The Real Estate Strategy That Changed Her Life with Lena Kennedy Vergara

The Real Estate Investing Club

Join an active community of RE investors here: https://linktr.ee/gabepetersen  0:00 Introduction to Lena Kennedy Vergara 1:42 Becoming an accidental landlord 3:18 Lessons from difficult tenants and property management 5:02 Investing through the Great Financial Crisis 6:25 Why Lena expanded outside California 7:40 Scaling with pre-construction multifamily investing 9:05 Using conventional financing to grow a portfolio 10:18 Triple net investing and passive income strategies 12:55 Scaling to 200 doors and larger multifamily deals 18:42 Builder bankruptcy lessons and overcoming setbacks  REAL ESTATE INVESTING JOURNEY 🏡  In this episode of the The Real Estate Investing Club Podcast, I sat down with Lena Kennedy Vergara to discuss how she transformed a small amount of capital into a massive real estate portfolio spanning multiple states and asset classes. Lena shares how she grew from an accidental landlord into an investor controlling dozens of units across California, Utah, Texas, and beyond. If you want to learn how to build wealth through real estate investing, create passive income, scale rental properties, and move closer to financial freedom, this episode is packed with practical insights and real-world experience. 🚀  MULTIFAMILY REAL ESTATE INVESTING STRATEGIES 📈  One of the biggest themes throughout this conversation is how multifamily real estate investing can accelerate wealth creation over time. Lena explains how buying a small property during a difficult market cycle gave her the confidence to continue investing even after dealing with terrible tenants and early mistakes. We talk about the importance of persistence, property management, and learning from failures as a real estate investor. Anyone starting in rental property investing, apartment investing, or house hacking will gain valuable lessons from Lena’s story.  We also dive deep into pre-construction real estate investing and how Lena identified growth opportunities in Utah before the market became highly competitive. She explains why strong population growth, educated workforces, tech expansion, and landlord-friendly conditions made Utah one of her favorite places to invest. For investors searching for the best states for real estate investing, cash flow properties, or long-term appreciation opportunities, this conversation offers a detailed look into market selection and strategic scaling. 🌎 #RealEstateInvesting #MultifamilyInvesting #PassiveIncome #FinancialFreedom #CommercialRealEstate  Want to learn more about our guest? Connect here: lenakennedyv@gmail.com  Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen

Transcript

00:03all right we are back with another episode of the real estate investing club i hope you guys are

00:09having a great day great week wherever you are and whatever day it is for you it is friday on

00:15the podcast so we're bringing that good friday energy to you and this will be a good episode

00:20we got lena kennedy vergara with us on the show she has 25 years of experience so a lot to

00:27jump

00:27into here 23 properties uh total across or 75 doors across five states she's grown a hundred

00:34thousand dollars into a 50 million dollar portfolio so any of you guys who want to start small and go

00:40big this is the episode to listen to lena i'm excited to jump into this thanks for hopping on

00:45thank you it's fun to be here absolutely i told you before we got on here we always like to

00:51start

00:51with stories we like to hear how people got to where they are so why don't you take us back

00:55to

00:55the beginning of your story in real estate and just tell us how you got here yeah i have kind

01:00of a crazy story kind of an accidental landlord i'm sure you've heard this before but i i went to

01:06live in italy for a year when i was younger and because of the tax treaty thing i was able

01:11to save

01:11some money and i what i did with it is i there's like a tax treaty you can make certain

01:15money yeah

01:16there was at least at that time that you could you know say not really have to pay dual tax

01:21you just had

01:21to pay in italy so you could save taxes okay i think still in place actually but i was able

01:27to

01:27save up a little bit of money you know like a little stockpile and with that i came back home

01:32i'm from huntington beach california and i bought a house in orange california which is like 10 50 miles

01:38away but soon after that i got married i had a child and we wanted to live closer to my

01:43parents in

01:44huntington beach where i'm from but unfortunately the market had tanked at that time with real estate and

01:50my house was underwater i couldn't sell it get back the money i paid for it so i thought well

01:55i'm gonna rent it how hard can it be so i did that i rented out the house moved to

01:59huntington beach

02:00and horrible horrible landlord i mean my first people i would just like on a handshake i'd take

02:06the person and let them live in my house and the first tenants i had they glued their hardwood

02:11floor the carpets to the hardwood floors ruined my hardwood floors so it just just kept going and

02:17it didn't get really much better and after about four years the market started to recover

02:22and i had these tenants that i had put i put my actual address on the leases right so this

