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Get In The Real Estate Game With Kenny Simpson And Krystle Moore – Real Estate For Women

REW Krystle | Real Estate Game


The real estate industry presents various opportunities where you could grow your wealth. There are many ways to succeed in real estate, but you must get started. Listen to your host Moneeka Sawyer as she talks with Kenny Simpson and Krystle Moore about tips on how you can get in the real estate game today. It’s not yet too late. It’s time to get your action plan together. In this episode, Kenny and Krystle share the importance of constantly growing and not making decisions based on fear to achieve your goals and attain financial freedom. They discuss the benefits of owning multifamily properties and what kind of investments will help you beat inflation. Tune in to learn how to be in control of your financial future.

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Get In The Real Estate Game With Kenny Simpson And Krystle Moore – Real Estate For Women

I am so excited to welcome to the show, Krystle and Kenny. Krystle Moore is the Founder of Pacific Shore Capital, San Diego’s leading expert in commercial financing and real estate investing. She began her career at the age of nineteen. With over eighteen years of experience, Krystle has funded over $1 billion in loans, helping over 1,000 clients with their commercial and multifamily financing needs. Between managing over 1,000 units, rehabbing, and designing countless properties, she is committed to sharing her immense knowledge and industry expertise with our clients.

Kenny Simpson, Head of The Simpson Team, is San Diego’s premier residential financier and real estate investor. He has worked with over 1,000 clients on 1 to 4-unit financing, helping them shift their mindset, and have confidence about qualifying for a loan, whether for a primary residence or investment properties. He is a Co-host of San Diego’s most popular real estate podcast, Get in the Cashflow Game with K&K. Kenny has over seventeen years in the business, including his own investment and management experience, having managed over 1,000 units, helping rehab, and design countless properties. Welcome to the show.

Thanks so much for having us.

I’m excited to have you on the show because I want my ladies to know this. It’s important to have mentors in the industry that have been here through the cycles. You guys went through the 2008 and 2009 crash. Many people that are in real estate now got in the last 10 to 12 years. They got in at the bottom when things were easy to get into. They didn’t have to ride that wave. That wave was a rough one. I love that you guys have been in the industry long enough to know that things can go bad and what to do when that happens. Congratulations on your success around that. I’m so excited to be having you chat with my ladies about financing.

I’m excited too. I’m passionate about women being involved in their financial future. I was honored to be able to be on the show.

Thank you so much for that. What’s important for us to all understand is that as women, we need to be in control of our financial future. We’re not taught that as younger women. We have to figure that out ourselves. Our allies, the men in our lives, are an important part of that success. Kenny, I super appreciate your support of our ladies. My husband is the same way. My husband is not as involved in my business though. He is a good support staff. This is big. Could you talk a little bit high level about how you got into the industry and what your story is?

I got started when I was nineteen. I was taking some community college classes. Quite frankly, my family couldn’t afford to pay for college or anything like that. It was all on me. As a young 19-year-old, I thought, “Why am I paying to go to school? I should get paid to do this.” I needed to pay my bills. My mom worked as a rep at Washington Mutual at the time. I was begging her to give me an in, call somebody, and let them interview me. That’s all I’m asking for. Don’t give me a handout, but give me an opportunity. When she felt I wouldn’t embarrass her, she finally gave me a couple of recommendations.

I interviewed and did residential for about four months, but I always wanted to do commercial. I did what they tell you to do, “Tell everybody. Tell your friends. Tell your family. Eventually, someone is going to give you a shot.” I met my first client at the gym. I was super into fitness at the time. I winged it from the beginning. I had no idea what I was doing. He knew that anyways. That’s how I got my first deal. From there, it was a good time. We were on the upswing on 2003. His partners referred me to their partners and his partners’ partners. It was a snowball effect from there.

Why were you so interested in commercial rather than residential?

REW Krystle | Real Estate Game

Real Estate Game: We’re taught to get an education and a good job. That may have worked a long time ago, but now, having a W2 job your whole life is not going to work out well for you when it comes time to retire.


I thought to myself, “I’m not as the emotional touchy-feely first-time home buyer. I wanted to work with business people.” On the commercial real estate side, even when you’re getting a real estate commercial loan, it’s a business loan. We assume that you’re a sophisticated business person. That’s why we don’t have RESPA and all these other crazy things that came as a result of the 2008 financial crash. I liked working with more sophisticated investors, generating wealth for people, and figuring out how to get more cashflow. That’s what lights me up. That’s why I went in that direction.

Kenny, how did you get started?

It’s a bit similar. I was in college, paying for my own way too. I had a lot of friends. In 2002 and 2003, they started making a lot of money around me in real estate and I’m sitting there going to college day after day. I woke up one day and I said, “I’m over this.” I want to go to work and make money. I always wanted to be in real estate, not sure which aspect. A friend reached out and said, “Do you want to come and join my team?”

I started off in the business as a loan processor which is good. It gave me a lot of well-rounded skills and I learned the background. Quickly, we ended up starting a branch, and then several years later, I’m here as a mortgage broker and enjoying what I do. I dove in and figured out residential was the way. I knew I didn’t want to sell real estate. I didn’t know I wanted to do financing, but now that I’m into it, I enjoy it.

I was a mortgage broker for years and it was so much fun like the puzzle of a loan package. Whether it’s commercial or residential, it’s like a puzzle. Putting the whole thing together, getting exactly the right product for the right person and the right property. There are so many moving parts. I love that you started as a processor because so much of the time, the processors don’t understand what mortgage people go through on the front end.

We’re trying to put together a puzzle. They’re trying to get it to underwriting. They’re the middleman. They are a key part of our success. Many of them don’t understand what it takes on both of those sides, the front end and the real back end. That’s amazing that you did that. What an asset for you because you understand them then.

The business has come a long way with technology. Lenders have tried to figure out how to make the process as easy as possible. As we’ve gotten further away from 2008 and 2009, Fannie, Freddie and a lot of the banks have eased up on some stuff and got a little bit more realistic. The pendulum swung way too far then way too far the other way. We’re getting some normalcy. It’s helpful because getting a loan sometimes cannot be fun. As we all know, it’s paperwork and it’s a stressful time when you’re buying a house. We try to make it easy as possible.

You wanted to talk about multifamily properties which is a topic that my audience is interested in. Let’s start by talking about why. Why did you get started in multifamily to supplement your income and how does that work?

The thing is we’re all taught in school to get our education, go out and get a good job. That may have worked a long time ago, but if you’re living in a major metro like us in San Diego, it’s not cheap to be here. Having a W-2 job your whole life is not going to work out well for you when it comes time to retire, even if you contribute the max to your 401(k) and things like this. We backed in to see what lifestyle we wanted to have.

A lot of real estate investors don't pay taxes. They provide housing and in exchange for getting a lot of tax benefits. Share on X

I had the benefit of seeing that since I was nineteen. I got to see tax returns. I worked with a lot of real estate investors that own multifamily. It seems like they didn’t have to work. They were always on vacation. Their idea of work was driving by the properties or having lunch with brokers. It seems so fun for me. I’m like, “I love to fill my days doing this.” I started realizing the cashflow that they were getting because it doesn’t look like that on tax returns.

That’s the benefit of being a real estate investor. A lot of real estate investors don’t pay taxes. They provide housing. In exchange for that, they get a lot of tax benefits. I find that multifamily is the absolute safest investment vehicle that has the most tax benefits. That is why I truly believe in owning multifamily properties.

I would like to add something interesting that shines a light on my own life. That’s similar to what you said, Krystle. First of all, Krystle, congratulations on starting at nineteen, both of you guys. The younger we started, the more opportunities we have to create huge amounts of wealth and a huge legacy.

Those of you ladies reading that are 19, 18 or 20, you need to get started. Even later in life, there are so many opportunities. I always say there are a million ways to make $1 million in real estate, but the sooner you get started, the easier it is. Congratulations on you guys. To anybody who’s reading that’s young, get started. It’s important. The thing that I wanted to comment on is my husband and I bought another property, a primary residence. I was dismayed at what we can afford.

There were a couple of things that I noticed that I want to highlight to my ladies. Because of the write-offs, the depreciation, and all of that stuff, in real estate, it looks like you’re making no income. Plus, you get to do a ton more write-offs. For me, I’m showing huge losses. That means we pay fewer taxes. What that also means is that because of me, we can’t qualify for loans. My husband does all the loans.

This is how we’ve distributed it. What’s also interesting about this is when we were young, our first house was $200,000. Our next house, five years later, was $700,000. Our next house was $750,000. What’s interesting is that even now, all we qualify for is $750,000 to $800,000. Why? My husband is a superstar at work. He gets nice raises, 3% to 6% raises each year. Think about that. Have property values gone up faster than 3% to 6%?

