From Living In Subsidized Housing To Owning 500+ Doors with Edna Keep

Episode 313: From Living In Subsidized Housing To Owning 500+ Doors with Edna Keep

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Everybody has, at some point in their life, experienced hard times while climbing up the financial ladder, even the rich. This episode features real estate investment coach Edna Keep and her achievements in the industry. Edna went from living in subsidized housing to becoming a multimillion heiress. She shares her secrets to getting on top of the real estate game, as well as managing her properties from tenants down to the tiniest parts of her units. She also offers some advice for anyone contemplating to take control of their financial future. Learn what these secrets and tips are from Edna’s amazing story.

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I’m here with Edna Keep and she’s got an amazing story. She went from living in subsidized housing to becoming a multimillion heiress. That’s the stories we like around here. I don’t know anyone who started rich. I know a whole bunch of people that started broke. For some reason, that should be encouraging to you out there because I’m sure there are a lot of people out there that are trying to find themselves and trying to find their financial future or even their financial dignity at this point. I was at that point where I was embarrassed with myself with what was going on. I was way better than what I was achieving. It had a lot to do with mindset, but it also had a lot to do with listening to people that had already been there so I don’t have to reinvent the wheel and following their footsteps. That’s what we’re doing. We’re going to follow in Edna’s footsteps and see where she started and where she ended up. Edna, how are you doing?

I’m doing great, Mitch. How are you?

I’m fine. Thank you for coming on.

You’re most welcome. It’s my pleasure.

First of all, I want to tell the world about TaxFreeFuture.com. I want you to go to TaxFreeFuture.com and watch the 37 little video vignettes. It’s all about opening up self-directed tax-deferred or tax-free growth accounts where your money can grow tax-free or tax-deferred. If compound interest was the eighth wonder of the world, then a tax-deferred money might be the ninth wonder of the world. Go to TaxFreeFuture.com and check it out. You will not believe what your financial advisors are not telling you because they don’t make money to tell you things I’m going to tell you. Edna, tell us a little bit about you.

I got my driver personality from becoming a single mom at the age of sixteen and being told that my future was limited, “You’re not going to get anywhere in life. You’re going to be lucky if you get a decent job and when you do, just hang onto it for life.”

You’ve already been proven to be an overachiever. Who has a baby at sixteen? That’s overachieving.

Scaling Real Estate Business: Anybody who wants to scale their business has to start with property management to ensure growth.

My daughter actually works with me in real estate. She does my property management now, so it’s pretty cool. We stayed good friends and we have a good relationship. I also have two younger daughters that I’m hoping that eventually come into the business. I got told I had to learn to live within my means and I never liked that. I decided very young that I didn’t want to learn to live in my means. I wanted to learn how to make money. Although I struggled for a long time trying to figure it out, once I figured it out, there was no stopping me.

It’s simple, “I’ve got to live within my means. How do I get my means up to $1 million a year?” Your strategy of choice though is to buy and hold. You like being a landlord. You like acquiring properties. You like enjoying the appreciation and the depreciation. What about the downsides of that? How are you managing the phone calls and the tenants and the toilets? How do you get peace with that?

We actually very early on partnered with a property manager because we knew we wouldn’t be any good at that. We were scared of tenants and toilets and all that stuff. Then now my daughter actually worked for them and now she’s our property manager. She handles all of that and she has staff so that my husband gets some of the maintenance calls, but the rest of it is handled by the team.

You’ve got to have someone in between you and all that if you’re the owner because it’s not ever good to be the owner and have to deal with this stuff because even if you are the owner, don’t tell them you’re the owner. I learned that a long time ago because that gets you into all kinds of issues. You’re just the guy that’s in charge to manage it for the company that owns them and you can’t make certain decisions and you can’t do certain things because you don’t have the authority to forgive that late fee. If I could forgive late fees, I get fired. It’s not our policy and I’ve been told what to do. Can you have a management company from just one unit or do you have to get up to a certain level before you can actually use the management company?

A management company per say, yeah, because it’s going to be more expensive for if you just have a single unit. We get volume pricing. At this stage, we have all staff on salary, but at one point it was per door price. If it was under an apartment building, then the price was even better. Our specialty is dealing in the apartment building world.

How many doors do you have?

We have 522 right now.

