Podcast 205. From 0 – 70 Units in 2 Years Without JVs or Syndications with Kyle Root

Average Joe Finances:
0:00

Hey, Welcome back everybody to the Average Joe Finances podcast. I'm your host, Mike Cavaggioni, and today's guest is Kyle Root. So Kyle, I'm super excited to have you on, especially with what we were talking about pre-recording about what you're doing at a very young age, man at least to be where you're at today. So I'm super excited. Thank you so much for joining me today.

Kyle Root:
0:22

Yeah, Mike, thanks so much for having me.

Average Joe Finances:
0:24

Absolutely. So Kyle, I wanna just knock this off right off the bat. Start this thing the same way we start every podcast episode and we wanna know more about you. So if you could share a little bit about yourself, share your background, your story. Who is Kyle Root?

Kyle Root:
0:39

Yeah, man. So I grew up, born and raised in Michigan. My grew up in potassium Michigan, which is a small area was born there. Ended up moving about an hour, oh, maybe an hour and 15 minutes north. So if anyone's familiar with Michigan you got the upper peninsula. You could. Basically walk out my back door and be close to Canada. We were north and again, grew up in a small town was your, oh, how to put it kindly your classic jock if you will. Didn't take school seriously. Didn't get great grades, didn't get terrible grades, just right down the middle, just enough to, keep playing sports and plowing away. So that was my claim to fame, was being an athlete and a lot of great lessons came from it. And I was lucky enough to go to college, played football in college at a small division two school, and again, great lessons through there. Wasn't a great student again in college until about my junior year. And I started off in construction, so that was my background was in construction management. That's what I went to school for. And I got my first job as a freshman, which was painting, and then my next year I was pouring concrete. And for any, anyone that's poured concrete or anyone that's been around it, or Obviously there's, you might have a lot of like construction or realtors or obviously investors that listen to this show and they've seen, the hard work that goes into concrete. So I did that for a summer and I realized I needed to start getting better grades cause I wasn't getting any internships. Everyone around me was getting internships. They were getting construction management internships, making good money. I was out here laboring and. Just, I was like, all right, Kyle, we gotta quit playing. Like we're going to the NFL here buddy. We're playing D2 football, it's over, man. Ended up taking school serious. Got my grades together, got, the next two years. Got good internships. Ended up graduating. Fast forwarding. Yeah. Worked in a construction management role for a industrial construction company working on power plants and refineries, traveling all over the US. And like many people, you start working for a few years and I just, things just weren't clicking for me. I just couldn't wrap my head around working till 55 and 60. And then hopefully things go well enough that I have a good retirement and really at this point, Real estate was like there in my head. It was a little nugget that I was thinking about. And yeah, that's just how it got kicked off for me. I'm sure we'll go more into the real estate side of things, but like many, I couldn't wrap my head around how I could be there for the next couple years, especially 25 years plus. So started reading on real estate. Gaining knowledge. Gaining knowledge. Ended up jumping into the game and yeah, just scaling from there.

Average Joe Finances:
3:17

Awesome. So Kyle let's talk about you jumping into the game, right? So there, first, the first thing I want to ask you actually is what was the catalyst or the thing that kind of flipped the switch for you to say, Hey, I'm not sure I wanna be in the construction business anymore. I wanna get into real estate and eventually leave this. So what was that part or what was that like for you?

Kyle Root:
3:40

Yeah, so the kind of, the first and even investing trigger in my mind was and again, I grew up in a small area. My parents did the best they could. But finances and investments even outside of real estate wasn't a talk like a company match and investing the stock market, what's what, first of all, what even is a 401k? We know there's company matches, but what's backing a 401k? I didn't know any of this stuff and when I graduated, my brother had Three or four years of experience in the workforce working for corporate Americas engineers. I had to call him and ask him like, Hey, what am I supposed to do with, 401k? Should I be putting mo money away here? What about all these, insurances? A lot of things I just wasn't educated on, and this was at, an age I should have been. And long story short, I started reading investment books and entrepreneurship business. Like even in college, I would try flipping phones, like I'd buy a phone off Amazon Crack screen, fix it, sell it for profit. Luckily that wasn't a lucrative business, so I soon found real estate. But, All the books and research I was doing kept leading back to real estate, even business owners and people that I was real realizing in different areas of entrepreneurship and business all came back somehow to real estate. So started reading books, making that transition from be a really hard worker to some nuggets starting to shift to Hey Kyle, maybe you are a business owner. Maybe you can be an entrepreneur and. Yeah, I did that for about two years. So from 24 to about 25, 26 was the timeframe. I call it like information gathering, period, where I was just reading books, listening to podcasts, going to some local meetups. And at that point I think I had all the information I could. The only piece I was missing was execution at that point. So I, went the normal. I went, my first investment was a house act. So again, just all these little nuggets being played in my head, I'm like, you know what, if we can just get one property every year. In 20 to 30 years, I could have one paid off and then boom, every year. Compounding after that is just being paid off in all cash flow. So I was looking at it initially as a long-term play. I'm like, man, I might be able to retire 10 years early. So I ended up sacking my first duplex and side by side duplex, lived in one side, rented out the other.