What do we qualify for? It’s still about the same number of dollars because he has only been going up 3% to 6%. We can do a little bit more if we dig into the numbers. There is stuff because of losses and stuff like that shows up on the tax returns. That’s not about me. Everybody who’s reading this, take that in. It has been 25 years that he and I have been together buying real estate. We still qualify for the same property value now almost that we did twenty years ago.

If you are going to rely simply on your W-2 income, are you going to be able to grow your wealth? We have to buy in bad neighborhoods to qualify for our loans. We didn’t have to use to do that. You hope that in life, you’re improving your lot. You’re improving the neighborhood. You’re improving the house size. Why are we not able to do that?

There are a lot more conversations around that. I don’t want to say that that’s the end of the story. It was an interesting thing for me to notice. How is this even possible? We have been in the business for 25 years. We made some adjustments. We did some different things, stop writing off things, stop taking losses or do some other things that we can do. If you’re just relying on your W-2 to plan your future, that’s what you’re in store for. It does not keep up with inflation. It does not keep up with house prices. The cost of living is going up. Your income will not keep up. It’s important to find ways to supplement that income. Does that make sense?

REW Krystle | Real Estate Game

Real Estate Game: Multifamily is the absolute safest investment vehicle that has the most tax benefits.


That is such a good point. We’ve always been commissioned-based. We’ve never had that idea. Even thinking about a W-2 job, that’s what we’re trained to do. That’s the safety that we run to and the safety is not winning in this environment.

In any environment, it’s never one. If you look at W-2 versus housing prices, over time, we’re not able to keep up. People have to move to cheaper areas to afford the homes that they like or you need to be a dual income. You’ve got to do something other than being a W-2 employee to keep up with housing prices. There are some interesting things there.

First, that’s your cost of living. The other thing that tells us is real estate is a good investment. It is increasing significantly faster than inflation and our incomes. It’s not true in every single market. If you do your homework and you pick the right markets, that is true. Ladies, I’ve never said this on the show. It’s important to understand where you’re headed if you’re not going to invest in real estate and you’re not going to create those other streams of income and cashflow.

I have a good example for your story on that because you do bring up a valid point. I do residential financing. Krystle is different. A lot of her clients might not even have a job. They might be real estate investors. Mine typically have a job and they’re just getting started or some. I happen to do her clients, but I have a client that worked at Qualcomm for 25 years. He did the retirement. He did the stock thing but never bought real estate or bought a house, and the crash came.

He said, “I’m going to go in and buy real estate. This is it. This is my time.” I remember meeting him. We probably ran into him 5 or 6 years after the crash. He bought all this real estate. He went crazy and worked crazy hours. I remember sitting down for lunch. He goes, “It’s crazy. I worked 25 years as a W-2 employee for Qualcomm.”

He did well and saved for retirement. He’s a conservative guy. He’s like, “I built more wealth in five years from real estate and cashflow than I have ever done with this job over 25 years.” He realized and said, “I should have started younger.” To prove your point, this is why you start younger and as soon as possible. What you can do at 5 years, 10 years or 20 years is unbelievable.

I am so grateful that for some reason, I figured that out also when I was in my early twenties. There’s a huge amount of my audience that is not in their early twenties. They’re in their 40s and 50s. There are many different ways for you to make money in real estate. If you’re not getting started early, it’s not the end of the world. It’s not the end of the game, but it is easier and takes less effort to build that wealth if you start younger. There’s a compounding, inflation, appreciation, and all of those things that aid intuitively and naturally so you don’t have to think about it.

Getting started is the most important part. It doesn’t matter how old you are. We have clients who got started later in life. We have a huge investor we know here now who didn’t get started until he was 35. He was a musician playing in bars. He borrowed $3,500 from his broker to buy his first property. He owns over 6,000 units now. He’s in his late 60s. From 35 to let’s call it 65, he owns 6,000 units, 100% by himself in San Diego, the most expensive market in the country. There are stories for every person. It’s not like if you didn’t get started in your twenties, it’s over for you. Get started at any point in time and you will exponentially improve your life going forward.

I’ve talked about this on the show all the time. Before you pick a strategy, you have to figure out who you are and where you’re at. What is your risk tolerance? What are the things that you’re trying to achieve? Part of that has to do with the timeframe that you have to achieve your goals. How much time do you want to spend each week and each day, but also how much time do you have? That’s one of the components to think about when you’re picking your real estate strategy. You’re not out of time, but more time gives you more opportunities. Kenny, what do you look for in an investment property?

Start younger in real estate and start as soon as possible, because what you can do at five years or 20 years is unbelievable. Share on X

We have this conversation a lot because we do get referred to a lot of first-time home buyers and also first-time investment property buyers. I have the same conversation. I said, “Why are you buying a house or an investment property?” I then said, “You need to answer that question.” I tell people that a husband and wife should be on the same page. If you don’t have a husband or a wife, then you don’t have to be on the same page with anybody. It’s your own money.

That’s the question. Sit down and say, “Why?” The other questions are, “What are the goals? What are you looking to do? What is the plan?” Some people are like, “In five years, I want to make $5,000 a month in income.” When you come up with the why, the plan and the goals, then we back into, “What kind of property do you want to buy? Are you going to buy a single-family? Are you going to buy a four-unit? Are you going to buy a five-plus?”

We always push, if you can, to buy the most units as possible because that’s what we push to. At the end of the day, if it’s your first deal, you might not understand it. If it’s your third deal, you’re like, “I should try to buy as many units as possible.” When you’re looking for your first real estate investment property, when you answer all those questions, it gets easier. If you’re getting pre-qualified with somebody like me, we back into it, “How much money do you have? Is it just you or are you bringing in other partners?”

We then back into, “This is what you can afford. This is what the gross rents need to be. This is how we can get you a loan.” Krystle could be a little bit different because the property has to qualify. When people say, “What are you looking at in your investment property?” I’m more like, “What’s your why? What’s your game plan? What can you afford?” From there, then we go, “Where are the areas we might want to look at?”

For example, here in San Diego, you might not want to go buy an investment property. We have to drive 45 minutes away every time you have to go somewhere. Maybe you’re going to look for something closer. My idea for your first property is if you can buy close to you or near you, it’s easier. Especially if you’re buying it, rehabbing it, and managing it, you want to be close by. What I’m looking for is probably not the first question I ask. It’s more backing in and getting all those questions answered and all the pre-qualification. I feel it makes it so much easier to identify what you want.

That’s exactly how I operate and used to work also with my clients. I love that. Krystle, how about your perspective on that?

It’s similar to Kenny. A lot of times when I’m working with new investors or even people who own a couple of 2 to 4-unit investment properties, and now they want to take the next step, it’s great that Kenny and I worked together because people don’t know when they’re making that crossover to apartments that the property has to qualify. They come to me and they say, “I have X amount down. I can get 75% LTV, right?” Technically, yes, but the property has to support the cashflow.

This is why having your criteria, your goals, and understanding exactly what you’re looking for is so important. You can go buy a 2 to 4-unit property and put 25% down and cashflow negative. If you don’t do your homework upfront and you don’t understand how to run cashflow, and you don’t have criteria, you could be in a property that doesn’t even cashflow. On apartments, we won’t let you do that. It’s difficult to fail. At the same time, you might have to come in with a lot more money down than what you anticipated.

The first step for me is talking to someone in getting qualified. It’s not just a broker. A good broker is going to want you to be in contact with a lender as it is, but you want to take a handful of deals to your lender and say, “What do I qualify for on these deals?” You can start understanding all of the different terms that we use in multifamily. It’s much different.

REW Krystle | Real Estate Game

Real Estate Game: Getting started is really the most important part. It doesn’t matter how old you are. So it’s not like if you didn’t get started in your twenties, it’s over for you. Get started at any point in time and you will definitely exponentially improve your life going forward.


Every building that you look at is a business. I’m underwriting the business. That business needs to cashflow. Based on that, I can tell you what loan I can give you. For most of us, if you don’t have a loan, you don’t have a deal. We usually start there. Pre-qualifying for multifamily is a much easier process than it is for residential. It’s a different way of looking at it if you’re used to residential.

I want to highlight quickly and summarize for my ladies. I’ve said this before on the show, but I want to say it again. The big difference between lending in residential and in commercial is in residential, you qualify. In commercial, the property qualifies. There are completely different ways of analyzing whether you’re qualifying or not.

Keep that in mind when you’re looking at switching over. Maybe you’ve got 1 to 4 units. You’ve been doing residential. If you’re going to switch over to multifamily, understand that the big key to remember is it’s not about you. It’s about the property, which can be amazing if you don’t have the income or the credit. There are a lot of things that we need in residential that we don’t need necessarily in commercial. That’s true, correct?

