Ken McElroy | How One of the World’s Largest Private Multifamily Investors Prioritizes life

When Kenny McElroy emptied out his savings to purchase his very first apartment— he had no idea how cash flow worked.

Ironically, years later, after building a billion-dollar business with over 300 employees, he would find himself traveling the globe and publishing books that teach agents how to do just that. Sharing his understanding of cash flow and ways they can tap into freedom and success of their own.

In today’s episode, Ken shares some of the values that have kept his businesses thriving, his greatest influencers and the strategies that have had a positive impact on his life. Listen in to hear his advice for raising capital, making smart investments and creating a life centered around what truly matters.

“People have life coming at him all the time. I think it’s my responsibility to find out if they’re present, not present. And if they’re not, that’s okay. Yeah. Not trying to change them, fix them anything. I’m just trying to meet them where they’re at, and sometimes they’re not even aware.”      – Ken McElroy

HIGHLIGHTS:

• [00:00] Intro
• [00:35] Meet Ken McElroy
• [01:05] How he got his start in real estate
• [03:27] What keeps him going?
• [04:28] Who’s had the greatest impact on his life?
• [06:02] What has had the greatest impact on his success?
• [08:03] His greatest setback
• [09:20] The piece of advice he shares the most
• [11:11] Creating a space for family
• [17:00] Having his friends speak into his kid’s lives
• [18:03] Ken’s thoughts on Robert Kiyosaki
• [20:49] Why they always come back to the same principles
• [23:06] Ken’s philosophy on surrounding himself with the best
• [25:55] Managing the little voice and minimizing stress
• [27:53] Personal development and keeping his company as a top employer
• [31:16] How Ken stays present
• [33:25] Ken McElroy’s advice on raising capital
• [36:46] Advice for the passive investor
• [38:02] Advice for smaller investors
• [40:05] Find more resources from Kenny McElroy
• [41:08] Outro

RESOURCES

• Kenmcelroy.com
• MC Companies
• Rich Dad
• Rich Dad’s CASHFLOW Quadrant
• The Starfish and the Spider
• Awareness: The Perils and Opportunities of Reality

CONNECT WITH KEN MCELROY

Find | Ken McElroy
At kenmcelroy.com
On Twitter: @kenmcelroy
On Instagram: @kenmcelroyofficial

FULL TRANSCRIPTION:

Kenny McElroy 00:53

Hey that’s awesome, man. Thank you.

Mike Ayala 00:54

Yeah, thanks for…

Kenny McElroy 00:55

Everyone’s been watching you guys. You guys are on fire.

Mike Ayala 00:56

Aw I appreciate that man. It’s like it’s awesome um, you’re a good model to look up to. So I appreciate that. Kenny, I’m not gonna take a lot of time, I want to just dive right in. So tell our listeners, how’d you get started in real estate?

Kenny McElroy 01:08

Well probably like a lot of people. So my parents, you know, both, neither of them graduated from high school. So start off very humbly, you know, got to college lucky, you know, with athletic scholarship, and that was really the first time I was like, wow, like, you know, you can do a lot with yourself with a little bit of education because at that point, you know, I was bumbling through high school and really honestly no direction really right. And I don’t want to minimize the impact my parents had, but they were limited in their belief system too. So you know, as you know, you’re a product of your environment and I was and you know, everything was we can’t afford it, we can’t afford it, we can’t afford it and etc, etc. So a lot of people grow up like that. So for me, it’s just been constant personal development from the beginning and I ended up by My first two bedroom two bath was $160,000 used my own money, the money that I’d saved, and I was cash flowing like $100 a month. That was my first real estate investment.

And up to that point, Mike, I gotta tell you, I like I didn’t really understand financial, you know, capability, the things that you could do and invest in and things like that. I was handing my money over to a financial planner, wealth manager, all that kind of stuff. I mean, not a lot. But I was like, I remember one time, It was like, 10 years later. Now, you can imagine my first two grand then out of college, I gave this guy. 10 years later, I think it was about two grand to, you know, to me, yeah. And I was like, okay, like something but you know, this is not what he told me it was gonna be, you know, they give me that whole, it compounds and makes money over time. It didn’t. And so that’s when I started digging into fees and what it was invested in up to that point, I just thought, I’m gonna work my butt off and then give somebody my money. And then I’m like, okay, no more of that. I’m gonna invest on my own. And that’s how I started and then I of course, just never stopped and now We’ve got 300 employees a billion dollars with the real estate and you know, a whole company that, you know, just organically grew from nothing, all through the principles that you and I both learn and teach.

