Episode 18: How to Retire Early at 32

Acquania Escarne 0:00

You are listening to the Purpose of Money Podcast How Kendra Barnes Retired at 32 Years Old Through Real Estate Investing. You are listening to the Purpose of Money Podcast, a podcast where we talk about ways to build wealth and create more freedom in your life today. I am your host Acquania Escarne.

Acquania Escarne 0:25

Hey guys, welcome back to the Purpose of Money Podcast. If you've been listening for the month of June, you've heard that I've been doing a series on real estate investing in honor of National Homeownership Month. This episode I'm so excited to have Kendra Barnes, who's the creator and founder of The Key Resource your online guide to how to get involved in real estate investing one property at a time. Kendra is amazing. She through real estate has been able to retire early at the age of 32, quit her full time government job, and become a full time entrepreneur and mother. Feel free to leave a comment and a review wherever you happen to listen to the episode. Enjoy.

Acquania Escarne 1:13

Hey guys welcome Kendra Barnes. Kendra Barnes is a full time real estate investor and founder of The Key Resource. Her real estate investments afforded her the ability to retire from the nine to five life at the age of 32. She created the key resource to inspire, empower and educate people about the power of home ownership and real estate investment. Hey Kendra, welcome.

Kendra Barnes 1:39

Hey, thanks for having me.

Acquania Escarne 1:41

I'm so excited you could take time out of your day to talk to the listeners of the Purpose of Money Podcast. This is a part of a very special real estate investing series. So I'm so glad you could be a part of it.

Kendra Barnes 1:53

Awesome. I love talking about real estate investing.

Acquania Escarne 1:57

Before we dive into the interview, I was hoping you could tell our listeners a little bit more about The Key Resource. And what inspired you to create that platform?

Kendra Barnes 2:08

Yes. So I have been investing in real estate for about six years. But when I got started, there were no podcast like out there. People weren't really like young black people especially weren't on Instagram. And they weren't like having webinars and, you know, courses and ebooks, there was really nothing out there that I could follow. That was like tangible. And so I made a lot of mistakes starting out. And so once I kind of got my footing and figured out what I was doing, I was like, wait a minute, there's no reason that anyone else should make the same mistakes I did. And so I created the key resource to basically be what I needed those years ago. And so it's just so exciting for me to see people like have these aha moments and start out better than me, just by learning from my mistakes.

Acquania Escarne 2:50

Absolutely. And I'm glad that you created a platform where you can help people avoid the same mistakes and I love that you are doing that. What is your current real estate portfolio.

Kendra Barnes 3:02

Yeah, so we own our we actually live in Texas now we just moved to Texas but our rentals are in DC and Maryland. And when we retired, we owned a four unit, a two unit, a single family home and a condo as rentals. So eight doors total. But right before we left DC and moved to Texas, we sold our four unit. So um, so yeah, that's that's where we're at now, but we're always looking for our next investment.

Acquania Escarne 3:29

I like it always looking for a deal. So selling the four unit property before you are right after you retire. But before you moved to Texas, was that a part of having enough income for your retirement or was that just a great opportunity that came along?

Kendra Barnes 3:44

It was all opportunities. So when we retired, I retired in February of last year and then my husband retired a few months before me so he retired like in November to February, we had already reached our cash flow goals before retiring we set a goal like how much Do we need to make per month to sustain our lifestyle and we made sure that was sustainable. We, we kind of tried it out and tested for about three years before we actually pulled the plug and left our nine to five jobs. So when we retired, we, whatever we did from there on, you know whether we bought another rental or sold anything in our lives, we were set, right. But selling the four unit was just all opportunity. We just had to seize it because the equity that we had built up, and it was just and I'm glad we did it now and I'm thinking I mean, with everything going on with you know, Coronavirus, if we had waited like, you know, would it have been the same?

Acquania Escarne 4:35

Right? The numbers could have been so different and a lot of real estate investing is based on the opportunity and the timing, right. Yeah, researching your deals. So if you could tell me a little bit more about the very first real estate investment you made and how you were able to fund it.