Average Joe Finances:
5:49

When was this?

Kyle Root:
5:49

And that? This was in 2020, end of 2019. Early 2020.

Average Joe Finances:
5:54

Okay, perfect. That's when I bought my first duplex.

Kyle Root:
5:57

Nice.

Average Joe Finances:
5:58

End of 2019. Beginning of 2020.

Kyle Root:
6:00

Yep.

Average Joe Finances:
6:01

And then the world ended. So.

Kyle Root:
6:03

Yeah.

Average Joe Finances:
6:03

Please, I don't wanna interrupt you. I just, I was just curious when you started that first one.

Kyle Root:
6:06

That was it. That was it. So yeah, house hacked my first one and I was like, man, this is great. I'm basically living for free. I was, paying 200 bucks or something, utilities and other things, garbage. But I was like paying 200, 150 bucks out of pocket. I'm like, this is incredible. And then I just did, I rented out the other side, fixed it up. I moved out, fixed up mine, rented it out, and then I heard about this cash out refinance thing. And obviously, 20, crazy things happened in 2020. I bought the property at one 90 and in a matter of six to eight months, it was worth 255. Luckily I was able to figure out that, hey, you can actually fix up a property, do a cash out, refinance, get your money back, still cashflow, and just move that capital on another property. So I figured that out early on. And I invest solely in the Midwest. And for people that invest in the Midwest, you can go buy and I buy in Green Bay, Wisconsin, Milwaukee. You can go to Milwaukee or like a Detroit or a Chicago and pick up a decent house for, $60,000, $70,000 and it'll rent for 1100 to 1200 and like people would dream of that kind of cashflow and it's cheap. So for me, I was able to keep saving up 20% down and we were buying$60,000 single family homes that were renting for 950 to a 1000. So we were buying for cheap, fixing'em up, doing a cash at refinance. We kept just building this capital. Yeah, and we just kept bankroll and building capital. And then we started, I guess to once we, you eventually run outta money, like not every single property goes great, right? There was a lot of learning lessons along the way. So I did start losing some capital along the way, and that's what ultimately brought me to having to figure something out, which led me to start going the hard money route, which is ultimately what helped me scale.

Average Joe Finances:
7:47

Yeah. So you were doing the brrr method, right? Correct. Did you even know that's what it was called when you were doing it.

Kyle Root:
7:53

I didn't, and to be honest, right around that time it was happening. In motion with me starting to li listen to BiggerPockets and that was a time like Brandon Turner and all those, like Brandon Turner and David Green were on together. To be honest, while I was listening to the burb strategy and the method, I was I was like, okay, I can do that with my place. So I was learning and doing it at the same time.

Average Joe Finances:
8:13

Nice, nice. Yeah. That's awesome. You know what I like about, what you were sharing with your story is that, you did a lot of research. You, you knew what you wanted to do. You even said it, and I love the way that you put it. You were like, I had everything together. I was ready to go. The only thing left was execution. So I talk about this a lot with some folks because there's a lot of things you can get right and a lot of things you can get wrong, but it doesn't matter. Like you can learn as much as you wanna learn. You can know all the right people, you could have all the right partners. But if you don't actually execute and take action, you're never gonna go anywhere. You're just gonna be stuck in analysis paralysis all day. So I really love the way, leading up to it when you decided, Hey, I'm ready. You executed and took action and then it seems like you took massive action, right? Because, Looking at your bio here, you went from zero and then you started house hacking to and to where you're at now. You started in 2020. It is now 2023. How many units do you have?

Kyle Root:
9:13

We're at 74 right now.

Average Joe Finances:
9:15

That's fantastic. That's fantastic, man. And you gotta update your bio, man. It says 70. I guess No, you did.

Kyle Root:
9:22

It's changing, man. So yeah. It's ever changing. We were actually a little bit more, but we had some good opportunity and again, when you scale like that, you're gonna pick up some bad eggs.

Average Joe Finances:
9:31

Yeah.

Kyle Root:
9:31

And, I was buying everything. If I could cashflow a hundred bucks, I was buying it. And that was all with hard money. But yeah, right now we're actually looking at doing some trading, like getting rid of some bad to bring in some goods. So we're really, we might end the year. I don't know. We could end the year just at 80, only add technically 10 units, but we're getting rid of, we've got some bad eggs and in the Midwest with basements and obviously the snow and things like that, there's lots of water damage. There's just some different things that we go through here that honestly weren't expected and you don't really read 'em in a lot of these books. Yeah, just getting rid of some bad eggs right now and bringing in some better ones.

