REIA 232 Eric Neely: The Wealthy Trucker Buying Apartments

Welcome to Real Estate Investing Abundance, the show for busy, fulfilled professionals like you to learn how to develop financial independence built on solid passive real estate investments. Now here is your host, Dr. Allen Lomax.

Hello, enlightened investors. Welcome back to the show. Thank you for being with us today. And we are going to take a look at how it is that a wealthy truck driver became a real estate investor. Eric Eric Knealy is a real estate professional focused on developing private placements in apartment complexes. So the everyday professional has an opportunity to invest in high-yield cash-flowing real estate. Eric is the host of the Wealthy Trucker Podcast. Welcome, Eric, and take us into the show and share a memorable experience that helped you to be who you are today.

Will do. Thank you, Alan, for bringing me on here. I'm excited to get to share with your listeners and yeah, it's all gonna be fun. So yeah, I read that, been thinking most of the morning about a memorable experience that, or a formative experience. And the one thing that popped into my head that I've shared many times with people is how my dad kind of taught me to do things when maybe others would give up. And so one of the prime examples I have is I was 15 years old. And of course, the number one thing on my mind was cars and I wanted a car and anything I could do to get one, it didn't matter what it was, I was going to get it. So dad had found a car with a blown engine. And he picked it up, and then he also had found a car with a good engine but a bad body. So basically, we needed to do a transplant. And I hadn't done a lot of mechanic work at that point. I kind of just done a little bit with my dad on the side, you know. But basically, Dad brought the car into the garage. We pulled the bad engine out together, and then he stepped back and said, "All right, if you want this car, you finish it." And you know, he was there to answer questions. He was there to hand me wrenches and help me move heavy stuff around. But if I didn't come out to work on the car that day, nothing was getting done. And I ultimately we figured it out over. the course of, you know, about a week or so. And I think I learned more about mechanics and more about my capabilities at that point in time than I think I ever have in life. And I've just kind of held that mentality throughout all of life. And basically one of the things I always tell my kids is if somebody put it together, I can take it apart and put it back together. So no excuses, get it done.

Well, an amazing dad and what a learning experience he provided for you in many ways, not just learning how to take care of automobiles, but how to get your act together to actually fulfill your big why in life. And we hear that big why oftentimes in real estate, but it really is critical. And at 15, that was a big why for Eric at that point in time. So, well, Eric, take us into real estate in conjunction with faith and how does faith, I guess, propel your real estate investing?

Sure. You know, when I first started looking at the idea of getting into real estate, and as you've kind of alluded to here, I, you know, I drive trucks and I have for many years and I started looking at real estate. estate as an opportunity, one, to eventually get out of the truck, but two, to have a long-term retirement plan outside of the stock market. And so for me, ultimately, it was kind of a— I was motivated by time. I was motivated by money. And then when we bought our first property, I quickly started realizing how I was really impacting so many other people. And my faith element certainly came into play. And honestly, I think I've grown more in my faith because of the apartment ownership. And just because, you know, even if it's a rundown Class C property and what you're doing is going in there and cleaning it up and making it a better place. So it's more lucrative, you know, so it improves the neighborhood, but you are improving living conditions for people and you are being a mentor to them, you know, just being there at the property and talking to them, sitting down and just having a conversation. I mean, there's a lot more to it than just money and time. I mean, if you really want to step back and look at it, you are impacting people's lives in a big way as an investor. And so that, that's kind of how my faith has come into play within all of this. And I, and now when I look at doing properties, I've got a whole new motivation behind it. I still want to make good money at it, but the idea that I can impact a lot of lives is more powerful than money ever even thought about being.

Eric, tell us about, or give us some details on that first transaction that you just alluded to.

Sure.

What size was it? Where was it? Why did you go into that opportunity?

