February 18, 2024

JF3454: ‘Have You Had Your Teeth Kicked In?’ — A 27-Year CRE Veteran on How to Recession-Proof Your Business Veteran ft. Roger King




Host Slocomb Reed interviews Roger King, the CEO of Kings Unlimited LLC, a real estate investor education and coaching platform. In this episode, Roger discusses how he went from pursuing a music career at Berklee College of Music to investing in real estate in 1996. From his 27 years and experience in multiple market cycles, he shares his tips on how to recession-proof your portfolio, including not being afraid to pivot or reinvest yourself and having difficult conversations with investors up front.

Roger King | Real Estate Background

  • CEO of Kings Unlimited, LLC
  • Based in: Dorado, Puerto Rico
  • Say hi to him at: 
  • Best Ever Book: Think & Grow Rich by Napoleon Hill
  • Best Advice: "Just because they’re nice, doesn’t mean they’re ethical or competent."


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Slocomb Reed (03:30.134)
Best ever listeners. Welcome to the best real estate investing advice ever show. I'm a Slocum read. And today we are joined by Roger King.

Roger is joining us from Dorado, Puerto Rico. He is a real estate investor and educator. He's the CEO of Kings unlimited LLC, which is his real estate investor, education and coaching platform. His current real estate portfolio consists of 14 mobile home parks, a lakeside resort, a glamping location near Zion national park, six multifamily units, some vacant lots, and he just completed a custom spec home in Palm Springs, California.

Roger, can you tell us a little bit more about your background and what you're currently focused on?

Roger King (04:30.053)
Yeah, for sure. Well, you know, my background is probably like most real estate investors that we know or meet. You know, we grow up and we think we're going to go down this particular path. And mine was that as a, you know, famous musician, that's where I was going to really expand my world and, you know, take the music world by storm. But at the same time, I realized, you know, there's some other things that are going on.

I went to Berklee College of Music in Boston to really figure out how to be a world-class drummer and met some amazing musicians and their careers took off and mine just didn't take off in the same way. And so what I realized was I have to figure out a different approach to really generating capital. You know, I needed income. I didn't want to just live on four or $500 a week. I just didn't like that lifestyle for my future. I knew that going forward, it was going to be something really imperative that I that I figure out a way to change my world. And that was ultimately through being a real estate investor. And that's where I've focused the majority of my time over these last 27 years. 

27 years I started my first project that I put under contract was in the summer of 1996 in Orlando, Florida. And, you know, very long story short, now I'm invested mostly in mobile home parks. That's been my focus for the last five years, with a few different things here and there to sort of spread out some of the risk, but also some of the reward. And I you know, I'm I'm a very blessed, very lucky, mostly focused guy. And I'm living here in Puerto Rico because of real estate. I'm living on the beach. Something I'd always dreamed of being able to do is just living 40 feet from the water. So that's kind of where I've been and where I'm currently at.

Slocomb Reed (06:51.234)
That's awesome. Roger 27 years in real estate.

Uh, you said, you know, you, you have focused on mobile home parks the last five years and it looks like that's a large portion of your portfolio of the stuff that you own currently. Well, let me take a step back, Roger. It's not often that I get to interview someone with the length of experience that you have in, um, in real estate investing, the market cycles that you've been through. And so...

I want to focus the conversation there on the lessons that, uh, well, the best ever listeners are going to learn things too, but I'm really just thinking about myself right now, the lessons that you can teach me about the market cycles that you have gone through. Uh, bought my first house hack in February of 2014 coming up on 10 years ago now. Uh, so really only still seen one market cycle. Uh, that's so I'd like to learn from you with regards to the breadth of your experience. 

What is the longest that you've held any individual real estate investment Roger.

Roger King (08:04.373)
A great question. I would say the longest I've held anything would be the very first mobile home park that we bought in 2018. We held it basically for five years. That was my longest project that I'd stayed in. But that was the business model. Up until we bought that in 2018, most of mine were fix and flips or the lease option strategy. Did a, when I was first starting off, bunch of wholesaling when I lost everything after 2008, 2009 started wholesaling again.

So those were mostly the transactional types of real estate investing that I was doing at the time. It wasn't until probably 2015, 16 that I decided that I don't want to do the transactional thing because the transaction time was starting to take too long. And that was based on what was happening in the economy. And the whole period used to be in 13 and 14, six months to do a flip, and that was nine or 10 or even 12 and 15 months. And that was a factor of the market had been really kind of slowing down in 15 and 16.

