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Kimberly Kesterke - Earning 6 Figure Cash Flow While Still Working A W2 Job

Uncategorized May 19, 2022

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Kimberly Kesterke, better known as "The W2 Landlord", became a landlord by accident at the age of 26. Because of the last market crash, Kimberly had a property where she was 30k underwater and needed to relocate for a job change. She took that rental and made the most of it. Over the next 15 years she's now built up a portfolio of 20+ units spanning Georgia, New York, and North Dakota, all while continuing to work a W2 job, and being an amazing mom to an 8-year-old. Hear from Kimberly how she was able to do it, the processes she's been able to put in place, how she used creative financing to fund deals, and why she continues to work her job despite an awesome portfolio providing amazing cash flow.

 

In this episode, hosted by Mike Swenson, we discussed:

  • A conventional loan is a good way to secure leverage and purchase a property
  • Be a good steward and do a good job in growing the units you have to obtain more
  • Finding good deals involves networking with real estate agents and networking with wholesalers
  • Looking at things from a cash flow basis helps in making decisions when analyzing a property
  • Monthly management is easier with having a property manager
  • The different strategies in real estate – seller financing, wholesaling, fix, and flip
  • Look for highly-rated contractors. They cost a little bit more money, but it's worth it
  • With creative financing, you can go a little higher on the purchase price, you just have to make the terms work for you
  • Medium-term rental is less turnover and you can profit more per month
  • The freedom to choose is the key

 

Timestamps

0:00 - Kimberly’s Backstory
5:23 - Getting Her Second Property
9:23 - The Market in Augusta
11:41 - Analyzing Properties
16:02 - Managing Properties
20:24 - Systems in Managing Time
22:12 - Finding the Right People
24:58 - Seller Financing
30:40 - Medium-Term Rentals
33:35 - Enjoying Real Estate
36:18 - Learn more about Kimberly

 

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Full transcript here:

Mike Swenson 

Welcome to The REL freedom podcast where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together.

 

Mike Swenson 

All right, welcome everybody to another episode of The REL freedom podcast. And today, I'm so excited to share with you we have Kimberly Kesterke, and she is the founder of The W2 Landlord. So for those of you that have been in real estate full time, for a long time, and still trying to figure out how to get everything done that you need to get done, Kimberly is doing it all and working her regular W2 job. And so obviously, a lot of structure and a lot of processes that you've put in place over the years. But your backstory is really you became an accidental landlord, when the market shifted, values went down, and you had to leave because of a job relocation. And so that's how you're kind of forced into that. And now you've turned that into an awesome opportunity. 20 units closing on tomorrow, today, primarily in Georgia, then you also have North Dakota and New York. So we'll get into the details. But welcome, and we're so excited to have you on the show.

 

Kimberly Kesterke 

Awesome. Thank you so much for having me, Mike,

 

Mike Swenson 

I'm kind of in a similar boat as you in terms of how I became a landlord, because we bought in 2006, the values went down and watched all my neighbors short sale or foreclosed on their properties. And we were looking to move and we had to look up and say what are we going to do? Are we going to stay here? Or are we going to try to rent it out. And I had a co worker of my wife that was looking for a townhouse. And that's how we were able to, to get out. But we were stuck in a five year ARM. We had no intention of staying up past five years. And then the market shifted and everything tanked. And we're stuck. So tell us about your story.

 

Kimberly Kesterke 

Yeah, no, thank you for sharing. So my my backstory is pretty similar. So I was 26 years old, I had purchased a house in Augusta, Georgia. And I just if that was around 2006 and 2008 happened. And I found myself $30,000 underwater. And at that age, I didn't have $30,000 to take to the closing table. So really selling the property was completely out of the question. And then on top of that, my job relocated me to Atlanta, which is about three hours away from Augusta. So I really had to pivot and figure out what I was going to do. And I was talking to some friends. And it turned out that there they had a friend, that was a young couple that they wanted to rent for a while. And, you know, I just kind of fell into it. I didn't do any screening, I didn't do any background checks, I didn't have any sort of processes in place. Gosh, you know, I think I downloaded a free lease offline. Like I really just didn't have the tools I have today.