Kendra Barnes 4:52

Yes, so the very first real estate investment was a duplex which is a two unit building and we didn't know what we were doing. So when we got into real estate investing, it was random. We don't come from a line of real estate investors. We don't come from like a wealthy family. We come from very middle class families, both our parents, you know, my husband's parents, my parents were in the military. So, you know, middle class when we got into investing after playing this game called cash flow, it kind of catapulted us and had, you know, this light bulb moment, we're like, oh, my gosh, we need to make our money, make money. Let's do this thing. So you found this duplex, but we hadn't been saving up for it. And so we had to pull that money from our retirement account to afford the down payment. And this gets a little controversial because some people don't believe in doing this. I would definitely say for anyone listening. If you plan on pulling from your retirement account to invest in anything, make sure that you consult a financial advisor, but that's how we funded it because we didn't know about house hacking. We didn't know about any other sources of like, downpayment assistance and funding and stuff like that. So that's what we did, but it isn't working out beautifully for us though.

Acquania Escarne 5:57

That's awesome. I love the advice of one If you're going to pull from retirement talking to a professional about it, but it is a big decision, and sometimes it can work in your favor, I guess in your case it got you started. And what did you do after that investment? How long did you wait before you purchase something else?

Kendra Barnes 6:16

Yeah. So the next year, we purchase our four unit. And so we just kind of it gets addicting once you see that you can do it. And once you see that, oh my gosh, it's really not as hard as I thought, right? I can, I can totally do this. And once you see how much money you can make, it's like, let's do it again. So we purchased our four unit just a year later.

Acquania Escarne 6:36

I really like that. So really jumping in there. But it seems like it was all good. Did you have any obstacles or challenges between the first and second property?

Kendra Barnes 6:46

Oh my gosh, yes. Well, the first property we bought it had a tenant already in it in one unit, and then the other unit was empty. So we're like, oh, we're good. You know, we're just going to get the money from this tenant and kind of slow roll it and fix the other unit up and put it on. You know, put it out there and get a renter at some point. So we thought we were good because the money we were receiving from the tenant that we inherited was covering the mortgage like yeah, we're set. We didn't have any contingency plan and the tenant left like a week after we bought the property, he just moved out like he just up and left. And we were like, oh, shoot, how do we find tenants? What do we do next? Like we hadn't thought of any. And so that was our first obstacle but we ended up putting it on Airbnb as like, you know, just kind of what we were waiting to figure it out. And that ended up being a huge moneymaker because you know, DC it's a big tourist attraction. So our next one was real estate in any business any you know, investing, you have to be willing to pivot, but be better than us and like, have these contingency plans already fleshed out through like, oh, where do you find tenants? Like we have this property. But for our four unit the obstacle was we also inherited tenants with that one, and they weren't the best tenants ever and it's really tough because for our for our four unit we house hacked meaning we lived in one unit and rented out the other units. And so we ended up having to put these tenants out to get tenants we wanted that we selected but putting people out, and you live under the same like building this man can be a little, you know, weird and so we had to kind of get over that obstacle, but it all worked out. We're fine.

Acquania Escarne 8:20

That's good. And I like the fact that you mentioned a couple of things. So listeners, if you're going to get into real estate investing, there's an important strategy called exit strategies, or more than one way in which you plan to pursue this deal in the event something happens. So in Kendra's case, they rent something and they thought they were going to have income from a tenant who decided to move out but then they pivoted or they came up with the concept of Airbnb short term leasing, to visitors to the DC area. So they had the location and they had the resources to fix it up and make it a comfortable place for temporary visitors. So you probably ended up making more money on short sales than you would a long term lease, which is way more. Yeah. And then for your four unit, you have a challenge that some landlords have, which is you didn't get to choose your tenants. Sometimes we inherit them. I am also a real estate investor. And in some cases, I've been able to market and advertise for the tenant that fits my idea of a good tenant, I got to do the background on them, I chose them. But other times we've inherited someone who lived there before, which is good in a sense that the income and a contract or the lease is already in place. But sometimes there's a reason why the landlord sold them to you with the house. So you have to always be careful about that. And I know that some landlords see the power and the benefit into choosing their own tenants. And it does take a little bit of work, especially if you've never done it before. So where do you advertise who can help you if you do this decide to hire a real estate agent to assist you with finding a tenant. What fees are involved in that are some of the things to think about when you're considering how do I get a tenant into my property? So I think it's great that you brought those up. Now, on The Key Resource, you are using this platform to help educate others, you have classes, you have engagement, and I've seen you on a lot of webinars out in the community talking about real estate investing. What is the most common issue you see that stops people from becoming real estate investors?

