Ep 125 - Financial Freedom For Busy Corporate Professionals with Kent Ritter

Today on Elevate Your Equity podcast with an amazing guest, Kent Ritter. Kent is a former management consultant, start-up owner, and corporate executive turned full-time real estate investor and operator. On the show, it was highlighted the skills he took from his corporate job then leveraged them into his real estate success, and his mission to help corporate professionals achieve financial freedom. Many more fascinating and exciting topics on the show including:

• How his mindset changed from your corporate life to your side-hustle life, to now financially independent
• The hardest lesson learned while pursuing the dream of financial independence
• The things to look for in identifying a new property in this new economy

More about Kent, Kent is the CEO of Hudson Investing, a multifamily investment firm that helps busy professionals scale and diversifies their real estate portfolio. Kent has achieved financial freedom, and now he is on a mission to empower others to do the same through multifamily investing.

Thanks a bunch, Kent Ritter for coming on the show!

Get to know more about Kent by checking out his website KentRitter.com. Listen to his podcast at https://www.kentritter.com/podcast/.

Unlock 3+1 degrees of freedom (time, location, financial + health) with our 5-Point Blueprint! https://elevateequity.org/podcastgift

If you really enjoyed this content and are looking for more, you can continue to learn more about us in several different places for free!

• on our website for blogs & other podcast interviews! elevateequity.org
• our YouTube channel! youtube.com/channel/derekclifford
• our book/audiobook! amazon.com/dp/ebook

If you'd like to have a FREE copy of our 7 Ways Commercial Real Estate Syndications Protect and Build Wealth, simply click the link below. We are here and vested in your long-term success! elevateequity.org/7waysEbook

Unlock 3+1 degrees of freedom (time, location, financial + health) with our 5-Point Blueprint! https://elevateequity.org/podcastgift

If you really enjoyed this content and are looking for more, you can continue to learn more about us in several different places for free!

• on our website for blogs & other podcast interviews! elevateequity.org
• our YouTube channel! youtube.com/channel/derekclifford
• our book/audiobook! amazon.com/dp/ebook

If you'd like to have a FREE copy of our 7 Ways Commercial Real Estate Syndications Protect and Build Wealth, simply click the link below. We are here and vested in your long-term success! elevateequity.org/7waysEbook

Transcript

Introduction: 0:03

Welcome to the Elevate your equity podcast where we, as married busy professionals, leverage real estate investing to unlock the three plus one degrees of freedom, health, location, time and financial.

Derek Clifford: 0:16

And today we are joined by Mr Kent Ritter, and Kent, for people that do not know him. He is a former management consultant startup owner and corporate executive turned full time real estate investor and operator. He is the CEO of Hudson Investing, a multifamily investment firm that helps busy professionals scale and diversify the real estate portfolio. And Kent has achieved financial freedom. And now he's on a mission to empower others to do the same through multifamily investing. Kent, amazing to have you on the show, buddy. How are you today?

Kent Ritter: 0:50

I'm doing really good. Derek. Thanks for having me on. I'm excited to chat always have a lot of fun.

Derek Clifford: 0:55

Absolutely. Let's get jump right in. First question that I always ask all the guests is, why don't you tell us a little bit about yourself? Also with kind of an emphasis on where you started getting interested in real estate?

Kent Ritter: 1:08

Yeah, absolutely. So I grew up in the Midwest, grew up in Indianapolis, went to IU studied finance and econ at IU. And then I went into a career as a management consultant, I spent 12 years in the corporate corporate life as a management consultant. And for people that don't know, really the way I view management consulting is I flew all around the country helping businesses solve problems, that they couldn't solve themselves. And that's really what it was. So it's kind of a crash course, in managing people and managing tough circumstances, you know, not one point in my career was that it was at a place where it's like, oh, you know, things are going pretty good here, because they only hired us when there were problems. And so I feel like I just really good at diagnosing problems and understanding how to manage people through change, because change is a difficult thing for us as human beings. And I say all that because all that just relates, I think, really well into real estate, it's a lot of what we're doing in real estate and what we do, and then into my management consulting career, started a management consulting firm on my own with several partners. And we sold that at the end of 2015, after growing that business from just five guys around the kitchen table to 95 employees and about 30 million in annual revenue, but not so small business anymore, and exited that at the end of 2015. And that's what really started my real estate career because I had capital from selling the business. And I knew I didn't want to just put it all in the stock market, which is all I really knew about investing. That's all I had done up to that point. And I knew I didn't want all my eggs in one basket, right, coming from my econ background is like diversification is the only free lunch. And so I started looking into other investment options, through a bunch of research really gravitated to real estate. And it took me a while to find my path within real estate. So I did everything from fix and flips build out a single and duplex portfolio was selling houses on contract and holding the notes and being the debt, doing all these different things. And at the same time, I was passively investing with others in in multifamily syndications. And what I learned through that process of doing all these different things was that none of those other things were scalable. And none of those other things were going to get me to the financial freedom that I wanted to be at. And really, even more than the financial freedom, it was kind of the time freedom, it was the idea of not trading your time for money, right? Because as a consultant, you're billing hourly, like you're What's the definition of trading your time for money, but having a having a young family and knowing I wanted to be there and be around my kids, I wanted to find a way out of that how to break that cycle. And so real estate, and then specifically multifamily real estate and specifically investing in syndications. And at first investing with others, was really the way to get that complete time freedom because you're giving money and then you really your hands off, right. And so that was really how I started, I didn't really know I was gonna fall in love with it to the point that I was like, Man, I want to build a business. And I really want to do this because, you know, I love finding the deals and, and I've just created, that I developed this passion for wanting to get as many people invested in real estate as possible. And that's why I do my podcast. And that's why I do stuff like this is because I didn't know about real estate investing until I was way into my investing career. I was, you know, and I didn't even know you could do this. And like when I did it, and it's been life changing for me and I've become so involved in it that I started my own business and and I just think that everybody, everybody should get involved. And so that's really what it's all come about for me is just how do we get people, educate them to get them there and then access to those type of deals?

