Triple Net Retail Real Estate Investing with Kenny Wolfe

Transcript:

Kenny Wolfe 0:00 

There’s always opportunity. I mean, that’s what we say that I take on these other guys, but there’s always opportunities gotta know where to look. And when you find a deal, you got to see the quick so

Taylor 0:12 

welcome to passive wealth strategies for busy professionals. Today our guest is Kenny wolf from wolf investments. Kenny has bought thousands of multifamily units over the years. He is buying dollar generals under double and triple net leases. 

We’re going to talk about that today. That’s a very interesting strategy that he’s doing very well with, so it’d be worth learning and it is worth learning about the double and triple net lease strategy with corporate guarantees. If you have ever been curious about who owns those dollar generals in your area. It’s private investors like Kenny and his investors in his fun so keep listening. You’re going to learn about the business of buying dollar generals, what the market is like. And now in the DFW area. You’re going to learn about multifamily developments. And yeah, this is a fun discussion. And Kenny’s a very knowledgeable guy. I hope you enjoy the show. I hope you are enjoying the show. Thank you for tuning in. And here is the interview. Kenny, welcome to the show.

Kenny Wolfe 1:25 

Hey, thank you, Taylor. I appreciate you having me on.

Taylor 1:29 

It’s my pleasure. before we get into talking about the topic today, could you tell our listeners a bit about your background and what you do in real estate?

Kenny Wolfe 1:40 

Yeah, sure. I run a fund and started wolf investments over eight years ago, we started buying multifamily properties here in Dallas Fort Worth, Texas and then branched out. then multifamily for over eight years and been in five different states, done about 3700 units so far, will probably pass the 4000 mark by the end of the year on that. And then a little over 18 months ago, we started buying dollar stores. 

We put a fund together for investors spots and double or triple net dollar store properties in Texas and Oklahoma, underneath that fund and really liked that model a lot. It’s a great cash flow monster. And then the third and final thing we’re doing is some development as well feel about this map of a town of development and kicking off a bigger developed multifamily developing project here in the next few weeks. 

Taylor

That’s awesome. You doing really good things. Before you got into real estate. What did you do?

Kenny Wolfe

That was in oil and gas, I was the CFO at the age of 28 an oil and gas company, in Louisiana. And they basically had three of us to the spin off company. And they said, Here’s 20 million bucks, go figure it out. we did and leased a whole bunch of minerals and put them to Chesapeake and a lot. That’s kind of where I kind of got my seed money to jump into real estate investing.

Taylor 2:53 

Wow, that’s awesome. Quite the background, quite the background. we’ve tackled multi family on the show before you’ve done a huge number of units. But today, I really wanted to get into the double and triple net commercial investing that you’re doing and buying dollar stores. 

First, I don’t think we’ve even addressed double and triple net and principal on the show. what are double and triple net investments.

Kenny Wolfe 3:22 

I don’t want to compare them a little bit to multifamily because they’re they’re good to compare to each other. for those of you listening, I think you the listeners are more used to multifamily or rental kind of residential, commercial real estate, right. If a tenant doesn’t pay you rent, you have to go chase it right. Then if the toilet breaks, you have to fix it. 

Those are the two kinds of suggest, you know, and then obviously would be you know, these double net or triple net lease is that we get the tenant is responsible for them and the majority of the upkeep of the property. if the toilet breaks, they fix it, it’s a letting go, lights go out or electrical issues, they fix it. 

Then the people guaranteeing the properties that were bought are publicly traded corporate stores. we don’t do franchisees and we definitely don’t do what nails, Mom and Pop owners on that side of it. In double and triple net, you don’t have as much operational risk as you do. multi family or single family for that matter.

Taylor 4:17 

So yeah, and you’re only leasing to publicly traded companies, like you said, Do you get a corporate guarantee? On your lease?

Kenny Wolfe 4:26 

Yes. And that’s the big draw. Right? Is that like right now we’re looking at 4 Dollar Generals right now for fund and it’s an eight cap cap deal and triple net guaranteed by Dollar General. Wow. I mean, it’s just, it’s amazing. It’s right now those kind of stores like that. And we’re not stuck on just the dollar stores, like an Auto Zone, O’Reilly’s other things like that. Right now that the highest cap rates, interest rate ratio, are those dollar stores civil are funded probably by a lot of those. Wow.

