One of the fascinating things about Robert Kiyosaki’s Rich Dad, Poor Dad was the idea that the wealthy teach their kids different things than the poor or middle class.
I’ve had the opportunity to see this up close with my investing partner, Kevin Edwards. His father, Dick Edwards was one of the founding partners of Hawkins-Edwards, a commercial brokerage firm based out of Spokane. Dick had been a broker for several years before starting the firm with Paul Hawkins.
Kevin is 34 years old, fourteen years younger than me yet he’s my investing mentor. When we bought our first property together, Kevin was 26 years old. I had just passed my 40th birthday and was looking at this young guy putting together deals in a way that totally impressed me. He had the confidence and knowledge, not me. What I brought to the table was a property manager skill set. My broker skills were still in the formation stage.
I rode his coattails on our first few deals until I finally stepped up to bringing ideas and properties to the table.
I had never asked Kevin about how he got to be the guy who so confidently led me into real estate investing.
The Early Years
Growing up, Kevin saw his dad, Dick, work as a commercial real estate broker. Dick had previously worked as a traffic engineer, but left the government position when it felt too constrained and boring. He eventually found his way into real estate. His mom, Leslie, ran her own travel agency, Edwards-Lalone Travel. Both of his parents were entrepreneurs and this affected Kevin’s childhood.
“My dad drove us around to look at real estate all the time. He’d buy my brothers and me ice creams to keep us occupied and then he’d drive around looking at properties.”
He laughed when he remembered a childhood vacation. “Once when we were visiting Disneyland, my dad took a detour and drove us through a huge industrial park so he could check out the buildings. Everywhere we went he would show us some real estate. This happened even in high school. It wasn’t until then I realized that my dad owned some of the properties we were looking at.”
When asked if he remembered any specific money lessons from his father, Kevin shook his head. “Not really. Nothing specific. I remember him telling me once that if you want to be wealthy you have to take risks.”
Kevin’s mom, Leslie, was an entrepreneur herself. When I asked if she gave Kevin any specific lessons, Kevin replied that he didn’t remember anything directly. He did say that he remembered his mom always encouraging his dad to take risk in investing.
Kevin also shared that his family’s front room furniture was less than desirable for a few years. “Our furniture looked like it had been on a curb somewhere with a ‘free’ sign on it. My mom wanted to get a new couch, but dad kept saying he was investing the extra money into real estate.”
What I found interesting is that Kevin didn’t recall any specific lessons during our conversation but if you listen to Kevin long enough you’ll hear comments similar to, “It’s like Dick always said, people buy with the eye” or “My dad used to say if you want to be a big tick you need to hang with big dogs.”
I’ve used many of the pieces of advice Kevin’s shared from his dad. I’ve even met with Dick a few times and he’s shared advice directly with me. It’s a trait I’ve noticed with many successful people who have earned their way up – they want to share how they did it so you can too.
Also, not all advice needs to be spoken, it can be shown. The way Dick and Leslie lived and invested early on would manifest itself later in Kevin’s own life.
Kevin didn’t have a childhood job. He did, however, help Dick with occasional tasks at his business.
“When I was younger, I would place skid signs on properties with my dad. In high school, I helped him with Filemaker, a database program. He had the original version and was learning how to use it.” Kevin and Dick now share that database started more than twenty years ago. It’s a contact list that has grown to over 25,000 people, including investors, retailers, office tenants, and more. It’s an impressive list.
Dick was also big into reading self-help books. “When I was a kid," Kevin said, "he’d pay us to read self-help books by guys like Zig Ziglar. I’m not sure how much of that stuff stuck, but I definitely read them for the money.”
As the conversation continued about early education, Kevin said his real job in high school was sports, especially football which earned him a scholarship to the University of Montana.
When I asked what his major in college was, Kevin said, “Football” and laughed. It was actually a BA in Business with a concentration in Information Systems. However, it’s clear Kevin’s main interest was on the field. He was a starting safety for the Griz throughout his junior and senior year. Although, that final year was not his best. He’d gotten a couple concussions and he felt his play had been off all that year.
Prior to the NFL Draft, Kevin’s agent advised him to sign with the Calgary Stampeders, a Canadian Football League (CFL) team.
“Who does that?” Kevin asked with a laugh. He says his confidence was shaken following the school year and his agent’s advice led him to sign with the CFL.
However, on draft day he received calls from several NFL teams. It was disheartening.
“Then I went to Canada and attended training camp. Afterwards, I was cut.”
He returned home and took a trip with his brothers to California to return one of them to college. “While we were driving, I received calls from the Phoenix Cardinals and the St. Louis Rams, both asking if I could report to camp. They asked if I was in playing shape. I don’t know if they just needed a body or what, but it was cool to get the call. I was in awesome shape, but my confidence had been shaken. I told them I wasn’t ready.”
He doesn’t dwell very long on the missed opportunity before admitting that, in the end, it was probably for the best. First, the average playing career in the NFL is a little over three years and injuries are part of the job. Second, it forced him to get a job which led him to commercial brokerage.
The First Job
“Commercial brokerage was the only thing I really knew,” Kevin said. “I’d watched my dad do it growing up so it’s what I gravitated to.”
The morning of Kevin’s first day of work started off with a meeting with Dick.
Dick looked at him and asked, “Do you have a pen?”
Kevin said, “No.”
Then he asked, “Do you have a pad of paper?”
“Then how are you going to take any orders?”
According to Kevin, Dick busted his chops that morning to set him straight. “I remember driving to the office that morning with the thought, “I hope I like this. I’m going to be doing this for the next forty years.”
Kevin went to work for one of the largest brokerage firms in Eastern Washington. “I wanted to see what there was to learn outside of what my dad had told me.”