Okay. This is a 24-unit complex. Located in Wichita, Kansas, which is my hometown, and it was a joint venture deal. So just me and two other partners got involved in it, and it was oh let's see the numbers on it. I think we bought it for about seven hundred and twenty-five thousand, and Class C property, and really kind of just run down, built in the seventies, not super well maintained, but it was fully functional. We bought it when I toured every single unit. I knew I was going to have to evict a couple people, which ended up not being evictions, ended up just being persuasive. You need to go ahead. and leave because what you're doing doesn't fit with how we're going to continue to operate this property. It was more of a forceful conversation, but anyway, you know, we turned it around, got rid of the bad tenants, have nothing but good tenants in there now. And every single time somebody moves out, we go in and do a full rehab and just make it a really nice place to live. Even though it's in a rougher neighborhood, it's still probably the nicest property in our area. And, you know, we do things like community involvement and trying to improve the neighborhood. So yeah, that's kind of a little bit of a taste of it. I mean, we plan to refinance the property here in the next couple of years. And even at this point, I'd say today we've doubled its value. So when we do our refi, it'll be a good chunk of change that we can take and potentially buy another one, or who knows, we have stuff we can maybe do in the neighborhood. We thought about buying the entire block and it'd be, you know, a handful of single-family homes, but it would still be a little more control over the neighborhood if we did it. So, so.

Eric, that's 24 units on your first deal is a fairly big chunk and a big chunk in terms of investing that most people are not willing to go into such a thing for their first investment opportunity from a particularly inactive perspective there. What gave you the confidence to know that you could do this?

Couple of things. Lots of education. I mean, I've been out here on the road educating myself for probably 2, maybe 3 years before I ever even bought that property. And, you know, the education came from podcasts, came from reading audiobooks and knowing in my head that apartments was the only route I was going to go. I spent too much time out here on the road to be able to flip houses, or even, I don't even want to manage a single family. Managing a fully operational business sounded like a much safer avenue to go down. And, you know, if I, if I lose 2, 3, 4, or 5 tenants, I can still pay the mortgage. So. It was less risky when you really analyze it than it was buying a single-family home. I had to do it with some partners. I didn't have enough capital to do it myself, but I've got 2 great partners involved in it. One of them's a family member. The other one is a long-term friend that is well-versed in the world of taxes and accounting. And so being able to do a deep analysis from a financial standpoint was really right in his ballpark. And so just being confident in the deal and knowing what we were getting into. Beyond that, one of my business partners, he's been an entrepreneur his entire life. So he owned an aircraft company here in Wichita. And so the 3 of us, it was a good combination to get into. And honestly, it seemed less risky than buying a single-family house.

So in actuality, that probably is the case oftentimes and probably more the case than not. And yet it is just a big step for a lot of people who are going to active investing. They They just can't see that big picture. But you talked about education, podcasts, audiobooks, and so on and so forth. So you were really educated. You didn't go into it blind. You talked about faith and the aspect of faith in particular that investing in real estate gives you the opportunity to impact many other people. And the example you've certainly given is that you purchased a property that was extraordinarily run down and you've made it a suitable living place for at least 24 residents. There's probably more than that, as probably there's couples and families who are in that complex as well. So you are impacting multiple, multiple lives in conjunction with that. How is that? How does that play out in your faith?

Well, I mean, specifically it's Christian faith. And so Jesus' example to us was being a servant to others. And so, you know, when I do things at the complex, when I'm helping with The management of it. You know, I can think back just a few weeks back, there was a lady there that their fridge was broken. And so I went there and had to swap out with another fridge because I didn't have time to try and fix hers. It was just easier just to move one around. Well, the idea of not having time to do that ended up not playing out at all because she was in a tough spot emotionally. And so she ended up just wanting to talk and we ended up sitting there for like 2 hours and I just let her talk and cry and I didn't want to leave. You know, I had other things to do, but. But I wanted to be a servant to her. And the whole time I'm thinking, you know, how can I share the gospel with her and, you know, and just help her through this tough time? And so it just opens up so many opportunities when you're around other people like that all the time, where you wouldn't normally have an opportunity like that. So that's one way I suppose that my faith is playing out in all of this. I mean, beyond that, you know, when we do bigger deals and I don't know How the heck am I going to raise all the capital? I spend a lot of time in prayer like, God, I'm just going to lean on you to provide because I don't know how the heck I'm going to do this. So there's multiple ways, you know, and some of the stresses that you deal with in a syndication, I just kind of have to, you know, one of the things that we're taught throughout the Bible is to leave your burdens on God. And so I've certainly had to remind myself of that many times and not try to just carry all the weight of the stresses that can be involved in this because It's not all easy and it's not all fun and games. And there are big challenges involved. So my faith's playing out in many ways, that's for sure.