Mike Ayala 03:11

Yeah. And as I said in the intro, what I love about spending time with you, Kenny, you’re the most unassuming guy that I’ve ever met. You have 300 employees, you’ve got all these assets under management yet at the end of the day, like you’re you’ve got such a passion for life. So, I really appreciate that about you. So, what gets you up every morning? Like what keeps you going

Kenny McElroy 03:29

Oh right now? Well, it changes but for right now it’s making my boys the best they can be. That’s it. So I mean, obviously, you know what I mean? So that’s just on my mind now because they’re in college. And it’s always on your mind. Right? You know, you want them to be producers. Yeah. Not necessarily just consumers, right. And producers for the greater good. So it’s changed over time. I you know, I’ll be honest in my 20s I was just trying to make a buck. Yeah, trying to pay my bills and You know, trying to buy a house, you know, and then then in your 30s, you know, I was trying to, you know, start my first business and, and doing that, but then and then it turns to relationships, you know, like everything right? It’s just then you start to realize that, you know, money is really nothing. I mean, it’s nice to have uh don’t get me wrong, it’s necessary, but relationships at the end of the day are everything- in my opinion.

Mike Ayala 04:22

I’m going to come back to your boys here in a minute because we were together at one point in time, but I want to circle back. So let me ask you a couple questions that I asked every guest. So who’s had the greatest impact on your life?

Kenny McElroy 04:30

Gosh, I don’t know one person, but a lot of people. So I have a tendency to gravitate to like people that are doing really well in an area that I’m aware of are focused on at the moment, and there’s been many. So in the early days, it was it would have been some of the business owners that I worked for, but before that, it might be some teachers you know, that I had at at university or even my wrestling coach in college. If you know, he was thinking everyone is just a, you know, a little bit here and there. And when I, when I first started having a family, I started meeting with a guy every month for 10 years, and he had five kids and all five wanted to hang out with him like all the time, you know what I mean? And they were all in their 20s and 30s. And I said, Charlie, like, you know, how is it that, you know, like, like, all five fly to you, like, you know what I mean? And it’s a series, it’s 1000 things, right? And so I said, I want a relationship like that with my kids. And so it always is changing, you know, sometimes Robert Kiyosaki, and a lot of ways, you know, as you know, I’ve been friends with him for 20 years, Mark Victor Hansen, you know, you kind of bump around and meet some of these guys, and you start to see really what they’re, what they’re all about, and who they are, and their character. Yeah. And so sometimes you meet somebody that’s really famous and they don’t have the character and you’re like, ‘okay, they’re out.’ You know what I mean? I don’t care anything about how famous they are. It’s just uh so it just kind of boils down to that and I just try to glean a little bit of off of each one.

Mike Ayala 06:01

That’s awesome.

Kenny McElroy 06:02

Yeah

Mike Ayala 06:02

That’s cool. Okay, so number two, if you could narrow it down to one thing that has had the greatest impact on your success, what would it be? What’s your superpower?

Kenny McElroy 06:09

Well, probably I would say, awareness. Yeah, I know. That’s an interesting one. But I think what happened is a lot of times for sure, I was young. You know, sometimes when people are talking, that you’re thinking about what you’re going to say, instead of listening to them, once I learned not to, and really, you know- because what happens is you whether you’re in a sales situation, or negotiation situation, or sitting down with your 15 year old kid. Listening and being aware of where they’re coming from, is the most important thing, in my opinion, being present at that very moment. I, I’m not trying to be all spiritual, but I’m letting you know, like, I remember my son, you know, you when, you know, I sat down with him and I was trying to manage him and you know, deal with him. And we weren’t connecting man, like, you know, I’m sure many, many parents have been through this. And then one I just settled my mind down and then tried to really hear him and listen to him. We started to click. And it was I just was trying to meet him where it was. And I’ve seen it in my meetings, like we had a, I was selling a bunch of projects, and we had this massive brokerage team come in from New York, and they flew in and they all sat down. And I said to the guy, I go, Hey- you could tell he wasn’t present.- I said, Hey, Tyler, what’s what’s up? what’s what’s going on with you? This is called processing. And he’s like, Oh, I just hung up on the phone. And, yeah, something’s going on, you know, with my, with my family. And, and I say, Okay, well, let’s just hold the meeting up, then, you know, once you go handle that right now, and so he went and handled it came back in and he was present. Yeah. And we had an amazing meeting, but he would have been not present the whole meeting. Yeah. You know what I mean? Yeah. So people have life coming at him all the time. I think it’s my responsibility to find out if they’re present, not present. And if they’re not, that’s okay. Yeah. Not trying to change them, fix them anything. I’m just trying to meet them where they’re at, and sometimes they’re not even aware. That’s probably it.

Mike Ayala 08:01

Yeah, that’s awesome. Thank you for sharing that. So number three, what was your greatest setback and what you learn from

Kenny McElroy 08:05

Oh man, I had a lot. Gosh, well, I had a partnership that was super successful. big name company. Two other partners handshake. Yeah, yeah, let’s do this. Let’s do that, you know, some kind of loose writing, but not even the legal agreements. Were that tight, you know what I mean? And we started blowing it up making a ton of money. And right before we started making a lot like this 15 years ago, maybe more. We had a big partnership blow up, and I left and I had a third and I was scrambling, you know, for all the pieces that were you know what I mean? So, honestly, I was young, younger, and I was, you know… they bought Jets and you know, I bought a laptop. True story. So but it’s okay. You know, I learned a lot. I did. I learned a lot. I learned a lot about verbal agreements. I learned a lot about you know, at the end of the day, I learned a lot about greed. I learned a lot about relationships. I learned a lot about a lot. And it was the best thing that ever, ever could have happened. Yeah.