 

Kimberly Kesterke 

But you know, that's really how I got started and how I started learning how to manage a property from a distance, how to really do this. And just from then, you know, over the years, we've acquired 20 units. A lot of those are duplexes, a couple triplexes and a couple of single families. So it's it's been a lot of fun these past few or past few years, guys past decade and a half. And just excited because you know, constantly learning new things.

 

Mike Swenson 

Yeah. And I think for a lot of people, they're always cautious to start and it sounds like Yeah, we were in a similar boat, where you're able to find a connection, to hopefully give you enough courage to make that leap where it's like, for us it was okay, it was a coworker of my wife's now that could have turned out badly as well, if they stopped paying, or they were bad tenants, but we knew them. And we'd hung out with them a little bit before but But for us, that was the thing that allowed us to take the risk. And for you it was you know, know at least having that connection to the person going in. And then you got to run the numbers and make sure that you're able to pay for it and able to cover your expenses. But But that first step, and that first risk is huge. And then I think after that it gets a little bit easier.

 

Kimberly Kesterke 

Yeah, it absolutely gets easier. I mean, at first, it was a little bit intimidating. But my whole goal and benchmark was as long as it covers my expenses. I'm good. I'm just going to wait, the market out was really my initial thought. But then over time, I started seeing all these great benefits like depreciation, at tax time, hedge against inflation, all of these really great things about owning property that just started gaining my confidence to start investing in more so it went from just, oh, as long as I can cover my expenses to really building a business, which has been a lot of fun.

 

Mike Swenson 

So then how did you get the second property kind of your first intentional property? You know, how did that come together? And then how did you finance that? I know so many people are curious about how that comes together.

 

Kimberly Kesterke 

Yeah, so you know, it's interesting. I was driving back from Augusta because I went over I would visit once every couple, like every six months, really just to kind of make sure everything was fine. And just something kind of hit me and just said, you know, if you've never had a vacancy never had an eviction, I mean, this was five years in at the time and, you know, you're, you're gaining confidence, you know, why don't you invest in the same neighborhood, because obviously, there's, there's renter demand all of these things.

 

Kimberly Kesterke 

So that's really how I decided to start doing it again. And then I started thinking, Well, I'm probably not going to do a single family, I'd like to do a duplex, because then I have one side covering all the expenses, the other one profiting was really in my thought process. So I really went out to look for duplexes at that time, and how I ended up financing it, you know, because I have the full time job, the W two, I was able to get a conventional loan, just do a 20%, down conventional loan. And that's really how I started. And then, you know, over time with other units, I've done other things more creatively, like I've done hard money lending, I've done private lending, you know, some of these other alternatives. But I think if you're just getting started, and you want to take a conservative approach, a conventional loan, really, even today, with the interest rates, going up is still a really good way to secure leverage and to purchase property,

 

Mike Swenson 

the sticky thing is saving up. Right. So I think, you know, I've heard this before, we're, you know, everybody wants to have a lot of units. And the key is, is you have to be a good steward and do a good job with the units that you have to be able to grow. Because yeah, if you can't manage your money, with just one unit, you're gonna have a hard time as it grows. So so for those folks that do want to save up and build that nest egg or build that that piece to do a conventional loan, that's big. The other option is Yeah, finding, finding some private lenders or things like that, if you do have a good deal, but then you have to it gets a little bit more complex. But yeah, I think that's a very safe, stable, great opportunity for your second one is have that money saved up and then do that conventional loan.

 

Kimberly Kesterke 

Yeah, absolutely. And I don't want to discourage people if say, they don't have the funds set up, there's, I look at real estate investing in a way that it just you have to just look at what resources do you have? So do you have cash in the bank or, you know, 401k that you can put into a self directed IRA and kind of use that like, look at the resources you have available? Or do you have time on your hands because if you have more time than money, then there are different real estate strategies that you can get involved in right away such as, you know, bird dogging, like that's basically going finding a property matching it up to a wholesaler, or a investor and just getting a finder's fee. So you do enough of those, like you can start saving money or wholesaling. You know, that's another thing you can do without a lot of money to start, and then you just start saving the money, and then you can get into those conventional loans, or some of those other hard money loans or things along those lines. It doesn't just have to be one strategy is what I'm saying.

