26-Year Old Alex Kingman, CEO of KGI Owns 253 Multifamily Units with an Estimated Value of $30M!

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Hello. Ginny Bowling here with Pivot to Prosperity, the podcast brought to you by Pivotal Real Estate Investments, where we help our investors build wealth and income through commercial real estate that also improves communities. And today we have Alex Kingman with us. Hey, thank you. I appreciate you coming, Alex.

Thanks for having me. Ginny.

I am going to read your bio and then you can tell us what's not in here, okay?

Sure.

All right. Alex is the Director of Investor Relations at KGI Capital. Her company helps high income and high net worth individuals invest passively in apartment buildings so that they can reduce their tax burden, grow passive wealth and live life on their own terms. KGI Capital invests in 20 to 100 unit distressed multifamily properties and redevelopment projects in the Southeast and Midwest. To date, they have acquired 253 multifamily units and have $30 million in assets under management. Before going full time into real estate, Alex was one of the top Airstream salespersons in the country. She is located in the San Francisco Bay area and is a mother of two girls. Very good. Okay, so tell us where you come from and a little more about where, how, what got you where you are.

Sure, sure. So my journey started when I was a little bit younger than maybe most. I was in middle school, I was in eighth grade. We were going on a family vacation from where we live, which was San Francisco Bay area, down to Southern California to enjoy the beach. And we had a long drive ahead of us. So I decided to bring a book. I looked at the shelf in our living room and realized I'd read them all except for one. So I said, well, I guess I'll read this one. And it happened to be Robert Kiyosaki's book. It wasn't Rich dad, Poor dad, it was teaching. Oh, what was it? It was like, oh, raising your child's financial iq. It came with the cash flow game, which we happen to have. And so it was just on the show, so I thought I might as well try it, I guess. I read it and it surprisingly was a huge mindset shift for me and totally changed the trajectory of my life. After that, I decided I wanted to be an investor and, and be a business owner. Before that, I had thought I was just going to get a job, work really hard, save a lot of money and retire early. That all changed on that vacation and I had a whole new outlook on my life. So that's where I started from there. Just went into trying different investments. Invested in the stock market when I was about 16 just played around with that. Learned different aspects of business by taking different jobs to learn once I was out of high school and eventually got into real estate and started out with a small house hack with my partner and then went from there into out of state one to four units and then after that went bigger and now we're looking at 20 to 100 units with heavy rehab and we do that now.

And how old are you, can I ask?

Yeah, sure. I am 26. I will be 27 in two. About two months, so almost 27.

Great, great. Okay. And do you have a regular job now?

This, this is it. I do this full time. You?

Real estate full time?

Yep, yep, that and take care of my, my, my kids.

All right. Yes. And the two daughters? Yes. How old are they?

I have a 10 year old and then I have an 8 month old, so. Yep. Definitely have my hands full there.

Yes, you do. Yeah. The 10 year old probably is kind of helpful, right?

She is actually. Yeah, she's very helpful. They, they get along so well. It's, it's. It's honestly really fun to see.

That's good. That's good. Yeah, that could. Yeah.

Y.

Well, congratulations. And so, yeah, the, that really helps you to not have to go to a job when you've got two kids. For sure. I know that. And so tell us about your first deal.

Sure. Our first deal, our very first deal was when we were 20. We, my partner actually, who's my partner in business and in life, he wanted to buy a house. And I told him I do not want to buy a house unless it's an investment. So we bought an investment house. And so what we did is we bought a three bed, two bath house that also had a studio granny unit in the, in the back that was attached to the house. It was 300 square feet with a little bathroom. And then it was also connected to the garage. And we lived in the three. I'm sorry, we rented out the three bedroom, two bath and then we lived in the little studio with our, with our daughter. We didn't have the second one yet and we remodeled it. We took the garage and the studio and we turned it into a two bedroom, one bath unit. And that's how we got our start in, in the real estate space. We turned it into a duplex essentially, and then we were hooked.

So converting a garage, I gotta think taught you an awful lot about construction too, then.

It did. It did. So my partner also is a general contractor, so he has a company here in the Bay Area, does a lot of electrical. He's an electrical contractor as well and does a lot of electrical and a lot of remodels and that kind of thing. So it was right up our alley. But yeah, we definitely learned a lot in that, in that timeframe, and we did it all ourselves at that time. Now we probably would go a different route because we have more options and more knowledge and experience.

Right. Right. Now, before that, were you ever helping him at work?

No, at the time he was an electrician, so he was actually working and he was working for another company. So he didn't have his own company. So he was doing his thing. I was doing sales. I was an Airstream travel trailer salesperson. So we kind of had our own careers going different ways.

