With pandemic-related demographic shifts causing a shortage of inventory in certain markets, it is expected that there will be an unprecedented spike in the demand for single-family homes. How can you, a beginner, position yourself favorably so that you can seize your rightful slice of this opportunity? More importantly, how can you determine which properties will get you the highest ROI? Join in as Brian Covey brings in a real estate maverick who is perfectly suited to discuss these things – Kris Krohn. Stick to the end as Kris opens up a rare opportunity that might become the start of your journey in real estate!
Kris Krohn: How To Get Into The Real Estate Game And Create The Life That You Deserve
This is a special episode. I’ve got my friend, you don’t know him, Kris Krohn. If you’re in anything real estate, if you’ve paid attention at all to what he’s got going on, on Instagram, he has several hundred thousand followers. I looked at YouTube and over almost 700,000 followers there. What I love about Kris, and we’re going to unpack for you, and probably why most of you tuned in is how do you learn about getting in the game of real estate. Many of you are trying to build wealth. At one point, you’ve probably thought, “How I am going to retire one day?” We’re going to unpack not only myths but things about you can’t get rich with just your 401(k), you’re not going to get rich by saving enough money in your checking and savings accounts.
For many of us, we’ve maybe been taught the wrong things about how we build wealth. Kris is not only a real estate maverick, but he’s also written a book on how to invest in real estate smartly. He’s going to talk about how he’s been able to do billion dollars of real estate over the years and build a team and find properties in markets that get the highest ROI. He has been able to build a system that he’s going to teach you and give you some wisdom no matter where you are. If it’s your first time, you’re looking to invest in that first property or you’re somebody who has done hundreds of deals, we’re going to unpack all of that.
We’re also going to give you guys a special invitation to a partnership that we are doing to help you get into the game of real estate. I want to see people get off the sidelines and sitting over there, watching other people make money and building wealth. Let’s help you get in the game. I can’t think of anybody better than Kris Krohn to join us and to share his wisdom and everything he has going on. Kris, welcome, my friend.
Brian, I appreciate it. It is such a killer time. The real estate market is doing something we’ve never seen in history, and there are going to be people in the next several years creating financial freedom. They’re going to be making history because while many people are worried about this economy in this post pandemic, what is this, there’s more money to be made in the single-family realm of real estate than ever before. It’s super exciting.
You probably have people out there that are going, “It’s scary. We’ve got low inventories.” Rates are doing this and doing that. They’re coming up with their own ideas of why it’s not there. As I listen to you, and we’ve talked about this is, you’ve built a system that is built for time for good markets, bad markets, the people that are concerned about that, tell me about what you’re seeing in the market now because you’ve got a lot of real estate. You see a lot of deals come across your table. What do you see?
Back up 2008, subprime crisis, the bubble burst, and we see the worst real estate economy we’ve had since the Great Depression, and everyone was so turned off from the game of real estate, but me, I was firing up my machine as fast as I could because starting in 2009 and 2010, I went into the hottest markets like Vegas and Phoenix. If you play the market intelligently, not in your backyard, but understand that the United States is made up of 324 markets and three markets at any given moment have the highest potential, and they’re only going to open that window for 5 to 7 years. Back then, within five years, I made my investors over $100 million. We did thousands of deals. I look at what’s happening right now, I would have never guessed that a government forced recession would have turned us into this type of economy, but we’re seeing similarly, this is going to be hands down even better than 2008.
This is one of the most exciting times. Look at what’s happening right now, we have a massive shortage, historically lowest supply that we’ve ever had. We have a greater demand for single–family homes than ever before because people are fleeing the cities. They realize that their future is working from home. They don’t want to go back into the commercial workspace. Seventy–two percent of them want this to be their new way of life, so what are they doing? They’re buying homes that are bigger, larger, where they can separate their private life from their work life and make this our future. We’re having a phenomenon hit single–family that I believe will move prices in the next five years, bigger than we will see for the next three decades.