 

Mike Swenson 

yeah. And for a wholesaler, you know, the benefit of for somebody in your shoes where you're busy or working in another job is a wholesaler goes and finds those deals, and it saves you time, because you don't have to find the deals yourself. And if the numbers work, you're still willing to pay somebody because they get that kind of a wholesaling fee in the middle for those folks that don't know about that. And so it saves you time, you have to you have to find ways to build leverage, right? And, and if you don't have time, you want to use the time that other people have, and if they present a good deal to you, and it makes sense, well, great, you can move forward and you're happy to pay them because your numbers still work. If the numbers don't work, then you wait to go find a property where the the numbers finally work out for you.

 

Kimberly Kesterke 

Absolutely, I think to having a full time job and real estate investing exactly what you just said. So it's really networking with real estate agents, it's networking with wholesalers. I mean, all the properties that I purchased either came to me from an someone in my network, either a real estate agent who knew this was coming onto the market and they wanted to let me know or even wholesalers reaching out and just sharing what they have so just just things to keep in mind you know for people who are looking to get started on where they can find deals

 

Mike Swenson 

and what's uh, you know, because you have a lot of properties in Augusta what is the market like in Augusta? You know, for people that don't know they obviously know of the golf tournament but outside of that like how how does that impact things you know, because I know it's it's chaos to you've got all these people coming into town. But at the same point in time there's there's a economic factor of having the golf course there that benefits the community. But yeah, what what's Augusta like?

 

Kimberly Kesterke 

Yeah, so what I really like about the Augusta market is it's one of those unique markets that it's not going to skyrocket all the way up when the times are good, but it's not going to deteriorate and go down when the times are bad. Like, yeah, it was underwater 30 grand, but it didn't go any further than that. And it really stays more even keel, which I like.

 

Kimberly Kesterke 

So as a conservative investor, I kind of like markets that are stable. And then on top of that it has it has really good industry that you don't really hear a lot about. So it has a government base out there a military base, Fort Gordon is out there. So you've got that leg there with a lot of people coming in and out, transient, you know, over at the military base, then you have this really big Medical College of Georgia, they now renamed it Augusta University, but it's this huge medical complex that brings in a lot of people doing their residency, those are like two to four year right there.

 

Kimberly Kesterke 

So you've got that set, you know, that sector. And then you have just the regular industry. And Kimberly Clark is there, there's a lot of manufacturing and industrial in as well. So the way I look at it, and the way you want to look at any market, if you're going to invest outside of where you live is you want something that has, say three to five good industries, so that if one thing goes away, you still have these other things helping and then on top of that, there's just a lot of transient people coming in and out that prefer to rent for a while rather than buy.

 

Mike Swenson 

When you run an analysis and you're looking at maybe the cash flow opportunity on a property versus the appreciation, opportunity to property. Where do you land on that some people like cash flow, some people like appreciation, some are like, like you said, originally, it's just I want to make sure my expenses are covered. That's the bare minimum. But But as you're analyzing deals now in the future, as you're more sophisticated, you have more properties, you're thinking bigger and longer term. How are you analyzing those properties to help make decisions on on where you want to be?

 

Kimberly Kesterke 

Yeah, so for me, 100% is cashflow because I look at the real estate investing as my retirement plan. That's what I'm going to retire on. That's what I'm going to live off of when I finally decide to retire. So my number one thing is cashflow. And I look at cash because appreciation is a good thing. That's the to me, that's a bonus, you know the inflation protection, that's a bonus, the depreciation tax all things you can do tax write offs. Those are just bonuses, but it's the cash flow. It's what am I getting from the mailbox or put into my bank account every single month? And how is that tracking? So I look at I look at all different types of strategies to really boost cash flow aspects. So when I'm analyzing a property, I'm looking at a lot of different things from a cash flow basis. Whereas a lot of investors look at it differently. And it just all depends on what your goals are.