That is correct. In your example of you guys buying a house and the fact that you only qualify for about the same as you did over the last twenty years or whatever, that doesn’t necessarily hold true in multifamily. I have plenty of real estate investors who cannot get a home loan but can go get a $5 million apartment loan.

Isn’t that amazing?

I like to say we use common sense.

It’s also interesting how we define common sense, but it’s a business loan, so you don’t have to qualify. Your business has to qualify. I love that. Let’s talk too about how to maximize your ROI.

One of the things that are so important when you’re buying a property is when you’re looking at properties, for example, some people might say LoopNet is the worst place to find apartment buildings. I’ve heard that so many times. I found some of my best deals on LoopNet. Why is that? I can look at a building and see the income potential that other people didn’t see. I get it and I get deals because of that.

When you’re looking at properties to invest in, you want to look at other ways that you can increase the ROI. The beauty of multifamily too is that the higher your NOI, your net operating income, the higher the value of your property. We value properties based on the cap rate. If you can increase the NOI, and multiply that by the cap rate, then you’ve already got an exponentially higher value.

It is advisable in high inflationary environments that you should be running to real estate. Share on X

I look at other things. When I walk into a building, I not only look at, “Does this building have RUBS, utility billing? If the landlord is paying all utilities or some utilities, can I come in and charge the tenants for their utilities to offset that cost?” A lot of buildings are doing that nowadays. “Is there storage? Is there parking? Are there other ways that I can increase?” In California, we have ADUs, which not every state may have. You can add an Accessory Dwelling Unit. “Is there a potential for me to add some ADUs or granny flats on the property? If I make small improvements to the property, can I increase the rent? Does that make sense?”

Also, I take a look at expenses. “How can I cut expenses?” Sometimes I go in and energy costs are astronomical. They haven’t converted to LED. The trash bill might be high. You can go renegotiate. There are a couple of different trash providers. You can negotiate the price down. There are so many ways to increase your NOI on a property. You have to be a forensic investigator when you go in and look at a property to see how you can maximize its potential.

Ladies, as you’re reading this, there are a lot of terms thrown out there that can be a little intimidating. Understand that that’s why you need a pro. When you’re looking at your financing and starting this journey, talk to somebody like Krystle. She’ll explain all those numbers and the way that the lending works around this so that you can understand it. Once you’ve talked to a pro, now you know what to go out and look for.

One thing that has been helpful for us in our business and also with other clients is when you’re looking at somebody to work with, it would be helpful that that person is also a real estate investor because they understand. They’re looking at the property as if they owned it. They know things that someone who has never invested in real estate would never know because they’ve never been there.

It’s helpful when you’re looking for somebody to work with that you go to somebody like that because we can be more of an advisor. I’m not just going to come and throw out loan options for you. I’m going to say, “What if we can do this? Maybe we can increase rents during escrow to push loan dollars. Maybe I can get this insurance quote down.” I’m doing everything I can to maximize your loan or get you the loan that you want. That’s the person you want on your team.

That’s going to be true, whether you’re buying a single-family, multifamily or commercials like offices, retail, or whatever. Anybody that you have on your team should be investors themselves. If they’re not walking the walk, they don’t understand your pain points. They also don’t understand the opportunities. That’s a good point. Kenny, do you want to add anything?

Some of the obvious things for ROI is you go into a dilapidated unit. You go put your cabinets, flooring, countertops, and all that. That’s a way to generate higher rent. That’s going to increase the value of the property. The other thing here in California that is huge is jet parking. I know that sounds weird. You have a garage. You have access to storage. We try to put laundry-in units, instead of a laundry room because people pay $100 to $150 more for a garage and $150 more for a laundry-in unit. We’ll also put AC and wall AC units in because people will pay more money.

As you get further along in the journey. We had the privilege of managing a lot of units. We learned a lot. We tested it. We would say, “Let’s remodel this unit. Do all this fancy stuff. What did we get? Why do we keep this one plain Jane over here?” We realized you’re getting a lot more money. It was worth it long-term. When you sell the building, some of these are going to pay you a premium.

When you’re doing ROI, what are you doing for the short-term for the rent game, but also what is a potential buyer if you are going to sell that property and exchange up for something bigger? Are they going to pay you a premium? We’ve found that there are a lot of buyers, especially here in California, who might be in a different part of their life and age.

REW Krystle | Real Estate Game

Real Estate Game: Your first property should be close to you so that it could be easier managing it.


They’re like, “We own this property. It’s got a lot of issues. We don’t want to deal with it. We have it free and clear. We want to sell it.” When you want to buy something that has market rents, is completely rehabbed and completely done, we will pay a premium for that. There are many reasons why you would increase the NOI and fix up the building, not just for the cashflow, but it could be if you’re going to sell in exchange for the building.

We refinance too. That’s another key.

This is an intuitive thing, ladies, to think about. When you walk into a house, if you look at it and go, “It needs air conditioning. This fridge is old. This doesn’t look nice. It was livable,” and then you walk into a comparable property that’s got air conditioning, it looks nice, and it’s a home for you and your family, would you pay a little bit more? It may not be dollar-to-dollar, but there’s this intuitive sense of, “I would much rather live here?” This is how I run my business too.

I want to make sure that people walk into the house and have a sigh of relief, “I could live here. This is so nice. This is so much nicer than these other places. I can do laundry inside. I can park my cars without getting sap all over them. I don’t have to pile the kids into the car and run to the car wash every week.” There are these intuitive feelings that we have in our gut when we’re moving into a home. Taking care of those pieces may not necessarily be a direct relation dollar-for-dollar, but you will notice it’s so much easier to rent, sell or maintain if you’re doing those things.

Not to mention retention too. That’s one of the things that we found. When you put laundry and/or AC unit, people stay longer. That reduces your turnover costs and vacancy. That’s our goal. We want you to get cozy and stay there.

Most of my tenants stay between 10 to 12 years for exactly that reason. They love the property. They don’t want to have to move to someplace else that’s not as cozy. I’m proud of my tenants. They usually buy something. Once they’ve lived in a happy home, they’ll usually buy something, which I love. It encourages them. They understand what it feels like to live in a place that feels like home.

Let’s talk about inflation. Everybody is talking about this. There’s a lot of fear around this. I can understand the fear, but we have had inflation before and real estate investors still have done well. It’s something to be aware of. It’s something to consider, and it’s something that you can use to your benefit. It’s not a time to sit on the sidelines and go, “It’s inflation. We’re not going to touch real estate.” I would like to get both of your guys’ perspectives on that, both in residential and commercial.

Frankly, I would advise in high inflationary environments that you should be running to real estate. Most of us want to feel the safety that we have all this cash in the bank. The truth of the matter is that the higher the inflation, the less your dollar is worth. You’re losing money by keeping money in the bank. That’s not to say that you shouldn’t be able to pay for your expenses for 6 to 12 months, whether it’s in your business or your personal life. You need to be able to cover your costs for a period of time.

In terms of the fear of inflation, I get that. The best thing to do in a market like this is to understand that there are things that you can’t control. While you need to be aware of them, you should not make decisions based on fear. You need to make decisions based on getting the knowledge, understanding where you’re at, and that you can’t change it, but you can have some control in your personal life about growing your wealth, making smart financial decisions, and changing some habits. It’s more like, “Let’s get an action plan together,” rather than, “Let’s be scared and be paralyzed.” This is the problem. Most people freeze because they’re scared. That’s the worst thing you could do in an environment like this. The most successful people take action.

The most successful people take action. Share on X

How about you, Kenny? What do you think?

For residential, because people are buying their homes, their costs and bills have gone up. If you bought a home, the rate is high. We’re in the camp that rates will come back down in the future. In 2020 and 2021, we saw all-time crazy low rates. We saw inventory at all-time lows. We saw buyer demand crazy. That resulted in crazy inflation in real estate. People overpaying all this stuff. We come to 2022, demand is going down. Supply is coming up. Some are selling for different reasons. Now, the buyers are going, “What should I do here?”

I tell everybody, “We have already seen price reductions. Some things are coming down and cooling off.” People are sitting here and listening. You hear this over and over. This is the story we’re having. “Should I buy now? Should I wait?” There’s probably a window from now until when the Fed says, “We’re going to do QE again.” That is quantitative easing. It means they’re going to put money back into the system. Now they’re taking it out at a rapid rate.

If you look at the ocean, it’s a low tide. They’re pulling money out. The water is draining out and they’re going to flood the system back. When that happens, interest rates will drop. Demand will go up. People feel more confident, but that’s also when everybody decides, “I’m going to get off the fence and buy.” Between now and whenever QE is, if we knew, we would write a book. This is what it is. We wouldn’t be here. This is the time to buy.