Kendra Barnes 10:33

Definitely the downpayment. Because when you buy a rental property, in most cases, if you get a mortgage, you have to put anywhere from 20 to 25% down. That's a lot of money. I mean, you're talking 40, 50, $60,000 and it's like, who has that kind of money, you're paying student loans you're just trying to survive, where might come up with the money and I think that's what stops a lot of people. I mean, there's a whole list of fears that I hear as well. Like, what if I get bad Finance? What if they turn my place? What if I can't make a mortgage payment. But I think the biggest hurdle is that down payment.

Acquania Escarne 11:03

Absolutely. And I could see that being a hurdle for some people to overcome. But it seems like you and your husband used your retirement asset. So you borrow from your retirement account to overcome that hurdle. In my case, I'll give another example where I found a partner to go in with me on my first real estate investment deal. So I had to come up with money, but I was able to split the cost with another person. So that's another way to do it, and make sure that it's more affordable for you. So I love that strategy. And I realize it can be an obstacle, but it does, it's not impossible. So we should try to work together, ask questions, go to experts, like yourself, take your classes, right? This is the best way to figure out how do we make it.

Kendra Barnes 11:52

So many ways to get that's the genius that you know, the way he did that, you know, having a capital partner basically is so smart and there's so many ways. You know, you can partner up, you can borrow from your retirement, if that works for you. But also think about if you own a home right now, you can turn your home into a rental property and then buy another house for yourself. Because when you buy a house that you're going to live in, you have to put less down much less you can put anywhere from 3.5%, you know, down, maybe even lower with certain programs and things like that. And so definitely think about it in that way too.

Acquania Escarne 12:25

I love it. Great idea. So be that being a primary occupant is sometimes in your best benefit financially, because you'll get a better interest rate. And you'll also have to put less down that's great tips. I didn't even think about that. So I am really proud of you. I follow you on social media. I've also interviewed you before for some other platforms. So I know a little bit more about you than some of my listeners. And I was really impressed when you told the story about writing your own resignation letter three years before you actually were able to resign. Can you think tell me why that was important for you to do and what did writing the letter and having it prepared empower you to be able to accomplish?

Kendra Barnes 13:08

Oh, this is a good one and I think like I was so ready to go and if it was not for my husband who is so much more patient than I am I probably would have left like as soon as we were able to afford it like I was saying we had created this this number how much do we need to make as soon as I saw me to make that like alright, let's go I'm done. Because I really really did not like my nine to five and if anyone's listening and you love what you do that is a blessing, I did not have that luxury. Um, and so I think having it saved whenever I was having a rough day I was able to be like you know what Kendra at least you've created this life and you create a retirement for yourself and you're going to be able to push the button soon. But right now basically my job my salary that I didn't like, it was acting as almost like an angel angel investor that money I was getting, I was able to pour it into my investment properties you know, you know, buy a new property or pay down debt on a property and so I had to kind of look at it like that so I think it was it was good in that way to know that okay I'm empowered that I can do this even though you know I have to I'm glad we waited I'm glad we didn't just like jump out there because with real estate there are ups and downs you know that you have to make sure that even when you hit that number, your financial freedom number that you can sustain it you gotta be prepared and you got to be able to sustain it.

Acquania Escarne 14:26

So I have a good question for you now what does full time entrepreneur look like for you because one of the other things that you did is decided to become a mom Yeah. So you went from nine to five quit resignation letter submitted to full time entrepreneur full time, mom full time wife. Like what is that like? How do you balance it all?

Kendra Barnes 14:52

Listen, let me tell you, I didn't decide anything. You know how you tell. They say you tell God your plans and he laughs. That's basically what happened. And my husband and I, we decided we decided we were going to retire and then we were going to go travel the world for a year. So we sold our house in Texas and we went to DC to go kind of like check on our rentals really quick. We were gonna hit the road, go travel and we got to DC we found out we were pregnant. So travel plans cancelled, we hunkered down in DC, I had the baby there. And then now we move back to Texas to be closer to family since we have a baby. So is this thing where we can just we can picture how our retirement was gonna look at least for the first year. And then now here we are, you know, starting a family which we didn't think was going to come into later. But it's been a beautiful experience and it couldn't have happened in more perfect timing. Now that I think about it, because my husband and I are both retired, not just me. And so we we have this opportunity to be home with our daughter and really pour into her. And so that's that's really been amazing. But for me, like people are like, oh, what do you do all day you retire like what does that look like? Because I think the view of retirement is this old person who's sitting like flipping through channels all day. For us, we still are really busy. My husband, he's like, into day trading, I'm running The Key Resource. We're both running around chasing our 10 month old all day. But for we still do things that make us money, we don't have to do that. And so there's this thing where we don't have to exchange time for money. But if we do, it's because we like what we do. And he loves the you know, getting into the stock market now and I love my business, I love pouring into my clients and my online audience and stuff. So that's, that's where we're at. But no, this was not what we thought it was.