 

Mike Swenson 

Yeah. And I think to just to go back to your point about analyzing a market, you know, if you have one or two properties in the city that you live in, you know, that's fantastic. But yeah, if you're going to do it at a larger scale, you do want to look at the big picture industries to find out what's happening. Because yeah, there's you know, there's there's properties out there where you can buy him for $5,000. But you can't even rent to anybody. And so that's where you are looking at if the cashflow makes sense, fantastic. You want to also just strengthen that through the the strength of the community or the town or the city that you're investing in. Because yeah, you don't want to have Hey, I've got five rentals in this city. And it's only based on you know, kind of one primary industry something happens and they you know, that facility leaves, all those job leaves, and then all the town dries up. You have to find that stability and yeah, running a good analysis like that's important.

 

Kimberly Kesterke 

Yeah, and there's some really good, like really great tools online, I use neighborhoodscout, they have a lot of really good free options. I mean, you can pay for it and get even more analytics. But everything that I've ever needed to figure out has all been on the free version. And that's what are the industries, what's the median income, and what are in and then I just go on Zillow to see what our rents looking like.

 

Mike Swenson 

And is there are there certain numbers or certain things that you're attempting to hit here, when you're looking at the viability of a city or is it just kind of like okay, yeah, we've I've got the three industries, I've got that everything else looks good, or how sophisticated Are you in that analysis of a community?

 

Kimberly Kesterke 

Yeah, so definitely the industries in terms of median income, I guess, you know, I'm not really a stickler on that because what I want to look at really is what our homes renting for and what are they like selling for, you know, I like to see kind of a, you know, three, two, I mean, even if it's a duplex or a two to two bedroom, two bath or a three bedroom two bath renting for at least $1,000 Do you know what I'm saying? Like that we kind of shows a really healthy rent. And then usually, you know, when it comes to just the incomes and things like that, you know, just as long as you're targeting a certain avatar, you know, everybody's got their day A friend tenant that they want to target to, I just always find that the tenants will come. So I'm not too big on the median income, but I am big on what the rents are the price and the industries.

 

Mike Swenson 

So quick to recap then So so how many units do you have in Augusta?

 

Kimberly Kesterke 

Well, a big majority of my portfolio is still in Augusta. So out of the 20 units, soon to be 20 to 18 of those are in the Augusta area. So I'm in now my next strategy is I'm looking more in Marietta, Georgia, that's really that's close to where I live. Especially, you know, Marietta, just because it's got a couple of hospitals for traveling nurses, there's, you know, we're seeing a lot of demand for housing and kind of medium term rentals, like what we were talking about earlier, and just kind of us utilizing that strategy a little bit more.

 

Mike Swenson 

Yeah. So So then now that, you know, with your day job, and we talked about finding good leverage, how was that process for managing the properties? Finding a property manager? How did that process work for you?

 

Kimberly Kesterke 

Sure. So the first 15 years, I ended up doing all of my own management, but then it really got to a point, I think it was right around the 15 unit mark, that it just, it just was too much. I mean, I had, I had processes in place, I had, you know, really good systems. But it just, it really came down to the point that I've got to have somebody do this for me. So I ended up finding an excellent property manager. And she just does a great job. And really, all I have to do every month is I've got to go in, I've got a QuickBooks, I go in, I reconcile everything. She lets me know if there were work orders. Were on the bill Diem platform, that's what she uses. So I'm able to see any work orders, and just able to track it that way. So really, my monthly management of my properties is maybe just an hour or two of the back and forth with her and then reconciling QuickBooks every single month. And it's just really made my life a whole lot easier.

 

Mike Swenson 

Yeah, I can't even imagine trying to self manage 15 properties as well as work a full time job.

 

Kimberly Kesterke 

It it got really stressful. I know I have an eight year old, and she was probably five at the time when I finally or five or six. And she's just still is like no, I'm never going to do she calls it real estate thing. Never going to do real estate. And because she just see like, I just be like, Oh my God, I've got another thing I've got to deal with, you know, my phone was ringing a lot. So just hiring a property management company, even early on, you don't have to wait till I did you know, you don't have to get to 15 units just hire them early. It's it's definitely worth the money.