Taylor 4:55 

Yeah, that’s awesome. I’m surprised to hear that it’s trading at an eight cap and not something even comparable to what multifamily is trading for right now maybe, you know, five or six or even lower if you’re in a major market,

Kenny Wolfe 5:10 

If you buy a Starbucks, that those go for about a five cap. Burger King, maybe five and a half. there’s different in the space on what category you can get. the properties that we’re buying mostly was that they were texting Oklahoma last the last time. We bought seven of those. It’s one fund in Texas, Oklahoma. They’re smaller towns. 3,000 to 10,000 people. And the cool thing about that is the good thing is that Walmart is it like a 45 minute drive away from the US dollar stores and Amazon and can ship overnight to those smaller towns. 

We’re protected from it because it is a retail shop. Right? 

You have to think about it that way to be somewhat protected from the big boys, Walmart, Amazon, China eating up like today, I would never buy a Best Buy in a major market right now. I think you’re crazy. To me, I think that’s why people why we’re getting these seeing these bigger cap rates and people are pouring out all retail out, you know, in the same bathtub, but they’re missing out. You know, they’re also throwing out the baby, right? Yeah. 

That’s something I think is what we’re capitalizing on right now.

Taylor 6:14 

So is this a pure cash flow play? And you just buying it at an eight cap and making money off of this spread between the cap rate and the debt? are you adding value? Like what’s the detailed strategy?

Kenny Wolfe 6:28 

Yeah, I mean, since it is you’re buying mostly for cash flow. for our investors via payout monthly on our commercial fun, because they are so stable, the rent shows up on the first mortgage out on the third, the automatic bank transfers to take the differential out on the 12th. 

It’s all pretty much automated after you buy it, which is beautiful. It’s real mailbox money on that part of it. Our investors seen between eight and 10% cash on cash return. And then because they’re 25 year am loans are getting another about 8% just paying down the loan. on the low side road 16% annual returns, it’s guaranteed by a publicly traded company, long term leases, and you know, appreciation and commercial can be maybe two or 3% are much higher, depending on the deal. But there’s a lot less that we can do to drive that valuation as opposed to like multifamily. 

We’re buying these mostly for cash flow, if we get extra on top of the 16%. That’s gravy on the deal.

Taylor 7:24 

So when you say long term lease, how long term are these leases,

Kenny Wolfe 7:31 

so three of the ones we bought last year, we bought on Grand Opening Day, family dollars, and so those are brand new, those were 10 year initial terms. And then there are six, five year extensions at 10%. rate increases every five years. 

Then so we’ve got three brand new like that the other 40 Bobby kind of mixed in some ones that are already into their extensions, those we got at a higher cap rate one was like a cap on really low rent, so I’m kind of hoping they don’t renew Honestly, I’m real when triple the investors money on that deal. If they don’t call one. It’s the Family Dollar and Diana, Texas. they’ve got another three years left on that extension. 

Right now in that town, there’s no Dollar General. I’m hoping they don’t renew and you can get another gentleman for much higher rent. And once we would do that we would sell the deal, because you maximize your price when you have depend on his guaranteed alone or delete and his guarantee or and then how long for how long was that the remaining term of that lead?

Taylor 8:28 

So? So meaning if the remaining term is relatively short, then Is that considered less desirable than if the remaining term is long?

Kenny Wolfe 8:40 

Right? Yeah. yeah, there’s folks that because there’s risk if they don’t renew, right, that’s your risk. that’s another thing, why I think buying them as a fund is very important, because, you know, we have seven of these stores under What’s one fund. if one goes dark, so even if they shut down the store, they still owe you that rent for the remaining years left, right, even as they close it down to so. 