Derek Clifford: 4:43

Yeah, I love this type of story. Man, this is so great. I can also tell that there's a little bit of heart centeredness here to because I feel like you know, when you're doing this type of business you're providing for others when in real estate investing, especially when you're managing hundreds or 1000s of units. You're taking care hear of people, it's their livelihood, they're literally living inside of something that you have been tasked to manage. And then of course, you're taking care of your investors, you're taking care of your family. And then now you're adding an extra layer of letting people know that there's a way to help escape their full time jobs. And so we'll get into that later.

Kent Ritter: 5:17

100%.

Derek Clifford: 5:19

Yeah, I wanted to backup though real quick in your story, and just wanted to get a little extra insight here. You mentioned that you found real estate, because there were stocks and everything there. Can you tell us just really quickly how you got interested? Like, where did that spark come from that exact moment that you knew? Oh, man, I gotta explore this a little bit more?

Kent Ritter: 5:37

Yeah, that's a good? That's a good question. I think that man, I think it was really in a conversation with my father in law, who had several rental houses and several self storage facilities, you know, and really had used that to get achieve their own financial freedom. And just as you know, I think that's how it started. And then he actually connected me with a friend of his who was a mortgage broker, and was doing some some strategies and things on the side, and really kind of got me to the next level into it. And then I just started picking up all the books, right? I mean, Rich Dad, Poor Dad, and all, like the biggest, you know, richest man in Babylon and all these beginning books. And as I, I just started to understand the impact that and all the benefits of real estate investing it just, the light bulb really went off for me. And then it took me a while to find the right strategy, though, right? And it really for me, it was about how do you scale? How do you scale? So you're not you don't, so I'm not taking on another full time job, right. Because if you're fixing and flipping, that is a full time job. Let me tell you, it's a headache. And with withholding notes, I found that it's just as hard to collect those, quote, mortgage payments as it is rent. But you don't have the upside, because your property is not appreciating, right, because holding the debt and then building out the singles and duplexes like that was fine. But again, I think you learn, it's difficult to find good properties. And it's difficult to go through a transaction. And here's the crazy thing that people don't understand is like, in some ways, it's easier to buy 100 unit property than it is to buy, sometimes a car home or duplex. And so there's a lot that comes with that scale. And so it took me a while to get there. But you know, I had some great mentors along the way, too, is the other thing I think is so critical for people is like learn, learn from others that have been there and done it because like none of us are really recreating the wheel there, you know, success leaves clues. And you can absolutely short circuit the process by by leaning on others who have been there and done it.

Derek Clifford: 7:41

This is golden advice for people out there who are maybe just getting started or wanting to walk down the similar path that tends on just absolute gold. So please make sure you guys are taking notes or listening to this again. Now, I want to go back to your story again. And I want to talk about your background while you made this transition. Can you tell us a little bit about the skills that you were able to more or less leverage from your corporate world to bring into the real estate investing business? Looking back now?