We’re seeing it. In 2020, whether we worked in an office on a regular basis or part-time, we’re all working from home. We have this slogan, home means everything. We realized that home did mean everything. It was your safe haven. Nobody was fleeing to their corporate office when we all got sent home. Those buildings didn’t provide comfort and security that we all need. I love when you’re talking about 2008 because I went through that as well. I happened to be in Florida. I remember back to that time and watching home builders go out and you saw all these factors that some people are like, “We’re getting towards that 2008 crash and all that stuff again.” I’m like, “The dynamics and factors at that point are nothing like we’re seeing.” This is a unique opportunity for people where it’s a perfect storm in a way. If you want to get into this game, you can get in.
At the same time, there are secrets to doing it intelligently. I get millions of views every day, organically on my videos, teaching and educating and trying to help as many people become successful investors as possible. Brian, you do such a great job with your social media, getting the word out. If I could drop a couple of tips on anyone reading that will help them succeed in the market, let me share with you what has brought me my highest returns. Number one, for sure you need to be focusing on single–family, not commercial, not multifamily, not anything else. This is the hottest this sector has ever been. Number two, you need to focus on homes below the median. In the last quarter of 2020, we saw the median bump up to $348,000, and yet my average purchase price is usually buying homes for $150,000 to $200,000.
When I talk about the 324 markets, Brian, there are three in particular that have the highest ROIs. I’m purchasing, right now, directly in the Orlando, Florida market, Greensboro, South Carolina. I’m investing in Memphis in Tennessee. In those three markets, I’m either getting the highest cashflow or I’m getting the highest growth. Over my last several thousand deals, I typically target a minimum of a 25% annual ROI, but truth be told, lately, I’m getting closer to 30% and 35%. You can imagine if you’re earning those kinds of returns on your money, you’re doubling your winnings in real estate every 2 or 3 years. That’s not something you can do in 401(k)s, IRAs or any kind of traditional financial planning.
Anyone that has ever been interested about real estate, becoming an investor, you couldn’t have picked a better time. You just got to figure out the most intelligent way to get in the game. Those are a couple of tips that you should be looking for right now, I dropped those markets, go to where it’s hottest, pick a team that knows what they’re doing. I’ve got 200 people on my team that run and build and evaluate thousands of homes every week to bring me a handful of the best ones. Stay in single–family and stay below the median. You do those three things and chances are you’re going to gain some of the biggest winnings that you can in the next five years.
You might remember, I’m originally from Memphis. As you mentioned that, it’s nice you see these markets. Some of us may know these markets, some markets we may not know as well. What I love is you and your team. I’ve been following this. This is what’s so exciting, many people think that they have to do it all themselves. That was the trajectory, “I’m going to do these fix and flips. I’m going to go out and find real estate.” When are you going to find time? When are you going to do the homework? By the time you spend all that time, are you going to get the ROIs that you’re talking about? Probably not for most people. You’ve already done the homework that’s there. What do you hear are some of the reasons people hesitate and they are not taking action on this? As we talk about it, we hear these numbers. This all makes sense to us, but we’re in the game, we’re all in on this.
There’s a lot of confusion. A lot of people think that the real estate market follows the stock market. They only crash at the same time, 2 out of 5 times, and they’re certainly not set up to do that this time. A lot of people think that when the market goes down, the stock market crashes, at the exact same time, real estate has to do the same thing. It’s usually the opposite. It’s not true. That creates a lot of fear. Back to my beginner days and I look at the things that held me back. I was 21 years old, I was in college, I was going to school full-time, and I was working full-time.
At that full-time job, I was blessed to have a job that I thought sucked. It was this telemarketing job. It was talking to people all day long that didn’t want to talk to me. It was not a great job, but there was a gift, a silver lining. I was interviewing people that had, for the most part, gone to college 30 years earlier and they had been following society’s system. They had been 401(k)-ing, IRA-ing and house payer offering. I got to be a voyeur peeking in on what happened 30 years after that game plan was set in motion.