Mike Ayala 09:10

I saw you. This isn’t one of the questions, but I saw you do a presentation on partnerships. You should try to get your hands on that and share that.

Kenny McElroy 09:16

Oh, yeah, I know. I drafted that way down to Miami.

Mike Ayala 09:20

I like it. Yeah. So number four, what is the piece of advice you find yourself sharing the most?

Kenny McElroy 09:25

Well, I think when it comes to business, or investing or real estate, it’s cash flow. So I remember I’m involved in a group called YPO, and also EO, entrepreneurs organization. And I remember connecting with a buddy of mine, who eventually became my partner. He was a lot more seasoned than I was, you know, he had taken a company public and he had one Entrepreneur of the Year for the country of Canada. He was a very, very big personality and very, very experienced. And he said to me, once he said, Follow the cash, follow the cash, and even then I didn’t do it. You know what I mean? And I was like, you know, I couldn’t quite wrap my head around his name was Phil Carroll. And, and then I got it. You know what I mean? And what happens a lot of times as you’re moving forward is you’re caught up at all the peripheral things and all the details. It’s all important, you know, and sometimes you don’t actually follow the actual most important thing, which is how are you going to pay for all this? You know what I mean? So I do it on my apartments, I do it on my businesses, I do it on my personal life. I do it almost on everything I do. Now. You know, I just want to make sure that that’s always sound and that I’m not chasing something for you know, what eventually isn’t going to pay off for you. Because you spent a lot of time you know, we see it all the time. I see it in businesses where, you know, like, I had a buddy that had a printing company in Phoenix, and I’m like, his name was Mike. I go Mike, like, you’re done, man, like in 10 years, like you’re gonna be obsolete. He’s like, No, I’m not. He just went and bought $300,000 worth of printing equipment, used in brochures, all that crap. I gotta do it. It’s all going online. No, I’m You know what I mean? I’m holding the line, I’m holding the line. I’m like, okay, sure enough, you know what I mean? The things worth nothing now, you know, so just following the cash, I think is the most important thing.

Mike Ayala 11:11

That’s awesome. Thanks. Okay so I want to circle back to, you talked about your sons. Yeah, we were, we had a small group of friends together a couple years ago, we were doing a small mastermind, and you had brought up you started talking about how you had bought your place in Idaho, and you bought a resort in Sedona and I’m listening to all this I’m gathering this and the thing that you said and I want to put words in your mouth but basically you said that you were looking at your legacy and you wanted a place that no matter what those those kids would want to come back and spend time with you can you. Can you dig into that for me because that was just such a pivotal moment for Karen and I.

Kenny McElroy 11:43

Yeah, well, I think everybody operates in the short term you know, like with real estate, I know you do but I always look at the end like the beginning and the end, the exit or whatever you want to call it, you know, the long game. I’m always playing the long game. So even with my relationships with my Like, I have all my goals, meet with my mom six times doing in 2020 like it’s a goal, meet with my brother, go do this right, you know, meet with my sister. You know, you know what I mean? So I have it that specific. And so I’m always um, you know, I’m working that long game and so where I was heading with all of that is, you know, again, this is back from one of my mentors. He’s like you have to have a place that is free, that your family wants to come to. Yeah. And that’s, that’s also healthy that you can have a place but if it’s not healthy while they’re there, you know, they’re not going to show up. Yeah. So it has to be that place right and so doesn’t necessarily have to be in Coeur d’Alene, Idaho or Sedona or whatever but, but he said my kids as they got married, had grandkids they had jobs, he didn’t have jobs.

Whatever he goes, they never miss was Telluride. They never ever missed those two weeks in Telluride, because I flew em up and everything. And so, you know, I’m starting to see that now as my kids start have girlfriends and they’re off a college and they’re, you know, having internships and stuff. I got… I’m seeing them less than less, you know, even my older son, you know, he, he, he literally had an internship all summer, you know, he came up to and spent time at my house and Coraline for 10 days. That was it, you know, and I’m used to having them for like three months. Yeah. So I started to look at I remember going to one speaker, he said, he goes, how old are your kids at the time? I can say 12 and 13 or something. And he said, How many summers do you have left? I was like, yeah, I’m like, like, five, six. I was it. Right? You know what I mean? So really put it in perspective. So that was a combination of that plus that other on getting this place, you know, having a kind of a spot, you know what I mean? And it’s working because every year my kids, you know, they fly in their girlfriends and their friends and you know what I mean? My house is a wreck, man. Cuz just annihilated you know, the pantries, the food and you don’t I mean the place is a mess. I love it. And you know, so for me it’s just have em around, you know what I mean? And it’s a big, big, big important thing but it’s a long game for me. I want to have a relationship with my kids. I already know where I am financially, I know where I’m going to go. Maybe not completely, but pretty close. And so the rest is all that’s all just, you know, not that important. What’s important is my relationship with them.