 

Mike Swenson 

Yeah, yeah, when we run analysis for on our real estate team, for our investors, we actually just in our calculator, bake in the cost of a property manager, and some people choose not to. But it's better to make a decision, you know, kind of like what you were talking about before and how you're analyzing it. If you've already got the property manager built in, and you still think it's a good decision and you're not using them, well, then happy day, when you do decide to use them, it's still a good financial decision versus it's already tight. And now I have to pay a property manager that might go from a positive cash flow to a negative cash flow, you want to at least make sure you have enough cushion.

 

Mike Swenson 

So we just build in that cushion in our analysis and and say, Hey, you can decide if you want to do that. Because, yeah, at some point, when you get big enough and sophisticated enough, you're gonna want to you're gonna want that time back. Right? 100% in your Facebook community, where you're helping other people who are balancing the W two landlord life? What are some of the big questions that people have? Or what are kind of some of the big things that you make sure that you want to educate them on?

 

Kimberly Kesterke 

Yeah, so I get a lot of questions. Just how do I get started? How do I how do I start? How do I get my first deal? So we talk a lot about that, you know, I bring people into the group, do Facebook Lives to just really cover a lot of those strategies. I mean, there's a strategy for everything in real estate. And I mean, it could be anywhere from seller financing. It can be wholesaling. It could be, you know, fix and flip. There's just a lot of different ways. So we talk a lot about those different strategies. And then other things.

 

Kimberly Kesterke 

Other questions we get then is how do I get started? And then how do I acquire so either find the deal or fund the deal? So we're just talking about those things all the time. And then and then people in the community, they'll post their projects, what they're working on, and just it's, it's highly engaged, which is fun, you know, it's really neat to kind of see people's projects and their content and everything. So it's just a really great place. Like if you want to start networking and and learning. It's a free way to do so. Yeah, that's

 

Mike Swenson 

awesome because it's the the chicken or the egg thing, like for some people, it's like, I don't really know what to do, I've got to save money, but I've got to find a property, I've got to talk to a lender, I gotta, you know, like, and they just don't really know where to get started. And you kind of just have to finally throw a dart at the wall, start with something and then build build from there. So yeah, and, you know, going back to what you said, at IDEO, trying to raise your daughter and do your other job? What were some of the important systems that you put in place or just kind of managing your time in your daily life as a parent and as an employee? And as an entrepreneur? How are you able to do that?

 

Kimberly Kesterke 

Yeah, so the biggest process I put in place that made my life a lot easier was in the lease, I defined what the what the timelines would be for responses on service and maintenance calls. So I defined what an emergency was, it's a fire, it's a flood didn't I mean, those those are obvious emergencies so that I gave them a system not necessarily system but instructions what to do. They had to know how to turn the water off. And then if it's a fire, call 911. And then let me know ASAP. Well, that, thank goodness, that never happened. Right? Right. So then the next tear are the maintenance requests that have to be done. But that is a maintenance ticket, it gets emailed over to me, I have 24 hours to respond to them, and start scheduling a contractor.

 

Kimberly Kesterke 

And then on top of that, they have to agree or they had to agree to be able to coordinate with the contractor their schedule, I was not the middleman in coordinating the tenant and the contractor schedule, it was they had to let me know, I would execute the contractor and then the contractor would call the tenant and do all the coordination than the contractor would send me the invoice. So that really cut down a tremendous amount of time where all I had to do was check the email, call the contractor or even shoot a text over to the contractor at that point, because I had some good relationships with different people, and then they would go do the rest. So yeah, basically a process that could take hours all the way down to maybe 15 minutes.

 

Mike Swenson 

And I'm sure it took a little bit of time to to find the right people to work with from a contractor's perspective. And I think that's another thing for people that are newer, it's okay that things are messy, it's okay that you don't have it all figured out. Because even as a real estate agent, we're still looking for great contractors to work on properties, and you can never have enough of them, because they might have just done a big job, or they might be busy and tied up. So your if, if your number one isn't available, you're gonna have to have a number two, and maybe have a number three. And so that takes time. And it's okay to struggle through that a little bit. But now I'm sure with the volume that you have, you do have some great people and some great relationships you've built up.

