RG 096 – Successful Passive Investing for Working Professionals with Lane Kawaoka

About Lane

  • Lane graduated as a civil engineer
  • Lane grew up in Maui
  • Lane is the co-founder and co-owner of MPFE investments

Nuts and Bolts

Lane is a licensed civil engineer and he does this as his day job, but at the same time he’s also a serial real estate entrepreneur. Lane is the co-founder and co-owner of MPFE investments where they invest in class B and C value-add apartments buildings. He is also the manager of Simple Passive Cash Flow and the host of podcast Simple Passive Cash Flow. He made his first dollar picking pineapples on Maui at $7 an hour, which taught him to work hard. In his first job out of engineering school he was working hard, long hours, which caused his health to suffer ad he realized he needed to do something else. The whole time he was working in the job he hated he was saving money to buy a property but once he had bought a place he realized he was never in the country long enough to enjoy it. He rented out his property and made $2200/month and the mortgage was $1600/month. This is the moment where he realized he could make good easy money through real estate.

His first property had been in Seattle but he quickly realized that he couldn’t continue to buy in tier one markets and transitioned into mid-west markets. He has bought in Indianapolis, Birmingham and Atlanta and he chose them because they have strong economies to support a rental market. At first he only did cash flow investing to raise enough capital to become a fix and flip investor and have more freedom to invest in other markets. He was being approached by friends and strangers asking how he got into real estate, so he decided to become a thought leader. The teaching material available in the market wasn’t very good so he set up a blog and a podcast to teach others how to get into real estate.

Lane has three rules of investing; firstly he has to invest in a hard asset rather then intangible stocks and bonds. Secondly the asset has to have a productive income, and thirdly it has to have good lending ability. He has also developed his own strategy for investing starting with creating a base cashflow rather than going straight in investing in 401K and stock markets. Once you have a amassed some capital and gained experience it’s time to go after the riskier investments. Also he believes you should only follow one investment strategy at a time, be it fix and flip or hotel investment for example. Before you start investing Lane recommends you look at which of the following three components you already have and this can dictate how you start investing; time, money and knowledge.

Lane has grown his portfolio from 11 units to 434 in one year by partnering on large deals. He’s also recently got into multifamily investing with a partner and joined a partner mentoring group. He prefers to use agency debt because they lend on single family homes and you can get up to 10 loans in your name and a further 10 in a spouses name. When he moved into multifamily investing he used agency debt again because if something happened to the property no one in the syndication is liable for the cash call, the agency would take care of it.

Top tips

  • Most important habit – The tips from “Getting things done” by Dave Allen
  • Most influential person – Many different people from podcasts
  • Most important tool – Calendly
  • Most important failure – He lost $25,000 on a Roth IRA investment
  • Contact – simplepassivecashflow.com

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