Well, it's a living faith. So oftentimes in the religious world, we run into people who want to tell us all about their way of religion. And we can't hear about their religion because their life isn't an example. And what you're sharing with us is actually a living faith that gives me Meaning to the faith, and also I find it interesting that I mean certainly you want to make money in conjunction with that. But the big why for you from what I hear you saying is that it is a way and a means to help others to a better way of life, you know. And then just being able to go into a tenant's home and share a couple of hours with them when they were in deep despair is just another example. Eric, our viewers and listeners would like to know more about you and be able to connect with you. So tell us how we can do that.

Well, I actually have a podcast myself. It's called The Wealthy Trucker. So, you know, people can hop on that podcast and take a listen. And if anybody's interested in becoming a guest, you know, you can go to the Wealthy Trucker link that you have here, and which is, it's at our website, our capital website, which is febroscapital.com. And then you can find the podcast link in there. So that's one good way. You know, I'm on LinkedIn, I'm on Facebook, and shoot my phone number. It's 316-640-8163. Just give me a shout. I'm out here on the road. You know, I spend a lot of my time talking to potential investors and doing podcasts like this, but I'm always happy to hop on the phone with anybody new. I just love making new connections. So shoot me a text or give me a call.

Kirk, how does family play into the investment process?

Family? Well, my daughter, one of my daughters, I should say, I've got 5 kids. One of my daughters is at the 24-unit today, right now working and learning how to, I don't know, she's, I know she did some plumbing work. She installed a sink, you know, she's installed flooring and she's 16 years old. And yeah, it reminded me of when I was 16 or 17, I actually worked for a property manager and learned a lot of these techniques and skills, and I still use them today. And so it was reassuring to me that my daughter is learning stuff that she's going to be able to use for the rest of her life. And, you know, my kids, they see me investing not the normal way that everybody else invests. I'm not just buying stocks, you know. That said, I do play around in the stock market. And my oldest daughter, when she was 17, she started wanting to figure out how to invest. And so we got her an account set up on, God, I don't remember which one it is, one of the online accounts where she can trade her own stocks. And so just teaching my kids investing your money now and not just using it to go buy candy bars and Is, you know, money is something you can have fun with, but it's also a tool and you should treat it as such. So I've certainly been able to use it as a learning tool for my kids.

So you work family, faith, and fitness and finances all together. How do you manage to work in the fitness with this busy schedule you're keeping?

Well, you just do it. I mean, in all reality, I'm only working out for maybe a couple hours a week. You know, sometimes at the most, maybe 5 hours a week. I mean, if you break it down per hour, It's not a lot of time. So figure out where you have an hour to spend in one day and make it be fitness. I mean, my time at the gym is probably more impactful for me in a mental capacity than anything else I do. Probably that and spending time in the Holy Bible are the 2 most impactful mental things that I do. And my physical agility and my physical wellbeing plays a big role in my mental wellbeing. And so it's not something that I think is optional. There's some weeks that I can't make it because I got too many things on my plate, feel it. And so especially as being a trucker, I've been driving trucks for 20 years and I'm not an overweight average run-of-the-mill trucker that you might imagine. I'm in pretty good shape. And so, and I need to be, I need to be in good shape if I'm going to be doing entrepreneurial stuff. I'm going to be volunteering at church. I'm going to be a good dad. It plays into everything in life.

So I would think being a trucker that certainly maintaining that fitness regimen would be very challenging because while you're out on the road and you're away from your gym. How do you manage to do that when you're out on the road, or is it something you reserve for when you're home?

It's, you know, generally I'm doing it when I'm at home. That said, you know, sometimes I'll do pushups and sit-ups in the hotel room just to get the heart rate up. I never use the elevator at the hotel. I don't think I've ever used the elevator at that hotel. I've been going there for over 2 years now and I've never even looked at it. So it's just little things like that. And then eating, you know, I never stop at truck stops. On a rare occasion, like today, I'm just craving a Snickers. So I'll stop, but I basically never go to truck stops. I'm sitting on an exit ramp right now, taking my break because I don't want to spend the money and I don't want to eat the food that's there. So, you know, I can tell you my meal plan for the week. I know exactly what I'm going to eat Sunday night. You know, it's the same every week. And that may sound boring, but honestly, I'm eating steak and eggs or not steak, sausage and bacon and eggs every single morning. And, you know, I enjoy what I eat, but I'm careful with what I eat. You know, I'm not pumping myself full of pop and sugar while I'm out here on the road. So just being conscientious of what I'm putting in my body is a main thing.

Well, you touched on the finance and you gave us the example that you helped your daughter to learn to invest in the stock market when she was 17, 18 years old. Bring us full circle here with this overall picture of faith, family, fitness, Well, it all starts with faith.