I would encourage people to look at inflation. It is now to your advantage. If you know rates are high and you think, “I’ve done my homework,” there are plenty of YouTube videos, podcasts and stuff to study, that interest rates go up and they’re going to lower the interest rates. Even if I lock in at a high-interest rate, I get a deal on a house. Let’s pick a house. A $500,000 house in 2021 was selling for $550,000.

The $500,000 house listed now is getting an offer at maybe $500,000 but they’re asking for a $15,000 lender credit. That is a huge difference between what was happening now and yesterday. If you’re seeing that, you are getting a discounted house. If you have a higher rate, it might not feel good, but if you can be in the camper, you’re refinancing in a year. You’re getting a lower rate and you’re not in the camp where everybody else is. You now have to buy. You’re amongst all these people and this whole wave of people that are going to come in.

I think now is the time to do it. Inflation is fearful for most because they don’t understand it. Putting your money in the bank is when they’re paying you 2% and inflation is 8.5%. We know it is more than that. You’re getting crushed. You might see a dip in real estate for now because of inflation and the rates are being manipulated up. In the long-term, you’re going to wish you look back. This is an opportunity to buy.

I loved your analogy of the ocean and the tides because that is how real estate is. There are low tide and high tide, and seller’s markets and buyer’s markets. It has been that way since the beginning of time. To understand that what’s happening is not permanent. You’re not married to the system. The system is going to change and you get to pivot and adjust based on what’s possible.

Even though interest rates are high, rents are raising higher. Interest rates are going up. They have gone up to 2% in the last few months. That’s too high. Anyways, they have gone up quite a lot. What have rents got up? Rents have gone up 30%. Even if you buy a place and you’re paying more, you’re getting significantly more in rent.

REW Krystle | Real Estate Game

Real Estate Game: Most of us want to feel the safety that we have all this cash in the bank. But the truth of the matter is that the higher the inflation, the less your dollar is actually worth. So you’re losing money by keeping money in the bank.


Inflation is playing on your side. You can be afraid of interest rates. You’re also losing a huge amount of money in the appreciation. The market is cooling down. We might see some corrections. Over time, if you guys can see me on YouTube, the real estate market is market specific. This is not true everywhere. In general, you have a correction and then it goes about higher. Over time, the general curve of real estate goes up.

In 2008 and 2009, we saw some people weird. It was a complete crash. Still many markets are significantly higher than they were before that crash. If you’re looking at real estate as a long game, what rates are doing is going to influence inflation, inflation influences rents, which influences your cashflow. Over time, appreciation is steady growth. There are different strategies in different markets, but I can’t say, “Don’t invest in real estate.” You have a good opportunity to benefit from inflation by investing. Would you guys agree?

Yes. Not to mention that you talked about buyer’s markets and seller’s markets. It shifted to a buyer’s market. You don’t have to go out and put an offer on a property, non-contingent, money-hard, day one anymore. You can ask for your proper due diligence timelines. You can get your financing contingency and your appraisal contingency because it’s not a seller’s market anymore.

It’s a much safer time, especially if you’re new to investing, to get that time to do your due diligence. Whereas before, it was this extreme pressure situation. You’re competing with all of these people. Nothing makes any sense. You just want to win. Now you get a lot more time to do your due diligence and research and make sure that you’re making the right decision when you’re making offers.

That’s a good point because it’s so much less stressful. You’re not scrambling constantly. Also, your taxes are based on your purchase price. In 2021, if you bought something for $550,000, as long as you own that property, you are going to have increases every single year based on a property value that started at $550,000.

If you buy it and it’s at $500,000, even if you’re paying a higher interest rate, you’re paying less in taxes. It could balance it out. You get exemptions on your tax returns too. It’s all a numbers game. Instead of running away in fear, take a look at the way that the numbers are working out. You may be pleasantly at what the opportunities are. If you take a look, you will be pleasantly surprised by what’s going on.

This is the thing. I’ve seen this so many times, even with clients who were experienced real estate investors. Every time they close a property, they go, “I don’t know. I don’t think it was a good deal. I think I overpaid.” Of course, you feel that way. You just paid the market price for the property that you bought. Let’s talk in three years and tell me how you feel. With property management, I did budgeting all the time for our clients. Every year I would have this budget and then, at the end of the year, I would look at it and calculate what their actual returns were on their properties.

In year one, they would be like, “That’s all right.” Year two, “Okay, fine. It’s a little better.” Year three, they’re like, “This is great. I made a good decision.” Everything feels expensive on day one because you are paying the market price. Sometimes you’re going to get a home run, but you can’t count on a home run every time. If you pay a market rate for a deal, and 3 or 5 years from now, you will look back and be happy that you did.

Even in the financial crash of 2008, our apartment values didn’t go down for us at least. There were some pains in a lot of parts of the country, higher vacancy, management companies going bust, mismanaging properties, and things like that. You’re going to have to watch those things. If you can hold on and responsibly manage your real estate, you’re going to win in the end.

Stick to your discipline. Know your numbers and know what you want to buy. Share on X

I feel like I could talk to you forever. We’re getting to where we don’t have time. I want to make sure that we complete the show and then we’ll talk some more in EXTRA. In EXTRA, ladies, we are going to talk about hacks to get your first deal. We’ve got two people. We’ve got commercial and residential. Both of them are going to weigh in on that. I’m super excited to be talking about that in EXTRA. Before we move towards the end of the show, could you tell us a little bit about how people can get in touch with you? You got a free offering for my ladies which I’m excited about.

We are almost done with a course on how to buy multifamily properties. It’s called the Real Estate Hustle Course. We’re going to offer the first ten people who DM us to Get In The Cashflow Game. That’s on Instagram, @GetInTheCashflowGame. We’ll offer the first ten people free beta access to the program. It will be a subscription-based program. People who will come into it are going to pay a monthly fee. We’ll give your first ten readers free access for a year.

That is so generous. DM is a direct message, ladies. It’s a DM on Instagram and it’s Get In The Cashflow Game. We’ve got so many ladies. I did a poll. I was like, “What social media are you on?” They’re all like, “I’m not on social media.” That’s what that means. Thank you so much. That was a generous offer. I love that. Are you guys ready for our three rapid-fire questions? I’m going to ask each of you separately.

Let’s go.

Who wants to go first?

I’ll go first. Krystle asked me to go first.

Kenny, tell us one super tip on getting started in real estate investing,

One super tip in getting started is listening to podcasts like this. We live in a day and age where you can go on YouTube, Apple or anywhere and find so much great content. It’s unbelievable. That is where you should start. Swallow and absorb as much content as you can.

What is one strategy for being successful as a real estate investor?

REW Krystle | Real Estate Game

Real Estate Game: The best thing to do in a market like this is to understand that there are things that you can’t control. And while you need to be aware of them, you should not make decisions based on fear. You need to make decisions based on getting the knowledge.


Stick to your discipline. Know your numbers and what you want to buy. Don’t start wavering on that and making bad decisions. Stick with what you set out to do. Don’t start doing crazy things and getting out of your comfort zone just to do a deal because they can come back to bite you in the butt.

What would you say is one daily practice you do that contributes to your personal success?

I am an early riser. I get up probably between 3:30 and 4:00 AM. I’m not saying I recommend that, but I would tell anybody is whenever you get up, maybe you get up an hour extra and take that time. I call it “Me Time.” If you have two kids or if you’re a mom, tell your husband, “You’re going to watch him,” but go spend an hour on making yourself better, whether that’s learning about real estate, meditating, or going for a walk. That hour extra added up over one year over 20 to 30 years, I guarantee you, will change your life.

Thank you for that, Kenny. Krystle, are you ready?

Those are some good answers. Let’s see if I can come up with something original. I promise you it won’t be telling people to get up at 3:30 or 4:30.

That was painful to listen to.

I’m tired just thinking about it.

It’s true. Each of us is different. We’re all built differently. When you’re picking your strategies or how to run your life, be aware of who you are. That works for Kenny. It wouldn’t work for me, but it works for Kenny. If it works for you, that’s awesome. No judgment at all. Krystle, tell us one super tip on getting started investing in real estate.

The super tip is to get started. First, you want to know your criteria because you’re not going to go anywhere without knowing your criteria and your goals. Once you identify that, you get off the sidelines and get in the game because you’re going to keep analyzing over and over. If you don’t get started, you’ll keep analyzing and never do anything. Know your criteria and your goals and just move.

Investing in yourself is one of the best decisions that you can make. Share on X

What is a strategy for being successful in real estate investing?

My strategy for being successful is that I’m constantly growing and learning. I not only have listened to podcasts, YouTube, and things. If you have the benefit of investing in yourself, that is one of the best investments that you can make. I had a hard time with that over the years. I would invest in real estate any day, but then investing in myself for marketing or courses seemed silly, which now I know that’s silly. I have a mentor. I am in coaching groups. Kenny is part of mastermind groups. We are investing in ourselves, growing our knowledge, and being better every day. That is how we’re able to be more successful every day.