And I really thought the fix and flip market was dying, if not dead. And so I'm like, Okay, so what is the next thing? Affordable housing seems like a really great pivot. You know, if the if in fact, the economy is tanking, what will do better in that scenario? And so I thought, hey, let's get into, you know, the fix and flip market. I'm sorry, let's get out of the fix and flip market into a longer term hold strategy. And I've been focusing most of my time strictly on those types of projects.

Slocomb Reed (10:11.37)
Yeah, it's interesting. You know, I became a full-time real estate agent in 2015. And the reason I say that here is because when I went full-time, I joined care Keller Williams and Gary Keller was trying to, uh, tell the hundred thousand Keller Williams agents across the world at the time, uh, that the that a similar thing was happening, that he was, he was predicting that a recession was going to be coming soon.

Because the market cycle is only seven to 10 years, right? And it, and it troughed in 2008, 2009. And so we were ripe, uh, according to Gary Keller, we were ripe for recession at that time. Uh, and you know, uh, it's interesting. I feel like I've heard the same complaints from investors then that, uh, property values are too high. They'll never be this high again. It's making investing harder to do, but here we are starting 2024, hearing the same the same excuses that we've been hearing for the last eight years.

So I, um, tell me if this is a fair, uh, summary of, of what you've said thus far, you've primarily been a transactional investor, uh, meaning that you buy looking to force appreciation and sell fairly quickly and that the transacting is where your profitability comes from as opposed to a buy and hold investor whose profitability comes from cashflow and the long-term appreciation and growth in the property. You've transitioned into what I would call, I'm not the only one, but the lingo I choose to use is value add investing where you're looking at much larger properties.

And so it makes sense to, uh, it's still, it's still a forced appreciation play, but it makes sense to draw that, forcing of appreciation over the course of three to seven years, so that there is some steady cashflow along the way to handle the expenses of the property. Make sure you're delivering some sort of return to limited partners or capital investors so that they know things are working. But it's still, the idea is still buy force appreciation and sell. It's just a much more stable asset, a more stable business plan. And because it's a lot bigger, it can, it can yield much larger. Yeah. Right. Uh, but because it's been, yeah. Uh, but hopefully, yeah, because, because the property is bigger and the numbers are bigger, there can be significant returns, even though you're waiting three to seven years to really see them.

Roger King (12:47.217)
Yeah. Yeah, I, it's exactly right. For whatever reason, it took me a little bit of time to figure out that I wanted to, and probably could really jump into these multimillion dollar projects. I'd always wanted to buy, you know, even back in 2008 and 2009 like, after the crash, I'm like, okay, there's gonna be multifamilies on sale right now, 
just get as much as you can. And I just, for whatever reason in my brain, I wasn't able to make the connections, you know? And like I was living in Palm Springs, California, back when all that happened, and there were some properties that I was looking at, and they just, you know, they were asking 25,000 a door in 2009 and 2010.

I'm like, you know, guys, it doesn't really pencil. And they're like, well, look, you know, it's totally going to pencil and like, yeah, but that's, you know, I can't buy it today at 25, hoping that it's going to turn out to be 40. Now, you know, this is my mistake. How could I bought, you know, 3000 units at 25,000 a door, that would have been a smarter play for me, and just ride that value wave up. But, you know, we get into these moments of over caution, because, you know, I just lost everything.

I just all my time and capital that I'd invested with this other company that was doing condo hotel conversions, everything was gone. And so when you get kicked in the teeth, you're a little more hesitant to jump back into the ring. But I also, having gone through a few different cycles, realized I have to get back into the ring.

And so the idea was, what can I start with that's not so difficult? Wholesaling, clearly. And I put the bandit signs up, drove around Friday nights doing that 12 o'clock at night. And it took about six months before I put my first property under contract in 2010. And on that property, within literally 30 days, putting that under contract, I made $188,000 flipping the contract.

And, you know, it's those types of things. It's like golf, right? You can you can keep swinging, keep swinging, and you're, you know, for putting. But, you know, sometimes you get to, you know, this close to a hole in one. So, to me, that what that's like a grand slam home run, I don't count on those. And I don't think that they're always going to happen.

