From Working At Wendy’s To Becoming Owen Sound’s Largest Multifamily Real Estate Investor: An Interview With Jon Kepler
When I started Real Estate Investing Explained, one of my goals was to interview real estate tycoons to see how they got started in real estate. As an investor myself, I was curious about what brought people into the real estate game, and how they were able to achieve consistent growth.
I recently had the opportunity to have a virtual interview with a real estate investor who’s been public about his journey, and who I’ve been following for some time.
Jon Kepler is one of Owen Sound, Ontario’s largest multifamily investors, going from a single apartment building to 20 investment properties within a 10 year period. In combination with traditional financing, Jon specializes in the structuring of vendor take-back mortgages and private loans to fuel additional growth.
What made you think that real estate would be a good investment?
When I was 18, I attended a network marketing presentation and told the hosts that I was looking for a business with residual income. So I was familiar with a certain type of financial or investment model from a young age. I worked at Wendy’s at the time, and was acutely aware of my need to find reliable investments so that I could move up in the world and take back control of my day-to-day life. I spent some time testing various opportunities before diving into real estate, but real estate was the clear winner.
What was your first investment property, what made you choose it, and if you could go back, would you still have chosen the same property as your first investment?
I knew I should have bought a duplex or triplex and lived in one of the units, but at first, I wanted a property all to myself. I bought a four bedroom house instead, but then subsequently changed course and rented out some rooms. It worked out well, even though I should have played it differently. It allowed my spouse and I to purchase our first purpose-built apartment building three years later.
How did/do you keep yourself motivated to keep growing as an investor?
I know people will answer this question many different ways. I’m motivated by the will to win. Beyond that, I push myself due to the simple fact that time is continuing to elapse. We are all getting older, even if we don’t always feel it. An acceptable level of success at a certain age may no longer feel quite so acceptable in 5 or 10 years. We’ve all worked so hard to become skilled at what we do. At some point, it becomes automatic. My business activities are so ingrained in my lifestyle and sense of self that slowing down seems implausible and unrealistic.
Do you have an end goal, is there an amount of properties you are striving to own?
Instead of a singular end goal, I like having a series of checkpoints or waypoints. Goals are healthier and more worthwhile when they are time-bound. But I also believe in having flexible goals that can be adapted or modified if your needs change. I don’t have a fixed goal in terms of number of properties owned, but I do think about the impact that having a certain net worth or financial capacity in the future could have on the world around me.
Why did you focus on Owen Sound, do you own any properties elsewhere?
I went to high school in Owen Sound, so I was familiar with the area. I was open to the possibility of being lured somewhere else with the promise of higher cap rates or extreme property appreciation, but it never happened. Owen Sound offered generous cap rates, reasonable appreciation, and the opportunity to play a significant role in a market that had minimal competition. To this day, the only property that I own outside of Owen Sound is my personal residence.
What types of properties do you own, and why did you choose to invest in that type of property?
I own a combination of small, boutique apartment buildings and mixed-use properties. The mixed-use buildings have businesses on the ground floor, with apartments above. The reasons for my particular mix of property types are complicated. On one hand, some of it comes down to buying the best deal that I can negotiate at any given time, whatever the building may look like. On the other hand, there are also practical considerations. I like to place limits on the number of flat roofs I own, the number of difficult-to-lease commercial spaces, and the number of buildings that happen to be singled out by the municipality for higher levels of taxation.
If you had a single piece of advice for anyone thinking of investing in real estate, what would it be?
There is already a lot of great advice out there. Many of the clichés repeated by others remain valuable, such as “don’t wait to buy real estate; buy real estate and wait.” My best piece of advice may be surprising, but it’s simply to get comfortable with the exponent button on your phone’s calculator. Finding a deal that earns you 25% cash-on-cash is great, but if you put in $100,000 and reinvest your earnings each year for 10 years, $100,000*1.25¹⁰=$931,322.57. If you are relatively young and expect to be investing for the next 30 to 50 years, the numbers get quite exciting, even with more conservative annual returns of just 12–15%. I use the exponent key to track all sorts of things, including my past performance, and even the opportunity cost of the deals I don’t do. It is the backbone of my short-term and long-term goal setting. Without it, I would not be able to get clarity in terms of my desired performance over the length of my career. It seems a lot of investors don’t use it, but to me, it’s indispensable.
More About Jon Kepler
If you are interested in following Jon, or learning more from Jon’s experience you can follow him on Instagram @jonkepler or visit his website at http://www.keplerresidences.com/.
Other Interviews With Jon Kepler
This article is for informational purposes only; it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