What do you say is a daily practice that you do that contributes to your personal success?

For me, I keep up with the news. It goes along with all of the podcasts and things. I don’t turn on the news in the morning, but I look at things on my phone. I listen to people that I respect in the industry, whether it’s economists or real estate investors. These are people I’m always trying to stay up-to-date with the newest strategies. Who are the newest lenders? Maybe there are newer types of loans available. Maybe there are other things I can do to improve my portfolio.

For example, we’re looking at doing solar and common areas to increase cashflow. It’s all these little things that I’m looking at to do to better my investing, but also me as a person. I focus on that. I don’t listen to the noise of the media, but I do look at people that I know and respect and people who are where I want to be. I look at what they’re doing.

I love all of it, but that last point of looking at people who are where you want to be. Don’t listen to the people who are not. It’s important to stay focused on the people that are where you want to be. They’re going to help you to get there faster. This show has been amazing and I’m so excited about what we’re going to be doing in EXTRA. Thank you so much for what you’ve contributed so far.

Thanks so much. This has been so fun.

Ladies, we’re going to be talking in EXTRA about hacks on how to get your first deal. If you’re subscribed to EXTRA, please stay tuned. There’s more. If you’re not, but would like to be, go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free. Check that out. For those of you that are leaving us, thank you so much for joining Kenny, Krystle, and me for this portion of the show. You know how much I appreciate you and I look forward to seeing you next time, until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.


Important Links

About Kenny Simpson and Krystle Moore

REW Krystle | Real Estate GameKenny Simpson is San Diego’s premiere Residential Financier and Real Estate Investor. He’s worked with thousands of clients on 1-4-unit financing, helping them shift their mindset and have confidence about qualifying for a loan whether for a primary residence or for investment properties. He leads the Simpson team and is the host of San Diego’s most popular Real Estate Podcast, Get in the Cashflow Game with K&K. Kenny has over 15 years in the business, including his own investment and management experience having managed over 1000 units, and rehabbing and designing countless properties as well.

Krystle Moore is the founder of Pacific Shore Capital and San Diego’s leading expert in Commercial
Financing and Real Estate Investing. She actually began her career at age 19 and now, with over 16 years of experience, Krystle has funded over one billion dollars, helping over 1000 clients with their commercial and multifamily financing needs. Between managing over 1000 units, rehabbing and designing countless properties, she is committed to
sharing her immense knowledge and industry expertise with her clients. Krystle’s expertise has been featured in SD Voyager and the San Diego Business Journal and she spoke on investing in Real Estate for the “MAX NOI” event. She shares insights and strategies as the host of San Diego’s most popular Real Estate Podcast, Get in the Cashflow Game with K&K as well as her Pacific Shore Capital YouTube Channel.


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Real Estate Predictions For 2022 With Kathy Fettke – Real Estate Women

REW 99 Kathy Fettke | Real Estate Predictions


With the pandemic affecting everyone around the world for the past few years, it also impacted the economy. A lot of people are struggling to get by every day. Kathy Fettke believes that 2022 will be different due to inflation. With a passion for researching and sharing the most important real estate and economics facts, Kathy is a frequent guest expert on such media as CNN, CNBC, and Fox News. In this episode, she emphasizes that people need to be cautious in buying and selling homes. The demand for houses is rapidly increasing, so the supply is insufficient, allowing opportunities to house rents.

Watch the episode here


Listen to the podcast here


Real Estate Predictions For 2022 With Kathy Fettke – Real Estate Women

Real Estate Investing For Women

Kathy, welcome back to the show. It’s nice to see you.

Thank you. It’s so nice to be back.

Thank you so much for having me on your show.

I learned so much about you that I did not know.

When you hang out with people and you get to know them, you respect them, but you don’t talk necessarily. We don’t talk about ourselves naturally. That was lovely, but thank you. What I wanted to share with my audience is what your perspective is on what to expect in 2022. Does that sound like a fun topic?

Let’s do that. It’s on everybody’s mind.

What are you expecting?

In 2020, I said I was expecting a Black Swan Event. Can you believe that? I did not know exactly what I was predicting there. 2022, we have a few factors in place that people need to be aware of. One is that we have inflation. We are seeing lots of inflation. For investors, the people who own real estate, that can be a pretty big deal. You can build some wealth. It’s not necessarily wealth because it’s inflation, but at least you own assets that are inflating. If you don’t have assets, then what you have is the higher prices. People who own assets in inflation are going to increase your net worth, and those who don’t are going to have to figure out how to get in the game.

A coin with two sides. We got to look at all the sides. What happens in an inflationary environment is the Federal Reserve will then want to slow that down. The Federal Reserve is a central bank. It’s their job to curb inflation. That’s one of the key metrics that they look at. For a long time, the Federal Reserve was saying, “This inflation was transitory.”

Many of us were saying, “We will be checking in with that. It does not look like it’s going to be transitory when you printed so much money. That’s a whole lot of money circulating. That is going to create inflation.” A lot of us were questioning that, but here we are and the Fed is now saying, “It’s probably here for a bit longer,” which means they are going to raise rates to try to slow down the economy to try to curb inflation.

This is a big mouthful. It’s a lot that I’m saying, but bottom line, when the economy is chugging along and it’s going strong, that means people are getting hired and there are jobs, there’s a strong stock market, real estate prices are going up, and people are making money. They are spending money and all that is circulating, and the velocity of money is driving prices up. When you add to it, the fact that we have so many job openings, and that’s usually common in a robust economy, lots of job openings, which means that employers have to pay more to attract good labor, and there does not seem to be the labor out there, that causes inflation.

You add all the money supply that’s out there and this issue with materials and all these issues that we are having, trying to get the materials that we need, and because we can’t get them, the costs are going up. There are so many factors that are driving inflation that it’s forcing the Federal Reserve to raise rates, which historically has slowed things down in the past.

31 is the typical home-buying age. It’s a massive, massive amount of people over the next two, three years that are just coming into home-buying age.

Unfortunately, in the past, it slowed things down to a screeching halt many times. Often, in an environment like this, it would cause a recession. What we are paying attention to is will the Fed get it right? Will they do it nice and slow that the economy can adjust to it, or will it take the air out of that balloon? Moving forward, we need to be careful and cautious in 2022, about what we own, what we buy and what we sell.

It’s not going to be 2021, 2020 or 2019. It’s going to be more like 2018, where interest rates were going up. It was back in 2018 that the Fed did start tightening and started to slow down the economy a little bit. It was chugging along pretty good back then, too. That affected new home builders. They saw a slowdown, but the real estate market, in general, did not slow down, but new homes were having a bit of a more difficult time until 2019, when that reversed.

I don’t know if you remember, President Trump had a big fight with the Federal Reserve and they said, “You better stop raising rates. Stop it. Not on my watch. You are not going to have a recession while I’m president.” It’s basically what he’s saying. The Fed listened and turned it around. I’m not sure how that all happened, but it happened.

COVID came along and then the Federal Reserve did what’s called commodating, which is lowering interest rates and flooding the economy with capital. That worked and it got things going again, and now they got to put the brakes on. The bottom line is things could slow down a little bit, which is a good thing. It’s prices can’t go up at these double-digit rates forever. We do need to pay attention to the Fed and what the Fed does.

With that said, we still have some serious fundamentals in place, which is so many young people, these Millennials, who are reaching home-buying age, and there’s not enough supply for them, many of these young people who are forming families and want to have that backyard and never want to be stuck in an apartment again. In case, there is another COVID situation where you are stuck in your apartment and can’t use the pool or the facilities. People are like, “I want my own yard,” especially when they have got young kids and they are having kids. They are the largest cohort of Millennials is 29 years old.

Thirty-one is the typical home-buying age. It’s a massive amount of people over the next several years that are coming into the home-buying age. The product is not there for them. You are going to have a tightening and a raising of interest rates while there the demand is still there. I don’t see any housing crash, but the intent is to slow down the dramatic increase of prices, which may or may not work because the demand is still there.

We have all these studies. Historically, we know what the markets do. We know how to affect and change the markets. There are specific tools that the government has used for a long time with some success or not, but it’s an unprecedented situation this time. First of all, we had COVID so we had all this money that flooded the market, but also our expectations. Up until COVID, everybody was moving more into the cities, people wanted to be closer together and condos apartments, and then COVID, now people are going back out into the country, not the country, but you know what I mean.

All over. They are going to cities, too. There’s a massive household formation.