Usually what happens is they have a store go dark, you’ve got that amount of time to find another tenant. And if you do, then the current tenant will pay you 50 cents on the dollar of the remaining rent. they can exit the lease. And then you bring in the new tenant to fill the spot. That’s typically how that would go. But that’s such a, like I said, we have less control over the valuation and multifamily

Taylor 9:23 

interesting. it’s quite this setup. And now I can imagine this market is fairly limited, especially if it’s, you know, there are a lot of buyers going after dollar generals, for example, whether they’re a finite number of dollar generals out there, especially compared to the number of multifamily properties out there. how competitive is the

Kenny Wolfe 9:48 

market? Not very, I mean, I think again, I think people are scared of retail as a whole. And so I think it drives a lot of investors, just because they don’t understand how it really works. Small Town, small towns, that’s where they need these dollar stores where there they know the new general store. my wife is from a small town, Texas go Fairfield, Texas, but it’s a town of three 200 people, but they have four different dollar stores today, and they’ve been there for at least 2030 years in this kind of 3200 people. 

It’s something where you know for that town, you know, they have to drive 45 minutes a Walmart, so they need a last minute item for a party they’re having or whatever they just drive to the one of the dollar stores, they’re in town, but that tells you how needed they are in these small communities and they’re single building their metal boxes with brick fronts or brick veneers on the front. I mean, it’s such a simple building, but there’s not a lot of upkeep as well.

Taylor 10:41 

Yeah, yeah, that’s nice. So the tenants going to sign a long term lease, they already have signed a long term lease as a corporate guarantee. if they want to shutter the store, they still have to pay you all the rent right? And then you will have the time to find a new tenant and then you can have them essentially you can let them buy themselves out of the lease at 50 cents on the dollar. They want to get out of it and you find a new tenant

Kenny Wolfe 11:09 

right we got it yep.

Taylor 11:11 

So wow that’s all then awesome deal for the investor now as far as brands to target and like a markets to go after you’re talking about these rural markets and small towns frankly out in the middle of nowhere How do you pick a good small town and a good small market from a bad so to speak small market because not all small markets are created equal? Right?

Kenny Wolfe 11:42 

So most of them are the ones that we bought last year were Texas and Oklahoma so like ones right in the oil patch out in the middle of nowhere Oklahoma so that down is going to be around there for you know ever you know, we’ve got some you’re loving some here in the panhandle again the oil patch up there. We have that one’s in Oklahoma, southeast Oklahoma is on the right outside of Paris, Texas, which is a bigger city. that always helps if it’s closer to a bigger city. 

I like that. One is in Diana, Texas. It’s a suburb of Longview, which is a city of 85,000 people but folks are moving to Diana because it’s a better school and I’m kind of old, they think long is getting too big at 5000 people. they’re moving out to the country. Country. They’re in Diana, Texas. Now. There’s Do you want to look for the different you know, what the that small town? And what are the drivers there? Right. Okay, so I mean, do you look for I mean, you mentioned the Diana, the case of Diana, that the population is growing? And you mentioned in many of those cases, they’re neither oil patch. presumably, they have jobs. 

Taylor

Now, if you were looking to turn this into come up with, say, investing principles, if you will, in terms of selecting a market for small retail triple net investments like this? I mean, you look for population growth, do you look at lease rates are, you know, dollars a square foot for commercial retail and how that’s changing over time? Or is that relatively steady? And what numbers are you now too? 

Kenny Wolfe

Well, we also look at the rent per square foot to like we do on the three brand new ones that we bought that family was paying a buck for the year, for the square footage, that the property we want, and Diana, Texas, the Family Dollar, down at least only paying four bucks a square foot. I know that and we bought a nine and a half cap rate. if we do have to get Dollar General in there, which you get less, so we bring them up to the eight bucks and then be able to sell it for a lower cap rate because they’ve done it 1015 year lease on that, right. that’s, that’s really where you can drive. 

The value is when you go through those kind of bigger, unsettling times, I guess I’d call it when you have a tenant move out or not renew, then you got to fill up quickly. Right? So anyways, those are the times where you guys big value gains, if at all. We look at the rent per square foot. I mean, that’s a big deal as well, because we bought them now. And now we kind of now we know kind of what’s the going rate, you know what our risk is on the mortgage side. But again, that’s why you buy, I wouldn’t buy one of these, you know, you gotta buy 10 to 15 I mean, the more you can buy the better, right? Because then it spreads that risk out.