Right, right. Yeah. Yeah. That's funny. Well, but so now you do do some stuff together, I imagine, if you need to. Right?

Yeah, yeah, we do. We look at. Yeah, we'll look at deals, you know, together and that kind of thing. Make decisions, of course. Have our meetings and everything every week and make sure everything's going as it should.

Well, that's good. That's good. Well, so now as far as your most recent project, what would that be?

Well, our most recent project, let's see, we have one that's open right now, so I can't say too much about that because it's a 506B.

Right.

But we have. Yep. So I won't talk about that one, but the one before that was a 72 unit apartment building. It was very distressed, I would say. And it was in Oklahoma. Oh, Oklahoma City area. UConn, Oklahoma, to be specific.

Okay.

Yep.

And how did that go?

So that one, it's been going really well. We're about a year in, and so, you know, we've taken our time, just found the right deals. We haven't tried to go and invest in just any deal under the sun. We're really specific about what we invest in. So it's been about a year. When we bought it, each unit needed about $30,000 worth of work. Now, that's interior and exterior, but just averaged out about $30,000 each for all 72. And we are almost done with the renovations now we're just closing it up, kind of punch list items, things like that. And we have like seven more units left, I think, that are, you know, occupied and that kind of thing that we need to renovate. But it's looking amazing. It had those, they're called mansard roofs, but basically like, you know, triangle looking walls on the. On the Buildings which are really ugly, so we ripped all those off. Did you modern? Yep. Yep. So it was a big project.

What'd you do with them? Did you. Did you do a hip roof?

No, we just went to, like, straight walls, like flat walls, vertical walls, because they were on the walls, and then it had a flat roof. So we just, like, made them normal walls, not like shingle walls. Yeah, yeah. So for lack of a way to say that with, you know, I'm sure my partner would have a better way to say that. I should say he probably has the right terms, but, yeah, we went from walls like this to walls like this. So, yeah, that's been really good. We started out with one property manager, and we. We ended up switching to another group because we kind of saw the writing on the wall. The first one was good, but then they kind of had a little bit of a. Internal issues start to happen, and so we left before it completely. They pretty much completely liquidated their multifamily management sector. So, you know, that actually didn't end up affecting us negatively because we were proactive about it. And. Yeah, that's really. That's been the main, I guess, thing that happened that wasn't really planned for. And so far, you know, it's gone really well.

That's great. That's great. And then you have investors in that one, do you?

Yes. Yep.

Yeah. How many investors did you end up with, roughly? Do you remember?

Nine.

Okay. Okay.

Well, I guess of our own, we had a couple other partners as well who brought in investors.

Okay. Okay.

Yeah. So I think total, it was like 30, maybe 25. So.

Okay.

Yeah.

Was that your first one property over 50 units?

Yes.

Yeah. Okay. Exciting. Good. Good.

Yes. Yeah, very exciting.

And so do the other partners. Helped very much with the operations. How do you divide that up? Where. How'd you end up doing that?

Yeah, so we met. I actually met the other partners through networking, and we ended up partnering up on this deal. They actually had found the deal, and then we partnered with them. So how we've kind of. How we have it, I guess, divided up is they do. They do a lot of operations. My partner handles a lot of the renovations and works with them on that.

And schedule kind of thing.

Scope and schedule, construction schedule, you know, details if we need to. We. We took over, I think, the. The main account at one point for the property and all that. So just making sure that, you know, we switched everything over making sure that our communications with all of our vendors and everything is good. So. Yeah, just a lot of the construction management portion because that's obviously where his experiences. I've been doing all of the invest investor side of things. That's where I focus on in our company. So all the updates, all of the. Also just, you know, weekly asset management meetings. So, yeah, we're very involved. There are six of us total on that team.

On the management team. Yeah.

Yep. So it's a good size. I wouldn't really think that more than that would be very good. It's just too many cooks in the kitchen, I think. But six is good. We've done really well.

And are they located there near the property?

You know, actually they're in Utah. So we just have a really strong property manager there that we, that we have, you know, that we have there.

That's.

And that's where, you know, I know that a lot of times there are some investors that want somebody there that's a, you know, a GP member to be there near the property. But we actually have. Up until this point, we've mainly just found really strong property managers to work with and then we've been able to successfully do what we need to do with that. So, you know, there are different ways to go about it. And just because someone's not there doesn't mean that it's necessarily a bad option or bad deal.

Yeah, I know it's. There's lots of people that do it. I tend to like to be within a day's travel just because I prefer that. But it's funny because a lot of people will say if you go ahead and invest further away, you'll systemize more.

Yep.

And that's a good thing.

Yeah, that's. That's one of the main reasons that we liked that. We kind of originally did that.

Well, that's good. That's good. Great. And then. So what's your buy box? What are you looking for usually?