Acquania Escarne 16:38

I love that. So tell me a little bit more what types of services do you offer through The Key Resource and other platforms?

Kendra Barnes 16:46

So I have several courses and ebooks, you know, from ranging from like, ebooks on just like the the 90 day action plan you need to get started, which is a really kind of basic roadmap to like the Real Estate summit I've done with other experts where I'm bringing in the experts on wholesaling and flipping, because I don't, I don't wholesale, I don't flip, I just, I'm just a landlord, right, I just buy properties and rent them out. But just those other strategies, because when it comes to real estate investing, you know, this too, there's so many ways to get started. You don't have to be a landlord if you don't want to. And so I have different products, you know, based around that kind of thing, but I also do one on one coaching, too. And then aside from that, I have a Facebook group that's absolutely free. And it's just a really empowering community of like aspiring investors and experienced investors who are all kind of like lifting as we climb and encouraging each other so much, this is really fun.

Acquania Escarne 17:38

I love that. So guys don't get overwhelmed. I'm going to include all the links in the show notes. So I'll make sure that you can grab everything from the ebooks to her website and the Facebook group information. And I'll also be helping to promote the 90 day action plan so you guys will get that from me in my newsletter as well. So I always ask guests Because the name of the podcast is The Purpose of Money so what is your purpose for money? And what do you hope it will help you achieve?

Kendra Barnes 18:09

The purpose for money for me was really to build the life of my dreams. Like I want them to be able to live my dream and that's what I'm doing now like living life on my own terms. And that's, that's actually like before I knew I was going to be a mom, right? So now the purpose of money for me as a mom, is really to make sure that I think it's very powerful that my daughter even if she doesn't ever want to invest in real estate in her life, I'm okay with that. But she knows that she can, like she can look at me and she knows that it's possible like I can be young and black and own properties within like plural and I just think that is powerful beyond measure, right? So that's that's the purpose for me.

Acquania Escarne 18:49

I love it. Black Girl magic. Keep doing it. Keep doing what you're doing. Before we disconnect. Can you please tell my listeners How can they connect with you when on social media?

Kendra Barnes 19:00

So you can find me @thkeyresource on Instagram once you find me on Instagram. Everything you need is right there at the link in my bio. And definitely DM me if you heard me on this podcast I love to chat with you guys.

Acquania Escarne 19:13

Awesome. So you heard that guys I'll also include in the show notes how to connect with Kendra on social media make sure to check out her website courses, ebooks, everything she has to offer. Kendra, thank you so much again for being on the show. I can't wait to share this podcast episode with family friends and anyone who will listen. So make sure guys to share it because Sharing is caring. Appreciate it.

Kendra Barnes 19:39

Thank you. Bye.

Acquania Escarne 19:41

Bye.

Acquania Escarne 19:45

Hey guys, I really hope you enjoy that episode with Kendra Barnes. Make sure to listen to it a couple of times. If you didn't catch all her gems. She really talked about some of the ways to get started in real estate investing, how you can find your deals, how you can create ways to get your property rented, and some navigation through problems that you may face. I hope you found this useful. Please share this episode with others that might find this information great for them. This is free content that I want everyone to know about. So please spread the word Kendra Barnes is also sharing with my listeners her rental property 90 day Action Plan A Guide to get started in real estate investing. It's only $19 and it's a five star reviewed program. Feel free to check out the link in the show notes and sign up today. We're going back to our regular schedule. So the next episode will be out in two weeks. Thank you for listening to the purpose of money podcasts. For more resources and information check out my website thepurposeofmoney.com and while you're there, please sign up for our newsletter so you have the latest information on new episodes and blog posts. Until next time, keep creating freedom in your life today.

Transcribed by https://otter.ai