Taylor 14:12 

Okay? So if we’re looking at this from the passive investor side, and we want to get some exposure to double or triple net, commercial, retail, these all sound like great deals, I mean, you double the rent, and you sell it later at a lower cap rate. I mean, folks can go learn how to do the math, but that’s a huge, huge, huge deal

Kenny Wolfe 14:34 

Yeah

Taylor 14:34 

That’s a big deal. That’s a lot of money. as far as you know, if people are evaluating passive investments, evaluating funds, looking at people like you, and evaluating that, what do you say, suggest that they look for and seek in terms of passively investing and say, a triple net fun? I mean, obviously, we’re not giving up specific investment advice, or just saying, from your professional perspective, what is important in a fund such as yours?

Kenny Wolfe 15:08 

I think you will, I mean, in any kind of investment like this, whether they’ve done some way, whether we’re kind of indication, you really got to do your homework on who’s driving the boat, right? I mean, no matter if you buy the heaven, by the best deal on the planet, someone that’s in the wrong person in the driver’s seat can really screw it up. Right? That’s number one. 

But you know, if you’re looking for triple man, I mean, I know that there’s a guy that we ran into, he invested in a bigger company is doing similar things buying triple net lease properties, they charge a lot of fees, a lot more fees. 

We do to compare that I mean, they’re getting like, I think six and a half percent on this cash on cash. And they pay quarterly, we do monthly just to kind of spice things up for people’s bank accounts, but still look at the fees. I mean, so who’s driving it? And what are the fees? So those are to me the biggest deal? And now then I guess, I wouldn’t maybe say, sir, but a quick third would be what kind of promotion properties are they going for? Are they going for the corporately guaranteed laces? 

Are they by the strip mall with maybe one or two big anchors, but then adding one nails or, you know, these mail depot? Whatever the guaranteed does? Lisa? So I would like that as well, because who guarantees Elise’s is a massive indicator for your value your future value on the deal?

Taylor 16:22 

Okay, so you mentioned the sponsorship fees. And obviously, as investors, you know, we don’t want to try to get our money for nothing, because it’s not going to happen, you’re not going to get paid if the person doing all the work essentially isn’t getting paid. what are typical fee structures? 

I mean, if we’re investing in say, of individual syndication in multifamily, there might be an acquisition fee, there might be an asset management fee, there might be refinance fees, or might be disposition fees, all those things. What are typical fee structures and percentages in a fund, such as yours,

Kenny Wolfe 16:57 

dollar fund, and even all of our production, we don’t do upfront fees at all, or this or this and fees, all that we just do a straight 8020 split of the profits of the property. For our triple net, we don’t even do an asset management fee. Because again, once we buy it, it’s pretty hands off. But our multifamily, we chose that we do the 8020 split on profits, and then we charge a point nap at the management fee.

Taylor 17:21 

Okay, that’s, that’s reasonable. And like I said, I mean, we don’t want to try to get our money for nothing and somebody managing my money, then they obviously need to get paid. 

Kenny Wolfe 17:32 

right. Yeah, yeah, yeah, it’s a fair deal. I mean, you know, we were trying to create outside gain, that’s part of what Wall Street can deliver socially, after yesterday, the bug letting that happen. But, you know, with deals were set out to have a much outsized, you know, game with the lesser risk of my opinion, than what wall sure you can get away can get it and get that 200 bastards at the huge win. 

Taylor 17:53 

Yeah, I like the sound of that, getting our wealth away from Wall Street and getting it back to Main Street. Now, as far as your you know, we covered commercial triple net. I’m sure we could talk about that for hours. I also wanted to at least touch on your multifamily experience. I think you said you have 3700 units of worth of experience, bought and sold. Right.

Kenny Wolfe 18:16 

Yeah. Currently, I think we’re down to 2400 units now that we actively own but we bought and sold for we’ve been involved 3700 today in five different states that we aren’t afraid to get on a plane to buy multifamily.

Taylor 18:29 

Nice. you’ve seen the market for multifamily change over the years over this market cycle? And what is your opinion on where we are now? It sounds like you’re drawing down, you’re selling off. And since you’re switching into commercial, retail, your me might be moving away from multifamily. I mean, what do you think?