Average Joe Finances:
10:07

Yeah. That's awesome. So now obviously they, there came a time, like you said, where you ran outta money and you started going and using hard money. But what about when it comes to using like traditional lenders and traditional mortgages, the Fannie Mae, Freddie Mac you're limited there too, right? So did you do anything else creative to finance some of these properties like DSCR loans or anything like that?

Kyle Root:
10:30

Yes. So to be honest, once I stopped I basically house hacked and put 20% down, did the bur method, and I had money coming in up until like maybe 15 units. And at that point I was doing it so fast that I, that's at that point I left my job because I knew when I was single at the time. So it was like, Hey, we're going for it or not. So I was able to leave at that point. But me, again, being young and not doing the research, And again, this, I'm almost embarrassed to say it, but I didn't even think about the possible repercussions of not having W-2 income. I didn't even think about it.

Average Joe Finances:
11:06

You left your W-2 at when you were at 15 units?

Kyle Root:
11:09

15 units, yeah.

Average Joe Finances:
11:10

Wow.

Kyle Root:
11:10

And along, along this time we did maybe two, and I say we, my wife now. But we did maybe one flip. So I just saw it and she, we were dating at the time and at this, and again, at this point, which was huge. I wouldn't, if I was married and had two kids, I would've never done this. Nowhere would ever advise anyone to do it. But I found a method and I thought, man, I can just keep doing this. So I never really did anything. Creative, overly creative. I strictly used hard money. Sometimes I do have two people that I would bring in, and this is what I did, is basically I screwed myself with loans. I left my W-2 income, couldn't show any income. 15 rentals In the Midwest, you don't cash flow enough, you don't have any tax returns. On those rentals there, there's no seasoning really on 'em, so what I ended up doing is I'd go to a hard money lender. They would use me in my LC, and when I'd go fix 'em up and I'd do a cash or refinance, sometimes I had to bring in strictly People to just, we would create an LC and I would just bring them into, so they could show a W-2 and potentially more liquidity, better credit score. Whatever it might be. So that is maybe a creative piece that I did utilize.

Average Joe Finances:
12:16

You'd bring them in to be like the key principle, right? Like

Kyle Root:
12:18

Exactly.

Average Joe Finances:
12:19

Yeah. Hey look at what you know, here's their income statement and what they're doing. Yep. And they're tied to this, as well.

Kyle Root:
12:25

Yep. Correct.

Average Joe Finances:
12:26

Now did they, for the people that you brought in like that, did they get any type of return. On being part of this investment? Or was this just Hey, they were hooking you up?

Kyle Root:
12:35

No. Yeah, unfortunately that would be great. If they didn't get anything out of it I gave 'em a very small portion of equity.

Average Joe Finances:
12:41

Sure.

Kyle Root:
12:41

And again, for them, we did it all through an LC and they were, we didn't do the traditional lending, so really didn't overly affect them as a personal, taking out personal debt. So yeah, you just gave 'em a small portion of equity and they were happy.

Average Joe Finances:
12:55

Okay. On man. Good deal. That's that's a lot to take in. That, that is definitely very creative way. It's actually, I think the first time I heard of somebody doing it this way. So when we talk about creative financing, that's definitely creative financing. Kyle, that's.

Kyle Root:
13:09

Sure.

Average Joe Finances:
13:10

Think this is a first for me, bringing people into the LLC for their W two s. Now, I've seen people brought in because their net worth and like normally you'll see this on like multifamily deals, like some of those larger scale deals. But man, that's, that is pretty interesting. I like that. I think my listeners are gonna get a takeaway away a lot from that too. Speaking of, I wanna go back to this action taking piece, right? Because a lot of times I feel like a lot of people do get stuck in that, that analysis paralysis. And, they'll sit here and they'll watch all the YouTube videos, they'll listen to all the podcasts. They'll hire a coach, they'll pay for a mentorship program, but then they don't take action. So why do you think, like a lot of people struggle to to take this a word action and make some moves?

Kyle Root:
13:57

Yeah, so I think, and again, it's gonna sound very. I mean they, everyone's probably heard it a thousand times, but it's fear and it usually, it's not what I've seen and like I do some, like one-on-one coaching and help people and everything that I've seen helping them or just like even local business meetups and talking to people that wanna get started or even, real estate investors I meet wherever at out at coffee, it seems to be, they fear failing somebody else, not even necessarily them. It's just the fear of potentially other people thinking down on themselves. What if I have a very good paying job, insurance, 401k, everything that I could possibly have if I start talking to people about real estate, and they're like, wow, you don't know. And right now it's such a crazy time. There's people that don't own real estate that are talking about, oh, wait for the crash. Wait for the crash interest rates. Come on. None of us really know, like deep down, none of us really know exactly what's gonna happen on the exact date. What I've found is that people fear the rejection of other people rather than rather than just solely doing it for themselves. And usually if you get a mentor or coach or do enough information, your first investment, there are thousands of ways to mitigate the risk. So there, there's, the only thing that to be feared about is just not, literally not doing it, not taking that action. Sure.