Brian, you’re not going to be surprised with what I’ll say, but I found out that the average person in their 60s had set up retirement between $150,000 and $200,000. Their house was half paid off. I’m like, “You’re nearing the final bend on retirement and you maybe have a net worth of $200,000 or $300,000. Because you consume $80,000 a year, that’s going to last you for 3 or 4 years. You’re financially screwed.” No one told me that. Here I am as a 21-year-old. It gave me the motivation to say, “This whole financial planning system is a hoax. It doesn’t work. It’s designed to benefit a lot of other people, but not the person that counts, not you.”
That’s when I decided that I needed to overcome my fear and become an investor. Four years later, I graduated college. I had a small portfolio of 25 homes. I had a six-figure residual income and I quit my job. I had all this time on my hands. I said, “This works so well.” I started doubling my portfolio every year. Eventually, dozens of homes became hundreds of homes and became thousands of homes. Now I’ve done over 4,500 deals. I buy a house just about every day of the week. My biggest advice to people is if you understand 401(k)s and IRAs, you’re habituated to them, but they only earn a single–digit ROI.
Even though Albert Einstein said that compound interest is the most powerful financial force on the planet, that’s not true if you’re earning a single–digit ROI. That’s not true if your 30-year average on 401(k)s and IRAs in your stock market are 5%, 6%, 7%, 8% returns, real estate gets me 25%, 30%, 35% every year. That’s how I became rich in my twenties and afforded a lot of great options. Anyone reading and thinking, “Is it too late for me?” Your best years are right around the corner. You’ve just got to get smarter. Part of that starts with define society’s broken financial game plan and getting one that works. I love educating and I’ve dropped some free gifts for people on that URL. For anyone that wants to say, “What if I want to get in the game of real estate? What if I want to still be with my career, my family, and be passive? How do I tap into those kinds of returns? How do I get 25% and then compound that to 100%, 200%, 400% or infinite ROI?” That’s what I love showing people how to do.
I love it because we have a similar passion for educating people about the things that we were taught that don’t work. There are things that we should know, and we should share those as we have those experiences. I love as you went through that too, because I’ve got a lot of friends and I have a full-time career and have family, so my goal is not to go out and become someone that finds properties every day. There are probably a lot of people. They have a job, they like it, they enjoy what they do. How can I build more? Whether they’ve read, Think and Grow Rich or whatever they’ve consumed, they realize there are other ways. To your point, there are people getting wealthy doing things besides just earning their income. Where would someone start now? I know you’ve got a lot of resources. You’ve got your book and your website, KrisKrohn.com, I’ve been consuming a lot of that content. It’s how we met. Let’s get in the game, to start and say, “Kris, I’m interested. Where do I start?”
It’s important because of the timing and the economy that you jump into the meat and potatoes that matter most. I always tell people that when you want to have the shortest learning curve and avoid all the trial, error and pitfalls, and get to the highest level of success the fastest, that route is always going to be a matter of finding the people who are winning the game the biggest. In my space, anyone that’s bigger than me is usually a REIT, or it’s going to be some hedge fund like Blackstone, but they don’t let you in on the juicy returns. They give you the easy stuff. I’ve prepared some resources. I’ll give you this URL. If you wanted to see a track record on a system that you can implement yourself where I’ve done thousands of deals, and you can copycat my system, you can go to InvestInRealEstateNow.com.
What you’re going to find there are some great hands-on resources, my track record, first and foremost on, “If you’re a mom-and-pop shop or if you’ve never done that before, here’s what you should do.” You should see a simple approach to single–family. Let me break it down a little bit, Brian. When people are investing in their backyard, they’re exposed to a lot of risks. If you go to the best markets, there’s a way to tap those markets and get the highest ROI. When I say I get 25% of my money every year, and that compounds to doubling my money every 2 to 3 years, what I’m doing there is tapping into these single-family homes, and I’m just renting them out for five years. Here’s a game plan I give to someone.