Mike Ayala 14:29

I’m not going to go into the whole formula right now. But you know, one of the key things that I’m always looking at is, you know, what do you really want? Why do you want it? How long from the time you started processing that I’ve got five summers left? Did you just immediately No, immediate Yeah,

Kenny McElroy 14:40

I was like, that one hit me hard. I remember. I remember that guy’s name was Joel Weldon. He’s a big speaker. He you know, he’d won like Toastmasters, best speaker of the year. And you know, he’s a very, very good guy. And I remember listening to him, and he’s like, how many summers do you have left? I remember I was like, oh geez. I have five. I have 500 With my oldest son and so that’s it, you know, so that’s when I started booking Kilimanjaro. You know, I took both kids to the summit of Kilimanjaro, you know, and I started doing these trips, so you know, Machu Picchu and stuff like that with them and start taking them around the world more and, and, and, and working less. You know, that was it. I that’s when I stopped working in the summer. You know, as you know, I move to quarter lane at the end amount of work while I’m up there, June, July, August. I spend the time with him. And it’s worked. You know, I’m out wakeboarding with them. I’m out on the boat. I’m out of the jet skis. You know, we’re playing golf or hiking or golf. You know, we’re just together. Yeah. And, you know, when they’re gone, they’re gone. They’re in college. I don’t see em, you know.

Mike Ayala 14:49

So you’re a mentor to so many of us. How’s that, like, looking at that relationship with your sons? Do you just look at it the same?

Kenny McElroy 15:45

Oh they dont listen, man. Like everybody, right? I don’t know. Like, I was laughing at it does the other day. My buddy’s like, you know, do you listen to your parents? I go, no, like, who does really? You know, let’s be honest. So you know, but um no… you know, like, I’ll tell you a funny story. Our Governor, Doug Ducey, texts me and he’s like, ‘hey, would you be willing to meet with Joe?’ his son who’s a junior with an issue. Like, of course. So Joe came in, like, two weeks ago. And he’s like, thanks man, like you know, our kids don’t listen to us, right? He’s the governor. You know what I mean? It’s just is what it is. So, so that’s what I’ve done is I’ve gotten my friends around my kids. They listen, you know what I mean? And then the other thing is, be careful who you’re hanging out with. You know, that’s massively important. So like, if your son was hanging out with me, you know, yeah, it would be awesome. Awesome, right? Yeah. And I would treat him like my own and I would only fill him with good stuff. Doug blew up my phone for two days afterwards. He’s like, Oh, my God Joe’s on fire, you know, after he left here, and that’s what I’m talking about. I just, you know, they do listen to me, I think and maybe at some point in their 20s. Maybe they’ll start to come around but I just assume they don’t. And then I just put them around. My friends and family that I trust and I know are just going to drop good. things in their head.

Mike Ayala 17:00

Man, I don’t want to brush over something that you just said. And I, somebody shared this with me a while back too. But that’s a great way to take inventory in the friends that you have in your life too. Would you want them speaking into your kids lives, I’m telling you that I don’t want to brush over that that’s huge.

Kenny McElroy 17:15

I think it’s a big deal. You know, Jim Rohn says, right you are you, you are the five closest people that you hang out with, right? And, and I gotta tell you, you know, I’ve I’ve leveraged my YPO friends my you know, and all my other friends to a great degree that way, you know, I’m saying hey, and I’ve had my buddies call me up, not just Doug, say, hey, can my son do an internship here at MC companies and, and I’m like, of course you know what I mean? You know, so it’s all part of the bigger game everybody’s playing, you know, and, and I think you just got to recognize that the truth is, is most to your kids don’t really think you know anything. So it’s okay though. That’s awesome, you know?

Mike Ayala 17:56

Okay, I appreciate your time on that and getting behind the curtain on the family. Because sometimes that’s off limits. So I appreciate always being open. Robert Kiyosaki. Yeah, you brought this up like friend, mentor. You’ve done business with him forever. How’s how’s that shaped? How’s that shaped your thinking? Oh, time

Kenny McElroy 18:11

Yeah, for me is a wild man to you know, he’s super volatile. He’s an ex Marine, you know, like, you never know what you got with him, but I love it because he always tells the truth. He’s, he’s characters credible, like he’s got, but he studies he’s one of the smartest people I know. I mean, he’s always reading three or four books he devour. He probably reads 4050 books a year. All we do is text books. I just saw I was just within the last two days, I walked away with three more books, you know what I mean? That he gave me and you know, they’re at my house and I started reading them. We’re just caught that’s all we do. We send each other links and videos. And you know, there’s a lot of banter back and forth there too. You know, when I met him, Rich Dad, Poor Dad wasn’t a big deal. You know, I met him right when it came out. And I was just looking for investors. And so we’ve become really, really close. And really, really good friends and he invests most of his money with me, as you know, you know, but we have, I have 400 investors, you know, Roberts, the one I’m the closest with because he’s here, and I see him a lot, but he’s, he’s really taught me how… well he realized before I did that I would be a good teacher. He actually said it to me. He’s like, you’re a teacher. I’m like, No, no, I’m a real estate guy. I love raising money. And it’s like, trust me, you know, you need to teach and so that’s why I went online with him. That’s why I speak around the world with him. That’s why I’ve written the books, you know, I donate all that money to charity, all the book revenues. So all that, you know, it’s just all part of that. It’s helped me on the philanthropy part, you know, so that’s how I look at it now. Any Rich Dad time I spend all goes to charity.