Average Joe Finances:
15:16

Okay. No I like that. Now, Kyle, I want to ask you, because you were saying we a lot, and you had mentioned that it's you and your wife, but do you have anyone else on your team, like I know you, you haven't done joint ventures, right? You haven't done syndication?

Kyle Root:
15:28

Yeah.

Average Joe Finances:
15:29

But what does like your team structure look like?

Kyle Root:
15:33

Yeah, so we have four, four employees. It's actually not my wife is not an employee. She, it's me. We have two acquisition specialists in two different locations, and then we have a project manager that oversees all construction projects. We also do like flips too. So it's not just our rentals that are, we're buying. We do, we just started buying some more flips. But yeah. He oversees not only our construction locally, but project managers that do a lot of our renovations as well.

Average Joe Finances:
16:01

Okay. On. So you have two acquisition managers, right? So what do they do for acquisition? Are they doing like cold calls mailers? Like what is like the strategy that's been working for you?

Kyle Root:
16:11

Yeah. Again, oddly enough, it's very simple. We've bought 90% of our, I bought, yeah, literally probably 90 to 95% of my properties off the mls. And it's all places where we can add a bedroom, add a bathroom where, yeah, I look at here where I buy, we look for two bed, one bath, 1100 square feet. I know there's an extra bedroom or bathroom in there. Luckily I've got a lot of good construction experience, so I do look at certain things, but we're on a pretty large scale as far as square miles that we cover. We don't just look at Hey, we wanna be in this neighborhood on this street. We're pretty spread out to be honest. And we'll, I'm buying in areas that you know, of 10,000 people. They're a little bit smaller markets that most people that other people aren't. So we've bought, yeah, everything's off the MLS

Average Joe Finances:
16:59

nice, that's something you don't hear too often either with especially.

Kyle Root:
17:02

Yeah, you don't.

Average Joe Finances:
17:03

With somebody that's flipping or doing like the brrr strategy, man. So that's fantastic. Now what about, so if you're doing most of the stuff off the MLS, right? And you're looking for properties that you can do some value add, right? You're gonna add a bathroom or a bedroom, right? And by doing that, of course, increase the value of what it could be rented for. Now do you. Do you run into any issues when it comes to permitting and different things like that? Especially when it comes to construction, like having to any additional, do you actually, that's another thing. Do you do like additions on some of the homes or are you taking what's already there with the bones in place and like adding another room inside?

Kyle Root:
17:44

Yeah, adding another room inside. So we don't, anything basically anything structural for the most part, unless it's already pre-image we stay away from. So yeah, it's adding what's already inside of the four walls.

Average Joe Finances:
17:55

Okay, perfect. Now, so with that, the Permitting's probably not as crazy as like having to do an, an addition on the house. But have you ever run into any issues with that, with getting stuff back in time to start a project or it's delayed you at all?

Kyle Root:
18:09

Yeah, we run into it all the time. We run into issues with the city, whether it's from the prev, even the previous owner, if you don't do your research, I guess one example would be that we bought a up lower duplex in the listing it said it was an upper lower duplex. It was like built like an upper lower duplex, everything zoned residential. We purchased it, we submitted our permits and it was zoned IU. And then here, that's industrial. And industrial can't be changed out of its current state, like what it was intended for. And this property was, is zoned single family. It's just, yeah we've ran into it and that's screwed us. It was, the whole thing was built like a duplex and we had to remodel it, and that's, that was a huge unforeseen expense so we run into it.

Average Joe Finances:
18:54

Did you have to turn that into an industrial space, like an office building.

Kyle Root:
18:58

No. So you, so it's either industrial or residential. So it can't, has to be like single family dwelling, but yeah, which is what his intent was.

Average Joe Finances:
19:08

Okay. Interesting. Yeah, I ask about the permitting and stuff because, where I live at in Hawaii, especially on Oahu. Yeah. We're looking 12 to 18 months to get a permit. It's insane.

Kyle Root:
19:18

Oh, geez.

Average Joe Finances:
19:19

Yeah. And then like other places, like there's other people that I know that do projects on the big island and stuff, and there's takes six to nine months out there. And that's fast for us. So it's pretty crazy out here. So that's why I was asking, because different markets.

Kyle Root:
19:33

Permits were days.

Average Joe Finances:
19:35

Okay. Right on, man. Now, for you personally, like we talked about, people taking action and that's one of the biggest hurdles people have to take over. What are some obstacles that you have faced? Especially with scaling from 0 to 70 in a two year period? What are some of the obstacles that you've had to overcome?

Kyle Root:
19:54

Oh my goodness. Yeah, there's so many, and I think about the ones that were most important, and believe it or not, the most important one. Overcome were a hundred percent not real estate or business related. They were related to my emotions, how I How I let other people's emotions dictate my actions rather than my own confidence and my, sometimes things take courage and when other people's emotions, like a lender tells me, Kyle, we can't lend to you rather than me, putting my head down and crying, rather, I should be out there just being like, okay, that's one step closer to the next person that will, and let's be. I think it pushed me to be extremely creative. I think general again, was not real estate or business related, but rather controlling my emotions. And again, I wasn't having these five-year-old freakouts panicking and thinking the world was coming down.