02:28one

02:29tenant would show up at 10 at night you know a week late and bring me the rent or the

02:33partial rent so i

02:34said you know i'm done i can't so i just sold the house i think i broke even that was

02:40it but for some

02:42reason that gave me the confidence that i could do it and so shortly after that my husband and i

02:46bought

02:47a five unit apartment building in long beach which is also close to here and you know then i started

02:52managing that and um i you know continued we bought some commercial property and i managed that and

02:57after about 10 years i had like 15. very cool yeah i liked that that first story because it just

03:04reminded me of my uh you know the first deals that i got into what i wanted to say was

03:09i was an idiot

03:09too we weren't big idiots we were just you know when you when you just get started you feel like

03:15you

03:15are generally too trusting and you want to see the best in people which is really good trait it's good

03:19to have that but it's not you know when you do property management when you manage properties

03:24you do have to stick to the rules you have to uh adhere you know adhere to the to the

03:29release that

03:30people are in um and you have to really do your due diligence on who you're letting in and that

03:33is

03:34something that i feel like a lot of first-time investors get wrong and why they they get burned and

03:39they're like this is not for me i can't do this but um it's just one of those you know

03:43lessons learned

03:44that i went through you went through i'm sure a lot of people out there go through um and it's

03:48uh it's

03:48it's good that you got through that yeah it was good that i was able to you know push through

03:53and

03:53continued because i was ready to throw in the towel for sure after that bad experience yeah but i i

03:59like

03:59you said you bought that second property because you had you you saw that it worked and that is so

04:07important for everybody out there anybody who wants to get into real estate just to see to actually go

04:12through the process and to get out of the other side and realize that it does work because it does

04:18work but that you just got to get through that first deal and you know get your teeth kicked in

04:22yeah you do you sometimes you just take that and you know you just need to do it i guess

04:28that's what

04:28i would say but you know it is a little scary and yeah absolutely so you bought that five unit

04:34in long beach you you were the manager for it tell us how the story um went from there you

04:40mentioned that you got you onto the commercial side you started buying other uh we bought a couple

04:45commercial properties here in huntington beach and we bought then we continued you know during the great

04:50financial crisis i bought a couple of things off the bank you know and did like a value add because

04:54they were really beat and you know you know got tenants rented them because they were vacant you know so

04:59i

04:59just you know i was kind of had my hands full you know managing these like 15 tenants through the

05:05different properties here locally right so i was doing that and then about 10 years ago i just i

05:11decided well you know really what it was that made me change my course was that california was going

05:17to do the split roll tax that was being you know that is no california we have that proposition 13

05:23where you buy a property they never really change your tax and that goes oh and it goes for residential

05:29but they were kind of putting yeah they don't change it so they don't re they don't reassess your

05:34property taxes an amazing thing about and i think a lot of people don't know that about california no

05:39they do not reassess you of all the states i would think california would just be like screwing you

05:45every time but well we think called proposition 13 that was like passed in like 1970 like my mom lives

05:51in huntington beach she's had her house for 40 or 50 two thousand dollars a year on like you know

05:57over a million dollar house because they don't change it but they were floating that in california

06:02that they were going to do a thing called split rule where commercial they were going to tax it let

06:06it you know reappraise but keep residential so that's like i was like no i gotta go i gotta get

06:12out right

06:12so i started looking out of state and i started buying like um pre-construction fourplexes in utah

06:21because i'm kind of familiar with utah and it turned out to be a really a great move for us

06:26i might buy them pre-construction get construction loan you know get them rented up

06:30and it turned out that it was you know utah 10 years ago and still is a very good place

06:35to invest

06:36so i started doing that and you know um then we sold our commercial things here and started buying

06:42triple net out of state and it just kind of snowballed once i moved out of state because

06:47you could get much more bang for your buck you know in a place like utah or arizona than you

06:52can in

06:52california coastal california so that's my path yeah it's interesting that you uh you have a lot

06:59of experience in different asset classes a lot of people will you know they'll they'll start with

07:03you know long-term rentals and then maybe they'll stick with that or they'll make one leap go to

07:07multifamily and then stick with that but you you have experience across a different wide variety of

07:12assets which is pretty unique uh the like the pre-construction that you're talking about that's not

07:17something that a lot of people get into what kind of led you in down that path i just met

07:23someone that

07:23was uh doing that in utah and i could see the value in it i went out to utah to

07:28the provo area you know

07:29the silicon slopes or to that area between salt lake and that was really starting to boom there's a lot

