have to be on property every day and manage the rehabs every day, but you need to be able to hold the property management accountable and you need to build systems to hold them accountable. And you just need to understand how to manage that process. And that’s what asset management is all about.

Seyla (12:31):

And in terms of the asset management you mentioned that a couple of weeks ago you started the asset management summit. So I attended those webinars. I really appreciate that. You’re putting a great content out there for everyone, especially as for free. So is this some it’s going to be annuals or can you elaborate a little bit more for our listeners?

Kyle (12:50):

Yeah. Originally what we were going to do is have a live event and obviously with COVID-19, we weren’t sure what was going to happen. So we went virtual here in September. In October of this year, we’re going to have a live event next year, and we’re still unsure what’s going on. So right now the plan is to have it twice a year, virtually every six months. And the next one is an April, but we’ll see how that goes. Maybe we turn it into a once a year thing. I would love to have one virtual and one live event, but time will tell if that’s possible, but we’re just really focused on, on educating people on how do you better and ask them management, whether, whether you’re the asset manager or you’re a passive investor, or just getting started, you really need to understand this side of things so that you can understand the execution of the business plan and whether this is a property you should invest in.

Seyla (13:37):

You’re talking about education. What is an education platforms and why is it important for a real estate business?

Kyle (13:43):

Yeah, I think there’s multiple ways to get started and execute a business plan. And that is the one I grabbed it towards not because at the time, like I said, I was very shy and introverted and it was something I would have to get outside of my comfort zone to start. However, it is one of the easiest ways to get started in this business is to provide value for other people. I mean, that’s what it is all about. Everything in any business or even life in general, when you add value back to other people, it comes back to you, right? And, and when I say that, I mean, true value, like really giving back to people. And so that’s, that’s the route we decided to take because we knew that if we were able to add value and education back into other people’s lives, it would help us grow.

Kyle (14:27):

And really along the way, you’re educating yourself as well. That’s the thing I love about it is that we put on this summit, it had 850 people. We had all these amazing speakers. We spoke at it too, and I have endless notes and I learned so much from that. And so selfishly, we’re putting on some of these events too, so we can learn as well. And so just because you’re an expert in a certain field does not mean that you can’t grow, learn. And so as you learn and grow, your company grows, right? And you become better at what you do. And so that’s, that’s the ultimate goal there, but the educational platform, I mean, in today’s society and day and age, there’s no reason why you shouldn’t do it. There’s, there’s no excuses why you can’t have a podcast just like you two are doing, which is fantastic. And I love your podcast and what you’re doing, and you can, you have a voice and someone wants to hear what you’re saying, but you’re not going to appeal to everyone, but you don’t need to appeal to everyone. And just by giving back and educating others, it’s, it’s really an easy way to help yourself at the same time.

Seyla (15:28):

Thank you so much, Kyle. I appreciate that. And I just want to echo on that as well. You mentioned like you, you creating the summits and also use that to educate yourself as well. And the same thing as, as we started a podcast so that we can learn from experts like yourself, like, especially from your experience and other people experience as well. And you mentioned a little bit earlier about, you were try just getting out of the uncomforted zones and can you walk us through of how you do that?

Kyle (15:59):

Yeah. It’s I don’t know if there’s an exact process, but you just do it, right. I mean, just like Nike’s logo or our motto is just do it and you really just have to, because otherwise you’re going to be stuck in the same place you were before. And that’s, that’s ultimately what pushed me to the next level is finally I asked myself, do you want to be here in the same spot you are right now today in three years from now. And my answer was no. And if your answer’s no, then you’ve got to do things that make you uncomfortable. That’s it? I mean, there’s no easy way around it. And once you face that fear and understand that actually feeling uncomfortable is a good thing because you’re growing and that’s what growth feels like. Then getting outside of your comfort zone is not as scary.

Kyle (16:42):

Now. It’s not easy, right? By any means. Even still to this day, I get very nervous about certain things and even putting on this summit and speaking in front of people. But if you don’t do it, you’re not going to grow. If you’re not growing, you’re going backwards. And that’s the plain simple of it. So I try and get outside of my comfort zone three or four times a year to continue to push myself. But you don’t have to start with that. And getting outside of your comfort zone doesn’t mean you have to go raise $20 million on a deal it’s, but first maybe it’s just making offers on deal or making phone calls to brokers or starting a meetup. I mean, start small, get comfortable, but once you get comfortable without one thing, now it’s time to get uncomfortable. Again, you always want to be in a place of being uncomfortable with something in your business because otherwise you’re just staying still.

Seyla (17:33):

Great advice. Thank you for that. I appreciate that. So I attended your summit. And one of the things that you presented was the asset management mastery program. So will you be able to provide more information and if someone wanted to sign up with your programs and what student can expect from that program?

Kyle (17:51):

Yeah. I appreciate that if they can head to www dot assetmanagementmastery.com, and there’s a landing page there with all the information that you get, I won’t take up too much time, but it’s going to be a group of like-minded individuals who want to make their operations better, whether or not you are the active asset manager. Maybe you’re the guy in charge, the guy or girl in charge of the asset manager. You still need to know the right systems to put in place and how to implement those systems and how to hold people accountable. And we’re going to be focusing a lot on how we can drive NOI at each of our properties. So imagine 15, 20 people around a table at a weekend retreat talking specifically about your properties on how you can drive NOI. I mean, that’s going to be invaluable.