Kenny Wolfe 18:54 

No, I mean, we bought 57 million worth of multifamily in the first four months of the year, all off my good stuff. And then we have another probably 2030 million about to close by the end of the year as well. we’re we’re we’re still active in multifamily.

We’re just forgetting all of our deals are off market. That’s to me the way to play it right now. And that’s part of the cycle because there’s deals out there, you just got to know who to ask and be the first five to see it. and then grab as much as you can. 

Multifamily then we’re also you know, in some markets like DFW is we’re seeing folks pay 100 bucks a square foot for 1970s products, we can build them for 100 tenants. that’s why we’re getting in development here we’re building in and the growth capital not requiring a five year growth as a Dallas Fort Worth on this deal that we’re doing. 

But it’s going to be a demo domain, we’re buying it for four bucks a square foot, whereas three miles south and Frisco their glands going for 20 bucks a foot. our base is going to be really well as long as our investors are willing to buy it or you know, build a stabilize it get into a Fannie or Freddie or hug bone, and then hold it 510 years as a bachelor that flavor at home at one.

Taylor 20:01 

Okay, so you’re building for 110 bucks a square foot? And that’s going to be new, is that the highest end product? And what level of the market? Are you going for and developing?

Kenny Wolfe 20:13 

Yeah, I mean, you can’t really build the class or definitely not the class because the land costs too much. And the framing is all the same cement the same. you’ve got to build a class on it’s not going to be your like, super premium class with all the amenities, dog washing stations and all that it’s going to have office and you know, in a pool from basic amenities, that’s kind of the new cool thing to do these days is kind of scale back on the amenities because no one uses them and no one can really afford them, you know, in the long run.

Taylor 20:41 

Yeah, I think that’s true. I mean, the number of apartment complexes that I’ve toured and looked at, you know, due diligence trips or whatever. And the usage rates, so to speak of all of the fancy expensive amenities are so low. When people might take their dog out to the fence in dog parks, they can take it off its leash, but you know, all the other stuff that grills sometimes I don’t know, it’s

Kenny Wolfe 21:07 

Yeah, right. Yeah, I’m an indoor dog washing station as well. But so my niece lives in a whole utility apartment complex here in town and so I had to go check out their amenities and brand new and they had the other got like a bath where you can put your dog blow dryers and all kinds of stuff in there for this so it’s just insane, but they can go too far. 

I think they have a lot of that here. I mean, because folks can’t afford that rent. I mean, here in DFW, they’re having to give away two months free rent and all the brand new stuff so the stuff we’re building is the growth path and a lot of I wouldn’t say a lower end but I’d say maybe an A minus is what we’re building is still gonna have green it can nice countertops, and all that kind of stuff and interior look good, but it’s not going to have you know, the Globo gym and all that extra fancy Sevilla small gym, but another Globo gym?

Taylor 21:56 

Yeah, well, people are using those gyms anyway, to be honest with you. I mean, if you somebody wants to have a gym or be able to use a gym little generally get a gym membership and go to an extra gym.

Kenny Wolfe 22:08 

Right, exactly. Yeah.

Taylor 22:10 

So and I wanted to touch a bit on the just how you’re, you said you can’t build be class multifamily right now for the numbers just to make sense based on how much it costs to lead things. as far as we are selecting your markets and figuring out where you think that five year path of progress is, how do you figure that out? Because in a way, you’re, you know, it’s hard to predict the future. how do you reliably do that?

Kenny Wolfe 22:39 

You can tell by how they’re expanding the road, you know, kind of where the growth is. And you see whether building these massive house new housing developments, so you can see it and then also it helps the jerry jones is buying a whole bunch of land there. you know, whatever Jerry is doing you want to be the thing in Dallas, though? Anybody that I don’t know, but, but I know he’s buying land up there coming near as

Taylor 23:04 

Good to know. All right, Kenny. I’ve got three questions. I asked every guest here at the end of the show.

Kenny Wolfe 23:11 

Are you ready? Sure. I’m ready. Bring it.

Taylor 23:14 

All right. Number one, what is the best investment in real estate that you’ve ever made?