If you have a 401(k), an IRA, equity in your home, an annuity, stock market, money under the mattress, and you’re like, “I’m not being served with my single–digit returns with earning 4% here and 8% here, 1% here. I want to get into real estate.” This URL that I’ve given you, will show you how you can take that money, often tax and penalty–free, transfer it into real estate and get leveraged, and purchase homes. In these top markets that I reveal on that link, if you go and buy in those markets, tap into the system that I’ve provided you with and you produce ROIs at 25%, here’s what you should know. A 25% ROI compared to your traditional retirement ROI over twenty years will make you 27 times more money. It won’t make you filthy rich, but it will make you rich. That’s all about giving you more options in life. That’s one of the things that I’ve prepared. If you go to InvestInRealEstateNow.com, you’re going to find some great resources and learn, “How do I take $40,000 or $50,000 from my retirement? How do I take that money from savings? How do I take that money for equity in my home?”
If you own a home, you are equity rich. Did you know if you have a median–priced home at $350,000, and maybe you owe $150,000 on it, the bank will lend you some of the cheapest money ever? That’s Brian’s expertise. If you’re borrowing it today’s rates on 80% of the value of that median-priced home, the bank’s going to give you like, “Here’s $100,000.” $100,000 at today’s interest rates are so cheap that’s enough money for you to go and buy two award-winning properties in the right market and start doubling that portfolio every five years. Twenty years from now, you’re going to be sitting on, for example, eight properties and earning a 400% ROI potentially off that original investment.
Most people don’t think that way. I’m sure you see that. I know you educate on that. We hear that. We’ve got people who are like, “How can I pay off my house the soonest?” I‘m like, “What are you going to do when the house is paid off?” “I have no idea.” I’m like, “Now what?” You feel better. You might sleep a little better at night. I love how you outline that and it’s specific. Going into these markets is where it probably is out of most people’s expertise unless there’s someone that’s done this before. When you talk about some of these markets that you shared from Greensboro to Memphis to Orlando, those people may not know those markets well. There are others, I know you’ve shared with me, that we’ve looked at.
As you start looking at those, what I’ve found that you bring a service to the market that most people don’t know how to start, and you’ve given some resources that are there. I think about somebody that’s moving to that next group. Maybe somebody is investing a little bit now, but they’re like, “Kris, I‘m doing this all on my own. I’m trying to find properties to your point.” They’re investing in their backyard, the same market they live in, they work in, how can they start to diversify? Would it be the same strategy for them if they’ve already got some real estate portfolio built? Should they start to do anything differently there?
Let me share with you the number one reason I see people fail in real estate. They try to wear too many hats. “I’m going to find the deal, I’ve got to find the loan officer and then I need to find the realtor. How do I work with them? I’m also going to rehab the property. I’m going to do the fix up on it. I’ve got to go to Home Depot.” In real estate, when you try to do 1 or 2 of these functions poorly, there’s a good chance that you’re going to reduce your gains to something much smaller, but worse, you could lose money. Unfortunately, with newbies, this happens all the time. I saw this starting to happen to me in the beginning.
I realized that even though society does train us to be solopreneurs, you’ve got to do it on your own, lone wolves get slaughtered in the game of real estate left and right all day long. I always tell people, “You do achieve more through a team. Together, everyone achieves more.” What I did is I built my original power team. I said, “I need to find someone like Brian who can do all of my lending because he’s a boss and he’s done billions of loans and he’s mastered the game. I need a team of realtors that can find me the best deals and bird dog for me. I need the right property management company that will know what to do with these properties and not take advantage of me, title company, all of these pieces, who’s going to do rehab.”
That power team started off as five people, and I’ve grown it over the last several years to 200 experts that now work only in the best markets. Here’s how cool this system works. I’ll spend maybe ten minutes a month, but I’m going to buy homes almost every single day. This is what I always tell people. I would give you two pieces of advice. If you’re doing backyard real estate, if you’re doing it on your own, first of all, there’s a good chance that your real estate, you’ve been outpriced with how much that median has moved up. You’re either thinking, “I’m going to wait for it to fall and miss on the best opportunities because I’m restricted to my back market,” or you figure out how to tap into a better market. I’ve already shared so far where those markets are.
I would be doing five-year holds on single–family rentals. You’re going to do it one of two ways. You’re either going to do it on your own, and if you go to that link, InvestInRealEstateNow.com, I’ll share with you a meaningful information on how you could attempt to do this on your own. Some of the right people, if you’ve got experience, that’s probably a good move for you. If you’re like, “That feels way too far out of reach because that’s a heavy lift.” I don’t want to be the expert wearing all the hats. In fact, I’m committed to the way I’ve set up my lifestyle right now. I don’t have hours a week. Brian, my team puts in 341 hours per deal just in the acquisition process.