Maybe once every three to five years, sure. But the idea that I needed to pivot became more and more and more apparent. And how do you pivot? How do you go from fixing and flipping and building multifamily units into something where you're gonna hold onto these things long-term and they're in the multi-million dollar price tag?

It's a little bit of a tricky thing to sort out. I figured it out. We're still buying mobile home parks. So it's one of those things where if you have somebody that you can rely on to help guide you down that path, get that information from them, latch onto them, let them mentor you. And don't just rely on people who are on the internet that have that say they can teach you how to do it if they haven't already done it. I think that's a really important part of the pivot. So I've had enough people helping guide me down those paths.

Slocomb Reed (16:52.402)
Yeah, that's awesome. Roger. I want to ask about, uh, your pivot, uh, in a, in a different frame of reference. Uh, and also the investing activity. I mean, you said you started in the late nineties. So, so you've had, you've seen a few market cycles, uh, and you referenced, uh, losing it all in 08, 09.

So I know you've experienced some of that volatility. Don't need to go into details there. But my question, I'd like to answer my question from my own perspective and get your thoughts on my perspective as well as get your own independent answer to the question. But the question here is, as real estate investors, how is it that we can make sure our properties, our business plans, frankly our personal net worths are.

Uh, are not going to be negatively impacted by, uh, the recession phase of the market cycle. The reason, um, my answer to that question has been, uh, lock in long term, low interest rate debt, uh, make sure I'm buying properties that give me the opportunity to force appreciation, get myself to a point where there's a cash out refinance uh, potential and get that long-term fixed rate debt, get everything stabilized and then keep it stabilized as well as possible.

Do what I can to make sure I'm reducing expenses, increasing revenue, and then make sure that I'm reacting to the changes in the market as they come, whether it be increasing rents or stagnant rents or decreasing rents, uh, changes in government policy changes in utility and insurance expenses.

It's really much more like, uh, what Simon Sinek calls the infinite game. I try to treat my portfolio and each individual property, like I could play this game forever, regardless of the headwinds that we face. I know your experience of real estate investing has been different. It's also been significantly longer and you've done more deals than I have. So I want to be asking you, how is it that you're building recession resistance? What is it that you have seen work through the length of your experience? And how is it that you're building recession resistance into your investing now?

Roger King (19:24.906)
What a great question. Great question.

Hmm, man, you know, there's no simple answer to that. Because yeah, I mean, you know, everybody wants this to be a 50 second Instagram clip. And I don't know that it is this is a this is a 10 minute discussion, or a 10 day discussion, right? I think that there's a couple of components to it. Number one, above everything, above all the strategies and the lowering of expenses and increasing management efficiencies and all that stuff. I say that it has mostly to do with your resolve, your mindset, your ability to be resilient. Because I don't know, have you had your teeth kicked in?

Slocomb Reed (20:12.819)

Yeah, absolutely.

Roger King (20:22.269)
Have you lost a hundred thousand? Yeah, totally asking.

Slocomb Reed (20:22.494)
If you're asking, if you're, if you're actually asking me, I have to answer that I have yet to lose money on a property. Part of that though is when things happen like a $50,000 rehab budget becomes $130,000 rehab budget or uh, we buy a 26 unit building and in the middle of the month and the day before closing the previous, the, the then property manager tells me that, uh, while there are four vacant units, there are also 16 delinquent rents, and it turns out we're going to have to turn over 60% of those, uh, units in year one when we weren't planning to, and that that's not what we were projecting our reserves to cover. 

That building also had to have a $5,000 shutoff main shutoff valve put on the main plumbing service line. The, uh, I haven't lost money yet in part because of the resolve that you're talking about. Uh, every time that I've been not that I've gotten knocked down, I have fought to get back up, uh, whether or not it was easy, whether or not it may have been a good choice to just roll out of the ring.

I've gotten back up every time. And so every property that I've bought where things have gone sideways, all of those properties, I still own them and they're now cash flowing the way that they were supposed to just after twice as much time and twice as much money and four times as much effort as expected.

Roger King (22:01.049)
Yeah, perfect though. But at least you haven't lost anything other than the time, the double the money, you know, and remember this conversation, because resilience is really the most important thing to be recession proof. Because if you can't find it, if you can't find the drive, when you've lost $100,000 or $1 million or more, pick yourself back up, then that's when the recession will take its toll. Okay? We could talk about other factors such as business partners. Not everybody has the same degree of resilience that you do or the same degree of ethics that you do. Right?