Kenny Wolfe 23:20 

Best one we did. We still own It is our first syndication you put together until 1982. Bill deal and Wiley, Texas, I noticed that even though were wildly was that was 2012. And I was I live in Plano whitelist, like 35 minutes away. it’s a suburb of Dallas as well. But I was in my final bubble. And so anyways, a broker bought it to me and say, Hey, you know, look at this deal. I didn’t know where the heck it was. 

I drove out there good like a deal. And I can’t because of Texas with non disclosure I can’t tell you how much we paid for it. But it was not a lot of money. It was mostly fixed up. And it was that was the time that was the deals were there on the market is harder to get the loan and hard to raise the money. You know, these days, we’ve flipped, but I feel we’ve made our investors 600% on their money. Yeah, so it’s pretty crazy. 

That is the best one. But that was a lot of timing. Honestly, that was just good timing to get into the market in 2012. Right. You bought anything, then you look really smart, whether you did anything or not.

Taylor 24:21 

Yeah, I think that market timing aspect. I think there’s probably not enough self awareness out there. Right now. Or maybe humility is the wrong word that a lot of people are claiming to be huge successes in real estate and Rod admittedly, they’ve done well, but say they started in 2009 2010. And they just think they’re absolute geniuses. Maybe they are. But we need to remember that there has been a massive, you know, market upside in that amount of time.

Kenny Wolfe 24:54 

Yeah. I tell folks, like, you know, our goal is to double our investors money in five years, on all of our deals multifamily. I tell them, you know, we’ve been, I think our average is like 32 months and doubling their money, but half of that is us and half is the market. You know, we’ve pushed in a way faster and increase the value faster than I thought we could projected. But the other half of that is that the cap rates have also compressed and that you know, we’ve had a wind in our back. 

I always wanna make sure investors know that we may not be able to beat this 32 months, whatever average we have to double the money again, our goal is to do it five years so lonely are okay with that. And not hold me to 32 months and we’re good. 

Taylor 25:35 

The second question, what is the worst investment that you’ve ever made?

Kenny Wolfe 25:47 

The worst real estate investment? Yeah. Okay, where’s real estate investment we bought it was fine. Now we bought a tanning salon. Two years after we graduated college, my wife and I, that’s a whole other conversation. But the worst one that real estate was, and we’re going to make money on it. 

I mean, 20 to 30%, over two and a half years, so not great, but was student housing. we’ve got two student housing built, one three years ago, about three years ago, the other two and a half years ago, but it was just something that is such a niche, people make money at it. 

You’ve got to be able to the biggest deal is if you missed that lacing window, because you have a you know, 90 day window to leave probably 80% of your property. Because the turnover rate so fast. but the actual turns is fine. That’s a lot more labor, condensed labor, right. But it’s more if you missed that window, you’re stuck for 12 months, because you’ve got this property is just for students, basically, because one of ours is a 24 units, but it’s four beds for bath, and that at least about a bedroom. we have 96 beds for the South.

If you miss that leasing window, that’s 90 days of craziness, to get them leased and moved in. I mean, you’re talking and then you missed it for 12 months. It’s not good for the soul in my life. we’re going to take that, Elmo, you guys, hopefully later this year. All right.

Taylor 27:03 

All right. Well, good luck with that. My favorite question at a three is what is the most important lesson that you’ve learned in investing?

Kenny Wolfe 27:15 

A patient, you know, like you mentioned, there’s a lot of a lot of these folks, especially in Dallas Fort Worth, because I’ve unit size, kind of grew up my real estate career here in Dallas and saw a front row seat of you know, we were buying, you know, B class deals for 45 adore, you know, and now they’re traded 95 at 110 120 a door. And so you just keep scratching your head, it’s like, Okay, so how are you going to make how these guys paying that much. 

The demographic, the paychecks haven’t grown as fast as the rents have grown, for however long we’ve done with eight years, whatever it’s been. eventually, who’s going to be left holding the bag, because right now in DFW, it’s more of an appreciation model, we’ve never had that here in this market. And historically, it’s always been kind of a cash flow, steady growth markets. But you know, it feels a lot like often these days with folks, you know, and then a lot of these guru groups that have popped out and are, you know, promoting retire in five years, and this might be do it and, you know, obviously, there’s a route to it, but that that adds some kind of false competition, I guess, almost folks that you know, probably don’t have the knowledge or experience to really be buying these deals, because they are operations heavy. you’ve got to have that detail done. 