His start in the business wasn’t gang busters. There’s a guiding principal that it takes three-five years in the commercial real estate industry before you start to make money. If you can hang in there that long, you’ll be fine the rest of your career.
“My first three years were tough,” Kevin admitted. “I grossed $25,000 annually. I was living on credit cards.”
His wife, Lindsey, was patient as Kevin grew his understanding of the brokerage business. Her income helped the couple maintain an existence.
“In my fourth year, I finally got my first big deal. I sold a building to a local architectural firm. My commission for the deal was $45,000. However, after the house took its 50% cut and then took fees out for the advertising fund and technology support, I was down to $21,000. I stared at that check. I busted my hump for that deal and got less than half of the fee.” You must realize that the taxman still hadn’t even gotten his hands on that money yet so it was going to get smaller.
Kevin credits the first ten pages of Napoleon Hill’s Think and Grow Rich to changing the way he conducted his business. “I don’t think I even read past ten pages,” he said, “and something just clicked.”
In looking back on the deal with the architectural firm, Kevin said, “I realized I needed to be buying the real estate. If I was going to work that hard on a deal, I should end up with a piece of property in the end.”
The First Deal
Kevin cold-called an owner of a 14-unit apartment building who agreed to sell. Kevin immediately brought it to another broker to discuss listing it. The other agent said, “I’ve got a buyer – me.”
Kevin saw the opportunity and asked, “Can I be part of the deal?”
“How did you have the guts to ask the question?” I asked. Kevin smiled, “The answer is always no unless you ask.”
The deal was written up and submitted to the sellers. When the property closed, Kevin owned 10% of the apartment building.
“It wasn’t a big deal, but it was a start.”
They kept the building for five years before selling. “I doubled my money in it,” Kevin said.
The Second Deal – When the Lessons Kicked In
Kevin found another off-market property. It was a NAPA Auto Parts building in north Spokane. He took the property to a different broker and said, “I know you’ll want to buy this property. However, I want to be a part of it.”
He revealed the location to the other broker and they agreed to a 25% ownership stake for Kevin. The offer was written in the other broker’s name and submitted.
However, a couple weeks prior to closing things changed. The other broker decided he wanted to purchase the building on his own. It wasn't what the agreed to and Kevin was upset.
He consulted with his dad who said, “Write up an assignment of the sale agreement into your name.”
Unfortunately, Kevin didn’t have the money to close on the property by himself. That’s when Dick Edwards gave Kevin some of the best advice that we’ve used many times over. “If you’ve got the idea, the money will come. Tie up the property.”
The next morning, Kevin presented the assignment to the other broker who relented and assigned the offer to Kevin.
He had two weeks to come up with $200,000.
As luck would have it, Kevin had just sold a building for a client who would clear a profit of $400,000, nearly twice what Kevin needed. The client expressed some interest in carrying a short-term "hard money" loan. They reached an agreement and Kevin now had his money.
He purchased the NAPA Auto Parts building on his own.
He was 26 years-old.
Where Has This Led To?
In 2011, Kevin joined his father’s firm. He’d gotten the education he needed from the other brokerage firm and it was time move on. However, his confidence was shaken again just prior to leaving and he applied for two property manager jobs.
“I should show you the letter I wrote to one company,” he said. “I told them I would be willing to work for $35,000.”
When asked if he’s had a normal, 8-5 job, Kevin shook his head. “No. Never. I’m not sure what it would be like to get paid consistently.”
As luck would have it, though, both property management companies turned him down. “I’m thankful for that every day.”
When he joined Hawkins-Edwards it took his investing and developing to the next stage.
Today, Kevin’s real estate portfolio is over twenty-two properties and still growing. Some of them have small stakes while others are substantially larger.
He recently put together a large neighborhood shopping center with Grocery Outlet, Dollar Tree, Spokane Teachers Credit Union and many more tenants. It was his vision that made that deal happen and brought those retailers to that corner. By the way, this was a deal that I passed on because I couldn't see the vision. It's one of those that I'm still shaking my head at how I missed it. I'm not alone. A lot of people in the industry missed it, but Kevin didn't.
Directly across the street, he’s put together a Maverik Fuel deal. He was out on his property the day the For Sale sign went up on the vacant property. “I called the listing agents right away and made a full price offer. I knew it was a perfect Maverik site and didn’t mess around.”
These two deals have transformed the busiest intersection in Airway Heights, west Spokane’s fastest developing area.
“Real estate is an idea business,” Kevin said. "If you can come up with ideas, you’ll make money."
Long Term Plan
Kevin recently purchased a larger, new house outside the budget he wanted. He would have been happy to stay in the home he owned with Lindsey, his wife of eight years, for many years to come. However, with their third child arriving, Lindsey wanted a new home and Kevin knew he wasn’t going to fight that battle much longer.
“That’s the partnership I need to focus on,” Kevin said. “If she’s happy, I’m happy. She’s been very patient while I’ve been investing in real estate.”
It’s clear real estate is fun for him.
“I look at real estate partnerships like a team. Sort of like football. You’ve got to have good people on the team, everyone can bring something different to the table.”
Kevin’s dad, Dick, is still involved in commercial real estate and he’s 73. He’s in it because he likes being around real estate, not for any other reason.
When asked about a long-term plan, Kevin said early retirement holds no allure. “I like what I do. I want to be in the game and I can’t do that if I quit playing.”
Kevin is one of the most positive forces I’ve been around. He’s a bottomless well of motivation and the guy to have in your corner when trying to figure out how to make a project work. Talking with him about real estate gets me amped up and ready to do the next deal.
I’ve already planted the seed for a story of how he brought the new shopping center together so keep alert. Real estate investors love to share their stories.
Do you know anyone with a similar story?
How were they taught about money differently than you?
I'd love to hear your thoughts.