Turnkey Real Estate: How to Identify Strong Markets, Good Properties, and Great Property Managers, with Kathy Fettke

Released Thursday, 28th February 2019

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Turnkey Real Estate: How to Identify Strong Markets, Good Properties, and Great Property Managers, with Kathy Fettke

Thursday, 28th February 2019

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Kathy Fettke, co-CEO of the Real Wealth Network, operates a turnkey real estate rental business. She is a powerhouse in real estate investing, and her company guides people through the process of identifying strong markets, good rental properties, and great property managers so that running an investment property far from home is manageable. On this episode, Kathy shares with Jonathan why she started her company, how she built a system for identifying the best markets, rehabbers, and managers around the country, and what she is seeing in the market today. Because of her tremendous experience with real estate investing and her network of teams all around the country, her read on the market situation is unique. You don’t want to miss what she has to say.

From a stay-at-home-mom to turnkey real estate investing powerhouse

Kathy began her journey to turnkey real estate investing out of desperation. She had a degree in broadcasting but decided to stay at home when she had children. Her husband, now co-CEO of Real Wealth Network, came home from the doctor with news of cancer. Preparing for the worst, she wanted a way to pay the pills and be able to raise her kids. Kathy already had a radio show from her broadcast career, so she decided to change the topic of this show from news to passive income. She began by interviewing millionaires and found that they were wealthy from either owning a business or from real estate investments. She also found that most of these millionaires were using profits from business to invest in real estate. Her show’s following grew from interviewing interesting people. She eventually got a show sponsor and co-host - a person in the mortgage industry. With this partnership, she began interviewing this lender’s clients to see where they bought their real estate and how they were making money. Kathy saw that many of these interviewees were retiring by the age of 30. At the suggestion of her co-host, she got her real estate license and became a mortgage broker. She learned how to build wealth with leverage. Her show continued on a major network, and she interviewed more big names.

Kathy guided listeners to obtain loans that would make money. She began looking for a market to invest in and found a small town in Texas on the lake that would soon have a freeway coming in. New properties were selling at great prices, and they tripled in value shortly after because of the freeway and access to Dallas. Kathy came back and talked about this experience on her show, and her listeners wanted to know everything! She realized there was a demand for someone to show others where and how to invest if your homework doesn't make sense. From this point, her business was born and continued to grow.

Finding reliable people for your team

From the beginning, Kathy realized that there was a low barrier to entry in real estate, so she could easily run into others who would not make good team members. In the beginning, her company did background checks, looked at the quality of construction, and real property management testimonials. However, they quickly realized this was not enough. Having good team members - realtors, property managers, and more - was vital to the success of real estate investing. She created an auditing system to prove that people they hired could keep up with standards.

To find good property managers, she recommends looking online to see reviews. She wants to see their track records, whether they are licensed, what other investors have to say about them, fair fees, that they have been in business for at least 2 years, understand construction, and have systems in place! She has an extensive list of things that make a good property manager, but these managers are crucial to the investment property. Kathy’s team helps find these managers and connects them with investors. Though she is not in a fiduciary role, she advocates on behalf of the investor.

Kathy’s view on the current real estate market

Kathy begins by saying there is not one housing market, but lots of different housing markets that are all at different places in the cycle. However, there has been a slow down in sales across the board in the last 3 months. Kathy explains that home prices are still up 6% on last year, but that the slow down on sales and price gain is a good thing. This means things are stabilizing with real estate and the market is becoming more normal. There is currently a shift from a crazy seller's market to more of a buyers market.

Scaling a turnkey real estate investing business

One key part to Kathy scaling her turnkey real estate investing business was building the right team. She is the idea person and visionary but needed someone to implement them. Defining her company’s core values was huge because it allowed her to hire and fire people to those values. She paid the right people to manage others, and she only had to manage those directors. Each person has a unique ability, so Kathy tries to find that for each person and allowing them to do that alone.

Kathy’s husband and co-CEO is an early adopter of technology. When podcasts came out, he began publishing her show on iTunes. She was one of the first real estate podcasts and got listeners worldwide. They were also the first to do webinars, allowing them to go from local meetings with investors to having virtual meetings where people all around the world could join. By having the right team and utilizing technology, Kathy’s business has grown to 40k members!