In this interview with Jason Kennedy a former coach of mine, we discuss how much real estate does he still owns and what he has done in the past. He says that he is close to owning about 1000 doors and he is primarily doing a lot of fix and flips and wholesaling because his portfolio is pretty much running on its own. He says that he is currently picking up a 10 unit in Youngstown, Ohio, and other things in the works. He also talks about the 400 units that he still has in Detroit and he says that Detroit is booming and most people don’t know that simply because they don’t research the markets which are part of education and knowledge by knowing what you’re doing. He further narrates that when most people hear Detroit, they run away from it. I also add to his narrative that a lot of bigger pockets say to stay away from Detroit hence there is a bigger stigma about it for the investment community.
To listen to Jason Kennedy’s Alchemist Nation Real Estate Podcast: #46 1,000 Unit Portfolio With Jason Kennedy Alchemist Nation Podcast
I wanted to know whether Jason owns these properties through syndication by being a syndication investor. He says that some yes though the smaller stuff he owns them through an LLC. He owns them with his own entity, that is him even though he can’t give legal advice. Though with bigger stuff, he does syndication and PPMs. He says that currently is doing a PPM with a business partner out of Boston. He says that he is a general partner on these syndications meaning he has more control over these doors than his partner. When it comes to partnerships, Jason doesn’t care who you’re and how much awesome you’re but how much you can do and so much you want to do. He continues to explain this by saying that there’s a thing called balance where you have to have a life and there’s no point in making all this money and you can’t find time to enjoy part of it.
He narrates how they started their property management company literally from their dining table, two cell phones, and a post office box and four years later they had a portfolio of 500 doors in addition to their own. He continues to narrate how Grubb & Ellis came with a good offer to them. He says that they had to take it and run. I ask Jason what made a property management company want to acquire him, what was it, and how was the business evaluated. He says that it always comes down to the numbers, to the NOI [Net Operating Income]. What is the profit, the net operating income? He further states that it is a little bit different because it is not an apartment building per se though it is the same idea of looking at your profit and loss, how much money you’re making. He says that probably they had their [Grubb & Ellis] system and assumes that they applied their system to Jason’s portfolio. He continues to say that they were looking at everything they were doing, their territory, how much was their collection ratio, and they liked what they saw which was fine with him [Jason] because at that time was over it.
I further ask him when he talks about a team who are the people are being referred to and what makes up a team or is it a group of people that make up a team. He says that in every market, he builds a team and he can expand it as he builds the real estate business. The core of your team is going to be your real estate broker, realtor, wholesalers [that’s the acquisition team] which helps him find the deals, the home inspectors, contractors, and if you’re going to do rentals – property managers and the money team whether hard money or private money, all that makes up the core team. I also ask him for private and hard money if he is using local or national lenders. He says that he uses both and he is also a lender too as well as doing wholesaling, fix, and flips.
Jason talks about his first deal that was so stressed in the way because he felt like he didn’t know what he was really doing even though he was following the system and that is what it comes down to which is the keyword right there SYSTEM. He advises people not to reinvent the wheel because they’re not that smart but just follow the system. For the first couple of deals, one can herky-jerky his/her way through it or fumble bumble stumbles through it but still follow the system and after closing a couple of deals, then one will be confident.
Jason offers three pieces of advice to 20 years old younger version of Jason on how to have a better easier life.
1) – Knowledge – Educate yourself. Get a coach or mentor who is currently doing the business.
2) – Knowledge without action is nothing.
3) – Have the second and third streams of income going on the side.
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