Mike Ayala 19:49

That’s awesome. That’s so cool. So you had brought up earlier that one of the things that you find over and over is cash flow, the cash flow conversation. I remember sitting across from Robert Kiyosaki at dinner on The Real Estate Guy’s Cruise. I was having a conversation and I’m like, it’s so simple and he was like, it’s not simple. And it like took me it sent me back a little bit. And I didn’t mean that like the whole con… It’s not easy.

Kenny McElroy 20:11

Oh, yeah trust me if you would have said it’s not simple he would go, ‘it was it’s simple!’ He just takes it contrarian view on most stuff. You have to worry about that.

Mike Ayala 20:19

It gets your attention.

Kenny McElroy 20:19

Oh my god. Yeah. Yeah, I laugh I was like Robert, Roberts always like, I remember he did it on Wolf Blitzer, you know, with Lehman Brothers. He’s like, you know, oh, yeah. I just said Lehman’s going down. I’m like, Yeah, I saw that was pretty incredible. You know, because it did. He’s like, Yeah, he goes, you just take a you know, to me, but he does it was study. So you could take either position is simpler isn’t simple. Yeah.

Mike Ayala 20:40

So on the cash flow conversation, which again, is probably one of my favorite books, The Cashflow Quadrant, but you know, you said that’s something that you find yourself over and over. It’s had a major impact on your life. I’ve noticed that when you guys are teaching, you’re constantly coming back to the same principles. And that’s why I brought up the simple conversation because what I realized through that conversation with him is it’s not it’s not simple to grasp. It takes repetition and it’s over and over and over. That is true. So why do you guys, why do you constantly come back to the same principles?

Kenny McElroy 21:06

Well, you know, there’s, I think one of the things that he helped me with was, you know, as you’re going and crank along and you’re, you know, I’m building my property management company, I’m buying stuff I’m building stuff I’m developing stuff, you know, you know, he has the ability to and even in the Steve Job’s book says this too you know, the ability to take the complex and make it simple like like he did with the iPod. That’s the best example it’s actually in his book he talks about Buckminster Fuller and you know, all the all those things and the generalized principles and commit making it all come back to something really simple. So people when they hear a word, like if I’m at church or I’m at a conference or something and somebody says a word like capitalization rate, I don’t understand it, I check you check out you just do you immediately check out when you’re like, Oh, I’m you know, the internal voice is going Oh, I’m not very smart. I’m this I’m that that you know, it just is what it is. So The more you use buzzwords even though you can, and I saw I do, depending on who I’m talking to like, like tomorrow I’m flying to Laguna Beach. I’m in a private equity conference. Everyone there raises money. Hundred 200 300 $400 million funds, right? Yep. Okay. It’ll be a lot different than I’m like, bop, bop, bop, bop, bop, bop bop. Right. But when I’m talking to somebody, you know, at a, like, say, a rich dad conference, income expense and a y, you know what I mean? So and the same thing with my kids, you know what I mean? Yep. And that I actually think that’s one of the bigger problems with school is they don’t meet people where they’re at, you know what I mean? And so that’s what it is. We always try to take, you know, we can talk about ROI and grm and noi, and, you know, like, Li like, it doesn’t really, you know, like we throw all this stuff out and people don’t understand it. So you just got to bring it all back to them. And I think keep business basic as you can and then you know, grow from there.

Mike Ayala 22:59

Such a good point. So, one of the things that I’ve really noticed, watching you, you’re always pointing back to your team. So investing is a team sport, whether it’s your attorneys, accountants CPAs, or your internal team, can you kind of just tell me your philosophy on surrounding yourself with the best?

Kenny McElroy 23:14

Yeah, yeah. Well, I think what happens is, you know, you know, that cashflow quadrant, you mentioned it SBI you know, like, he is employee be as busy, you know, or as, as you know, self employed and be his business and is investment. I think what happens is, and I’ve seen this a lot, especially with guys I hang out with or maybe went to college with, you know, let’s say like, I have a couple friends that are doctors and dentists, let’s say back, I can go on, you know, whatever he can do that day is all he can do. Yeah, like, you know what I mean? Like he can only have so many appointments in a day period, right? And so your capacity to do whatever it is you can do, whether you’re a CPA, whether you’re a lawyer, whatever real estate agent, doesn’t really matter insurance agent. You only have so much time today, if you believe that everything has to go through you, yeah, you know what I mean? And so I see this, you know, and so I know some very successful people that are working 60 7080 hours a week, and they’re making pretty good money. They’re going crazy, but they don’t they don’t believe in other people. They don’t delegate, you know what I mean? And they have no team, it’s all them. And usually it’s an ego issue. But regardless, that’s another that’s another topic. But what I found is that I don’t want to be responsible for anything. So I want to make all the money, but I don’t want to have to do anything. I can hear what I mean. Yeah. And, and in the meantime, you know, it can spread the money around and let everybody participate in it. Everybody gets to learn, you know, people like you met my marketing team. We’re here right? Awesome. Yeah, like right. So we got six people in there all they do, I could not sit in there and do what they do. I don’t even know how but I know what I need. You know what I mean? And so you bring these folks in, uh they just blow me away, honestly. They’re so smart, so bright, they’re articulate, they come in with all this experience, if you let it happen, you know. Like, so I find like, a lot of times if, if an organization is super controlled, and top down, you know, like the spider and the starfish book? yeah, you know, like Control Center, you know, this is where you’re going to do everything, then there’s not a lot of collaboration. But if you do it more like a starfish model, you know, where everybody’s got a hand in the overall direction, you know, then like as a starfish, you get one one of those legs or tentacles cut off he grows right back, you know what I mean? It doesn’t affect the, you know, the whole thing. So I just end and you know, you hit a wall pretty easily and pretty quickly if you try to do everything yourself. And I believe in empowerment and, and also, it’s fun, it’s more fun to learn, you know, keep an open mind.