You’re not joking around it then. With 522, we better pay attention here. This girl is no slouch. How many people out there would like to have 520 doors and be a landlord? At that volume, you’ve got people to handle all the different things, maintenance guys and stuff. You’ve got enough volume to get the help that you deserve.

I tell anybody who is wanting to scale their business, they have to start with property management because if you get drawn into that day-to-day stuff, you won’t have time to grow.

You buy the things where the money’s made, so anything not having to do with the acquisition of the next property is a drag on your way to where you’re going. You’re getting slowed down. It takes a little while to figure that out, especially when you start out. Everyone starts out as a one man show, but there are things you can delegate quickly while servicing. If you’re an owner financer like me, I owner finance houses. That’s the other side of the coin. I’m always teaching the difference between landlording and owner financing. Not to say one’s better than the other, it’s just I chose the other side of that coin.

I think when the gurus are out there talking about landlording, they gloss over the bad parts. They don’t talk a lot about the things that happened more often than you’d think and they don’t teach you how to handle that downside. You go in there thinking, “I’m going to collect $1,000 and I owe $600 so I’m going to clear $400 a month. That’s $4,800 a year.” You just acted like nothing was going to go wrong in that whole house for the whole time and no one was ever going to move out and no one was ever going to break a window. You have a book out. Does it talk about the whole business as a whole?

It’s not really. When I wrote that book, it was before we got fully involved in the multifamily like we are. I was writing more about multiple ways to wealth. There are so many ways to become wealthy starting with your mindset. That was my premise back then before we even got into specializing in apartment buildings.

That’s a great place for people to start. What’s the name of the book?

Multiple Ways to Wealth: Creating Your Prosperous Lifestyle

Multiple Ways To Wealth.

You start out living in subsidized housing and you start to change your mindset and you disregard what people are telling you or who you can be and how you can be. You end up writing this book, Multiple Ways To Wealth. It’s true, there are so many ways to make money. It’s almost unbelievable why they’re not teaching this stuff in school. I have no idea. They throw you out there like somehow that’s going to make you some money. I want the audience to get a free copy of this book. You just have to pay the shipping and handling. It’s a great value. She certainly shouldn’t have to pay to get you a book. Why you pay the shipping and handling? Go to 1000houses.com/edna and get a free copy of your book over there. You also teach a course. Tell us what that’s about.

That came about organically. People were watching us. We took our training through the Rich Dad Group and within eighteen months we had 50 doors. People kept asking me, “How do you do that so fast?” There are people in our group that three years later had not even bought a property. I figured there’s something that people want to learn from me. Let me take my story and build it into a course. That’s basically what we did. I talked about how we started, how we were able to scale, all that thing and that’s what I teach people.

If the audience wants a free consult about that course, also go to 1000houses.com/edna and there will be a link there to get a free consult. She’ll explain to you what else is involved. If you want to get into the multiple-door business, it might be a great place to start. It doesn’t hurt anything to talk to Edna. It doesn’t cost a thing to talk to Edna. Go to talk to her. Maybe you’ll connect. One of the best things in the world is to find the right mentor for you. I had one. I got unlucky a couple of times and it’s the same story. If you’ve paid for some help one time and didn’t get what you paid for or weren’t satisfied, don’t feel like you’re the lone ranger. It happens all the time. I get calls all the time.

Some of these people are spending $30,000, $40,000, $50,000, $60,000, $70,000 to $80,000 and are very dissatisfied, but don’t feel like you’re the lone ranger. If that’s you that I’m talking to, you can’t stop there because you haven’t found the right mentor. You have to find the one and that one’s going to make the $80,000 back that you spent and more. You just got to find the right one. That’s one of the reasons why I have consulted too. I want to find out if I’m the right person for the person on the other end of the phone. I don’t want to take the money from someone if I don’t think that I’m going to help them. The other thing that I do a lot different is I don’t sub out my coaching to a student. When I’m doing one-on-one, you’re talking to me. I can’t take very many people. I can take fifteen, seventeen a year maybe because I want to have a life. Is your course all online? Is it personal mentoring? Do they have access to you? How are you doing?

I structured it as a twelve-module program, which is all online but once a week we get on a group call and that’s where all the live mentoring happens. I offer that as a backup to my program for a whole year because I realized that you won’t always buy your first multifamily in the first 90 days.