And so you're going to have to realize going into whatever property or project with a person or people, you need to have that operating agreement, the joint venture agreement, whatever structure you're using, so well clarified and rights and responsibilities, and if you wanna call it penalties, outlined when everybody's happy and friendly. You know.

If you don't set those things up, you will be hurt even more because you might be able to get up and take another couple of punches during the first few months of a recession, but your business partner may not. And they may bury their head in the sand like a few of mine did. They just couldn't deal with it. And then they would disappear for three weeks. And you're just like, this stuff has to get done, and you're the guy, you know, supposed to be on site. Where are you? Where's our other partner? Why aren't they doing these things? And so how can you take control over the project? Now, if I understand you, you're only investing in the tri-state area, Cincinnati, and like that area.

Slocomb Reed (24:19.362)
The greater Cincinnati area. Yeah, I am. I do property management in Ohio and Kentucky, but all my personal holdings are in Ohio.

Roger King (24:26.897)
Great. Okay. And so you're not traveling to South Dakota or Utah or California or yeah. So which is okay. You know, I mean, I think that there's a lot to be said for that. Um, where I was, you know, at the time I just wanted to continue to expand. And so it made sense for me. Uh, is it the right choice for everybody? No, for sure. Not. Um, is it, uh, a smart choice for you know, just the ability to diversify, you know, my capital plus my investors capital. Yeah, I think so. You know, Alabama is a very different market than Chicago. It's very different from, you know, North Dakota and, you know, North Carolina, they're very different markets.

So that concentration risk that you may have, and you may be increasing isn't as prevalent in my portfolio. And I'm not saying one is better or worse. Who knows, right? We can't, we can't address every single problem that arises. Like I was talking to one of my business partners last night and he said, yeah, we'd be paying about $8,400 a year on insurance in California on his portfolio of I don't know how many houses, 12 houses, something like that.

And now he gets a bill, it's $32,000. And that's because all the insurance companies are leaving the state of California. All of the major name brand insurance companies. How do you protect against that? It's literally something that the smartest people in the world cannot see, and they can't maneuver their portfolio. So you've got REITs, you've got large apartment complex owners, you know, these large 12,000 unit owners, they're dealing with very similar challenges. And those are, you know, I would imagine that most of those people are fairly smart, MBAs and, you know, very well connected, very different social and professional circles than I run in.

And they're still dealing with the same sort of thing. So how can you protect against that? I don't know, is it a concentration risk problem for people in California? If all of their portfolios in Southern California and now all the insurance carriers are taken off? Yeah, seemingly. How do you protect against that? You know, geographical diversifications one way.

Slocomb Reed (27:13.375)
Yeah, those are big questions in 2024 especially, not just in California, but in Texas and Florida, all across the Gulf Coast for sure. Not as much, I will say not as much in Ohio. When we get upset about our insurance rates going up, it's because they went up 20% instead of 15% year over year right now, not some of the stuff that we're seeing in other places. 

Roger King (27:35.725)
Yeah. Well, I've got our the resort up in Wisconsin, Minnesota. It's on the chain of lakes. You know, we had budgeted 20,000 because they had been paying 11,000. And it ended up being 40,000.

You know, how do you 400 time the amount? You know, how do you budget for that? You just don't, you can't.

You got to figure it out. You know, what's the next, how do you, how do you restructure? How do you redo what you got into a year and a half ago? You know, so that's how nimble are you? Right. Anyway.

Slocomb Reed (28:18.582)
Yeah. Uh, nimble, that's a great word for it. One of our core values is adaptability for exactly that reason that you just, you can't predict all of the things that are going to come up, which is a great segue to my final question before we transition the episode, Roger, uh, because you've, you've transitioned in the last nine, eight, nine years, to a business plan that has a better stability in a longer hold period.

And those things, uh, assuming everything goes well, of course, those things, naturally lean towards recession resistance by comparison to fix and flip or, or new construction investing for sure Without asking you to predict the future. Cause that's not what I'm asking here, Roger. What else are you doing right now to recession proof your real estate investing?

