LIVE, from Denver’s Cherry Creek neighborhood! This is the Kyle Malnati Show! I’m your host, Kyle Malnati, and I’m broadcasting from Stewart Title in Cherry Creek. Very excited to have you listen to me, this is our inaugural show, and what I do for folks in the business of real estate is help people buy and sell 10 to 110 unit apartment buildings as investments. Really happy to be here and share with you some knowledge and some inspiration along the way, we’ll have a couple of different topics to talk about today. First, if you would like to get in touch with me, I can be found on Twitter, my Twitter handle is my name, @KyleMalnati. I can also be found on LinkedIn, I would love for you to connect with me there, and our website is http://www.DenverApartmentBuildingsForSale.com.
I was awarded in 2012, a prestigious national award by Realtor Magazine called 30-under-30, and what that does is it chronicles the lives and career experiences of 30 real estate professionals, and that’s one of my deepest honors that I have. I’m really proud of that, and the reason I share that with you today is I believe I am a high-octane realtor that can help you out, and bolster your investment properties. What we’ll talk about today are a few different things, but first I would like to share that we are sponsored by Dustin Thome of Keller-Lowry Insurance.
Here is a little information about Dustin: Dustin is a commercial insurance broker, and I would like to say thanks to him for sponsoring the show. He is a partner and owner of Keller-Lowry Insurance Inc., which is located here in Denver, Colorado. He understands the challenges of risk of your business that it faces everyday. Dustin works with targeted insurance carriers that have specialty policies designed for just property owners. Keller-Lowry’s fresh and innovated programs have become the standard for providing owners and property managers with very competitive products as it relates to habitational insurance market place. Habitational is one of those million-dollar words, but basically, Keller-Lowry, Dustin, and I have had a long relationship because they provide insurance on apartment complexes. Dustin can be contacted at 303.756.9909. They also have a toll-free number for you out-of-state, and that is 800-753-9909. If you’re looking for a quote, you can email Dustin, Dustin@KellerLowry.com. Thanks again for the sponsorship, Dustin.
To kick off our show, I’d love to talk about: Why do people buy apartment buildings? And what is my role in the business? Well, people buy apartment buildings because they are looking to invest, they’re looking toward the future, and what I help folks with is 10 to 110 unit apartment buildings. And a lot of people don’t even know that those are possible investments. Well, I believe in living a life that is fueled by a very powerful WHY, having purpose, and the purpose of apartment buildings is number one: retirement. People have the ability to have appreciation, as well as an inflation hedge, with their retirement planning. To also invest for a college fund, for their kids, grandkids, I’ve seen investors buy apartment buildings for the benefit of their nieces and nephews, even if they don’t have kids. Lifestyle, this is the third reason why our clients, after surveying them, have said that they like to buy apartment buildings, and the reality there with lifestyle is you want to stop working for the man. Nothing wrong with having a corporate job or a job at a company, but to be able to control your own destiny is critical in our clients’ reason for buying an apartment building. Creating wealth, and this is leaving a legacy for those when you are gone, leaving a legacy for your heirs, for your children’s children, or for even just beneficiaries of your will that aren’t your kids. So, again, the reason why people buy apartment buildings is really to further their investment, but it is also so that they can have freedom, and I believe that investing in any type of property provides you with freedom if you are doing it the right way. I often think of the topic of apartment buildings and the question that I get the majority of the time is: I didn’t even realize you could own an apartment building, what’s that all about Kyle? Well, what people do is you’ll buy an apartment building, could be 10 units, could be 5 units, could be 25 units, it doesn’t matter the size, and you basically have the ability to operate your own business. You collect the rent, you’ll pay expenses out of that, and usually your expenses are lower than your operating income, and you make a profit. And it gives you an ability to have a side business that is complimentary to your existing portfolio that you have, maybe in retirement, it is also complimentary to your existing primary income, and that’s really why people buy apartment buildings.
Again, this is the Kyle Malnati Show being broadcasted live from Stuart Title in Denver’s Cherry Creek neighborhood. Specially thanks to Laurel Rossi at Stuart Title for providing the location of our podcast today in our inaugural episode. The quote of the day is from George Washington Carver, and I picked this up this morning. The quote goes: “How far you go in life depends on you being tender with the young, compassionate with the aged, sympathetic with the striving, and tolerant of the weak and strong, because someday in life you will have been all of these.” Again that was George Washington Carver, and I just love that quote. Treat others in life whether it is in your investments, in your day-to-day life at your job, basically trying to give yourself an understanding of where that person is coming from, and realizing that you might be in that spot in some point of your life.