Mike Ayala 25:55

So I’ve watched you whether it’s employees, whether it’s friends, relationships, clients, Your energy level is like 99 always, is that something that you had to work at? even slow even back to the employees or whatever? Like, is that something that just comes naturally to you? Or did you have to learn that and you have to work at it?

Kenny McElroy 26:12

Well, it’s a good question. I’m always aware of it. So I mean, even the mornings, like sometimes how you get up sometimes, like, Oh, my God, like, you know, all your self talk. Yeah, I think it’s all part of it. You know, I don’t want to go to the gym. Right? Yeah. You know, oh, my God, I gotta, I gotta leave and i want i gotta be here and then here and then here. And then I got to make here and this is my life do do do, I’m stressed out. All right. So I just come back from that. And I’m like, okay, like, relax, you know what I mean? Like, it’s gonna be okay. And that actually, you know, once I kind of put things in perspective and what what is important, is, you know, a lot of times what I’ve found is that people, they make things important that are not important, you know? So, um, this weekend, I went to a charity event and the woman lost her her nine year old daughter and her husband within a year. Wow. That’s important.

Mike Ayala 27:05

Yeah, right. That’s crazy. Yeah.

Kenny McElroy 27:07

That’s all I’m saying. Like, like, you know what I mean, you guys, like you go, like when I went to Africa or I go, you know, travel abroad and you start to see people that are really in need, you realize, you know what’s important, right? So now I’m not saying, you know, certain things aren’t important. I’m not. But what I’m saying is, you know, so once you’ve kind of filter through that and realize it, you know, it’s really a lot of its self talk and the little your little voice and a little voice management. And honestly, it just raises my energy. You know what I mean? Because I don’t I don’t really have much weighing me down, you know, stress wise, right? Yeah. There’s just a few things on my mind at all times. That I feel like are worth maybe some stress. Yeah, you know, but not very many.

Mike Ayala 27:53

Yeah. You know, you guys are constantly ranked in the top employers in Arizona. I mean, you said it earlier. The governor calls you from Advice. Yeah. Is it just I mean, is that all intentional? I mean do you go out? No, you just, you’re just a good guy. You just show up…

Kenny McElroy 28:06

No, no, actually, I’ll tell you exactly what I did. I followed the rich dad process. I knew there was a process here that we could do. I, we started doing book studies for our employees like 10 years ago. Okay, so I started doing book studies with Robert. So you basically take a book and you study it. In fact, before Doug was president, we did good to great with Robert at Roberts house. You know, I brought him over there, cuz Doug started Cold Stone Creamery and founded it. And, you know, before he sold it, and you know, and went in politics. And I’ve been doing these book studies forever. And I found that when you study something that is everybody’s on the same page on literally, yeah, you know, there’s no opinion, like, what does the author say here? You know what I mean? It’s not a debate. It’s not this, but everybody’s on one page. So we started doing that in the early days. We still have the normal meetings, you know, here’s our NOI. Here’s this. Here’s that, you know, Here’s what we’re going to grow, here’s what going to do next. And they’re sitting there going really like, okay, flew halfway across the country to sit for this. And then we started doing book studies just tried it, and I facilitated the first few. And it was, it was life changing for me and for a lot of people. And so our employees started realizing that this company was more about developing me as a person and not as much about the numbers and I always start off by saying, you guys know your numbers, you guys know what’s right and wrong. I’m not gonna we’re not gonna talk about that today. That’s awesome. We’re just going to get into you know, communication things and you know, and things like that, you know, and so we we pick all kinds of books, like we picked one called the habit loop, you know, which is a great book, well, how do you Why is it you get into habits and then we have fun with it, you know, and, and another one’s on communication and you know, and another one’s on relationships and, you know, there’s one one was called the happiness advantage and you know, like, you know, where the guy literally this this guy had gotten Harvard, right? He’s from Texas. And he’s like, got lucky he got it was like a draw wasn’t as great. He went there. And he’s like, oh my god about Harvard. Yeah. He’s like, 2,000 of these kids were there. And he’s like, nine, not, you know, 1,950 of them were like, ‘Oh my god, I’m at Harvard. Like, my dad went to Harvard, I have all this pressure,’ you know what I mean? Yeah. So the whole book is, as an example, you know, your mindset, you know, like, one one sees as a burden, one sees it an opportunity. And so that’s where we stay. We’re just at personal development, personal development, personal development. And so all of that has developed into better relationships with our vendors. And they give us a bunch of money for flat speed, better relationships with my friends, better relational to my kids better relationship with my employees, you know what I mean?