 

Kimberly Kesterke 

Yeah, and one thing I learned probably the hard way is I tried to go with the cheapest people at the beginning. And what I found is, a lot of times, I'd have to get it done twice. So I have kind of figured out that the people that are out there with the good looking truck, you know, yeah, they're gonna be a little pricier, but going to get done right the first time. And if it's not, they're gonna back up their work the warranty it, there's a lot of, there's a lot of things they do that justifies that bit of the higher price. So that's as I've grown, as an investor, I really go and look for the highly rated contractors now, and usually they are going to cost a little bit more money. That's just what I've learned. And it's worth it.

 

Mike Swenson 

Well, and I like even even you just you know, as a as an owner of a rental property, you probably have a longer value approach to your property versus even like myself, as in my home we've lived in, you know, we've kind of rehabbed a few homes over time, but I think we've lived in five or six homes in the span of 15 years. And so in some regards, when I'm looking to get something fixed, I'm probably thinking through the lens of, well, if we you know, this home, hopefully won't be in for a little bit longer. Now that we've we've got kids, we've settled a little bit. But even even at the time, when I was thinking through repairs, I was thinking like, Oh, we're gonna sell in two or three years.

 

Mike Swenson 

So we just need to have kind of the two or three year repair. When you're a landlord now owning a property for 15 years, you're thinking, I want to have this never happen again. So I want to get it done right the first time. And like you said, finding that reputable person that's going to get it taken care of correctly, is a whole lot better than, hey, I got to have the same thing every three years or every five years because I tried to skimp a little bit that first time. If you're owning a property for 15 years for you another 15 years. You want to make sure it's the right quality. And to do that it's going to cost you a little bit more money.

 

Kimberly Kesterke 

Absolutely. I absolutely agree. So talk a little bit about

 

Mike Swenson 

some of the seller financing. You had brought that up. What are some strategies Is that you have, you know, if somebody identifies a property, maybe maybe trying to figure out if seller financing is an option?

 

Kimberly Kesterke 

Yeah. So in terms of seller financing as the buyer buying with seller financing or selling with because I've done, I've done both sides of the transaction,

 

Mike Swenson 

I was thinking mostly just buying buying properties with seller financing. Yeah.

 

Kimberly Kesterke 

So there's, there's a lot of people out there that want to sell their homes that don't necessarily need all the money up front. I know that sounds crazy. But what they do want is they want that, that reliable monthly income without necessarily having to deal with the expenses of the home. So it's so the couple transactions that I've done. Really, that was the case, you know, it was somebody that wanted to sell, but they didn't want to take on the tax burden of the sale right away. So they wanted to chunk it up over time. And then that allowed me to provide monthly payments. So I've done a couple of those transactions. And then how I found this particular transaction was, believe it or not, a wholesaler called me and they wanted to purchase one of my properties.

 

Kimberly Kesterke 

And I was trying to sell it to the wholesaler or to one of their investors, as the bank, right as the person holding the financing. And he just said, Well, I don't really know if we can do that on that property. And I said, Well, are there any properties that you've had to walk away from because you couldn't make the numbers work, because as a buyer of a seller financing transaction, you can go a little higher on the purchase price, you just have to make the terms work for you. And he goes, Well, let me think about that. I just talked to a lady that we had to say no to, and let's see if she'll be open to that.

 

Kimberly Kesterke 

So he ended up coordinating the introduction, we ended up coming to a deal. And he got a finder's fee for just making a simple phone call and connecting us together. So I think, you know, a lot of wholesalers, they don't look at it that way, then that was the only wholesaler that's ever really been open to like passing me a throw away deal. But I think they're out there. And I think it's a really creative way for investors to really start these introductions with some of these sellers, you know, and talk about seller financing.

 

Mike Swenson 

So how does that conversation happened with the seller then.