07:34of tech there and i could see being there the value you know there's a lot of educated people there

07:39you know uh good tech jobs very outdoorsy you know you could afford a house young family could

07:45afford a house and i could really see the value in that area so i started really investing heavily

07:50in that you know nice yeah no and this is something i should share with you that i think a

07:56lot of people

07:56don't know it's a valuable piece of information i think like my goal initially was to get 80 doors

08:03all through conventional loans which would mean fourplexes because with a conventional loan the

08:09easiest best you know cheapest loan that you can get conventional loan you can control like a

08:14fourplex a residential or fourplex and you can have four of those loans most banks tell you can

08:20only have four and your spouse can have four so then you'd have eight right but the reality is you

08:25can have 10 you can have 10 of those loans and your spouse can have 10 so with just conventional

08:29financing fixed for 30 years you can control 80 doors which is kind of amazing right you don't have

08:37to worry about commercial your rates going up it's just set it and forget it it's actually that was my

08:43original strategy so i'm that's a good strategy i am curious the reason why i like commercial so much

08:48is that you can get dscr loans and so you can you know you can buy outside you know you

08:53can punch above

08:53your your weight class essentially and i it's been a long time since i bought a an investing property

08:59with a with a standard residential loan yeah does that do they take the noi of you say you're buying

09:06a fourplex should they take the noi of that fourplex into the into the underwriting process

09:11yeah they do they do take the noi of the projected noi of it but you know i i agree

09:16with you now that

09:17i want to continue to scale and get bigger i'm kind of hit hit a wall with that right that

09:21strategy that

09:22i initially have and so i have to move forward into you know what you're doing like more commercial if

09:28i want to get bigger like get bigger you know i have one 18 unit building we have one 18

09:32unit

09:32building but you know i want more of that right instead of the little it's a scaling thing like

09:36single family fourplex scale up to you know 20 unit 30 unit buildings yeah yeah absolutely so tell

09:44us a little bit about your triple net uh that is also unique not something that a ton of people

09:49get

09:49into but it is i mean if you want to talk about passive income most people think real estate's

09:55passive it's not it's a business you got to run it like a business but if you do want passive

10:00income triple net is the closest thing you can get to to passive income and real estate so tell us

10:05how

10:06you got onto that side of things how'd you get into those deals and how'd they gone well they've

10:11gone really well actually how did we get into it well we there's a when we were selling our commercial

10:16properties around here there was a broker that we knew was doing a lot of canvas and he turned out

10:20to be an amazing guy and he kind of set us up to buy these triple net properties out of

10:24state

10:24because they're also out of state and they've turned out you know we were in a low rate environment

10:28and also you know i refinanced them a lot of times a credit union will refinance a triple net which

10:34is

10:34great you know they usually have pretty good terms and easy to work with you know in that low rate

10:39environment the problem with triple net of course is that you know you're kind of limited on the

10:43upside because you know you have increases every five years every 10 years whatever term leases yeah

10:49if you can get a corporate tenant and you know have a decent loan so it you know cash flows

10:54it's

10:54actually yeah it's very easy because they cover that they cover they cover all the maintenance

10:58they cover all the tax increases everything's covered so it's really is the closest thing to

11:05yeah i love i love that it has to be the right fit though for sure and you need a

11:09credit tenant for

11:10sure or a corporate tenant really is what i should say corporate tenant is the best yeah um what type

11:15of

11:15property is that i think you you mentioned this right before we got on the show but i didn't catch

11:19it

11:19well we have we have qsrs you know quick serve like drive-through restaurants that's what we have

11:24we have two in texas and we have a whataburger which is the like the in and out of texas

11:29and then

11:29we have a raising canes in texas and then in utah we have a burger king in salt lake so

11:34we have three

11:35of those we thought about buying more but you know i think there's more upside in a lot of ways

11:40with

11:40the multi-family but it's good to have a mix you know yeah yeah triple net is very stable and

11:46it's a

11:46long-term investment uh you're not going to get the upside like you mentioned that you would

11:50in other deals unless you buy something that's been destroyed and you fix it up right but it is

11:55yeah it's definitely definitely stable not awesome so you've been at this for 25 years you've uh you've

12:02grown a very substantial portfolio you've had a lot of success but it sounds like you're still eager

12:08you're still out there you're still crushing it so what does the next you know two to three years

12:12look like what is your goals for the future well my goal really you know originally my goal was to

12:18get to 100 doors and now you know i'm getting close to that so now i'm really looking like maybe