Kyle (18:36):

And so that’s what this goal, the goal of this mastery group is, is just become a best in class operator by leveraging other people’s experience, leveraging other people’s networks to continue to grow. And maybe it’s learning some tricks of the trade, but also just drilling down into your financials and saying, Hey, maybe you’re missing something here. What can this group provide for you to find that because $5,000 in [Inaudible] immediately becomes a hundred thousand dollars in value, right? Is that yeah, $5,000 a month, I believe becomes a million dollars in value. And so you can really, really make your investors a ton of money and yourself a ton of money by just increasing your NOI by small bits and pieces. That’s what asset management is about is you’re not going to find a hundred thousand dollars in one chunk. You’re going to find it in 10, 15, 20 different chunks made over time, making the right moves. And that’s what our mastery program is going to provide for you.

Seyla (19:32):

You already own $17 million of assets and you start up education platforms and you have your mastery program. What is next for you?

Kyle (19:40):

Well, we’ve got a long way to go. I know looking back, we definitely have come a long ways, but our goals are pretty big. And I would love to have a half a billion dollars under management here within the next five years and possibly grow that to a billion. But right now, what is in store for us is we do have a book coming out too in January or February of 2021 that we wrote. And it’s about hiring our team over the next 12 months. We want to grow and expand. And the only way you can do that is by adding people to your team, to help take the things off your plate that are not revenue focused, income focused. And so that’s what my partner, Gary and I are focused on right now. We’re going to be hiring an executive assistant and hopefully in the next 12 months, also someone to help with the day-to-day asset management piece that we can kind of train and go along with. So really excited to see the growth in our company, but we just want to eventually be one of the biggest buyers of multi-family in the Arizona markets.

Seyla (20:34):

Yeah. But real love all the contents that you put out the presentation or the meetups, the webinars. And I really enjoys your content where Mike, so I look forward to your books to come out. So how has real estate investing impacted your life far?

Kyle (20:48):

Yeah, I mean, not even from a monetary standpoint, just as from a person I am now someone that is more extroverted than introverted and it’s helped me grow my network, build more confidence in myself. And so even again, not talking about money, just in that sense, it’s made me grow as a person before real estate. I was not the type to push myself out of my comfort zone very often. And now the friends and the network that I made because of it is, has been invaluable. And then obviously we’re setting ourselves up for long-term success and long-term wealth growth and real estate certainly not get rich over time, but it is get wealthy over a long period of time. And so I’m looking forward to five, 10, 15, 20 years down the line when that wealth really does start to build, but it’s certainly been able to put us on the right track for that.

Seyla (21:35):

What is one thing that, you know now about real estate investing that you wish you knew when you first started?

Kyle (21:43):

Yeah. To not buy single family houses and to go straight into multifamily. I mean, I was buying single family homes in 2010. So if you can imagine if I would’ve gotten started in 2010 and multifamily, how much further along we’d be. And really we would have gotten to ride that wave up. Like a lot of people did. So I would have just said, get started earlier in multifamily versus single family.

Seyla (22:06):

What is one thing that sets successful people apart in the real estate investing business?

Kyle (22:11):

It sounds really simple, but it’s a plan and consistency. I mean, that’s all you need. If you want to beat out 99% of your competition, just be consistent in anything that you do because most people don’t have it in them to be consistent day in and day out over long periods of time. And I’m not talking about just six months, I mean, years, if you can be consistent in what you do for years and trust and follow the plan, you’re going to be so much further ahead of other people.

Seyla (22:40):

What tool or techniques have you used to improve the efficiency of your business or personal life?

Kyle (22:45):

Yeah, I thought about this one and it’s just always trying to find the next new thing. Right now, technology is such a huge differentiator from the mom and pop investor to an elite investor right now. And really we’re always focused on becoming a lead investor. So it’s just adding software as a service type of tools or AI based tools or things like that. So like our underwriting tool, we use a tool called red IQ now, which is an online platform. We’re using things like Slack to communicate and real page is what we use for our KPI dashboards, but using technology to move us forward and ahead of our competition and to make us better and better investors, right. It’s using that data. I know Neo Bala and that name, and he’s really great at what he does by utilizing that. And I just try and add something to our portfolio or our business strategy on a monthly basis that utilizes technology to better improve your processes.

Seyla (23:48):

Kyle, thank you so much for taking the time to come and talk to me today and share all your knowledge. We will appreciate that. So if our listeners wanted to find out more about you and your business, where can they go?

Kyle (23:58):

I would just go to APT capital group.com. We’ve got a free passive investors guide there, and it educates you on everything you should know before you do get in your first real estate investment. And you can schedule a call with us on that website as well. So we’d love to talk to anyone and help you any way I can.

Seyla (24:14):

Thank you so much Kyle.

Kyle (24:16):

Thanks Seyla.