Mike Ayala 30:28

So you’re just showing up adding value. I mean, I always say in order to live more, you’ve got to give more. It just sounds like you’re just constantly looking where you can add value and just help people grow.

Kenny McElroy 30:55

Yeah, that’s it and, you know, some people leave us and then they come back And some people leave us and don’t come back. That’s okay. Yeah, totally. You know what I mean? Like it is what it is and what we do have very low turnover. And we continue to be, you know, the people that work here. They know that I value them. Yeah. over anything else. Right?

Mike Ayala 31:15

That makes a ton of sense. Yeah. You said earlier, I want to make sure that I get awareness. Is that the same as just being present? It’s Yes. So that that was actually going to be one of my questions, because I know like, every, every time I’ve ever been with you, I mean, you’re a busy guy. But if it’s a two or three hour dinner, you’re there. You’re present. Did you have to work on that?

Kenny McElroy 31:32

Oh, my God. Yeah, I’ve got the worst ADD ever. Like, I find myself drifting all the time.

Mike Ayala 31:39

Can you give us some tips on how you work through that?

Kenny McElroy 31:41

Well, the way you’re supposed to do it is actually watch yourself. That’s it. That’s actually it. So in other words, like in this conversation right now, instead of me having a conversation with you. I watch it. Okay. So I’m a third person. Yep. Looking. You know what I mean? And that makes me aware. Just that simple. I mean, there’s a lot to it. You know, there’s a bunch of books. One of the best books is called Awareness by Anthony DeMello. I love that book, you know, you know, I study that book and I’ve read a number of times it’s one of the rich dad books. But one of the things he says in there while he says a lot, but is everybody’s happy, they’re born happy. Think about our kids when they’re little they’re happy. Yeah, but then we be happy then you know things right things shocks whatever things we say to them things a teacher says to them thing a coach says to them, things that go through that you’re there or not there whatever, all sudden, they get closed down, you know what I mean? But when they’re little they’re super happy. And so there are things that you know, once you start to be aware of their their, you know, like, like, I look at the ripple effects, but Buckminster Fuller calls it procession, you know, which is when you drop a pebble in the water, the rings that go out that’s called a processional effect. So, you know, if I say something to my son across the table, it might just be a knife in his heart, right? Or could be a big hug, you know, just my words. And that could go that could resonate with him forever. Like, you know what I mean? So it’s all it’s all of that combined, you know what I mean? And so when I, when I think of the awareness piece, I think that’s what I think of.

Mike Ayala 33:25

So I’m going to bring us together, because I think we could probably talk for hours, I’ve just appreciate your knowledge and insight. So for our listeners who want to invest in capital, what piece of advice or want to raise capital, what piece of advice would you give them

Kenny McElroy 33:38

To raise capital raise capital? So I actually think raising capital is easy. I really do. I don’t think it’s hard. I think that I think, you know, a lot of people think it’s sales. It’s not, it’s not sales at all. And if it becomes a sales job, then that’s a problem. So in my opinion, the way you should be raising capital is By showing how thorough you are in a deal that you select, and when they get their money back, you know, and have all the steps on exactly how that’s gonna work. In other words, before I buy something I already know when I’m going to exit it. I already know, I know exactly when I’m getting my money back now doesn’t always work. But I, I have worked to plan out to when if I’m going to invest 10 million bucks, my goal is to get it out, you know, in three and a half years or whatever, right? And then I work on the plan. So a lot of times equity raising is that way is showing the investor, here’s your return, here’s what’s going to happen. You’re one year to year three, and here’s our plan, right makes you accountable and responsible. You have to go through it. But then all of a sudden the raising of the money becomes about the knowledge and the experience in the education of the deal itself. And I think a lot of times people believe that has it’s a sales job. And I’m not saying that it isn’t a little bit you know what it means process, but it always goes back to the deal itself. And so Robert and I were at the great story. We were at this conference, speaking at the Javits Center in New York. It was actually one of the first times I met Trump. So this would have been obviously before he’s president, but he was the headliner, and Robert was second or whatever. And so it was fun. I got to go up on stage with those guys. And I met Trump multiple times now since then, but I remember walking through, you know, the conference, there’s all these beautiful girls with these high rise buildings in New York, you know, with these big, beautiful brochures, you know, like a brochure was like two to $5 Yeah, you know, and they were like, oh, check this out. This is a beautiful building on the corner or whatever, and whatever, right. And so I, I just grabbed a bunch of stuff as I’m walking through. And, you know, from really every single person I walked into the green room in the back was sitting there with Robert and we’re a big round table. I just spread him out. I gotta check these things out, you know, and we both I was like, You know, wherever it’s interesting, the bigger the brochure the worse the deal. And he’s like, yeah, you’re right. Like you don’t you don’t I mean, the more stuff the sales job to push that that you have to push, because most deals as you know, are right now back of a napkin at sometimes just over a beer. Yeah, right. Yeah. Like now I’m like, hey, like I just did this billboard deal. You know, I’m like, hey, blah, blah, blah, blah, blah. He’s like, in that’s it. No brochure, no business plan. You know what I mean? Yeah, it’s that it’s like it goes, You know what I mean? Like when you see something and you’re educated around it, and you can kind of see it. the raising of the capital is not that hard. It’s hard when the deal’s hard.