You can’t get halfway into this stuff and be successful. You’ve got to get immersed. You’ve got to immerse yourself and get around people that have done it. That’s the number one thing. Get around people that have done it. If you hung around people that bought apartment complexes all day long, you couldn’t help it but buy one sooner or later. We’re a product of our environments. When you want something, get in that environment. Stay in it as often as you can. Your energy radiates. Do you always see this energy, the smile and this vigor for life?

Yes. I just didn’t always know how to channel it.

That’s a trick. Let’s talk about that. What’s the difference now?

I was negative when I was younger. Even though I had the drive, knowing I wanted to get there, I took many twists and turns to get there. I blamed people for my challenges and I was one of those people who signed up for courses that didn’t work for me and they’re terrible. I learned to take 100% responsibility for my life and since then, that’s when everything has skyrocketed for me. I’ve been able to channel that energy into helping other people as well. I’m sure you get as much satisfaction out of your students doing well as you do out of yourself doing well.

At this stage of my life, money’s not my issue. Money is not my problem. I just found that if I didn’t charge money for it, I didn’t get what I wanted out of the relationship. What I wanted was to see somebody go in and fire their boss. That’s what I want to see. My emotional high was being a part of something that allowed a guy to walk in and say, “Boss, I don’t need you anymore. You’re fired.” When I wasn’t charging, no one was doing anything. I told someone, “I’m doing this coaching, but I’m not being effective. No one’s doing anything.” They said, “Tell me about it.” I said, “I’m doing it for free.” They said, “There’s a problem. You’ve got to set a gate that only certain people are going to crawl over. The people who crawl over that fence, which is the price, are the ones that are serious enough to get what you want out of it, which is the emotional high of helping someone better themselves.” It’s not all about the money.

That’s why I have those interviews like you do, the little consultant call. I don’t want to sign up with someone who I don’t think is going to make it. I won’t ever say it like, “You’re not going to make it. I’m not going to take it.” What I suggest is, “Why don’t you just do the $3,500 a year weekly call and let’s buy a couple of houses and show yourself that this business is for you? Then at that point, when you’re sure this is the business for you, maybe the house will pay for the course. I’m trying to get paid from the houses instead of you going to get it on your credit card or something. Break it down and let’s come along that way and see if this business is a fit. If you are and you buy a couple of houses and I see you doing well, absolutely, but I don’t think you’re ready to spend $15,000 on me right now.”

I’ve told a lot of people that and I don’t teach newbies to begin with. I’m not here to help you learn how to write a contract or figure out how to make offers. The last people I talked to had already done 20 or 30 houses. They just wanted to know how to go into owner financing or to how to shortcut some of their processes or how to free up some of their time. They were already doers. They’d already proven that they were doers. I think that we both agree, the student that you’re looking for is the one that was going to win.

I like you and I don’t usually deal with beginners. Most people come to me after they’ve got some experience, a few properties and now they want to learn how to scale and take it to a bigger level using investor capital and that sort of thing. One thing I want to point out with the long-term buy and hold that a lot of people forget about is our mortgage pay down. We’re at $25,000 a month in mortgage pay down and we’ve been doing this for twelve years. Where else can you get that to happen for you?

There are little tricks to pay down mortgages faster than normal, that doesn’t hurt a lot. There’s a guy that talks about all these money hacks. I interviewed him. He had some money hacks on cutting mortgages down to nothing that was unbelievable. It can change a person’s life. If you take a 30-year mortgage or a 20-year mortgage and cut it down to eight or ten, it’s not that painful to get it done. If we were just starting out, what advice would you have for people that were going to contemplating, taking control of their financial future?

Scaling Real Estate Business: The key to scaling is how much you can buy with nine-year-old money and make that stuff work for you.

You actually nailed it right on the head. You said to get around like-minded people because it’s like a rising tide. You can’t help but do the things that you’re looking to do. You’ve got to be around people who are doing what you want to do. If you want to buy a multifamily, get around people that are doing that. If you want to owner finance, get around people that are doing that because that’s what you do every day. It’s like another language to some people and they’ve got to learn that language.

