EP.21 // How to Properly Vet Investors and Consistently Make Money in Real Estate w/ Kenneth Gee
On today’s show we have the Founder of KRI Partners and the KRI Group. Welcome Mr. Kenneth Gee, from Cleveland, Ohio.
On today’s episode we have Real Estate Investor Kenneth Gee, the Founder and Managing Partner of KRI Partners and the KRI Group out of Cleveland, Ohio. Kenneth is a seasoned, industry veteran with myriad experience and insight that he was kind enough to share with us on this episode. David and Ken talk about the ways in which you can properly vet investors and firms, the benefits of conservative underwriting, and how buying in a recession can be an amazing opportunity if you’ve properly prepared for it!
Stream This Episode on Your Favorite Podcast App!
Key Points from This Episode:
Ken talks about the ways in which you can properly vet a firm
You should always read contracts, PPM, operating agreements, etc that are proposed and be completely familiar with the terms of the deal.
Properly vetting these investors is crucial. Verivest is a service that creates total transparency in a firm’s past investments, both good and bad.
Can the sponsor do well even if the investor doesn’t? Are they chasing fees and buying up everything they can? These are warning signs against investors. A deal should make it so a sponsor can’t make money on fees if the investors themselves aren’t doing well on the deal. This assures a mutually beneficial relationship.
Ken talks about the supply and demand of the market, submarket, and neighborhoods. As potential sponsors you have to know these terms. There is a stable supply of properties if they’re difficult to build as the population increases. This applies upward pressure on rents.
The concept of value creation is the means through which to make a profit consistently. Adding value to the property, through property management or physical improvements, makes value that isn’t relying on the market. Always understand how value is created instead of relying on the rising tide of the market to increase value.
Ken talks about the ability of patience in order to run the property and figure out the skeletons of the investment. Start on obvious fixes, but don’t go full on and blow your entire budget. You will learn things about the property in the first 30 to 90 days that were not readily obvious before purchasing. There are things the seller may not even know that your due diligence will make clear. Because going back for more money after closing is a Career Limiting Move!!
Ken talks about the benefits and the opportunity of buying in a buyers market. Recessions and stock market dips are great opportunities to buy if you’re prepared to. This is an amazing time for seasoned investors!
Conservative underwriting, value adding, and market research allow for accessing your projected rents and values immediately.
Ken’s morning routine is simple: get up early and get to work! Ken talks about loving what he does and therefore is excited to get started before everyone else does in order to get a lot done.
Ken’s advice to new investors is to get an education. Knowledge builds confidence, and cutting out that education is a way to cut corners and hurt you later on in your career.
Relevant Links from Today’s Episode:
ABOUT KENNETH GEE
Kenneth is the founder and managing partner of KRI Partners and the KRI group of companies. He has more than 24 years of significant real estate, banking, private equity transaction, and principal investing experience. Throughout his career, he has been involved in transactions valued at more than $2.0 billion, much of which has included the acquisition, management, and financing of various multi-family real estate projects. Before forming KRI Partners, Kenneth was a tax manager with Deloitte & Touche LLP. Some of his major clients included The Riverside Company, Key Equity Capital Partners, Blue Point Capital, Linsalata Capital Partners, The Zaremba Group, Charter One Bank, and Applied Industrial Technologies, Inc. Before his career at Deloitte & Touche, he spent several years at National City Bank (now part of PNC Bank). He also owned and operated several certified Cessna Pilot Centers in the Northeast Ohio area. Kenneth is a licensed Ohio Certified Public Accountant, a member of multiple apartment associations, and Ohio Society of Certified Public Accountants and American Institute of Certified Public Accountants.