Average Joe Finances:
21:26

It sounds like a lot of mindset stuff, right? Shifting that mindset.

Kyle Root:
21:29

For sure.

Average Joe Finances:
21:29

Out of that. That employee mindset to the entrepreneur mindset, right? And business owner. Which you did when you left your W-2 job. You forced yourself into it, right?

Kyle Root:
21:41

Yes, exactly. And that's what, there was no other option. And I personally,

Average Joe Finances:
21:45

At that point. Yeah, it was a done deal.

Kyle Root:
21:47

Yeah, for sure. And I remember actually I called my boss the day out, put in my two weeks. It was a Monday. I just got done working out and I was like, you know what? It's time. And when I called my boss, I told him I'm putting my two weeks in. He actually told

Average Joe Finances:
22:01

You talked to your wife first though, right before you called your boss?

Kyle Root:
22:03

For sure. Yeah, For sure.

Average Joe Finances:
22:04

Cause you, you were like, I was just working out and said, ah, I'm calling, this is it.

Kyle Root:
22:08

No. Actually I got done working out and then called her like, we were just talking and I'm like.

Average Joe Finances:
22:13

Yeah.

Kyle Root:
22:13

Wait, I could just flip a house. If we need, if I, and again, she was my girlfriend at the time, but.

Average Joe Finances:
22:17

Yeah.

Kyle Root:
22:18

Yeah. And that, she's yeah, you could, and sh she's the best too. Cuz any idea I'm like, I'm going for this. And she's yeah, do it. Go for it. And I'm, so she's extremely supportive in that realm.

Average Joe Finances:
22:28

That's good. That's good.

Kyle Root:
22:28

Yeah.

Average Joe Finances:
22:30

All right. Right on, man. Okay. With all that being said, obviously it sounds like your mindset was the biggest hurdle you had to overcome and you managed to shift it sounds like pretty easily, but at the same time, I feel like there's a lot more struggle in that for people. So it might sound easy as we're sitting here having this conversation and my listeners are like, oh yeah, he just, he figured out what he wanted to do and he just attacked it. Yes. Yes. But at the same time, all that behind the scenes stuff, all that work you had to put into it. Like what kind of ways did you educate yourself? I know you had mentioned you started listening to some some podcasts like BiggerPockets and stuff. Are there any other things that you did to like really push yourself down this rabbit hole of real estate to say that, this is what I wanna do.

Kyle Root:
23:18

Yeah. And I'll tie this in, which goes back to what ultimately lit a fire for me. And that was like going back, I forgot what I was saying there for a second. But yeah, I was talking about my, when I called my boss and when I called my boss and I told him that I was quitting. He told me that he's seen this before and that he basically told me that you're welcome back here anytime. Like I was already gonna fail, right? That was a huge thing for me. Rather than being like, Hey Kyle, good luck. Go get him. And I think everyone deals.

Average Joe Finances:
23:45

That's a motivator right there.

Kyle Root:
23:47

For sure. To say that, and he's had people quit on him before and they end up coming back and I'm like, no, I'm not gonna.. That was a huge fire for me. For sure. And yeah, it was nuts, there was times that were brutal. Honestly, there was one time, it was probably my fifth property out of my W-2 job, and I was, I ran the numbers wrong, I ran the numbers wrong, and I had actually do the renovation again. I was lucky enough that I had some construction background, but I legitimately was out of money. Everything was capped. There was, I had used all my escrow money up from my hard money lender. I was, everything. We were waiting on refis to close. It was like we were down to it. And I honestly, I don't know if I've ever told to anyone this story on a podcast, so this is cool. But yeah, I was sitting on a paint bucket, man. I remember just like, Crying cuz I'm like, it's over. I literally remember playing like, I can call, I'm, I can call, get my job back. It's a good job. It's a hundred thousand dollars job. I was making good money. I was, but yeah, I just remember sitting there crying and shut everything off. And I was just like, you know what Kyle? If we can take this one day, one decision, one email, one problem at a time, we stay at a chance if we can just take one. if I ultimately did run outta money and the refis didn't close and the flip didn't actually go through, I was going back to the work anyways, but I had some time, I had about 30 days for things to work on. I said, you know what we're gonna do? We're gonna take this one day at a time. We're gonna appreciate the small things. I ate food, I have a house, I have a vehicle. I have, 20 properties at the time. We're just gonna take it one step at a time. And we took it one step at a time. And basically two years later a year and a half later, we're still in the fight. Yeah I just think that there's a fire in everybody and I think sometimes you just have to dig deep for that fire, but when it's there, it can be easily re lit. You're never too old to relight it. Yeah, and that was just, honestly, that was one of the greatest things everyone ever, someone ever told me is that I was gonna fail. Yeah. And it just kept it going.