Kent Ritter: 8:10

Yeah, that's another good question. I you know, I think one thing that I really learned is as a consultant was just how to be a good communicator. And I think really understanding the importance of communication. And being being able to communicate effectively and being able to communicate timely and being able to, you know, how to get how to get people to see kind of the way you see things and get them to move in a right direction. Right? That that I think is critical. I think when you when you think about real estate investing, I mean, whether you're talking, you have to get a lot of parties on board and make your project successful from the property manager, right. I mean, even if you think about like your, I mean, your insurance, like I've had conversations with insurance, underwriters that have resulted in us dropping our premium by like, you know, $25 a unit a year, right, just because we're able to, I was able to get them on board with our story. And so it's like, just the ability to effectively communicate, and then you think about your investors, right. And a lot of people, especially first time investors, you know, for lack of a better word, I'm trying to help them kind of get out of their own way, because there's a lot of fear of the uncertainty that comes in because people, it's just how our brains work, right? If we're not familiar with something, it immediately is viewed as a risk. And so a lot of people who are unfamiliar with real estate investing, think about it as this very risky endeavor. And really, when you look at it the way that that I do it, I know that you do it as well, it really is a relatively low risk. It's a high return for a relatively low, low risk, but just educating people and helping them do that. I think that communication piece has been critical and then even my experience as being a passive investor myself. That was one of my big takeaways is something I wanted to do better because I've had a couple experiences where I could give somebody money and you don't hear from him for six months, you know, and you're kind of like, what's going on? And again, that's how our, our human minds work, we go to the negative, right? You're like, Well, are they doing anything you know, and, and so just that proactive communication is something I've tried to build into into our business. And I think that's critical. I mean, another piece just briefly, is just managing large scale projects. So like, as I went up in my consulting career, I mean, I was managing multimillion dollar projects, you know, 2030 people on a project. And leading these engagements, and then selling those types of engagements. And I think just learning how to, again, project manage, right project management. And again, when you think about a real estate, these deals are doing they're multimillion dollar projects with lots of stakeholders involved, and you have to be organized, and you have to be able to manage and hold people accountable. And so that all just just really translated, I think, very nicely. And then I'd say the last thing is just the, the, the analytics, like I spent 12 years and my face, well, maybe six years for six years, my face and an Excel spreadsheet, you know, and so I can make Excel sing. And that's critical when you're learning how to underwrite, you know, and learning how to evaluate deals and build models and things.

Derek Clifford: 11:14

Yeah, that's well said, first and foremost, the thing that came to my mind first, when you said, communication, I think that that's so important. Because the communication, we keep thinking, or we keep forgetting, actually, that real estate is a people based business. It's trust based, right now on all levels, I empower and trust my property manager to be able to handle the day to day activities of the building, I trust and empower my team to be able to help with the asset management, and you know, all these other little pieces that come in. And then we also trust our tenants to be able to pay rent, right and hold the uphold their end of the bargain. And so the accountability piece, you know, being in the details, all these things kind of tie in together. And what I'd like to express to the audience is that most likely, you listener, you have all of these skills already. And so I want you guys to listen to Ken's story, and see where you fit into that and extract that piece and see yourself doing, you know, what Kent is doing later on down the line or just investing passively. That's also something that's a very, very powerful option for people who don't want to be active in it. But any of it. I'm digressing from the point that I want to make. But anything else you want to add to that?

Kent Ritter: 12:30

No, I think just to double down on on your point is that that's what's so great about real estate is, you know, there, there's a lot of different ways to do it. There's there's a flavor for everybody, right? There's a fairly low barrier to entry, depending on which strategy you go. Go with. I mean, I mean, you could, at a minimum, just you could go to a crowdfunding site and invest, you know, a few $100 in, in some sort of investment. But I think it's something everybody can do. Right? Like, I don't, I don't necessarily look at it. Anything that I've done is necessarily rocket science. I think it's a lot of people have done it before. A lot of people do it after me, I think it's just about committing to the action and doing it, you know, and surrounding yourself with good people. That, because I think one of my successes is I've been humble enough to know what I know, there's a lot I don't know, and there's a lot I don't even know, I don't know. And so at every point of evolution in my real estate career, I've tried to find somebody that's already there, you know, and try to learn from them, whether it's a paid mentor, it's an unpaid mentor. It's a coaching program different things, and try to learn from the people who have already been there.

Derek Clifford: 13:37

Yeah, yeah. Well said, I want to shift a little bit more towards the resources and tools side. So can you maybe give us a little bit of what you found useful when you were kind of exiting that, you know, the full on corporate world and into the side hustle world and then eventually into the full time? What type of resources have you found that have just been absolutely essential for you in that part of your career?