One of the services that I’ve done is I decided that there’s a need in the market and no one’s filling it. I’ll interview people to partner with me. I’ll help them shift their assets intelligently into real estate, but they get to be passive because me and my team will do all the work. I partner with people all over the world. That’s one of their options. If they don’t want to become the consummate expert and they don’t want to wear all the hats and they don’t want the trial and error, if they want to skip to someone with a track record with a billion in single–family that’s figured it out, they can partner with me. We’ll split the profits 50/50.
Here’s the math that’s important. Let’s say someone’s reading and like, “I want to get in contact. I’m going to go to that URL. I’m going to get in touch with Kris’s team. How does this work?” If we interview you and we find it’s a good match, then we’ll bring you aboard, we’ll set up an LLC, we’ll set up a bank account, we’ll get you pre-qualified working with Brian’s amazing team and then you’re ready to buy. We’re going to start finding homes that meet my strict criteria. Let’s say that your game plan called for buying three homes. The goal would be to buy those three homes over the next few short months, and then we’re going to hold them, rake in the cashflow with huge tax benefits. If you’re paying too much in taxes, you’re going to love this, but the goal in five years is to sell three homes and replace it with six new homes.
If you do that without adding money in, you have shifted from a 25% annual ROI in theory, to a 50% annual ROI. If you do that for five more years, you’re going to shift from 50% to 100% sitting on twelve homes. For twenty years, you’re now sitting on 48 properties and a 400% annual ROI. No wonder 90% of all millionaires do it in the game of real estate. It’s not overnight, but it’s intelligent and optimized. That shows you the kind of games that I help people get. Is it worth it for some people that want to be passive to partner, split all those winnings and have a real retirement? There are people that make that decision every single day.
I love how you share that because that’s for a lot of people now, their wheels are probably turning. They’re like mine when we were connecting up. There’s got to be easier ways for those of us that want to get in the game. We recognize the shifts and the market. It’s right, right now to get in the game. I love how you define out a plan. It’s not get–rich–quick. There are significant tax advantages that we want to make sure that we take advantage of those and that we’re wise about what we’re building. You have a roadmap and I love that. It’s 5, 10, 15, 20 years down the road. We all should be thinking that way. At some point, we should be working towards that and not, “What am I going to make next month? What am I going to make in 2021?” That’s the small mind. The abundance mentality and the bigger minds, and to your point, the people that are truly wealthy now, they’re living the life that they want to live. They figured out how to work the game that exists. They aren’t sitting on the sidelines.
Most people, if they thought about their current financial strategy, here’s what would happen with a little bit of thought. They would start realizing, “My 401(k) cannot accumulate enough money in my working life to create the retirement I want, so if it’s not going to work, why am I putting so much money into it? Is it because of the free money match that will still leave me broke?” You get people that will put money in an IRA because they’re trying to save, usually, a couple of hundred dollars on taxes, but they’ll tie up that money, earning low ROIs and can’t use it. They might shift to annuities or maybe the S&P 500, but what all of these investments have in common is that there’s no diversification. They’re all indexes. They’re all mutual funds that are designed to produce a 30-year average of a 6% annual ROI and that doesn’t compound meaningfully.
If people recognize that, what they should do is stop doing what isn’t working. Even though it feels riskier, there’s a certain amount of risk that people have to take to get the retirement that they want. For me, that’s answering this one question. How do you predictably and safely get to a double-digit ROI with the least amount of risk? That’s what real estate is for me. It provided that answer in the beginning. It’s still doing it now. I’ve got a billion-dollar game plan. I know my path to become a billionaire while I’m also equally helping spread the billion dollars out amongst the rest of my partners. It’s fulfilling. It’s a fun game.