You know, in my mind, if I don't have a good, healthy view of God and following his plan for my life, then the rest of my life is lacking. And so that's why faith is in the forefront there. And then family comes next because, you know, they're very supportive of me and I'm doing my best to take care of them. Together we take care of each other and, you know, having good family dynamic. I mean, I've got 5 kids. If I didn't have a wife willing to stay home and take care of my kids, I don't know where I'd be. You know, it wouldn't be good. And so, and then beyond that, she supports me in my entrepreneurial ventures and, you know, has no problem with me being in the truck every other day. So even though it's not maybe the ideal, you know, life of luxury, it's still our life and we love each other and support one another. And then we've got fitness coming next. You know, I kind of alluded to that earlier. If I'm not physically fit, I can't take care of my family as well as I should. My mental state isn't where it should be. You know, my ability to volunteer at church would be lacking. So it plays a role. And then finally, finance. I mean, we all have to have money to make it through life. And so it's certainly an impactful element, and I just don't want it to ever be my primary focus. If I'm just focused on being rich and making money, I'm not focused on my faith. I'm not focused on my family. Those things are going to fall by the wayside. And I just, there's no doubt in my mind, I'm not going to achieve success in life. I don't care how much money I have. I won't be successful if I don't have a family there. I won't be successful if I've given up my faith. And so that's the reason for the order of faith, family, fitness, and finance.

Eric, when you talk about the myth of retirement, What do you mean?

I can't imagine actually ever just retiring. You know, I've got my grandfather-in-law is my primary example of this. I mean, he hasn't been a teacher for many years. He retired from teaching, but he's always been a traveling missionary or he's always over at a neighbor's house helping them, I don't know, remodel their house. You know, he's always traveling around, constantly networking, constantly helping others or You know, whatever it is. When I hear the word retirement, I think Mai Tais on the beach and just a life of gluttony and doing nothing. And it is just, that's not for me, you know? And maybe that's not how everybody sees retirement. That's the picture I get. I don't want to just stop working and stop producing in this life. That's not what I was put here on earth to do. I was put here on earth to be productive and to serve others. And so in that aspect, I'll never be retiring. I'll work until the day I die. It just may not be for money.

Well, I just can't imagine retiring either. I mean, who would want to? It's just, I just—

When you frame it in that manner, yeah. Who would want to?

There's just, yeah, I'm still teaching and love it. I just don't know what I'm going to do when the day comes I can't do that. My dad retired from civil engineering to go into the ministry and he worked in the ministry until he had a major stroke and heart attack and just was not able to do it any longer. But I don't know. I don't know why people want to retire. I don't see the big pull to that. But I mean, I could see it if you weren't, if you didn't, if you weren't working in something you were satisfied in. But like you say, there's always going to be something that is going to be fulfilling. Sure.

It's a fascinating thing. I, you know, I live here in Wichita, Kansas, which if you haven't heard of that, Maybe you've heard of this, the air capital of the world. I mean, that's what Wichita's regarded as. We've got companies here like Boeing, Cessna, Raytheon, you know, big company, big aircraft companies. So anyway, I just say that because I heard a statistic a while back. I don't know if it still stands today, but of the people working in the aircraft industry, once they quote unquote retire, they're dead within 3 years. And even if they weren't completely fulfilled in their life and didn't love their job, That's not the point. The point is they had something to do that ultimately gave them purpose. And that was building an aircraft part. Even if they hated their job, whatever, they still had purpose. And then all of a sudden they're sitting at home watching Netflix and causing heart attacks. So just be careful. If your path is to retire, make sure you've got— make sure you have something to do. You need a good hobby.

That is for sure. And if they're making it 3 years there in Wichita, they're actually a year above the national average because the national average is that people die within 2 years of retirement. And you know, it does, you know, it just seems counterintuitive, but that's the statistic. And well, I mean, if you just plan to go sit on the beach, how unfulfilling can that be? I just— Sure.

Well, there's a time and a place for it.

Yeah.

Enlightened investors, I know you've enjoyed our show today and enjoyed getting to know Eric and his philosophy on life in conjunction with his real estate investing. So thanks for being with us, enlightened investors. Look forward to being with you next time. Eric, thank you so much for being with us and sharing your life experiences with us.

Thank you, doctor. It's been a good time getting to talk and yeah, I enjoyed it.

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