It’s because people are getting to choose. I don’t know if this is true all over the country, Kathy, help me to understand, but in the Silicon Valley where I am, we can now work anywhere. You can move to where you can get a larger house. Even if you are paying the same amount, you are getting a larger house that might be in a different city. Are you seeing that people have so much more mobility so they can make choices that are better for them and their families?

We are seeing that, but we are also seeing a massive demand for homes in Silicon Valley. I read an article about the mass exodus out of California. I know real estate agents in the San Francisco Bay Area who cannot keep up with demand, still have multiple offer situations. None of it makes sense. I would say that there are people who are making life decisions that they maybe could not before. That life decision might be, “I might sell this house while I can get multiple offers and go live in Arizona or Boise, Idaho, Texas,” or wherever they are going, and live a very different lifestyle.

You could sell your house in the San Francisco Bay Area and have the mortgage-free if you wanted to, or have a much bigger house for a much lower payment or have maybe better schools. A lot of people are making life choices that they maybe could not make before, but what that does is open up a property for someone who now gets to buy it, even though it seems so much more expensive than it was a few years ago, but maybe not with the interest rates.

My daughter bought a house that was probably $750,000. She paid $1,100,000. That payment is the same as rent in Southern California. She’s outside of LA and half an hour from me. She was able to take on such a huge purchase because the payment is not different than the rent. What was offered out there was hideous.

REW 99 Kathy Fettke | Real Estate Predictions

Retire Rich with Rentals: How to Enjoy Ongoing Cash Flow From Real Estate…So You Don’t Have to Work Forever

She could not find anything she wanted to rent, so she bought it. I’m so proud of her. She had listened when she graduated from college and got a job in Chico. I knew that the home prices were still in the $250,000 to $300,000 range. I was like, “Please, listen to your mama. Don’t buy a car and please go buy a house.” She’s like, “Mom, I’m 24. I’m not buying a house.” I said, “Please talk to a mortgage broker.”

She did. She found out she could own a house in Chico for the same price as renting, again, amazing in California. She did it. Three percent down. She had to put $11,000 down. She had it, she had saved it. She made $100,000 on that. When she sold that house, she was able to buy this $1 million house. It’s amazing to me that it’s the same as rent. All in, she’s at $5,500 a month, and that’s sadly what the rent is, but that’s how it is in the Bay Area too.

I had the weirdest situation. We had a bidding war for a rental that I was renting out where I listed it a little bit low, which is what I always do. I like to be in the middle of the market, not the high range, and provide a good product for a little less. It was the people motivated to stay. We had a bidding war that went over market. It did not go over market. It went right about the market.

Things are crazy to even as a landlord. You are right. There are all sorts of interesting things going on. I feel like it’s hard to understand and predict. That’s causing an awful lot of uncertainty with investors. There is this the right time to do it. What would you say to an investor around us? You told your daughter to buy, so that speaks very highly about getting to the real estate market.

I was worried for her, not that she was paying $1 million for a house that was $750,000. I was worried she was not going to find a place to live, and they have a big dog that’s part pit bull. He acts like he’s a poodle. He’s the sweetest little guy. It’s hard but no one’s going to rent to someone who has a big dog, a little dog, a baby, and another baby soon. The fact of the matter is, I look at my daughter, who’s 29 and she represents what’s happening. It’s anecdotal, I often look at her and she’s always shown me what’s going on when she was trying to get into a soccer team when it was very difficult because she’s the largest group of Millennials, the 29-year-olds, most competition.

She had a hard time getting into college. She did get into college, but she was competing against brilliance everywhere, that largest group of educated people competing for houses. Watch the 29-year-olds because they are facing what we faced or I faced as a Baby Boomer, competition. It’s a massive group of people who are the most educated ever of any group ever. They have more education at their fingertips, more access to information and data. They have the highest college degree rate. Our generation did, but they have more information than our government had when we were young. It’s incredible.

I look at her and honestly, my 29-year-old has no problem paying $5,000 a month for rent. Not even a problem at all. These are dual-income families. She works at home. She’s got a tech job. She’s focused on email marketing. It’s nothing that unique but it’s needed. As more businesses go online and more jobs are needed for that and these kids know how to do it, they grew up with it. She’s doing great. I look at her and say, “How many of her are out there?” There’s a lot. If you look at the fact that there are 5 to 6 million homes that change hands every year, we think that we were looking at real estate that sells.

This group of Millennials is 80 million. It’s a lot of people. You don’t need every single Millennial to be a huge success, but there are a whole lot of them that are, and they are able to afford nowadays’ prices and especially if they are the ones who say, “I’m going to get out of these big, expensive cities and go live wherever I want.”

My daughter could, but I made sure she lived near me because I needed to see those grandbabies. It’s a hard thing for me too. At RealWealth, I’m responsible for the things that I say influence thousands of people. We have 60,000 members and they do rely on me and my research to help them make decisions of what to do next.

We syndicate. We have funds that we buy houses and apartments. I got to get it right. I can’t get it wrong. It’s a lot of pressure. For those of us who have been through something like 2008 or 2001, these times when the economy contracted, it’s scary. It’s like, “Is that going to happen again? Are we going to be buying at the peak and stuck with properties? We can’t rent.” I come back in 2009 when there were foreclosures everywhere, and people were losing their shirts.

I wrote this in my book, Retire Rich with Rentals. My mother was renting. They sold their Bay Area house and my dad died. She did not want to be a homeowner and she was renting. She was renting in Chico, California, where my daughter was going to school. Her landlord was a pastor. He was on a pastor’s salary. I’m imagining in Chico, is not a lot of money. Let’s say it’s $50,000 to $60,000.

I don’t know what a pastor makes in Chico, but I don’t think it’s a lot, but she was renting from a local pastor. This pastor was retired. When he was 30, he decided to start buying a house a year. He bought ten houses in the Chico area with his little pastor’s salary. When 2009 hit, it hit Chico too, and those houses lost value, but you know what did not lose value? Rent, because all the people that lost their houses suddenly became renters. My mom was one of them.

We need to be really careful and cautious in 2022 about what we own, what we buy, what we sell.

She did not lose a house, but she was choosing a simpler life that was renting. Here’s this pastor as an example. I wrote a bit about him in the book to show that example that during the worst housing recession since The Great Depression, that was the worst and we lived through it. This guy was getting a raise. His rents were going up.

He did not even care that the value of his asset had gone down maybe by 50%. He did not care because the cashflow going in his pocket, his retirement money, was going up. That’s all that mattered. I’m looking at this guy going, “He owns ten houses, probably free and clear. He’s retired. He bought him when he was in his 30s and he’s making $2,500 on each. He’s okay.”

I want to highlight this because this is a thing that people worry about when they are looking at buying and investing in investment properties. I had a very similar experience in 2008. I bought a property at the top of the market. That was brilliant. A lot of our properties dropped in value, but you are right. The rents went up. When you buy real estate in the Silicon Valley, in Northern California, you don’t expect cashflow for at least five years.

Sometimes you are going to carry negative because we are in appreciating markets. People don’t have this anymore. It’s expensive, but that’s how I have always invested, so that’s what I do. I buy these properties and I have got negative cashflow when I buy them. Suddenly we have a disaster and all my property values go down, but suddenly all my rents are now cashflowing those properties.

It’s the same thing as what are you looking at and making decisions based on what your long-term goal is. For him and for me, it was a retirement plan. I had confidence that the markets would go back up and my properties would go back up to value, hopefully, surpass. At the very least, my rents were going up.

It’s interesting. That was another disaster time like this pandemic we went through was another disaster time. It’s hard to predict what’s going to happen there. From my perspective, I love what you do, Kathy, because you are getting people into the get rich slow, tried and true path to building wealth in America. It’s like, “This is the thing that you do if you have a long-term vision.” A lot of people are twenty years out like, “I can’t think next week what I’m doing.” How do you think 20 to 30 years out? If you have enough foresight to put a little bit aside and do that, real estate performs.

I don’t invest in high-priced markets for long-term rental like you do, because it took us down. I’m telling you my story that we were about $10,000 negative cashflow during the downturn. That’s not sustainable, especially when the values have gone down too, and you can’t sell it. It’s not for me. What I decided worked better for me is going into markets where the values are lower anyway, so the risk feels lower to me. If I’m going to buy a house in Florida, that’s beautiful and maybe brand new, it is $200,000 to $225,000. That’s a lot different than $500,000 or $1 million.

If it goes down a little bit, it’s not a lot. The rents are $1,500. It’s not impossible for someone to pay versus $5,000 a month. That’s harder. I felt that for me, I never wanted to go through a negative cashflow scenario again. We look for neutral or enough cashflow in markets where it’s still so ridiculously affordable to me.

