The concept of full-time real estate investing was sparked for Kendra Barnes during a game of Cashflow — a board game that uses components from real estate investing to teach you how to build wealth. After that game, she bought her first investment property, quit her government job in Washington, D.C., bought more investment properties, and founded The Key Resource to help other beginning investors carve their own paths
We spoke with Kendra about how she made a profitable career out of real estate investing, what she’s learned along the way, and how the industry has been changed by COVID and a new wave of investors.
How Did You Transition From a 9-to-5 Job to a Full-Time Real Estate Investor?
“We never imagined investing in real estate,” recalls Barnes, who owned a house in Washington, D.C. with her husband and worked as an international economist for the U.S. government. “It wasn’t that we didn’t think we could do it, but we had literally never thought about it.”
The board game Cashflow opened up the idea of passive income for Barnes — and made her realize working a nine-to-five job until retirement age wasn’t the only option. She and her husband played the game on a Saturday night, and by Monday, they were already looking at investment properties.
Because they didn’t have enough money for the down payment on the D.C. property they wanted, they took a loan out from their retirement funds (Barnes recommends consulting a financial advisor before taking similar steps).
Once Barnes started seeing a return on their first investment property, she and her husband were eager to buy another — which they did through house hacking, or living in one unit of the multi-family property they had purchased while renting out the other three units.
“We started using money from one rental to fund the next,” said Barnes. “People ask me all the time how many rental properties they need to retire or be financially free, but there is no magic number. It depends on where you’re at and the financial goals of each individual investor.”
Pro Tip: There are different types of real estate investments, so it’s important to determine which is best for you.
What Were the Biggest Challenges You Faced When Starting Out in Real Estate?
“Lack of knowledge, followed by lack of funding,” said Barnes, which was part of the reason she wanted to bridge the gap in knowledge and share what she had learned (and the mistakes she made) in her own investing journey.
“One of my friends jokingly said, ‘Did you have to rob a bank?’” Barnes recalls after sharing the news of her newly-purchased four-unit building on Facebook. “I realized there was a gap in information. People wanted to do this, but they really didn’t understand how to start.”
Barnes notes that buy-in from family and friends can also be a major obstacle, especially if investing in real estate isn’t common within a social circle.
“In the Black community, conversations about wealth, in my mind, were lacking,” said Barnes. “We weren’t talking about it in our families, we weren’t talking about it among our friend groups, and I know people often need to see themselves represented in a story. So I started the Key Resource to bridge that gap and be the representation that I wish I had when I started.”
Have You Seen a Shift in the Kind of Investors That Are Getting Into Real Estate?
“One hundred percent,” said Barnes. “I would say 95% of my students and coaching clients are single Black women. There’s a misconception that you have to be wealthy first, or that you can’t do it on a single income, but that’s not true.”
In Barnes’ new book, “Acres,” she highlights the stories of 25 Black investors that built their wealth from the ground up — some of them overcoming homelessness or six-figure debt to build million-dollar portfolios.
“The face of real estate investing is changing and people are realizing that wealth is not a prerequisite, but a byproduct of investing.”
How Do You Think the Industry Has Changed From COVID?
Barnes has seen a mixed bag of reactions to real estate investing brought on by the pandemic. On one hand, people have realized the importance of multiple streams of income when traditional jobs can be taken away at the moment’s notice. On the other, she acknowledges the fear many investors have experienced over tenants not paying rent.
The pandemic has also helped widen the opportunity for long-distance real estate investing. “People are jumping on the remote investing train because they realize that if they live in a high cost of living area, they get a bigger bang for their buck shopping in the lower cost of living areas,” Barnes said.
But overall, Barnes thinks COVID has taught investors to better prepare for all outcomes and be aware that things can quickly change.
“People often find a property and think of one use for it, and those are the only numbers they run,” said Barnes. “But what happens if it doesn’t work out? What happens if something changes, like the county puts restrictions on short-term rentals? When you’re identifying a property, you have to make sure that you’re putting yourself in a position to pivot and still be profitable.”
How Can Real Estate Investors Connect and Learn From One Another?
Barnes’ favorite networking tool has been Instagram, where she connected with almost every investor featured in “Acres” and has been sharing stories of other successful real estate investors through her account for years.
“I’ve met some of my lifelong friends through Instagram, just for the love of investing,” she said.
She also points to Facebook groups, local real estate investing meetups, and networking through social media, with an emphasis on listening to other investor stories and learning from their successes.
“My story is cool, it’s unique, but there’s so many other people out there doing things differently than me that can help someone in a different way.”