Next segment of our show, I would love to talk about the benefits of apartment buildings specific to how people operate their buildings, and what these people really look like. Who are the people that own apartment buildings? Well, they are highly educated folks, I’ve got clients that are doctors, lawyers, and clients that are CPAs. We’ve got folks that are in financial services that own apartment buildings. Obviously, we’ve got real estate professionals: developers and realtors, I’ve often been called the realtor’s realtor. I’ve got several clients that are apartment building investors, but also residential or commercial realtors in their primary job. Folks that have high income sales, this group of people all kind of has the same theme, folks that can make nice sums of money in their primary job. But, you’d be surprised, the next set of folks are contractors, electricians, plumbers, first responders (firefighters and police officers we’ve had as clients), and educators (retired teachers, even preachers). What I like to say is everyone can buy an apartment building, that includes the butcher, the baker, and the candlestick maker. So my thoughts about buying apartment buildings is we’ll start to dive into the dynamics of how you buy an apartment building, and really where I serve the market is I try to be the second or third-level realtor for an investor. A lot of people start their career buy owning a single-family home, that they bought, that’s how my wife and I started. Once you’ve owned a single-family home, you realize that maybe you have the ability to scale your business, and what some people do is they scale their business by buying lots of single-family homes. What ends up happening is all of a sudden you’ve got properties dotted all over the map, and it just becomes inefficient. And where I come in, is typically the buildings that we sell start at a million dollars and higher, the financing opportunity for an apartment building, the required down payment is 25%, so we start with $250,000 to invest, and I’ll broker the sale of that transaction just like a regular residential realtor would broker the sale of your home. So, it’s not very different, it is a different process and obviously has a lot of dollar signs in front of the price point. What we want to do is make sure that you have got a situation where you can control your own destiny by buying a business that provides cash-flow and appreciation over the long-term. Apartments are a way to diversify your portfolio, they are not necessarily the only way to invest and I want to make sure I have a cautionary tale there, that don’t stick all of your money into apartments. Just like anything else, there are benefits to spreading your risk around, and spreading your risk around is simply, diversification.
This is the Kyle Malnati Radio Show sponsored by Stuart Title in Cherry Creek and Keller-Lowry Insurance. Keller-Lowry is an insurance agency that provides commercial insurance products to investors, specifically in apartments, and where my experience lie with Dustin Thome. Dustin is a partner and owner of Keller-Lowry Insurance Inc. here in Denver, Colorado, and Dustin works with targeted insurance carriers that have special policies designed for property owners. Dustin can be contacted at 303.756.9909 or Dustin@KellerLowry.com.
The last segment of our show, I would like to share, and this will be a recurring theme, some of the personalities in apartment buildings. Who is it that buys an apartment building? We covered that a little bit on the first go-around, earlier in this episode, but we’ll actually dive into the real characters in our business. First, folks I would like to talk about the fact that these apartment investors come from all walks of life, you don’t have to be special to own apartments, really it takes hard work, grit and determination, and this is a really good story that proves that point. I met just a few weeks ago a couple of brothers that own apartment buildings, they are foreign, they came to America a long time ago, and came to America with very little money in their pocket like a lot of immigrants that you’ve heard of in the past. They came into Denver, looking for work, they actually spent a period of time working on a ranch in the mountains, and for two fellas that were from a warm climate, working in the mountains in Steamboat Springs was frigid cold over one winter, as they told me. These two young brothers came back to Denver, got jobs bussing tables and working in restaurants, saved up their money, were conservative with the way that they spent their money and bought an apartment building. They work on that apartment building to this day, and it has provided them with longevity, a reason to be in the world, and that may sound funny, you say well I’ve got my family, my wife, and my kids, but you often hear stories and it’s sad of someone who has grown old in age and all of a sudden they have their retirement and looking back and say what’s next? Apartments provide people with a reason to belong. So these folks, these two brothers, bought their apartment building, worked hard on nights and weekends leasing units, and they’ve owned it for several decades, they owned this building free and clear and this apartment building is worth more than $1,500,000. That’s just a rough estimate, but it is just amazing, a very simplistic view, apartment buildings aren’t complex at all, they’re apartment complexes ha ha! Maybe that will be funny to you later, but apartments can be very simple and I encourage you to consider buying an apartment building. If you own single-family homes, maybe you own a duplex or a triplex and want to trade up, maybe you are getting frustrated with some of the inefficiencies of smaller real estate investments, I’m your broker. I’m Kyle Malnati, I am a partner and shareholder of a company here in Denver called Madison & Company Properties, my phone number is 303-358-4250. You can connect with me on Twitter, my handle is KyleMalnati, you can also connect with me on LinkedIn, and please visit our website http://www.DenverApartmentBuildingsForSale.com. So happy that you have listened to me, please tune in to our next episode, where we will dive into more of the benefits of buying an apartment building. Have a great day wherever you are listening, and thanks so much for taking the time to listen to me. I’m Kyle Malnati, take care!
~Kyle Malnati, Partner/Shareholder
Madison & Company Properties
Madison Commercial Properties
1221 S. Clarkson St. #300, Denver, CO 80210