Average Joe Finances:
25:39

Yeah, I love that, man. You took that to keep that fire burning, man. Those words were your Kindle no matter what.

Kyle Root:
25:44

For sure.

Average Joe Finances:
25:45

I love that, dude. That's motivating right there, especially for my listeners right now, if they're like, new and they're getting ready to start investing. Man, hearing a story like yours is gonna be something that kind of pumps'em up, so I really like that now. You again, like we talked about earlier, you scaled very quickly and I'd like to think at the beginning, especially since you were house hacking, you were probably managing on your own, right?

Kyle Root:
26:07

Correct.

Average Joe Finances:
26:08

Did you shift to using property managers or are you still doing that all yourself?

Kyle Root:
26:14

Yeah, no I'm using property managers at this point and.

Average Joe Finances:
26:17

Awesome.

Kyle Root:
26:17

That's exactly it is. I couldn't I personally with my skillset, and that's the other thing, I was very aware of what I was good at and not good at. I wasn't good with tenants. I didn't have the patience. I wasn't right in the right manner, what I needed, what tenants deserved, and ultimately what the asset deserved. But yeah, they were huge in me scaling because, the right property manager, they can renovate two to four units in a couple months for you. And at the time we were still building our personal construction team, so they were huge for me. And yeah, at this point I couldn't, I wouldn't be where I am without property managers.

Average Joe Finances:
26:51

Okay, awesome. So speaking of things that you can't live without, is there any tools or CRM systems that you use that are like, these are my must haves.

Kyle Root:
27:02

To be honest, I don't use a whole lot again. If I had yeah, if I had a big cold calling team. Luckily we buy everything off the mls, so for me, honestly, we have this well.

Average Joe Finances:
27:13

Im talking to track like your rent rolls. Do you use like QuickBooks or do you have google spreadsheet or anything like that.

Kyle Root:
27:19

Yeah, great question. So I actually hired a software developer and we're working on building on a software that tracks all that right now because that was actually the problem that I had. We were, like many, you start off with a nice little spreadsheet, one address, but that address line when it keeps growing, the spreadsheet keeps growing and it gets to be a lot. So yeah, I came across a guy, he basically referred me to this software developer. He charges a reasonable price and we jumped in on it. And yeah, we're working through basically how we want it to look print the reports we need, look at our cash flow, our global cash flow, all that stuff. So yeah, I haven't used anything. I went from basically Excel to working with the software developer.

Average Joe Finances:
28:01

Nice man. Are you looking to, is it gonna be just for you or are you gonna look to make this like a public thing? You know that if somebody else said, Hey, I really like what you put together here, I'd like to use it too, is that gonna be available in the future?

Kyle Root:
28:14

Yeah. So one of the things we're working on is first obviously seeing if it fits. What I need, and we're gonna make our critiques, but we, yeah, we've had conversations back and forth about getting it out there because I know I know tons of landlords and even early investors that would love to just look at something like that to help track their expenses, their revenue, all that stuff.

Average Joe Finances:
28:36

Yeah, a hundred percent. Man. I'm interested in it too. It sounds like a really good software.

Kyle Root:
28:39

So what did you use?

Average Joe Finances:
28:40

So what I was using back in the day was cozy.co. Which is now switched to apartments.com or whatever. But STS is another one that I was using as well. But yeah I like things a little bit more simple. And I like to be able to pull up everything all in one dashboard at once and print out whatever I need to print out. If I need to see my expenses, I need to see what I'm actually making this month. Having everything in one place I think is phenomenal.

Kyle Root:
29:08

Gotcha, gotcha. I was just curious.

Average Joe Finances:
29:10

Yeah, for sure. Now let me see. So we talked about the CRM systems and tools that you use that you can't live without. Now what about you yourself, Kyle? Do you offer any types of services to help real estate investors out?

Kyle Root:
29:26

I do. Yeah. Yeah. Offer a one-on-one coaching program and I talk to a lot of other successful coaches and just what other investors are looking for. And there's a lot of people out there selling courses and they're making tons of money at it. They're making tons of money at selling courses. But one of the things that was important to me is I wanted to be interconnected with someone else's success and to really help an individual. Yeah. A lot of people say you can help more people if you help a group, but I want like the one-on-one connection to be like, intricate in the details. Sometimes it's hard to cultivate a plan for mass groups of people that helps everyone. And for me, that's why I went the one on one route.

Average Joe Finances:
30:05

Yeah, you wanna invest in that person, right?

Kyle Root:
30:07

For sure.