Kent Ritter: 14:05

Yeah, that's a good question. I think it starts with just kind of a resource but a routine I think routine is extremely important. I think, especially as you leave a structured day, right? You go to work, you know, from eight to five, and you have your your days outlined to becoming more of an entrepreneur where you can, you know, wake up and you can do anything, right and I think that I think it's that routine, it's extremely important to get into a rhythm because you're not going to feel like doing everything every day. You know, but it's that routine that I think that gets you through those those up and down times. And also I think that you know, how you start your day is extremely important. I read the miracle morning and I was really really ended the miracle morning for a while I still do a lot of the same things. I don't follow it kind of to a tee anymore. I've kind of made my own blend of it but starting your day off for I you know, meditating, focusing on growing attitude journaling, you know, getting some exercise and getting your body moving, things like that, I think are critical to setting the tone for the rest of the day. So I think, like that stuff, I think is absolutely critical to success. And then as far as you know, other things, I think like you need to, it kind of depends on on where, like, where what your strategy is, and what you're going to do, but it but I think, you know, you should, if you're somebody that wants to go out, and you want to be taken seriously, especially want to raise capital from other people, I think you need to, you need to figure out what your professional persona is going to be. And I think you need to start kind of living that life, as soon as soon as possible, start projecting yourself in that way. And like not skipping on skimping on things like website and email and setting up your brand. And really putting thought into that in your messaging. And then really started to talk with people about that. Because I mean, most people fail at their first capital raise, I mean, I tell people, I raised half as much as my goal on my first capital raise. And it's because like many people, I underestimated how difficult it was gonna be. And I didn't start early enough. And so I think just just really figuring out what your brand is going to be, and really spending some money to make sure it's high quality. And everything that you're putting forward as high quality, I think is really important.

Derek Clifford: 16:25

Yeah, that is such great advice. And honestly, if I had that advice, when I first started, who knows where it would be right, you kind of disappoint. So for those listeners out there, make sure you take that to heart, because that is that's really important stuff. And I love that. Now, throughout your journey, I want to talk about how your mindset has changed. Again, you know, we talked about the transition from full corporate life to being kind of side hustling while you're working your job, and then being full on investor at this point. Can you talk to us about like, what your mindset is now, like compared to what it was back when you first started?

Kent Ritter: 17:03

Yeah, it's changed a lot. It's changed a lot. I mean, I believe I can do anything right now. I truly do. I believe that if I put my mind to it, I think that I can do anything I surround myself with the right people. When I started out, that was not, not my mindset. I'm also not afraid to put myself out there anymore. I've done hundreds of podcast appearances like this, I also have my own show, which, which required me to crush a lot of limiting beliefs to be able to do that. But I mean, when I first started out, I remember having the thought, like, oh, I can't find any big deals in Indianapolis. And it was just because I wasn't plugged in to the right networks. I didn't know the right brokers. The brokers I knew I thought were commercial brokers were more kinda like, small time, let's just say, you know, and they just weren't putting the right things in front of me. That's because I hadn't really done the work, you know, to expand my network. But that was a limiting belief, right? Because there's tons of big deals in Indianapolis. And yeah, and so just along the way, I think building up, just building up the belief, and kind of, I guess, identifying what your limiting beliefs are, because we all have them, and they're all those little Gremlins in the back of our head, right? And then proactively going after them. And really getting to a point where, like, there are points early in my life, where if something was uncomfortable, I would avoid it. And I've really changed to seek out those uncomfortable moments and really use that kind of butterflies in your stomach feeling as a sign that like, Yeah, I think this is right, like this is something that's going to cause me to grow. And seeking those moments out and continuing to just get comfortable being uncomfortable, right? Like, I mean, it's all about continuing to grow, you know, like grow your little bubble, right, and you continue to get bigger and bigger and bigger, and you can do better, better, bigger and better things. And I think that's, that's how I've evolved my mindset. And that's through working with a lot of coaches and reading a lot and educating myself. And then looking inside and meditation. I really I've mentioned a couple times really believe highly in meditation, and it's great for everybody. But yeah, I mean, I guess that my mindset has changed quite a bit.

Derek Clifford: 19:21

Yeah, you know, something that that really spoke to me here on this was the fact that a lot of these limiting beliefs are subconscious. And we let these subconscious things and these cues push us around and make our decisions for us on a compounded daily basis. Right, like Yeah, I'm not gonna say that your subconscious thoughts are gonna drive what you do every single moment. But I'm saying over time, if you let these limiting beliefs, rule, your decision making, you're going to end up in the same place you've always been. So I love this fact that you bring up. You felt the income for boldness, right, or the, um, the, the tension, the internal tension that's coming from the subconscious. And I think that you have had the training on a conscious side with coaches and with mentors and people that have been able to guide you through this, that you should find those and identify those moments. Most people they'll turn away from, right. Yeah. And I'm so convinced that the ability for you to do that tent has been the main reason why you've been able to get to where you are today. Because if you were still in comfort land, you would not have left the full time world. And it's just one ladder after the other. And so I just want to want to bail you out.