That’s what we are seeing is in these markets like Florida, Texas, Arizona, Alabama and Ohio, that other people are saying, “That’s cheap.” I could make that my primary, and then I can go on these fancy vacations or go do whatever things. I’m in good schools and so forth, but my mortgage or rent is $1,200.

To me, it felt safer to have more diversification and different markets with cheaper properties, but nice and good quality. I don’t like junk. A lot of people go into these other markets and we did for a while and to certain markets, and I won’t say which ones. We buy old junky properties and they were difficult. They are expensive to maintain. I don’t do that anymore.

I like to buy high quality not older than the 1980s. I tried to get even newer than that, and brand new if I could. I don’t mind buying retail in an area that to me is undervalued, because the locals are like, “Why are you paying retail?” A local real estate investor in Tampa might not want to pay $200,000 for a brand new property. They are going to look for the older one.

For me, that is so cheap. Can you even imagine a $200,000 property? I feel like it does not exist. It does not even exist in Chico anymore. Years ago, maybe Redding. I don’t know, but it’s, to me, there are enough people in the world who would look at this $200,000 property and think that’s a good deal. There’s enough money flooding in from all these different places. That’s what we look for, areas where even if there was a recession to me, I would not be worried about owning a bunch of brand new or very new-ish renovated properties in the $200,000 to $300,000 range. I don’t see how that could go wrong.

REW 99 Kathy Fettke | Real Estate Predictions

Real Estate Predictions: For people who own assets, inflation is basically going to increase your net worth. And those who don’t are going to have to figure out how to get in the game.


Let’s say 2008 and 2009 when the markets fall, when you got these lower kinds of pricing, do you see big swings in those prices also as far as the home values, or is it more stable?

I can say this strategy that I did back in 2005, I had Robert Kiyosaki on the RealWealth Show back in 2005. That was one of the best things that ever happened to me. I was a mortgage broker at the time. I should have been able to see it, but I could not and millions of people could not see it. He saw it clear as could be that the loans that were being given out were going to go bad. People lied on those loans, and I knew that. I was in the industry. I saw it every day. He knew when those were going to reset and they were going to reset in 2007 or 2008. He knew exactly when things were going to be a problem.

He was saying, “Sell everything in the high price markets, where there was an abundance of these loans because the only way anyone could afford California at the time was lying on their loan.” He’s like, “Sell everything in California,” because he knew how many bad loans were out and going to reset. He said, “Buy in Texas because they were very strict on their lending laws.” They did not allow that because they had gone through the financial crisis of the ‘80s, the S&L crisis. They had already had their banking system go down. They were like, “We are not doing it 100%.” Back then you could have a no money down loan and get money back.

That was not happening in Texas. He saw the lending environment being stronger there and there are so many jobs going to Texas. It all made sense to me. There were jobs going to Texas, population growth, pretty strict lending laws for the most part, and affordability. I was like, “This makes sense.” We went. I found a real estate agent back then and she seemed to understand what to buy.

Rich and I bought fourteen brand new homes that were retail. We got them slightly under, but we were paying between $120,000 and $150,000 for brand new homes that rented for about 10%, so basically like $1,200 to $1,500 a month and it cashflowed. It was like, “Let’s do that.” I could do as many as I wanted. It was so easy to get loans back then. That made sense to me.

When the market crashed, those homes did not go down in value. They did not go up, but they did not go down, but the rents went up. Here we were in the middle of the greatest recession and I was experiencing the same thing my mom’s pastor had experienced was rising rents. Unfortunately, I had kept a couple of California properties that took us down. You got to be careful of the weak links.

A couple of bad decisions took the whole thing down, but the good decisions were what I did. I bought quality properties. Since then, those properties in Texas have tripled in value. Unfortunately, I sold them before that happened. Someone else benefited tremendously. I was like, “Maybe people are right. Nothing ever happens in Texas,” so we sold them. We were cashflowing. It was not a reason to sell them. It’s so dumb.

Even the very best of us make wrong decisions.

Live and learn. That’s why I’m here to share all the stories that will help you not make those mistakes.

It’s true. I wanted a little bit more of that deeper information because I have seen this. I talked to somebody else, who is investing in Alabama and he was saying that, “You don’t see the appreciation.” Like in Texas, you are seeing the appreciation too. That’s an interesting market, but in Alabama, they don’t see the appreciation. They do see the rents going up. They see a little bit of appreciation. It’s not stable. It’s happening. When the market goes down, it does not have these huge dips that you get, for instance, in Northern California, LA or something like that.

It’s because it’s still so affordable. Part of our game plan is to only buy things that the average person in that area could afford. That left a very large group of people that, if things did turn, they would still be able to afford it. I did not want to go too cheap and go too high-end. It was right there where the average person could afford. That’s pretty easy to figure out.

You can go online. CityData.com is a great place to get data. You can find out what the average income is of the area, and that will tell you what the average home price should be. It should not be more than 2 to 3 times the average salary. That’s certainly not the case in California. In California, if you buy right, you are going to do well. That’s the bottom line. You have to have the stomach for that because you are going to make the most money in California. There’s no question. The first property I bought in California, our first home went up $100,000 every year for ten years. You don’t get that in other places.

It feels safer to diversify in different markets with cheaper properties but in nice, good quality.

It depends on your strategy. I’m thinking about what is cashflow going to look like for me. We don’t do that in California. Cashflow thing does not happen here. You going to figure that whole thing out. The other thing I wanted to ask you, I have never asked anybody this online. I always recommend the easiest real estate to get into is your primary residence, because there’s a lower down payment.

You have to pay rent anyway, why not pay it to yourself? I always say, “Get your primary residence first then you can use the equity from that either to buy something else, or you can start to save for something else, but at least you are not making another landlord rich. You get the benefits of it and for very little down often.” Do you agree with that?

Yes. Kiyosaki says your home is not an asset. That’s one area where I differ from him. For our home, we have a guest house on it. When we Airbnb it, it pays for the entire thing. The money we get from that rental pays our entire mortgage and landscaping. Your primary these days can be an asset. I have got friends who are going to come to stay with us because they rented their house out and Airbnb and I’m like, “You use our guest room.” What is our term? We will use yours. People are using their primary now to make money. I’m close enough to LA that I will rent my kitchen out for cooking shows and stuff, and I’m like, “I love making money. I will do it anyway I can.”

A hundred percent, there is no excuse. I’m going to say this right into the camera. There’s no excuse for not owning real estate because you can buy something with 3% down and maybe even less. If You are a veteran or in the military, you better own real estate. That’s all I can say because the opportunity for you to get low-interest rates on veteran’s loans, you can do it. The FHA loans or conventional loans, you can get a fourplex for 3% down. You can live in one unit and rent out the other three units and probably live there for free and or even cashflow get paid to live there.

You might have to sacrifice a little bit. You might have to live somewhere where you don’t want to live forever. That’s okay because you don’t have to live there forever. That’s the important thing that a lot of people don’t understand, and my daughter, even with this house is a $1 million fixer that she bought. I’m like, “This is not your forever house. This is your inn. That sounds crazy. That was the cheapest house in the neighborhood, but in a nice neighborhood with the best schools. It does not have to be your forever house, even if you are buying it as a primary residence with a primary loan. It’s a loan as your primary home. There’s nothing in that documentation that says you have to live there forever. You can get that 3% down primary residence loan and rent it out in two years.”

We think about the way Americans are. We move every 4 to 5 years anyways. No matter how much you love that first home, you will find something you like better, even if you think it is your dream home. That first home that you get into does not need to be perfect. The mistake that we make is that it has to be the perfect home, or you don’t want to move into it.

Would you do that with a rental? “It has to be the perfect rental or I’m not going to move in.” You would not do that, and you are paying somebody else to own that home. Instead, do that for yourself because it does not need to be perfect. It needs to be good enough that you will enjoy it for the period of time that you choose to live there. You are not marrying this house.

In my opinion, the deciding factor would be, “If I found something better, could I rent this out, and would it cover my payment?” In the case of my daughter, her payment is $5,500 a month. There’s nothing in the area for less than that. That’s what I said, “It may be not perfect for you, but it’s good enough. If you something better, you can rent this out.”

What I found is when you are busy and you are raising children, ten years can go by real fast. When they first came down to be near me. When they found out they were pregnant and needed mom around to help, I said, “You are going to be shocked. You get a two-year rental because you are not going to believe how fast two years go.” Sure enough, the lease is up and there was nothing for them to rent, if you want the security of knowing that no one can kick you out and that your mortgage is going to stay the same.

That’s your key. If the mortgage is going to stay the same. No landlord is going to raise your rent. Nobody’s going to sell the house from underneath you. It’s yours.

You can fix it up and everything you do to it is improving it, increasing value, and I guarantee, I can almost say, even though legally I should not, but I guarantee if you stay there for ten years, it’s going to be worth more. Even if it’s not, you have spent ten years paying down that mortgage and you have paid towards it.