You’ve got to find out what turns you on and get in the niche that you’re excited about, that you feel like you’re good at and that you’re drawn to it for some reason. I never woke up and said I want it to be a house owner. I accidentally bought a condo to live in. It was a one-bedroom efficiency condo and I owned it. It was nice because for once in my life I could say, “If you don’t like it, you can leave.” It’s my house. Then there was a two-bedroom down the way and I bought it. No one was financing condos at the time, so I leased it. I leased the second bedroom for a roommate. I noticed by accident that I was not only living for free, but I was also making potentially $50 a month. I’m not very smart, Edna. Everything has to hit me in the head with a bat. I think I discovered a new business, real estate. There are books on it. There were Carleton Sheets back in the time and Dave del Dotto. Half those guys went broke, but it wasn’t because the theory was bad, they were just bad money managers.

I don’t think Sheets went broke, but I know a lot of those guys, some of them went to jail for doing things they weren’t supposed to do. It wasn’t because the theories were bad, they just had character flaws, either financially or morally. I kept taking in all those things and all those ideas and morphed my way into seller financing. My way is like a way of having a cashflow but without having the liabilities, but my way is temporary because that note’s going to expire. How much do you think your houses have earned your financial statement in appreciation?

That is so hard to say because my accountants don’t even put that on our net worth statement. They don’t even count it. They count what we purchased it for and then mortgage pay down each year from there.

They send my net worth, this little number and it was actually sixteen times bigger than that because the values of the property are what I paid for them twenty years ago. It’s a twenty-year storage unit and now they’re assessing it at what I paid for it. Where is that you’re coming from? I went and did my own agendum to add to their certified financials. What they’re not telling you is they’ve owned these properties for fifteen and twenty years. They’re now worth millions upon millions. The rents don’t even resemble twenty-years-ago rents. That’s the cool thing about renting houses too. Even a moderate deal can outgrow moderation into a great deal. It can mature as the rents go up.

Our very first no money deal where we bought a house with none of our own money, we paid $160,000 for it. Some people might have thought we overpaid, but we got it with none of our own money. Five years later, we got an appraisal or something and it was only worth about $5,000 more than we paid for it. The key there was we made $1,000 a month on the cashflow from those properties over that five-year period with none of our own money in the deal. We paid for the legal fees and that was it, which was about $2,500. That’s the key in scaling. It’s how much can you buy with none of your own money and make that stuff work for you.

People think they have to have money to do this business. If that’s what you’re thinking, then you don’t understand the business at all because the art of this business is that you don’t need business. Let me rattle off a couple of nothing down ways right off the bat. One is to get your seller to finance you, maybe or maybe not. Two is I bought my first 100 houses on credit cards. In my town, I could buy houses for $20,000 and then $10,000 and fix it up. I had $30,000 in when I started several years ago. It’s like, “Give me $10,000 off of this card, give me $10,000 off this card.” I go by the house, “Here’s $10,000 for the rehab.” I got $30,000 on credit cards, 0% interest or 1% interest. It’s free money.

I go and owner finance it for $65,000 with $5,000 down, I put $5,000 in my pocket and then I go sell my $60,000 note for $45,000 or $50,000 cash and I get the $50,000 cash down because believe me, when you sell their house and sell these notes, there are no liens on them because I bought them with credit cards. The debt is all on the credit card. I get the $50,000 cash in my hand plus the $5,000 down that I collected. I have $55,000 in cash. I take it down, I pay off the $30,000 worth of credit cards and I keep the $25,000 difference. The other one is to get a partner and split half. I could have went and got a financial partner. You put up the $30,000 I found the house, I’ll do the work, I’ll sell it and we’ll split the $25,000. It’s $12,500 apiece. Making $12,500 a deal, it’s hard to go broke doing that. Where you go broke is where you won’t do a deal because you don’t want to split it with anybody. Therefore, you don’t do any deals and you get 100% of zero. That’s not the way to go.

That’s so true. We do a lot of joint ventures with people.

When we start out, we’re professional deal finders. We’re professional deal-writer-uppers and so for all these deals, we don’t have a penny. We’ll write all these deals, but we’ve got 45 days to close, 60 days of close and it’s a great deal. After all, you put $30,000 into this and you can sell it for $65,000. Your job is to be a great deal-writer-upper and then you walk around with your deal over your head and you start screaming at the top of your lungs, “I’ve got a house that can potentially make $35,000 profit. Who wants half?” Then you’re talking to the people that show up. What you tell them is, “I have the deal. You bring the money. We split.” It’s not complicated. Now that you have this mindset that you don’t need money, you can make offers on $700,000 buildings. You can make offers on hotels. You can make an offer on anything you want.