Average Joe Finances:
30:08

You're investing your time and energy into them. So you want to help them succeed? No that's great cuz there are a lot of times out there you see all these group coaching calls and this and that. Like for my financial coaching, I do the same thing. I do one-on-one. And we break it down like that. It's just it's a lot more intimate and you can really learn a lot about each other and make sure that they are the right fit. Because sometimes in a group setting people get in that herd mentality and they're just saying yes cuz everyone else is saying yes. When really they're uncomfortable with something. And they might be scared to say something. No I can definitely appreciate that. Kyle. So yeah, I wanted to ask about that because I wanna bring us into the final round now. And we're gonna get to a little bit more about, some of the services you offer here at the end of the podcast as well. But first things first, the final round here, I'm gonna ask you the same four questions I ask everybody that comes on the show. And it's gonna help us get a good idea of of how you are when you get stuck in a tough situation or put under pressure which I'm pretty sure I already know how this is gonna go because you're crushing it. So if you're ready to go, we'll get this party started.

Kyle Root:
31:07

Let's do it.

Average Joe Finances:
31:08

All right, Kyle, so the first question I'm gonna ask you is, what's the biggest mistake you've ever made in real estate?

Kyle Root:
31:17

I purchased, man, this is embarrassing to say sometimes, but I purchased a triplex and did not look at any of the mechanicals. I looked at 100% of all the cosmetics that it needed. But didn't I, when I went in the basement, I looked at the electrical panel, didn't see if there was a hot water heater, didn't see the HVAC unit. And I purchased it. Yeah, I purchased it, man. And that was basically 50, 60 grand out the door.

Average Joe Finances:
31:49

Were they broken or just not there? They weren't even there. Oh, no. Weren't even there.

Kyle Root:
31:55

Oh no. Yeah. Oh man. And we were we were just on a roll. We were on a roll buying tons of properties. And this is again, at the time where it was just unit count. We were all make, we, it was just, it was almost like chaotic how fast we were growing. And again, we were flipping properties, so we had some ex, extra money. At this time, but yeah there's no excuse for something like that. So that's by far the worst mistake I've made.

Average Joe Finances:
32:21

Yeah. Oh man. I appreciate the transparency there that, and especially with the fact that, you had that high going, right? That dopamine hit cuz you were just crushing it and you're like, yeah, let's just keep going. Let's get one more, one more. Like you were pulling a whole DJ Khalid, right? And yeah, but this time you complacency, right? Complacency kills, and yeah. You learned a lesson there, so I appreciate that man. Okay. Next question kind of ties into that and it's what is something that you've learned, Kyle, that you wish you knew when you first got started?

Kyle Root:
32:55

That systems, when everyone's pushing systems and methods, they're not gonna. Until you get experience, because I think a lot of people in business push you need to have the right systems. You need to have the right methods, and they overwhelm people with information. I think I wish I would've just been okay using some smaller tools like continuously using an Excel spreadsheet for certain things. Yeah, I guess in just a little more generally, hands on. For sure. I think that people are, get so systemized and try to be so like, technology driven where they actually end up losing out on a lot of great experiences. So I guess really to put it in short, would just stay in the weeds a little bit longer, to gain a little more experience before developing strong, standard operating procedures, if you will.

Average Joe Finances:
33:42

No, I love that man. It's funny cuz when I was talking about like my duplex and stuff, yeah. I use cozy with that and STS with that. But when it comes to my syndications, I have an actual Excel spreadsheet with the deals that I'm LP in and I track everything in there, right? This is how much it was when the asset was purchased. Here's what you know is coming in each month on the rent roll. What my cut is. It just the whole thing, right? So that way I can have something I can physically look at and pull up on my screen and say, okay, this is where I'm at right now and this is where we're going. Yeah being able to manage it yourself a little bit, at least at first, and being hands-on and manually like you, you've gotta touch on it. It's a little bit more I guess intimate, right? Where you've got the hands-on experience and it puts you in a better place knowledge wise, so that when you do upgrade to another tool or feature, you know what's happening in the background already. Instead of, it's calculating everything for you, but you know how to do it if you need to. Yeah. If we go back to paper and pen, because there's a, EMP wipes out the grid. That's probably the end of the world anyway if that happens, but for sure you'll be able to pen and paper these things cuz you got it. Okay, Kyle next question of the final round is, do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Kyle Root:
34:59

Yeah, believe it or not, I would recommend anybody to get, and again, It's gonna be tough to find group coaching mentorship out there, and I'm not even saying I'm the person for people, but finding a coach or mentor will expedite your process from where you want to be, to where you want to, like where you are today and where you want to go, because again, they've made mistakes that you're gonna pay for one way or the other. You can either pay someone to help you not see them. Or you're gonna find out yourself. And yes, all the information's out there and everyone I tell this to, I was like, literally every single piece of information that you are gonna run into is out there. It's just how long do you wanna keep searching for it?