Kent Ritter: 20:39

You're 100%, right. And honestly, I mean, I had people like I was making, I was making a really good salary, high six figure, salary, and bonuses and things. I mean, and people thought I was crazy, too. Of course, you say, why would you ever do that? Yeah, so So the situation really was that I didn't really expand upon, I think it's relevant here is like, we sold the business, like when you sell a business, they don't often let you just like walk away, like, we sold the business. And then you have like, an urn out period where you have to stay around and make sure that the company you sold to is like realizing the value. And if all the leadership leaves, well, they're not going to right. So we had an urn out period where we had to stay there for a few years afterwards. And during that time, was really that time where I was building, you know, my real estate knowledge and working working on all that. And, you know, so I was still there. And they're like, Why would you leave? Because I'm not happy? Like, Bob, you're making all this? Yeah, but I'm not happy. And it's like, it was crazy to me how like, that didn't really matter to people. It was like, Yeah, but you're leaving, you're not going to have insurance, and you're not going to have this and you're gonna walk away from the south. And, you know, you've golden handcuffs. And all of this is like, Yeah, but not happy. It's not what I want to do. And by the way, I'm never gonna see my family, because we're traveling all the time as like that type of stuff. So my wife has been super supportive to this whole process. And she, she's been a rock, but a lot of other people, friends and family who just you, they tell you, you're crazy. And so one thing I really had to find is, as an entrepreneur, you have to find your own circle, you find your circle of like minded people that are going to support you in that because it's tough. If you're just getting negativity all the time, you start to doubt yourself.

Derek Clifford: 22:20

I'm so glad that you mentioned the spouse, because people out there another thing that I just wanted to inject that's maybe not directly related, but it's just so important that I feel compelled to say it is that if your spouse is not on board with you, in any regard, whether they disagree with what you're doing, or completely want to be actively involved, right, or whether they want to be passively there, whatever, if they're not on board with what you're doing. You succeed in real estate, it's going to draw you in to do more, and they're going to resent you for that. And if you do bad, right, and you start losing tons of money, it's pretty easy to see what's going to happen. So even if your spouse is with you, in the sense that they agree with what you're doing, you have a shared common vision, there's no way for you to lose. And you know, two brains are better than one. We all have blind spots. And so why not use the advice of someone who knows you most likely better than you know yourself in a certain regard, right? Why not use that person to help you? Because my wife has been instrumental on the visionary side, I'm very much an integrator, just at heart, because that's my training and everything, and relying on my wife revisionary things for problems I've been having. She's been able to point out the big like the things for where to go, right and setting goals and mindset. And that's why I'm so interested in this conversation on the mindset piece in the relationship. So I apologize again, for digress and it's just too good for me to pass up.

Kent Ritter: 23:40

That's good insight. Yeah, absolutely.

Derek Clifford: 23:42

Yeah. So one question I have. And then I have one more after this, before we go into our Rapid Round, is I want to hear about the hardest lesson that you've learned while pursuing your dream of financial independence. I don't know if you have something on top of your head. But if you could share a story with us, that would be really incredible.

Kent Ritter: 24:03

Man, that's it. That's a good one. There's, there's there's a lot of lessons, right. I think that I think the biggest lesson is kind of going back going back around to capital raising and it's broader. It's what I mentioned earlier, building your brand, your personal brand, right, and how you're going to present yourself and, and really being comfortable putting yourself out there. I think, you know, like I said, I only raised half as much on my first capital raise for our first deal as I thought I was going to be able to and luckily I had partners that can help you know, fill that gap, but it was really eye opening for me about wow, like where did I go wrong? And I remember talking to my coach and and really helped me understand that it really is about because I thought oh, you know, I've had success in business. And you know, I'm a good guy people like me, right? Like, well, like it's gonna be easy. And it really and I've seen a lot of people fall into this trap. Come to me for advice. And it's just like, you really have to change people's perception of you and really have to position yourself as a real estate expert. And that means like eat, eating, sleeping, breathing, talking about it, right. And doing that, like six months before you actually want to raise capital, I think that's where people often go wrong is like, they get a deal. And they're like, Oh, now I have to go raise capital. It's too late, like you got to start before and you start building that brand and kind of building that tribe. And I think you have to have some sort of thought leadership if you're really going to be successful at raising capital, because it's how else do you let people know about you and put yourself out there in that expert position. And I think that, that, for me was was kind of a huge limiting belief of, you know, whether you call like imposter imposter syndrome, or just the who wants to hear what I have to say, type of mentality, you know, and it's all in your own head, it was all in my head. You know, I've had really been blessed with it with a ton of positive feedback and things as I have put myself out there. And so just proved to me over and over again, it's just all in my head. And if I can get out of my own way, like, like, like, I'll be fine. But I think that that was a huge lesson was I got that punch in the gut on that first raise to be like, Okay, well, how do we do it differently. And that was one of the things that that led me really, to start the podcast and start my meetup that I do here in town monthly, and just start really putting myself out there.

Derek Clifford: 26:24

Yeah, this is great, great advice for people who are looking to get into this. And I think, talk about that trap that you talked about is like, you know, you find the deal, and then you get the capital. That's the the fallacy. That's what a single family mentality is like, right? Unfortunately, people are not investing in deals or investments, they're investing in you as a person. And I made the exact same mistake, right, is that there has to be that trust. And there may be people that know you. But remember, you have to walk them through the whole funnel, first you have to be seen, then you have to be known, then liked, then trusted, and only then when the situation and timing is right for the investor or the person you're talking to? Well, they then gladly put money into your deal. And that takes it takes a long time. I think six months is a fair amount of time to allocate towards that. But for many who are just starting from scratch, it may take longer than that.