The few of you I’ve seen don’t teach operations, you know, which is a huge asset to teach you how to buy it, which is great, but they don’t teach you how to run it. . I would say patience, because you see these other folks buying a lot of deal. And you guys, you know, and they’re paying a lot of money for room, so you kind of scratch your head, but it is like, and I wish I could buy that deal. You know, wish I could buy that amount of units, but you just gotta be patient, you know, the market will correct. And again, like, you know, we’re not afraid to buy in markets like El Paso or Shreveport, Louisiana, or, you know, we’re buying a second deal in Cleveland, Ohio. We’re not afraid to go to markets where people buying there yet to kind of stay in front of the wave. patient,

Taylor 29:05 

There’s a lot in that. I mean, you mentioned the guru circuit, if you will add fuel to the fire. The word today about Dallas and Texas in general is that it’s pulling a lot of jobs and companies and all that from other areas, California and less business friendly markets, but the other doesn’t explain all of it. And salaries haven’t been doubled in that amount of time.

Kenny Wolfe 29:33 

Now the ad and you know, we look a lot of median income on our properties. And you know, whenever we found a deal where it’s about a one to one ratio, Bill, price per door equals median income, and that’s very tight market. just a few couple blocks that they are dealing with in a home run. Because if you think about it, I shouldn’t be able to buy it for that price. That means their revenues not great or their expenses aren’t great or both. 

There’s something wrong, there’s a bad operator there. Right. that’s what we’ve seen. But today, we’re seeing folks and you know, here in Dallas Fort Worth their pants to three times per door compared to the median income in that neighborhood. And that’s, I mean, think about the amount of loan they’re putting on there. 

Then how much rent these folks have to pay that are like making maybe 35 45,000? You know, but can they afford it? You know, 100, you can pay? Because I mean? Can they afford the mortgage? I mean, they couldn’t, usually they wouldn’t get approved for three times on a house because it’s only 45 K, right? Maybe two, two and a half. If they’re paying to just do the same thing for them, they’re paying the down payment for them, they’re still having this massive loan on this property will do people actually paying your loan for you, you know, know, we’ll see if they can actually do that long term. 

Taylor 30:43 

I definitely don’t know. I certainly cannot, cannot predict the future.

Kenny Wolfe 30:48 

No, we can’t either. But I mean, it just makes you think makes you wonder if you think about it as a mortgage payment, because it is a mortgage payment. Just there’s two different people involved on the mortgage payment. You have

Taylor 31:00 

no, I agree with that, you know, in that way of thinking about it, and in principle, and you wonder, how sustainable are these gains? And when is it going to stop going?

Kenny Wolfe 31:12 

Right, and there’s always opportunity. I mean, that’s what we say that I take on these other guys, but there’s always opportunities got nowhere to look. And when you find a deal, you got to see the quick sound. 

Taylor 31:22 

Well, I appreciate everything that you’ve shared today. And it’s great to, you know, get to pick your brain and learn from a fairly, you know, a very unique experience. And, you know, thanks for everything you shared today.

Kenny Wolfe 31:36 

Yeah, so thanks for having me on. I appreciate it.

Taylor 31:38 

Yeah. if folks want to learn more about your fund, and what you’re doing and your company and everything, where can they get in touch with you?

Kenny Wolfe 31:47 

We’re on Facebook, LinkedIn, we’ve got a YouTube channel and best place to go is our in our website. www.Wolfeiinvestments.com.

Taylor 32:00 

Perfect. Alright. It’s a nice website to I’m looking at a good looking website. yeah, once again, thanks for joining us today.

Kenny Wolfe 32:09 

Yeah, thanks, Taylor.

Taylor 32:10 

My pleasure. to everybody out there tuning in. Thank you for listening. I hope you’re learning a lot. I certainly am. If you’re enjoying the show, please leave us a rating and review on iTunes to big help and helps other people learn about the show. If you know someone who could use a little bit more passive wealth in their lives, please share the show with them and bring them into our little tribe. Once again, thank you for tuning in. I hope you have a great rest of your day and a great week and we’ll talk to you on the next one.