Average Joe Finances:
35:37

Absolutely. I'm a firm believer in coaches and mentors and not because I do coaching myself. I use them myself. I have many mentors, likewise, and then coaches too. Like I pay them because it's an accountability thing for me. Masterminds as well, like I love being in Masterminds. I'm in two of them right now, and it's just one of those things that, I feel like, it's not so much that I'm being held accountable by them, but I'm holding myself accountable because other people are watching. And that's the way, to me it just gets in my head like, okay, I need to, and it was the same way I thought about like, when I was in the military too. I always thought to myself, you're always on parade. There's always people watching, so do the right thing, right? So yeah, man I love that kind of mentality and a lot of people look at that as oh, I don't wanna pay for this. I don't wanna pay for that. Look, you're gonna pay for that education one way or the other. Either you're gonna have somebody that's gonna help guide you along the way and push you in the right direction, or you're gonna go make those mistakes yourself and pay 2, 3, 4, 5, 10 times what you would've paid that coach to help you out. So yeah, firm believer in that stuff, man. Okay, Kyle, the final question of the final round is, do you have a favorite business investing or real estate related book or podcast or both?

Kyle Root:
36:53

I do. So I would say, and I just read it. I've got it yeah, behind me. So it's not necessarily re real estate related or business, but also both related. And it's called the Slight Edge. It's, I don't know, have you ever read it? The Slight Edge?

Average Joe Finances:
37:09

I have not.

Kyle Root:
37:10

No, it's a great book and it's believe it or not, it's about how getting the slight edge in life and business decisions and your relationship just in general. And I think I think a lot of people get really hung up on the intricacies of business. But again, I think there's so many piece pieces of like your personal relationship with, your significant other. There's so many things going on in life that can get overbearing. Sometimes they can get overbearing and start clouding your judgment and business decision. And this book talks about it. And it was great. It's a great book. I would recommend it to anyone. It's just by Jeff Olson the Slight Edge by Jeff Olson. And it's, yeah it's great. It just goes over how to get a slight edge, get up earlier, sleep in a little bit longer go to bed earlier at night. Just everything. Little plants that little seeds that create plants in your brain. It's it's a great book.

Average Joe Finances:
38:00

Awesome. Yeah I'm glad I was gonna ask you who wrote it, so I'm glad you added that in fantastic recommendation. I appreciate that. So that is it for the final round, Kyle, but I do have another question for you, and this is probably the most important question I'm gonna ask you throughout this entire. Podcast because my listeners are sitting here listening and they're saying, man, I'm getting so many golden nuggets, so much valuable information from Kyle Root here, and I wanna know where I could find more information about him. Kyle, with that being said, can you share with us where people could find more information about you? Give a website, social media that we can follow. If somebody wants to check out your coaching program, where can we find all of this?

Kyle Root:
38:39

Yeah, so the best place for coaching is probably my website, which is kylejroot.com. Again, that's kyle j root.com. Instagram is @KJ_root. I'm posting about five times a week on there. Just, my mindset, just real estate information, pushing out a bunch of free content, shoot me a dm. I love meeting new people, chatting with people. So those are the best two places to, to get ahold of me and find me.

Average Joe Finances:
39:04

Fantastic man. So I'll make sure I have all those links in the show notes to make it easy for people to copy and paste or click away. I just only ask that you don't do it if you're driving. Okay. But hey man I genuinely appreciate everything. Do you have any final thoughts for our listeners? Anything that we may have missed?

Kyle Root:
39:22

Yeah, I just, one last little round here is I keep looking at your little sign behind you that says Work hard. And I think that's extremely undervalued in, in today's society. And sometimes your work ethic your work ethic will outplay anyone that has that might be a little bit more swifter than you. A better salesman. Your hard work will win every single time. If you can work hard consistently and do the right thing. You're gonna win. So I just think having the ability to work hard and do it consistently, and not only do something consistently, but make sure you have the right information is important. And yeah, just stay after it and then good things come.

Average Joe Finances:
39:59

I appreciate that, man. Cause I was just, I just came back from a real estate conference, I was telling you about this pre-recording and, one of the things that one of the speakers said there is that the one thing that you cannot put a number on, Is your persistence, right? And that somebody, if you are persistent and consistent and you constantly strive towards your goals, nobody can stop you except for you. So I absolutely love the way that you put that. And then the other one you probably can't read the rest of the words on here, but the other sign I have says, good things come to those who hustle. So you, nice. I can't see the small words on top, but yes, that's why I have the hard the work hard and hustle. But it says, good things come to those who hustle. So I'm a firm believer in all of that, man. Awesome. Hey Kyle, genuinely appreciate you taking the time to talk with me today. This was fantastic learning about your story, what you've done in such a short period of time. You're 28 years old, you're financially independent. I absolutely love it, man. This was fantastic. Thank you again so much for talking with me today. Thanks Mike. Appreciate it, man. Absolutely. And hey, to my listeners, I also wanna thank all of you so very much for joining me and our special guest, Kyle Root, on the Average Joe Finances Podcast. Go leave us a five star review and tell us what you liked about today's episode with Kyle. Aloha from Hawaii and have a great rest of your day.