Kent Ritter: 27:21

Yeah, I think yeah, I think the important message is like, like, even if I got really good advice in that like you, because you're probably like, how do I raise capital? I don't have a deal. Right? What do I show people? Well, the great advice I got was just, you know, find that example deal, right? And so I put together. So I mean, you just get on brokers lists and you get tons of deals, doesn't matter if it's if it's a great deal. But at least you can put together a presentation, and you can talk through it. And then you can say, you know, kind of show them what you're doing how you're going to do it you're practicing, which is great. You every needs practice at presenting it. And then it's, you know, the conversation is look, so if I were to bring you a deal like this, is this something that you might be interested in investing in or something along those lines, and then at least they're in their heads starting to see you in that position, because there absolutely is like, there's this, I don't know what the right term is. But there's just the psychological thing where the more you see things, like if your condition, and you see things over and over again, like it becomes true. And it's kind of like you have to, like I learned this back in consulting with like trying to get promoted. And then later in my career trying to get other people promoted, and I was really successful at it. And one of the techniques was, you know, in in a not a aggressive way, but you got to start putting it out there that like you want to be promoted, because people start to have to say, like, Okay, I see them at that next level, they start to associate you with that next level, and over a six month time period, they start to say, Yeah, you know, I really could see them there. I see how that. And so you have to kind of plant the seed and let it grow. And I think that's, that's what that helps to do.

Derek Clifford: 29:06

This is gold for me, man. I love this. Thank you for sharing that. It's so last question that I have for you. And I just can't help myself here to ask this question. Just because, you know, I'm I'm a student of the economy. I'm a student of the markets the way that they are right now. And I just am curious to hear what other operators who are doing really well, right now are finding. So because this is challenging, a very interesting time for finding property to invest into what are you looking for right now to identify property and then also insulate your investors from some of the risk that is out there at this point in time?

Kent Ritter: 29:46

Yeah, that's, that's a good question. So I think one, I think there's just too much focus on interest rates. I think interest rates are one lever, you know, among On the many levers that you can pull up or down to make a deal successful, right, but but I think if you look at the headlines, there's so much focus on interest rates and where they've gone. And, and so interest rates are something that has to be accounted for. But my recommendation is, and how you insulate investors is by you need to be pricing that risk into your deal mean, when we, when we model our deals, we're modeling him to a foreign interest rate curve. So we're modeling in and saying, okay, interest rates are gonna go up, and then they're going to come down, and they're going to maybe do like a loop to loop and who knows, and come over here, but we're using the forward rate curves, which are all readily available, which is the expectation of what interest rates are going to do, and modeling that in. So as long as rates do what everybody thinks they're going to do, that risk is in and if we're still comfortable with the deal, then it's still a good deal, right? And that, and then that way, we know it's a good deal for our investors. And on top of that, then we just we cap it right above where we think interest rates are gonna go. And so if it goes above what we think it's going to do, then then we're protected again. And so that's how you insulate the investors from interest rates and from their interest rates become a non issue. Because if they do what we think we're going to do, we're fine. If they do more than we think we're going to do, we're fine, because we've kept it. If they do better than we're good, that's great. Right, but But you got to price that in. And so I think that's important for people to look at and understand as they're looking at deals. But again, it's only one lever. I think what I'm experiencing on our properties is that there's other levers right now they're having much more impact. Inflation, and namely rent, rent growth, right, and rent inflation and wage growth associated with that and continuing to push that is having a much more impact and net positive impact on our properties over anything that interest rates could do. And I think that I think right now, what I'm seeing is I'm seeing there, there's definitely fear, right, there's kind of FUD fear, uncertainty and doubt, I'm seeing less people come into the table as buyers. I still think there there is kind of a spread between like the bid ask or like buyer expectations and seller expectations, right. I think those are starting to kind of come together. But I still think there's kind of a gap there. But, but my message, I guess to folks is like this is a fantastic time to be investing in real estate, don't let the fear and the headlines, and just lack of understanding, I think of all the levers, right, keep you on the sidelines, because I think in the next couple of years, specifically 18 to 18 months to two years received some fantastic opportunities. buying opportunities, because what what things haven't changed? Well, we still have a housing crisis that hasn't gone away. I actually just saw this morning, that new contracts for to building default rates on contracts to build new houses are up 15%. And also, the amount of people dropping out of contracts to purchase existing homes is 14%. And so which are both like, at second highest only to like March and April of COVID of like 2020. And so what that means is more and more people are dropping out of the single family market, right? Because these can't afford the homes anymore. Well, what are those people do? Well, they're gonna rent, and they're gonna rent longer. And that's not going to help us solve this housing crisis. Also, by the way, on the supply side, we have supplied, we still can't get materials and everything costs more than it has historically. And so building as long as they slow down. And so I think that, you know, you have to understand kind of all the dynamics that are coming to play. But I think interest rates are up for a short, a short time they are but again, let's keep history and context, right? Like, these interest rates are still not bad, a five and a half percent interest rate isn't bad. Historically, like if you can't do a deal at a five and a half percent interest rate, probably not a deal with enough meat on the bone to do that deal. And so I think, just don't let the headlines keep you out of it. I think, you know, like, what isn't a Warren Buffett's quote is like, you know, buy when there's blood in the streets or something. And I don't know if he actually said that, because that sounds like a really aggressive thing for Warren Buffett to say, but it's a tribute to him. But there's just that idea that don't you know, people make money when other people are sitting on the sidelines. I think it's a fantastic time to do that. As long as you are pricing in the risk with interest rates and other things. I think if you're staying conservative and your assumptions and and yeah, rents growing at 10 plus percent, I mean, 20% some markets higher and others. We don't don't underwrite that that's going to happen for the next five years. You know, but but you don't have to, again to make deals work. So stay to the historical averages. You know, now way, that way, if it does continue to grow like crazy, and this inflation isn't transitory, and we're stuck with it for a few years, then your deals just gonna totally kill it. Right? But don't put yourself in a position where everything has to go right. For your deal to work, I think that that's my message, right? But, but don't sit on the sidelines, because there's going to be great buying opportunities over the next couple.