12:22at 200 doors i want to scale and i want it like to double my portfolio really like in the

12:27next five

12:27to ten years and i think really to do that i've given it a lot of thought i really need

12:31to scale up

12:32you know i need to get into bigger properties you know it's just a transition phase i have a lot

12:36of you know i i should be able to do that i'm actually working on it right now

12:39so i think that's the next phase for me to move maybe into syndications or maybe just you know

12:45scale up the properties that i'm buying to a larger size take on a little bit more debt not too

12:50much

12:50debt because i'm kind of risk averse but you know that's my plan i love it yeah and those uh

12:56you know

12:57those moments in life are the scariest but they're also the most exciting when you're going into something

13:01new you're trying something new and you're trying to reach for new heights uh there's a lot of unknown

13:06in that moment but anytime you know everybody out there you guys haven't done your first deal

13:10it's all going to be unknown so you got to reach out there you got to connect with people who

13:15have

13:15already achieved what you want to achieve um go out there have conversations with them and you'll

13:19realize just through those conversations through being around the people who've already done it

13:24you realize that it's not as scary as you're putting it up to be and that it's definitely achievable

13:28um and i truly believe this for for anybody who does want to get into investing you can do it

13:32um you know usually the first goal people have in mind is financial freedom that can come much much

13:38sooner than you think covering your monthly expenses can come come very very soon and uh it can come

13:44within the first couple of deals so um yeah go out there and you know lena she's done it over

13:48the

13:49course of a long time and she's still looking for the next next goal she's still trying to level up

13:53so go out there and get those deals done so lena and we have crushed the time clock we're at

13:59the 15

13:59minute mark so we do have to move on are you ready for the quick question round yes i'm ready

14:05all right it starts with education it could be any form could be a book you've read movie you've seen

14:11conference you've gone to mentorship program you've been a part of anything like that i just need two

14:15recommendations one for general life wisdom and then one for real estate well i was thinking you know

14:21everybody says robert kiyosaki of course everybody has to read the book by robert kiyosaki right but

14:26but really a book i read lately that i thought was really good was that book by chris boss it's

14:31um

14:31never split yeah and he has some great negotiating it mean it's a very fun read to read and he

14:38has

14:38some really good negotiating advice which is cool and another one i would say that's very good is a book

14:45called the millionaire in you i read this like 20 years ago and it's by this guy and he really

14:50lays out

14:51how a young person can kind of get you know maybe if you don't have financial education background he

14:57really lays out what you need to do like kind of not like robert kiyosaki is more general but this

15:02guy

15:02really tells you you need to do x you need to do y da da and all the things that

15:06are important

15:06uh to get financial freedom that that's a really good book i think it's by a robert

15:11you mess up his last name or um or something like that but the millionaire in you i'd say that

15:16cool yeah that is a uh that's a new recommendation we don't often have those so

15:20good one we'll definitely put it down and that leads us to the next question this is for your

15:26younger self so let's go back to the lena who was just buying that first what'd you say it was

15:32like a

15:32first house yeah the first first house no then the five plates yeah that that first house where you

15:39were dealing with those crappy tenants go back to that version of lena look her in the eye and give

15:44her one piece of advice moving forward i would have to say at that point hang in there i mean

15:48because that was just not a great thing in general i think you just got to dream bigger i mean

15:53you got

15:53to think bigger and dream bigger and you know just that i think that's really key to moving ahead

15:58yeah yeah and that that sentiment has been echoed across so many episodes i asked this question to

16:04all 600 plus investors who've been on this show and they many of them say that same kind of thing

16:09i wish i got started sooner i wish i went bigger i wish i went harder any of those i'm

16:14so

16:14whenever someone says that i always pointed back to you the listener if you haven't done your first

16:19deal go get it done everybody wishes they got started sooner they wish they went bigger and so

16:24now is the time to get something done it could be anything it could be a piece of land a

16:28single

16:29family multi-family whatever just go out there get that deal done 10 years down the road you're going

16:34to be happy that you started today versus tomorrow and that leads us to the next question this is about

16:41the u.s it's a big place there is a lot of opportunity out there give me the single metro

16:45you're most excited about investing in today well i mean i would say utah because utah has such great

16:51you know demographics it has has great educated people but i would say you know it's really kind

16:57of become kind of a darling kind of a place so i'm looking more towards like idaho at this point

17:01i

17:02would because it has a lot of the same but it's not quite the same yeah yeah idaho that's uh