So typically we, we have always focused on properties that need a lot of work, a lot of physical work to them. So lots of construction needs, I guess you could say, or lots of rehabs. So we look for currently 20 to 100 unit properties that are in distress. It could be whatever kind of distress, you know, it could be debt distress, it could be, you know, property management distress, whatever. But typically we're focused on that physical distress. So if the property looks bad, it's probably our kind of property. We look for that. We look in Florida, especially Jacksonville, Oklahoma City area, the kind of Fort Worth, Texas area and also in northern Indiana. So those are where we've focused in and yeah, really just anything that's distressed we'll look at and see if we can, you know, provide a high enough equity multiple for our investors and see if it makes sense.

Is that the key, key number they're looking for is the equity multiple?

Yeah, especially for distressed. You're, you're not going to be investing for a monthly income check. I guess you could not that there isn't cash flow. There is, but typically we, we have our, typically our investors are making money for their day to day lives elsewhere through a career or their businesses and they are looking for a way to grow their wealth quickly, not necessarily for a monthly cash flow check. So they're looking for that equity multiple. You know, a lot of them, you know, like 2 to 3x is typically what we try to look for when we look for deals. A two to three times multiple on your initial capital, I guess you could say so yeah. Typically with these kinds of deals you're not going to find like the same returns as like an A class building that you're investing into. So different strategies, different, different types of deals are going to, you know, maybe work better or worse for different investor strategies.

Right. Greater appreciation though because you're driving up the value with all the capex, right?

Yeah, exactly. So yeah, we're able to buy it at a good price, force the appreciation and then return a good, a good total return because of that.

All right, well, so now I'm going to ask you, is there a pivotal person or event that brought you to either where you are now or where you are going from here?

Yeah, so I mean of course the pivotal time when I was a kid definitely had a big impact, a pivotal person. You know, for me I actually was in high school, I believe I was a senior in high school, I might have been a junior. And at the time I was writing a book about high school. I guess now I'm embarrassed to say I never published it. I wrote the whole thing. It's actually pretty, it was pretty good but I never ended up publishing it. But just by chance, by luck would have it, of all people, Mark Victor Hansen, who's the author of Chicken Noodle Soup for the Soul series and that whole franchise happened to come to our house because we lived in, basically we lived off grid. We didn't live like hermits though, like normal people off grid, like we had all the normal conveniences. We just lived far enough away that we didn't have utility services. So we lived off grid. He was interested in the solar aspect of our off grid properties. So he came to check it out. He was interested in investing with his group, so they were trying to learn more about it. And so he ended up being at our house. And I remember just talking to him and saying, hey, I have a lot of ideas. You know, would it be okay if I just, like, called you sometimes and asked you questions? And he was like, yeah, of course. So for the next couple of years, you know, I would just ask him questions and talk to him and here and there. And he'd always give me good advice, and sometimes I'd follow it and sometimes I wouldn't, unfortunately, because I just didn't see how it made any sense. Sometimes, like, oh, that seems way too simple, you know, because I was like 17. I don't know.

And you knew everything. Right.

And I knew. I'm like, that doesn't seem like it'll work. I'm going to do something else. Yeah. So, you know, the person's right in front of me telling me this. Yeah. But looking back now, I have really implemented a lot of the things that he told me that maybe I didn't listen to at first, but now I'm like, oh, my gosh, that makes so much sense and I wish I had done it sooner. And so I think that was a pivotal moment because he really believed in me just because I was excited about it and he was just. His mindset was so much bigger than mine was. And so I learned a lot just by asking him questions and talking to him and things like that.

Think bigger. Well, and it sure sounds like you need to write another book then.

Yeah, I know you've got access to.

A very special guy and then you can ask if you, you can credit him or maybe a co author or whatever.

There we go.

You can find, find something to do. Maybe do a feature in your places that you call your Chicken Soup Corner, or.

There we go. I like it.

I'm stretching, obviously, but that's fun. Yeah, that's great. And develop a brand maybe, or. I don't know, but then you gotta watch out for all the, the royalties and. But he might let you inch in on that. I don't know. See how much he really liked you.

Yeah.

But anyway, well, very good. Well, so I don't want to, you know, push the time too much here. Why don't you tell people how they can reach you?

Sure, sure. I'm, I'm very active on LinkedIn, so if you want to reach out to me there, we can connect and chat more in mess, in the messages or whatever you want to do there. Otherwise, I have a lot of resources for passive investors at our website, and you can always set up a call with me there if you're interested in learning more about what we do. It's at www.investwithkgi.com.

Great. Great. Okay. Very good. Well, thank you again for coming on. I appreciate it. We're gonna stay in touch.

Yes, yes, it.