Gary: We have with us Kelli O’Keefe from a town outside Boston, Massachusetts, called Leominster, pronounced ‘Leminster’. The New England area, particularly Boston, is what I would consider a high-price/low-inventory area. If you’re in Toronto, Washington, D.C., or San Francisco, whatever we talk about is going to be very applicable to those areas, too.

Kelli, people like to know who they’re listening to, so let me first ask, “Who is Kelli O’Keefe?”

Kelli: Well, I’m a New York girl and a Yankee fan stuck in the Boston Red Sox and New England Patriots territory. I am an investor specialist with Keller Williams. I mentor new and seasoned investors. I have an investment team, and we focus on helping investors from New York and up through New England. I do consulting, and am licensed in Massachusetts and New Hampshire.

Gary: It sounds like you’re really leveraging your license if you’re working that wide range of territory and doing some consulting. I like to teach people to think of a real estate license as an asset that gives you the right to generate commissions and other streams of cash flow in multiple ways. Could you give us some examples of how you leverage your broker’s license?

Kelli: If you have investment groups in your areas, I highly recommend you attend investment meetings. There’s a Real Estate Investment Association that is throughout North America. I primarily obtain and retain most of my investors from that group. I attend and make personal connections.

I actually fell into doing investment real estate when I started a little over 10 years ago. I met this young man who came in asking questions on houses. I found out he did some contracting. Lo and behold, now he’s 30 and I got him started on investing. We’ve done about 250 houses together. I hunt properties, search foreclosure. I call myself a catalyst. I put investors and properties together. I was doing offers, $30,000, $20,000, $50,000 and established a core business of individuals and partnered people.

Originally, I was an HR director for a Fortune 500 company. Then I got my own security business. So I had the business background and naturally fell into the business aspect of real estate. It was a natural progression into meeting investors, partnering with people, getting to renovations way before the DIY channels. All that happened over time. Right now I have about 60 cash investors. I mentor and meet them, and that’s my primary core business.

In six years I have not done a listing appointment. My investors refer me to their parents, their friends, their cousins. And that’s awesome referral business. Because of capacity, I now have buyer agents that I refer to them also. So it’s just not investments. You can actually establish a business of referrals.

So that’s how I’ve developed into where I am today. I am a top 2% named by Keller Williams International for New England as one of the top agents. And ironically and amusingly—it’s kind of a joke where I do $50,000, $60,000 offers—but my amount of transactions are phenomenal which makes me the top 2%. I may have a property that I purchase for $50,000. My investors renovate it, and then I list it for $180,000. I get the front end purchase, and also get a buyer agent bonus. Plus the commission.

And when those investors decide to list their $500,000, $600,000, $700,000 property, I get to represent those transactions as well.

Gary: You just mentioned a couple of key things. The referrals. I have always gotten way, way more referrals from my investors than I ever got from other occupants. The second thing is while 95% of agents are going after the same mass of people and competing toe to toe, when you focus on investors, you still get the owner-occupied listings. But you don’t have to compete for them because they’re laid in your lap through referrals.

Kelli: That’s absolutely correct! Here’s an example I will close on Friday. I got the property for $75,000 from my investor. I’ll get that $1,875 commission on Friday. We’re wholesaling it for $90,000 to my other investor and they’re partnering. For the second transaction I will get $5,000. And then because I partnered them, I get a $1,500 buyer agent bonus from the second investor. So on Friday with a $75,000 property, Gary, I’ll make $8,375.

Then after they renovate the property, I will get to list it for $325,000 at a 6% commission.

Gary: Wow. That’s how you do the business! In the last five days you’ve covered four ways people can leverage their license with literally one property and two investors. So one of the things I want to point out here is that you’re building the relationship up front. You help investors get the properties on the front end even though it means low commission sales.

But then you get the listing on the back end when they go to flip it. A flip in my experience is always going to re-list because the flipper wants their capital back. It’s like a guaranteed listing, a guaranteed sale, right?

Kelli: There is some work to it. If you are an investor, I have to give you an ARV that I can sell. Because if I can’t sell the property for what I say at the back end, they’re never going to use me again.

The other thing I do is multi-unit portfolio packages. I went to an auction on the street. A gentleman said, “Kelli, you know what? I don’t what to be a landlord anymore.” And he gave me the whole 7 multi-family packages to sell. I mean, there’s multi-units, there’s single families, and there’s flips. In today’s world a lot of people are taking their self-directed IRAs and instead of buying stocks, they’re buying real estate. That is the new retirement plan.

When I get them a multi-unit and they’re happy, they’ll say, “Hey, my brother’s looking to buy a home.” It’s just an amazing referral basis once you win an investor over. They can’t stop talking about you. Of course you have to make them successful with cash flow because they have carrying costs. But even multi-units, when people are acquisitioning and want to buy and hold, they’re still going to refer you.

And then what happens is I always say, “Whatever I buy you we’ll have to sell one day.” Some will build a portfolio, some will hold them. But they’ll also refer you. And that’s what this business is. If you take care of them and understand they have carrying costs, they have cash flow; they’ll take care of you all day long.

Gary: You’re chock full of good stuff tonight. This is one of my favorite interviews.

Kelli: I hope I’m not jumping around too much. I’m just trying to tell you that it’s a great business. I’m happy Keller Williams has started offering this training for our agents, because it’s usually a luxury. I signed right up for your class and went to Concord, Massachusetts. I’ve been very successful at this and love what I do. But someone can either take the long way like me, or quite frankly for the cost of the course, you can cut it down substantially and hopefully be where I am sooner than later.

A lot of realtors are afraid to work in investing and ask me about it. It’s like anything else when you first start. You get out there, you try, you listen and you join investment groups. That’s the key. If there are any groups around you, just go. Because of that, I don’t have to pay for any of my leads. Just maybe $100 a year for the investment group membership.

Gary: I would consider your 10 years the fast track for self-educators. It took me 29 and half years to get where I am.

But back to what you were talking about with the flips. For me this has been true across the board. When you sell homes, 30% of the time you get them back as single-occupant buyers as well. From that one transaction you described, you’re not just going to make money on the wholesale transaction. You get paid twice then you get paid again when they later sell the property because you’re the listing agent. And 30% of the time, Kelli, you’ll get them back as for their own personal property transactions.

You can potentially get paid four times on one property. The fee you charge the buyer on the wholesale side. The commission from the sale. The fee from selling to a partnered investor. Then once the rehab is done, a fourth payday from the resale commission.

And potentially the end user buyer—the family who’s ultimately going to live in the house once it’s remodeled—could even be a fifth commission. So kudos to you for being creative and figuring out how to combine wholesaling, flipping and traditional use of your license.

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