 

Kimberly Kesterke 

So it's just basically just letting them know who I am, and just telling them, I would like to buy your house, but I'd like to buy it in in payments, and kind of just pause and let them come back. And you know, a lot of times people are gonna say no, just only because they don't understand. And then it's a conversation of educating them will pay, you know, this is how much we can do down, you know, this is how much you can get a month, this is when it's going to be fully paid off. And you know, we'll get a law office to drop the paperwork, you know, so then that way they feel secure and knowing that it's a legal transaction, that they're engaging in, not just the back of the napkin. Yeah, whatever, Kimberly

 

Mike Swenson 

coming along, trying to scam somebody and steal their property. Right.

 

Kimberly Kesterke 

Exactly. And so you know, full title gets trans but you know, it's basically exactly like any other closing, it's just that now they're holding the mortgage, they're holding the note, and I'm paying that note to them, rather than to Wells Fargo or, you know, whoever,

 

Mike Swenson 

yeah, and the benefit for you is, you don't have to go through the pre approval with a lender, and all of that process that can, you know, once you start to acquire more properties that can get more complex, it allows you to continue to acquire more properties without having to have those those credit checks, the finance checks, all that kind of stuff that goes with the pre approvals and, and the appraisals and the lending requirements. And this, that and the other.

 

Kimberly Kesterke 

Yeah, yeah, it's a much easier process and honestly, moving forward, that's how I'm going to opt to just acquire my deals, you know, either I'm gonna buy homes cash, or I'm going to buy them seller financing, because I'm just kind of at the point, I feel like I've got enough mortgages, I don't want to bring on another one. And this is a really great way to keep acquiring.

 

Mike Swenson 

Yeah. Now, we had talked a little bit offline ahead of time about, you know, kind of mid term rentals, you know, furnished rentals for professionals, traveling nurses, that type of thing. So talk about, you know, some of the opportunity that people might see in that, you know, obviously, there's a lot being made about short term rentals, Airbnb, that kind of stuff. There's a great market that's happening there. You're finding that, you know, rising costs to own the property, rising interest rates, the traditional rentals, sometimes it gets a little bit trickier. But talk about kind of the that midterm opportunity that's out there for people in what you're seeing.

 

Kimberly Kesterke 

Yeah, so I really tested this strategy out in my own home Believe it or not, I renovate did a garden level or a basement but I had an I have a 500 square foot garden level studio apartment. And it has been booked ever since April of 2021. And it's been booked by traveling nurses, it's been booked by people that have sold their homes quickly. and I aren't going to the closing table for another three months or something. It's been booked by just you know, people that are in town for three months.

 

Kimberly Kesterke 

And I didn't want to necessarily do the standard Airbnb or short term model, because that's, you know, usually three days to a week, there's a lot of turnover, there's a lot of cleaning, there's a there's just a lot of chance for things to get damaged. But a medium term rental, what I really like about it is it's less turnover, you've got reliable people staying and believe it or not, I mean, the place is well taken care of because they know that they're going to be there for three months or so not just trash it for a weekend and beyond. I really liked that medium term rental strategy.

 

Mike Swenson 

Yeah, well, and that's the thing like thinking about short term rentals. You know, if you happen to live in a spot where people want to vacation like that is their vacation time, that's their party time where they're going to be up late, you know, you might have impact on the neighbors, and that sort of thing. And so yeah, that medium term, you get a chance to get a higher rent a good quality tenant. Because these are usually traveling professionals. And like you said, they're because they're going to be there longer than just a couple of nights, they want to take care of it. So they're treating it more like their own home. And so it's a happy medium grown between, there are great high returns that can happen on a short term rental, more so than a longer term rental. And at the same time, there's a lot of benefit there.

 

Kimberly Kesterke 

Yeah, absolutely. And, you know, that experiment really has motivated me to convert a lot of my long term rentals into these more medium terms, the two units I'm picking up today are going to be basically furnace and rent it out. So it's going to be you know, marketed to traveling nurses. And another market that I think a lot of people overlook, that is a huge demand, you just don't hear a lot about it are, you know, insurance companies have to place people when there's insurance losses, so fire losses, or, you know, flood or a pipe breaks, and you know, the contractor, it's going to take them three months, you know, that's another market for this medium term rental strategy.