If you live in San Jose, California, you might not be able to do it. I understand that. Maybe you are going to have to move to Milpitas. You are not going to maybe, “Milpitas might be too expensive. Maybe you are going to have to move to Stockton.” “I don’t know.” Whatever it is, if you can’t do it in the Bay Area, I understand that it’s pretty hard to get anything there, but it might be for a period of time, you live somewhere else.

Real Estate Predictions: When the economy is going strong, people are getting hired. There are jobs, a strong stock market, increasing real estate prices, and people making money.


There is this whole thing about your primary residence that is not your asset. You made some good points that you did Airbnb, and you rent out your kitchen and all of that stuff. My husband always says, “Does that mean that my stock portfolio is not an asset? Does that mean that whatever this and that my savings account, making 0.02%?” That’s not an asset.

The thing is that all of those things are part of your net worth. It’s also depending on how are you accounting as an asset, just because it’s not making you money that you are writing off against or whatever does not mean that it’s not an asset. The big thing to remember is that instead of making somebody else rich, you are putting money towards your own future. There are a lot of cool things that you can do with that.

It’s your own. It will never be sold from underneath you, all of these things that we talked about. You can rent out a room if you need to. When I first bought my very first place, we could not afford it. We rented out a room so that we could. When we lived in Mountain View, I rented out one room. Airbnb and it paid for the mortgage and so much of our lifestyle because we were right next to Google. We were making a huge amount of money on one room. There are interesting things that you can do.

I have rented out my driveway. I’m near LA and we have a big driveway. That’s rare. They wanted to do a car commercial. I have had people want to rent our backyard for weddings, just for the ceremony, because I did not want drunk people in my yard.

Each market that you are in is going to have different things. Keep your ears and eyes open. She lives in LA and she has access to all these different things. I had lived in Silicon Valley. I have different things that people are asking for, but every place has its own little things. Each community has its things and you can take advantage of those things.

What I would want to leave with your audience is that we are in an inflationary environment. The Fed is going to try to slow that down and it will probably slow it down a little, but they are in a difficult situation where they can’t raise rates high because of the enormous amount of debt that would be impossible for the government to pay. It’s a difficult situation for the Fed to try to slow down this inflation.

What we know for sure in the housing world, in the US housing market, is that there’s not enough new supply for the amount of demand that these Millennials are creating. That’s a huge group of people that are now home-buying age. Add to it that you have got more people buying investment properties, having second homes, Airbnbs, people living longer, staying in their homes, the supply continues to diminish.

At the same time that we have got massive demand and low-interest rates, we don’t have the supply. This is going to be a problem moving forward for a while, and this is why across the US, you are seeing the same problem. Huge demand and not enough supply. If you are looking to protect yourself against this massive inflation, it’s important that you acquire real estate.

I can’t say that enough. You are going to get left behind. It’s only going to get more expensive. If you are waiting for that foreclosure crisis, you might be waiting for a while because there’s simply not enough supply. If somebody can’t make their mortgage, they are going to put it on the market. They are not going to sit around and wait for the bank to take it from them.

They are going to put it on the market and get their equity and sell it, and it will sell quickly. These foreclosures are not looking like that’s going to be an issue any time soon. If you can save your money and find parts of the US where there’s high demand, Austin, Dallas, Tampa and Jacksonville. The Southeast is the fastest-growing part of the US and homes are still cheap there, yet it’s attractive and there’s job growth.

You can still buy properties for $200,000 or less. If you want a fancy property in a class neighborhood, you pay $300,000. What are the chances that you are going to lose money on that? It’s slim. You are going to be all in around $1,200. There’s an incredible opportunity and a $200,000 house, that’s a $40,000 down payment. You do need to save your money, but if you don’t want to wait, then buy your primary because that’s only 3% down.

You have been on the show a few times and you have talked about the RealWealth Network. I want to make sure that I highlight that to my ladies. Kathy knows what she’s talking about because she helps you to buy properties all over the country or her team does. We have met Leah before on the show. She’s our own exclusive coach with RealWealth Network.

Live and learn. Listen to other people’s stories so you can learn from their mistakes.

If you want to find out more about what Kathy is talking about in these different markets, you can go to their website. The URL to remember is BlissfulInvestor.com/RealWealth. That goes directly to a page where you can sign up for a consultation. It’s free with Leah and then will also guide you to the link to go see Kathy’s amazing website, where they have so much education and all of that amazing stuff. Ladies, I want to let you know that Kathy and her team are amazing. You need to connect with them. Go to BlissfulInvestor.com/RealWealth.

Thank you so much for saying that. We have solid relationships with builders and property managers nationwide. We have known them for years and they take care of our people. They become close friends and they don’t want to let us down. I mean that sincerely. There were times in the early days of RealWealth that sometimes, they were not the highest quality, but we have learned through the years.

These relationships are solid and they set aside properties for us. You don’t have to do the bidding wars. You don’t have to fight for this stuff. They don’t raise the prices just because ten people want it, you go on the waitlist. It’s a nice relationship. A lot of them are in business. They don’t have to be. They could be retired, but they want to keep helping our members. We have a tremendous amount of trust and faith in these people.

I have been in those markets for a long time and you have these relationships, you have relationship leverage too. When things go wrong, because it’s a part of a community, they want to make things right. Not that they would not anyways.

These people would, but there are a lot who won’t. If you are one investor who’s got a property manager is taking care of you, but that got 5,000 other properties, you don’t have a strong voice, but with us, they don’t want to let us down. It’s because we have had this long-standing relationship and we have thousands of people that they take care of. They would not want to lose that business.

I loved our conversation, Kathy. Thank you.

Thank you. It’s always fun to talk to you.

Do you want to do our three Rapid-fire questions?

Let’s do it.

Tell us one super tip on getting started investing in real estate.

I know this sounds basic, but talk to a mortgage broker. We have got 3 or 4 on our website that works specifically with investors. That’s important. You don’t want to just go to your local BMA. You need to go to a mortgage broker who specializes in working with investors and find out what you can buy because you might be shocked to see that you can qualify for more than you thought.

That’s important for your audience because they are used to having to qualify for a million-dollar property, and then all of a sudden, they find out, “This is like qualifying for a car.” It’s shocking. I would say talk to a mortgage broker and see what you can do. If you are not in a position to buy it, they will tell you why, and they will give you reasons on what to work towards. That to me is one of the first things, and, of course, educating.

REW 99 Kathy Fettke | Real Estate Predictions

Real Estate Predictions: We know for sure in the housing market that there’s not enough new supply for the amount of demand that these millennials are creating.


What is one strategy on being successful in real estate investing?

The more you learn, the better. I interviewed the cutest NFL guy on my show, Devon Kennard. He’s with the Arizona Cardinals. He was darling. When he’s training for football, he’s listening to podcasts. He’s constantly learning. There’s so much free information out there.

What would you say is one daily practice that you do that contributes to your personal success?

Exercise. I have to. I carry a lot of duress from what I do. If I don’t exercise, then it gets in my body. It gets out when I go work out. Especially in nature if I can go paddleboarding, hiking or something like that.

Thank you. This has been amazing. Thanks for all that you offered in this show. That was amazing information.

Thank you so much. It’s always a pleasure.

It’s always nice to hang out.


Important Links


About Kathy Fettke

With a passion for researching and sharing the most important facts on real estate and economics, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR, CBS MarketWatch and the Wall Street Journal. She is the author of the #1 best seller, Retire Rich with Rentals, and is host of The Real Wealth Show – which is a featured podcast on iTunes with listeners in 133 different countries.

Kathy received her BA in Broadcast Communications from San Francisco State University and worked in the newsrooms of CNN, FOX, CTV and ABC-7. She’s past-president of American Women in Radio & Television.

Kathy became a certified personal coach through the Coaches Training Institute in San Rafael, California. In 2001, she took the coaching process to television and produced a cable show called “DREAM” which followed the process of 6 people going after their dreams over 90 days. Kathy noticed a theme on her Dream coaching show: most people didn’t have time for their dreams when they are spending all their time at work to make money to pay the bills.

Her show sponsor was a real estate expert and the segments they produced changed her life. After interviewing dozens of real estate millionaires, Kathy discovered their best strategies for creating passive income streams. She and her husband bought numerous investment properties and since then learned the highs and lows of investing that can only come from hands-on experience.

She is passionate about learning more and sharing that information with the members of RealWealth and the listeners of The Real Wealth Show. Kathy loves the freedom that real estate investing can bring. She is an avid traveler and enjoys hiking, rock climbing, skiing, figure skating and surfing. She lives in Malibu, California with her husband, Rich, and their two daughters.


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