17:08our next

17:09store here in washington and that is a it's a great place there's some really good metros in

17:13idaho that i i honestly i haven't invested myself but i just know that those are they're doing very

17:18well yeah um all right and that leads us to the next question this is about lessons learned you've

17:24already gone out gone over one lesson but i want you to take us to a second lesson not every

17:29deal we

17:29get into it goes the way we expect it in fact pretty much every time something goes wrong and that's

17:34when we get to learn a lesson so what was a deal that went a little bit sideways for you

17:38and then

17:38what was the lesson you pulled from it well i'm kind of involved right now in a deal that really

17:42went quite sideways uh we were involved in buying some um you know pre-construction units in heber

17:49utah if you know where that is and um you know make a long story short we got the construction

17:55loan

17:55etc etc but the builder did not the builder actually kind of went bankrupt and he just left all the

18:01investors there's like 12 of us holding the bag unfortunately we're all kind of it's kind of a

18:06project where we're kind of conjoined we're all separate owners but we're kind of got like we have

18:11common walls i would say right so we all had to do it together we had to like refinance our

18:17loans

18:17together we had to find a new builder together and i kind of spearheaded that for the group and it's

18:24been quite a process you know really a learning process for me you know but but we've just got our

18:29cfo's this month earlier this month for all 64 units in this project i don't own 64 i own eight

18:36you know me and my own eight but you know everybody's at least we have a tangible thing not

18:40just a piece of dirt so that's been been really something though for sure yeah but i mean i feel

18:46like this thing happens so often in real estate where something out of the blue is going to happen

18:50you guys probably i mean you might have been able to figure it out but it's not something that is

18:55common that you commonly will know whether someone is going to go bankrupt or not and so i mean it's

19:00something that kind of came out of the blue and slapped you in the face but you're solving the

19:03problem you're uh you're figuring it out you guys are you're taking the steps and um it sounds like

19:09i mean if the underwriting worked originally i'm sure it'll still work even after all of this and so

19:14maybe a few years from now yeah eventually it will that's the good thing about real estate is if you

19:20hold it long enough it's going to be a good deal yeah all right and that leads us to the

19:26next

19:26question uh this is uh your highlight reel the other side of lessons learned is the deals that

19:32just kind of work out um you get into them and things do go to plan and those kind of

19:36stand out

19:36in your mind as your favorite so which deal is that for you well i think that would be that

19:41five

19:42unit building that we bought in long beach so we only it was we bought it from the bank we

19:46only had

19:46to put like a hundred thousand dollars down on that building and you know set it straight you know

19:51you know got tenants in it kept it for you know several years you know market rents and sold it

19:56for like double double the amount right and then we took that money in 1031 to utah into an 18

20:02unit

20:02building a modern also pre-construction but beautiful building that building now has appreciated to like

20:08four and a half million so you know what i mean so from an original 100 000 to you know

20:15400 4.5 million dollar building in a span of i don't know you know 10 years you know that's

20:23incredible right so that was for sure a win yeah yeah and it's it's very satisfying when you you see

20:29a plan in your mind you execute it and then it just works and uh you kind of look back

20:34and you're like

20:34wow that was uh that was a good experience it makes you want to do more and then you're going

20:38to run

20:38into the deals that hit you in the face and you're going to be like oh this sucks but uh

20:41you got to

20:42take them both that's just how real estate works all right and that leads us to the very last

20:47question this is for the listeners you've given us a lot to think about i'm sure people want to

20:51reach out get in contact with you is a two-parter where can they find you and then what can

20:55they

20:55expect when they reach out well i i'm on linkedin lena kennedy v i mean i'm on linkedin lena kennedy

21:03scotty group that's one of my llc's that i have so you can you know connect with me there

21:09or you can email me my email is lena kennedy v at gmail.com and i'm happy you know to

21:16answer any

21:17questions that you might have perfect i will put that in the those uh links in the show notes so

21:22if

21:22you guys want to reach out all you got to do is click the little more in the description it's

21:27going

21:27to pull down that full description and in there you can find her links all right lena that is it

21:31i

21:32appreciate you hopping on the show thank you it was fun absolutely for everybody who's with us today

21:37thank you guys for showing up you are the reason we do this so if you guys have any questions

21:41reach

21:41out to me gabe at the real estate investing club.com if you guys want to support the show just

21:45leave us

21:46a review comment anything like that other than that i hope you guys have a great week keep rocking

21:51real estate and i look forward to seeing you on the next episode

Category

Transcript

Comments

Recommended