Derek Clifford: 35:20

Oh, yeah, man, I couldn't agree with you more on this can't because I remember when I first started buying single family houses in Indianapolis back in like 2017 2018. And I was like, Man, this is the top of the market. And then two years later, even with COVID Coming, I'm like, Man, that was a fantastic buying opportunity. I wish I had bought more. And even though interest rates are maybe, you know, for the short term a little bit less favorable. I completely agree with you that we have all this demand coming in on the back on the back end, we also have record job growth or jobs being added to the economy. So as long as there's jobs, look, that's that's kind of the one thing that everyone's looking at right now to determine how healthy the economy is. And yes, there's, you know, geopolitical crisis, there's all these things happening. But the truth of the matter is that there's so much strength in the US market for all those reasons that you mentioned, and more. And I just think that it comes back down to the trust of the operator. Because we are economists, right? We have to be for investors to have like a, you know, maybe a cloudy crystal ball, I don't want to say a completely clear crystal ball, right. But we we can only make our predictions based on the people that we talk to who are experts in what they do, to try to see the future as best we can. And that comes with the trust that the investors place in us to make the right decisions.

Kent Ritter: 36:45

Yeah. And I think that just like just a couple of points, you know, people are really concerned about about gas prices, right? And, and on a micro level, absolutely. There are families that are hurting because of those gas prices. But if you look at a macro level at the US economy, the US is a winner with high oil. And that's different. I mean, that came from starting fracking in like 20 Oh, like it's changed since 2012. But the US is a net exporter of oil, and the US wins if oil stays high. And so I just think I just think people have this mindset that high oil prices are bad. And and really that used to be the case, but But that changed with fracking, to where the US actually, it's the leading exporter of oil, and actually does well. And so I think it's just if you look at the strength of the US economy is extremely strong. Right now, the US economy grew with the GDP 3% through COVID, like through, like coming out of COVID grew 3%. And that's pretty incredible. And I don't think that the US economy is slowing down. And I think that you know, and you're seeing it, if you look at foreign investment pouring into the US. I mean, we're just we're seeing we're seeing a lot of foreign investment poured into us because they want to be here, like I mean, this is the best place to invest in real estate, and everybody wants to be here and do that. And so I think that you just have to keep things in a context and kind of understand the broader, again, the broader levers of what's going on. But But I think we're in a strong position.

Derek Clifford: 38:27

Awesome. I don't doubt that we could sit here and talk about this for hours, but I want to be respectful of your time as well. And so what we're going to do is we're going to head into the Rapid Round, which is the same five questions that we asked every one of our guests, and they're meant to be answered in about a 32nd timeframe. So if you're ready, we're just going to rapidly ask them to you if you're ready. Number one, what book has had the biggest impact on you and why? And we ask that it not be the Bible, or the purple Bible, which is Rich Dad, Poor Dad, because we get those all the time,

Kent Ritter: 38:58

Think and Grow Rich, because I think you know, after reading a lot of the other books that have come after it, you really read that when you realize well, that's really where it all started. All the all the sight, this idea of mindset, and how your mind everything starts with a thought. Right? Yeah. And how powerful your mind really is.