Mike Ayala 36:40

So what would you say to the person that wants to invest passively? What should they look for? Does it kind of piggyback…

Kenny McElroy 36:45

It’s the team.

Mike Ayala 36:46

Yeah, okay.

Kenny McElroy 36:46

It’s 100% the team so, you know, I watch this. Now, there’s a lot of syndicators out there raising a lot of capital for a lot of things. And you gotta, you gotta understand cap rates. You gotta understand how they buy you gotta understand it. Why did we have a good friend of ours, send me a deal and said, Hey, somebody wants me to raise some money for them on this. And I said, Oh, take a look at the year, you know, year one, revenue high go, you know, there, it’s much different than the rent roll. So just ask him this question, you know, how do you go from a rent roll? That’s X to a year one revenue of Y, you know what I mean? And the deal was dead, so, you know, and so, luckily, we have that network, you and I where, you know, sending it around. And, you know, and so deals get killed that way, or they continually might have been the opposite. It’s like, Oh, my God, this is a great value add, you know, but it wasn’t, and then the guy just got defensive, and, you know, started trying to figure out a way to capture it. And this is a syndicator, you know, out of the southeast area of the US, no big deal. I’m not judging him. I’m just saying that, you know, so luckily, they came to me and asked me that question. I said, just make sure you ask these two or three questions, and then the deal died. And so that’s it. You know, knowing what to ask knowing what to look And if you don’t find the person that can help,

Mike Ayala 38:03

So for the other the last question for the group of people that are not accredited investors, they don’t have $100,000 to invest, you know, maybe they can save hundred bucks a week, 500 bucks a month, what should they invest in?

Kenny McElroy 38:14

Well, I’m a massive gold and silver guy. So I have a lot, and, you know, goals 1520 bucks, or whatever it is, you know, and, and the reason why I like that right now is because, you know, we have to figure out some way to pay for all this social security and, you know, all this printing, you know, we’re going to print the heck out of, you know, the US is going to print a lot of money in the next 20 years, period. And so that means that the currency is going to get devalued and, you know, precious metals, you know, but I don’t really look at it as an investment as much as I do as a hedge, you know, like an insurance policy, you know, because it true investments actually make money for you, you know, I mean, so you got to kind of buy and sell it, but I think just paying attention to trends. But also just education man, you know, obviously it at kenmcelroy.com we got a ton of videos on this stuff, just YouTube and you know, whatever you can devour, you know, it’s for free, right? buy books and you know, ask questions and just educate yourself, I was an idiot in my 20s not really knowing what to look for and what to, you know, I just started reading, start reading and talking to people and sitting down with meetings like this, you know, but, you know, one on one over coffee or whatever, and just trying to learn.

Mike Ayala 39:27

I love that you said that, you know, investing in the education piece, because, you know, a lot of times we hear stock market, Wall Street, don’t invest in a 401k. But I think sometimes we don’t really know what to do with that. And so I think I think investing in your education is probably one of the most important things somebody can do.

Kenny McElroy 39:41

I still do, I mean, I’m literally flying tomorrow. I’m paying for a conference for three, you know, three nights in Southern California just to learn about waterfalls inside of funds and raising capital at the wall street level. You know, there’s never it never ends.

Mike Ayala 39:56

Yeah, you know what I mean? You said this already, but what I love about you Is that you can hang out with the Blackstone guys at the conference tomorrow, but you’re always here to teach. And so where can our listeners get more information? You kind of mentioned it already. But where can we find you?

Kenny McElroy 40:10

Thanks. Well, you want to see our deals, it’s MC companies, right? But you want to get some of the videos and podcasts and all the things. It’s on kenmcelroy.com. And you know, it’s right here. And I think that that’s a great place to start. There’s a lot this free, can download forms for free. I have a forum where I answer questions, I actually jump on twice a week. And so it gets, you know, filling up with questions and I go in and answer them for the people and people really like that. And we’re just continuing to deliver really good videos for folks so that they don’t make mistakes.

Mike Ayala 40:44

Well, I really appreciate everything you do and you know, just helping escalate the net worth of humanity. So anything I didn’t ask you that I should have no man, but hey, you’re a great father too. So I think great minds think alike. So congrats on that. I mean, meeting your kids at your house was awesome. Know and seeing the relationship you have with your wife and your friends and you know congratulations. Thanks, Kenny. Appreciate it. Yeah, thanks for your time.

Kenny McElroy 41:07

You bet.