In this Alchemist Nation Real Estate Podcast, I talked to Kenny Wolfe who is a senior syndicator working on tons of projects, who recently bought a Rockefeller building in Cleveland, taken out 2 deals of 100 plus units. He commends me for having him on the Alchemist Nation Podcast and he says that in 2020 they have been busy and it has been pretty good for them where they have bought 42 million of multi-family assets this year and another 25 million under the pipeline either by contract or close to it. They just launched their commercial real estate fund, their third one so as they can triple net stuff as well.
To listen to Kenny Wolfe’s Alchemist Nation Real Estate Podcast on Anchor:#83 Alchemist Nation Real Estate Podcast With National Syndicator Kenny Wolfe
I ask Kenny how did he get into real estate in the first place. He says that he graduated from Baylor University, got an oil and gas job in the accounting field as, entry-level accountant where he quickly worked his way up the organization. He was CFO [Chief Finance Officer] at 28 years at a spin-off company. They had one client called Chesapeake energy, the first time they went bankrupt was 3 years into their 5 year contract with them, and he and his wife decided that they should find something else because his Dad was in oil and gas, same with his grandfather. So he reached out to a family friend and told him to go to a two-day real estate seminar. On the first day, they talked about single family investing and so he and his wife were so excited that night. Their goal was to buy 10 single-family homes in Dallas, Fort Worth and they were super pumped. On the second day, they talk about multi-family, and to him, a Light bulb went off and to them, they were like, forget about single-family altogether. They had the means to jump into multi-family. They did two passive investments to learn the ropes, one fixer-upper, one yield play, then the third year, they did their own syndication of 76 units. This all happened in the last 10 years, meaning that they started in 2010.
Kenny talks about the Rockefekker building he recently bought in Cleveland. He says that it was built in 1905 which was always been an office building and 50% unoccupied today. They are going to convert the vast majority of A-class downtown and one of the cooler things is that after they put the deal under contract, Jordan Williams announced their brand new headquarters going literally across the street into massive parking lots.
I further ask Kenny what he thinks about DFW and Tampa in terms of real estate investing. He says that would pick DFW first and he thinks DFW is fine and is a great market. They just bought an a-class deal there in June like 200 yards from the lake, a very beautiful asset. Right now the play in DFW is either one of two things, either you’re building brand new because you’re getting a slightly higher basis but you get a brand new product or they have seen some of these a-class deals workout because the interest rates are so low and if you’re able to structure your debt the right way, get a little bit leveraged, a higher leveraged like the last one they did, they got 84% leverage on A-class deal. For Tampa, he went there probably 5 years ago to check it out and it was just as hot as Dallas. He says that the demographics are awesome, you’re protected from the hurricanes for the most part. It is a great place to be and it has some competition but there is competition everywhere except for them in Cleveland.
I also ask him where the economy is going in the next 5 years in terms of multifamily, does he think we are going towards more affordable housing or luxury is going to hold its ground. What is the right structure to be in the next 5 years? He says that hard assets, inflation is going to be insane because they have already pumped in about twice for what they did for 2008/2009 into the economy and it sounds like everybody is on board for doubling it. Your dollar is going to be a lot less further, so rents are going to go up, valuations are going to pop. So he always tells folks to buy hard assets because they’re going to do very well in his opinion over the next 5 years. He also says that multifamily is the best hard asset to buy, not because he is biased but you can buy a big enough building, rents are going to keep going up, obviously expenses too. They are no longer building B and C buildings because you can’t afford to build that cheap. Then the caveat is the only way the affordable play is a big piece is if you’re in California, New York, Massachusetts because places like that lean that way.
Kenny offers 3 pieces of advice to 20-year-old Kenny on how to build his empire faster, be happier, and live a little better.
1) – Go bigger, Go home
2) – Make sure whatever real estate you’re getting into is scalable.
3) – Don’t limit yourself on belief.
To get in touch with Kenny, visit http://wolfe-investments.com
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