Derek Clifford: 39:18

Yeah, and I love that in that book. The first chapter is burning desire. That's something I'll never I'll never forget. Every time I reread that book. It's like got to start with it. Start with the basics. Love it. Absolutely. Number two, if people wanted to emulate your success, what do you think is the first actionable thing they could do to follow in your footsteps right now?

Kent Ritter: 39:40

Good question. I think I would say find a mentor or coach that's doing what you want to do.

Derek Clifford: 39:49

Great answer. There's no reason for you to reinvent the wheel. Right?

Kent Ritter: 39:54

Exactly. I think otherwise, you're gonna go through a lot of pain to get to the same place.

Derek Clifford: 39:59

To get to the same place that someone else has already done for you. So exactly right. Number three, what is one tool process or hack in the last three months or three to six months that you've used to help you save time or effort in either your business or your personal life?

Kent Ritter: 40:15

I hired another VA to specifically manage my email. And that's awesome. Very helpful.

Derek Clifford: 40:23

Can you go into a little bit of detail there? I'm just curious.

Kent Ritter: 40:26

Yeah. So So twice a day, every day, like morning and night, she'll go, she'll go through my email, and just kind of categorize things. And as it evolves, is even getting the point where she can start to answer some things. But if there's something that like, I need to really pay attention to, she'll put a specific tag on it, it's like read and says, like, you know, look, or, you know, please read. And so, so that way, I know if I get in, and I just, I don't want to ever miss an important email, and I get hundreds a day. And so she kind of filters those out, she tags, everything for me, gets everything organized, cleans out my inbox. And I just I know that everything's in the right place. I know I'm not missing anything. And then she'll actually if there are, you know, high important thing, she'll just shoot me one email with like, Hey, here's the five, I need you to look at.

Derek Clifford: 41:12

Amazing. That's really cool. And you're also setting someone up to be a conduit for basically your operations to which that's really smart to think ahead of the curve there. Anyway. Awesome. Love the insight. Thank you for that. Number four. If the people that you know had to describe you with one word, what do you think that word would be?

Kent Ritter: 41:33

Thoughtful? I don't know, that popped into my head.

Derek Clifford: 41:35

Yeah, yeah, I could see that. That makes a lot of sense. Last question. Number five, what is one small thing that most people do not know about you?

Kent Ritter: 41:46

I'm an introvert. People think I'm an extrovert, I'm really not. I'm introverted. It takes a lot out of me to get out and get in front of the people. But it's it's one of those things where when your mission is bigger than your, your, your fears, or your uncomfort, then you're able to do things that you otherwise wouldn't be able to do. And that's really how I feel. I feel like it's important to be out in front of people. It's important for me and my family to be able to provide for my family. But it's also important, because I truly believe that more people are investing in real estate. You know, we're gonna put more people in a better financial position. I hate to think about all these people that are retiring now, with only their 401k. And they're learning that like they just don't have enough. Yeah. Get them through retirement. And I think that's that that to me is a terrible would be a terrible feeling. terrible place.

Derek Clifford: 42:32

Yeah. 100%. And also those people that are holding cash, right, that that's, that's all they have, and they don't know what to do with it.

Kent Ritter: 42:39

Yeah, please don't just be sitting on cash right now. Yeah, please invest so bad and put it to work. That is the worst thing. And you're losing eight 9% a year just by sitting there on your hands.

Derek Clifford: 42:51

Month over month even? Yeah, it's happening. I guess. So. Yeah, you're right. But anyway, you know, Kent, this is this was an incredible podcast, I had a lot of fun coming on. But before we let you go, why don't you tell the audience a little more about how they can find out what's happening in your world? Or if they want to learn some more about about where to find you or follow you. Please? I'll give you the floor for a couple minutes.

Kent Ritter: 43:14

Yeah, sure. So you can go to KentRitter.com. That's my home base. You can check out our podcast there. It's called Return on Real Estate. We've got you know, a bunch of other videos, we have a weekly blog. And you can also sign up if you want to get on our mailing list, to potentially become an investor and just you know, understand what what we're doing on a month to month basis. So that's really Yeah, learn more about me and easy spots, find me.

Derek Clifford: 43:38

Very cool. I encourage you listeners to please do check that out. And anyway, Kent, thank you so much for coming on the show. It was a blast having you here.

Kent Ritter: 43:46

Yeah. Thanks, Derek. Appreciate it.

Derek Clifford: 43:48

Yeah, absolutely. And for you listeners who have made it to this point in the show, I want to thank you guys so much for your listenership. But please make sure wherever you're listening or watching the podcast, please leave a thumbs up a like a comment, subscribe, anything you can do to interact with us that'll help appease the algorithm gods and the more appeasement we get from those algorithm gods, the more exposure we're going to get and the more ability we're going to have to bring on incredible guests just like tents. So thank you, dear listener, and Kent, thank you once again for coming on the show. This is Derek signing off, and we'll see you next week.