 

Mike Swenson 

And how are you? So how are you marketing that? How are you finding those people? Are there certain websites you're posting to Don? Or what?

 

Kimberly Kesterke 

Yeah, so furnish finder is a really good website for traveling nurses, but then there's people that are just looking for furnished rentals on there. And with the insurance companies, there's a lot of different loss insurance companies out there that you can actually input your property as an option there. And so when there is a loss, and your property meets the criteria for whatever family or scenario, then they'll pick up the phone and they have this list. And they'll call you, they'll go down the list really. And I you know, a friend of mine, she had somebody in her place for six months, because of it. So so it's just, again, just another Dart that you can throw at the wall and just, you know, just put all these little seeds out there and just see what, what blossoms.

 

Mike Swenson 

Yeah. So the the question that I know a lot of people probably ask you is you are making enough money with your rental properties to cover your expenses. Why don't you just quit your job?

 

Kimberly Kesterke 

Right? Yeah, like, and sometimes, you know, I wonder the same thing, but I, so what I'm doing right now is I'm working for a startup. And it's really rewarding. It's really challenging, and I'm learning a lot. So it's just I'm learning a lot of really great skills. And so I'm enjoying it. And I think what really what my message is to people is that, you know, get into something you enjoy, or or do real estate, you know, full time, it's you don't have to keep both.

 

Kimberly Kesterke 

But I just want to give people the encouragement that you can do both if you want, you can keep Do you can keep work that you love doing, and utilize real estate investing as more of your retirement plan or, you know, just something that helps build wealth. You don't necessarily have to do one or the other. And I think that's you hear a lot of that messaging of it's one or the other. And my whole thing is, why can't you just do both, you know, just put processes in place, hire the right people, and just do what you enjoy.

 

Mike Swenson 

Yeah. And it's about having the freedom of choice. You know, we talked about you know, real freedom, it's real estate, leverage freedom. If you want to work and do that great. You know, I always joke about how my inlaws both retired, and now they're working because they're doing the work that they they enjoy doing. And so my my father in law, works at a golf course and so it's still The job for him, but he has the choice to do that. And he likes doing that.

 

Mike Swenson 

And then my mother in law has worked at a lot of different kinds of retail spots, you know, Hallmark, that kind of thing, because she really likes doing that. And she really likes the products, she really likes helping people. And so now both of my in laws have been, you know, my father in law has been retired for over 10 years, but he still works. And it's the freedom of choice, because he can do that. And it's the same for you, you're able to choose what you want to do something that's enriching and engaging. But it's not because you have to.

 

Kimberly Kesterke 

And that's really the key it is that freedom, it's that that freedom to choose. And, and I do think that when we're doing when we're being challenged and growing professional, professionally, and personally, that's like a very, you know, like, that's a spiritually fulfilling thing. And I just, you know, you hear so many times that, you know, people will retire and just be bored. And then three months later, they're out doing something again. So it's just, this just gives the freedom to do both.

 

Mike Swenson 

I have one of the agents on my team, his his dad just retired, I think it was two or three weeks ago, and he's already looking for a project to do now, you know, so that that kind of stuff happens for folks that you know, want to learn more about what you're doing with The W2 Landlord. How can they reach out or how can they connect?

 

Kimberly Kesterke 

Yeah, absolutely. So I would say they can email me at [email protected] right now. And then also, too, they can go on to Facebook, we have an active community, it's W2 Investors right now. So as of the podcast today, I'm working on revamping my website, but that should be available June 1, and that is basically the w2landlord.com. So there's a lot of different areas that you can connect with me and get engaged. But I highly recommend joining the free group. There's a ton of great content there.

 

Mike Swenson 

Yeah, thank you for all that you're doing to help people. I mean, it's it's one thing to have the job to do the work as a landlord, but then to be able to give back to people and help educate is awesome. So thanks, you, you have a wealth of information. You've accomplished a lot and congratulations on that and excited to see what you continue to do in the future.

 

Kimberly Kesterke 

Thank you so much for having me

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