It’s a juicy alternative. Now it’s one that has come with a lot of track record through some of the worst economies, some of the best economies. The most successful people rip off and duplicate the most successful models out there. You’re welcome to do that with me because there are more than enough deals for everyone to play. You don’t have to partner with me. You should do it on your own in the least. If you go to InvestInRealEstateNow.com, you can get free access to my document called Krohn Consortium, it’s my track record on my last $500 million. It will show you step-by-step exactly how and where I buy real estate. Copy me.
I love that you give that away because I know that’s where we aligned up so much. You have dropped a lot on people. People are probably going either, “I get this, or I still have questions.” I know we have been talking about this and I’m excited to be partnering with you because there are so many synergies about how we want to educate people, inform them and get them equipped to go out and win their game. To get in this game that is happening, we want to make sure you have the tools. Part of that was let’s give you some education around what’s happening, where the current market is, where we believe it’s going, where opportunities lie.
I’m excited to be partnering with you because there are people that we can help that right now are sitting there and they’re like, “If I had somebody I could trust and ask these questions to, it would give me some of the advice that I can’t seem to find anywhere else.” They would start to get educated about this and see where that fits in. Where can they go after this? I know they can follow you on social. You’re extremely active on Instagram, YouTube, all over the place. Where can they go to connect up and to find out more information and take those next steps?
There’s a lot of great free information on that URL, InvestInRealEstateNow.com, but in addition, if you want to follow me on YouTube, for example, and you click a link in the description below in any of my videos, you’re going to find eighteen different resources. Almost every one of them is free. I give away all of my books for free. I have this philosophy that if I can help a billion people financially increase their knowledge base, they’re going to be better off. Sometimes people need to get one gold nugget from me or sometimes it’s 100. Sometimes they want to partner or leverage some of my systems to make it easier. Whatever that level is, it’s simply meaningful for me if your life is enhanced and moves to that next level.
Get your hands on any of my books for free. You can find them in my link and bios on Instagram, TikTok or anywhere, but more importantly, that link I shared is probably the most relevant to this conversation of Kris. If you’re telling me that, “The next five years is how I set myself up to become a multi-millionaire in real estate,” then you want to go to InvestInRealEstateNow.com and get that resource where I’ll show you my track record. Copy some of it, any of it, or at least be more knowledgeable on what some of your options look like.
This has been a fun episode, but also informative. That’s what we try to bring you every time. I believe we’re all on this path and we’re learning and growing. Sometimes it’s called what it is. We’ve been taught things or things are outdated that we need to up and become more modern and get with what’s happening out there. We want always to help you get those resources, and Kris is one of those. Reach out to either one of us. We’re here to put out that, educate you, give you some tools and steps so you can take whatever the right next step is for you. That’s the joy of getting to bring on great guests. Kris, anything we missed or any final thoughts for them before we wrap up?
At the end of the day, you need to decide that your financial future is yours to create. If you have fiduciaries, advisors, financial planners, CPAs, remember, they’re not responsible for your results and outcome. They are guides along the journey. Sometimes they’re more helpful. Sometimes they are a lot less helpful. I would add some mentors to your list that have made hundreds or tens of millions of dollars and can show you how to achieve the same, because most of us are going to need a more aggressive strategy than the typical financial planning model to get where we want to go. Find those mentors, learn from them, get in their airspace, read their books, because ultimately, at the end of the day, your financial results are going to come down to you and nobody else.
Not only did we get to bring this to you, but for those of you who’ve been following along, we released my first book, Conversations with Covey. You’ve got that. It’s on Amazon, check it out. It’s got eleven of our favorite season–one guests that we share all kinds of wisdom and things that will not only give you hope, inspiration, motivation, but like now, actual action items in particular areas to help you move the ball down the field and help you win the game of life. Kris, thank you. I’m excited. I know, you and I, we’re on the same mission of how we impact a billion people. I get fired up about how do we impact more people? That’s what the show is all about. If you guys would go over to Apple Podcasts, make sure you like, subscribe and leave some comments. Follow Kris. Get out there and get in the game. That’s my encouragement to you. Let’s make sure you’re living your best life and you’re contributing out there and making a collective impact. Let’s do this together. Let’s go. We’re out. Good luck.