Roger King (29:10.437)
Operations, you know, I want to get, I want to have our vacant lots filled. I want to make sure that our entire portfolio is running better operationally. I want to make sure that our managers are more rapidly filling our empty and vacant units.

So that we, if there's a downturn, you know, we are already full. And if there is a downturn, you know, because of the sector I'm in, you know, multi, excuse me, mobile home parks, those tend to do better. As the economy softens, people need to downsize. And so they're, you know, more than willing to go into something that's not a thousand dollar a month apartment, but a, you know, a $700 a month mobile home they like the land.

So operations, I think, is one of the better plays. I would say recession-proof, setting expectations for investors way up front. Say, look, you know, I'm saying that we can pay a preferred return, a 6% or 7% preferred return on this. But if in the future things become so drastically different, you need to understand that we're probably unable to come out of our pockets to continue to pay you a preferred return and have a very frank conversation. This is an investment. This is not just free money because I'm such a nice guy. There are problems that we cannot foresee.

And if that scares you too much today, then don't invest with us. But understand we're gonna do everything we can to make sure we're gonna pay you. But I think having those frank conversations upfront and just say, it could be years longer and you may not make any money for years because of things I cannot foresee. Is that too problematic for you? Or is that too real for you? And let them self-select out of it. I would say that that conversation is being, the flip side of that conversation is being had with many multifamily investors right now, because so many people did not get into the right loans. Or they didn't, you know, foresee, because they're not paying attention to, you know, history, market cycles, and how things change, and how fast they change.

Roger King (32:08.229)
And so they're just sort of, I guess, caught with their pants down. So I would say that those types of things are very important to have right now moving forward.

Slocomb Reed (32:20.362)
Roger, that makes a lot of sense. Are you ready for the best ever lightning round?

Roger King (32:23.982)
Absolutely, for sure.

Slocomb Reed (32:25.758)
Awesome. What is the best ever book you recently read?

Roger King (32:30.097)
Well, one of my mentors, Keith J. Cunningham, loved the book, it's called The Road Less Stupid. Phenomenal book, phenomenal educator, mentor. I don't know that he's doing any more live events, but holy cow, you know, just fantastic.

Slocomb Reed (32:54.062)
What is your best ever way to give back?

Roger King (32:57.405)
Gosh, you know, since I moved to Puerto Rico and there's 500,000 stray dogs here, I want to start, and I haven't yet, volunteering at some of the animal shelters here. Because you saw my dog walking around, Daisy. Since I have had her, man, my heart has just opened up to animals and seeing the homeless dogs here and cats. I just want to give back to them and show them some love if it's their last days. So I think that that's something I'm really definitely going to be spending some time with this year.

Slocomb Reed (33:32.974)
Nice. Roger on the deals that you have done, properties that you have acquired, what is the biggest mistake you've made and the best ever lesson that resulted from?

Roger King (33:44.009)
I would say the biggest mistake I made is believing that just because somebody is nice, doesn't mean that they're competent.

Just because somebody's nice doesn't mean they're qualified. Doesn't mean that they see the same things that you see. So I rely less on if somebody's nice, but I rely on the agreements and how well they follow those agreements.

Slocomb Reed (34:17.73)
Gotcha. On that note, what is your best ever advice?

Roger King (34:37.92)
That's, there's so many things. I would say that one of the most powerful phrases that I've learned, you know, 30, however many 30 years ago, 33 from Tony Robbins is the past does not equal the future unless you live there. So I think that having a having experience, if it's a negative thing, it doesn't mean that it's always gonna last and you can change it, whatever that is.

Slocomb Reed (35:18.35)
That's awesome. Last question, where can people get in touch with you?

Roger King (35:22.609)
Well, they can go to my website, rogerking.com, sign up for my newsletter. You can also click through, and if you wanna join my real estate investing accelerator group, the founders group is forming. You can join into that. I'm happy to help everybody who wants to learn how to be a real estate investor, either if they've ever bought their first property or they've bought their 100th and they wanna expand, they wanna grow, they wanna learn how to pivot.

That's what I'm here to live, you know, that's what I live for.

Slocomb Reed (35:58.862)
Awesome. Those that link is in the show notes. Roger. Thank you. Best ever listeners. Thank you as well for tuning in. If you've gained value from this conversation, please do subscribe to our show. Leave us a five star review and share this episode with a friend. You know, we can't value to through our conversation today. Thank you and have a best ever day.

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