It’s the mindset first. You have to have the right mindset to go into this.

You have to understand what you need in that contract so that you can be successful. You need to present that contract to someone who has the money and explain to them why it’s a good deal and why they should come.

It’s your mindset that first of all, you believe others done it and then that you can do it yourself.

One of the ways to change your mindset is ride around with a guy and watching them do it. The turning point in my life was when I watched the guy drop off a check to the IRS for $385,000. He said, “Will you come with me and ride with me?” I said, “Why?” He says, “I can hardly make myself get in the truck.” I said, “I’d be right there.” I thought he was all depressed. I said, “What’s the matter?” He says, “I have to take this to the IRS and drop it as well.” I said, “Your taxes are $385,000 and you buy those crap little houses over there?” He said, “Yeah.” I said, “I’m a believer. I’m in.”

Scaling Real Estate Business: Do whatever it takes to get around the right people.

Not too many people have that attitude that they’ll do whatever it takes to get around the right people. Do they?

No. That’s the thing. You’ve got to find the right people as a coach and you’ve got to find the right coach as a person. Not all coaches are created equal and you’ve got to find them one that fits you. I always tell people, when you find someone that you think you want to go with, research. Call and ask them if they have any students you can talk to, but you want to find them on your own because they’re only going to give you the happiest students. Research them and then make sure that when you’re in your research that they’re the person you want to be on and off the field. Just because they make good money, it doesn’t mean that’s the right guy for you. There are a lot of crappy people that make a lot of money. Be with someone that you want to be like on and off the field. That would be my suggestion. Do you have mentors and coaches yourself?

Always, I got my first coach in 1999 when I was a financial advisor and I’ve seldom been without one since. If I am, it’s a short period of time while I’m figuring out my next step and always somebody who’s done what I want to do.

They’re not talking about it. They’ve done it there. I’ve heard the theory where you need a bunch of short-term mentors for specific things, not one long-term mentor. You need to get people in increments. If you’re trying to learn how to find houses and that’s the coach you get, then you want to learn how to sell houses, you get that coach. Then you want to learn how to systematize your business or delegate, get someone who’s buying 100 houses a year that doesn’t have to be in an office. I haven’t seen the last 350 houses I bought and I haven’t seen the last 350 people that bought my house. I don’t even know what houses I own right now. I couldn’t tell you one address. Can you set up that way? I don’t need to know. My job is to go out and socialize and make sure that we have enough money to fund all.

Isn’t that a fun job?

It’s hard. I ate at Myron’s Steakhouse. It’s horrible. They cook this big juicy steak and I could hardly stand it. I was talking to a guy who is a multimillionaire who sells water. Learn something every day.

I love that about my clients. It’s just fun getting to know people and seeing what they’re up to and the different ways that people are making money and scaling their businesses. It’s so exciting.

If you would like to have a consult with Edna go to 1000houses.com/edna. I’d like to thank you for taking the time to stop by and say hi to the fans. I’ll introduce you to the audience. I’m sure some people are going to call you because if I was out there and wanting to do apartments, I’d call you. You seem like a nice person. You don’t get to 500-plus doors not knowing something. You’ve got to know something. I would be very curious to know if that was my realm. I have also learned and that I have to stay in my lane. I have this thing I do well, I stay there and I do it every day. I don’t bounce around to all the different things because there are so many ways to make money, then you’ll dilute yourself to nothing. If you end up to doing multifamily or collecting rentals, then let’s go to 1000houses.com/edna. I appreciate you being on.

Thank you very much, Mitch. It was my pleasure.

Important Links:

• 1000houses.com/edna
• 1000houses.com/moat
• 1000houses.com/livecomm
• 1000houses.com/AOF
• 1000houses.com/Coaching
• Edna Keep
• TaxFreeFuture.com
• Multiple Ways To Wealth

About Edna Keep

Former Certified Financial Planner Edna discovered the power of real estate in 2007.  Since then Edna and her husband Warren have amassed a $60M Real Estate Portfolio primarily multi-family and primary with OPM.

Since 2014 she has been training and coaching real estate entrepreneurs who want to scale their real estate business into multi-family with Investor Capital.

You can connect with her at edna@ednakeep.com and her website is https://ednakeep.com