Outrunning Failures

From Cubicles to Real Estate with Kit Mixon

• Vish Muni • Episode 31

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Today’s guest is Kit Mixon.

Kit has 13 years of experience as a Cost Analyst in the oil and gas industry and on US military contracts, where he specialized in employee resourcing, cost forecasting, variance analysis, and management reporting.

In 2016, he began investing in real estate with single-family homes for flipping and rental income.

A pivotal moment came when he discovered a multi-family property deal, leading him to recognize the potential for greater investment growth.

This prompted a transition to multi-family real estate in October 2018, culminating in the establishment of Maximus-REI, a company dedicated to helping investors achieve financial independence through multi-family investments.

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Creator/Main Host: Vish Muni

Show Advisor/Editing: DBT Marketing

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>> Vish:

Welcome to another episode of Outrunning Failures. today we have a kit mix in one of my friends from Houston. me and Kit belong to same mastermind group that is a, commercial real estate investing mastermind. And we do have a lot of common friends who are multifamily apartment investors. And with that being said, allow me to welcome, Kit Mixon from Houston. Kit, could you please tell us a little more about your background and how you got started in real estate and what is your asset class?

>> Kit Mixon:

Yeah, definitely. So thanks for having me on today. But I just got started in real Estate in 2016 with single family homes. I had been working as a cost specialist and government defense contracts, oil and gas, wind technology. And I really started disliking working in a cube farm and working in corporate America. And I ended up getting laid off my job. As I was working in oil and gas, I got laid off and it was my dad who came to me and asked if I'd be interested in doing real estate. it was one of those meetups for single family flips and rentals. I was extremely hesitant because I thought it was going to be some kind of gimmicky thing and really wasn't too interested. But I agreed to go. And after that I said hey, I think we can do this. A few months later we bought our first house and flipped it. And I thought, hey, this is something we can, we can definitely do. I started working again back as a cost specialist, ended up getting another job and said okay, I can do both at the same time. That was a little bit more difficult when I started being transferred to places like the Middle east, and having to work over there then trying to buy real estate here in the United States was, was pretty hard. but when I came back, I had gotten, seen some things about multifamily and we, we and he had, my dad had seen it as well. And so we both agreed that ah, we wanted to go to a multifamily real estate boot camp. We went to it, we thought hey, we can do this as well. So Em and I teamed up as a business partners and created Maximus Rei, to start acquiring multifamily properties. We started that in the summer of 2019. a little unfortunate for us right before COVID started. but after about three years of trying to find a property and buy one, we were finally able to buy our first property in September of 2022. And we've been very active and Hands on with, managing it for the past two years.

>> Vish:

Well, that's wonderful, Kit. So, I mean, it's not too many people I come across and not too many investors where you and your dad are partners in the deal and that your dad was instrumental in getting you into real estate.

>> Kit Mixon:

Yeah.

>> Vish:

And, it is good to know that you guys did a deal in 2022. most of us didn't even see this coming to Covid in 2020. And, like you, I was all, excited and all fired up to do a lot of projects in 2020. And little did I know that, something else is on autopilot and something. Something else took over.

>> Kit Mixon:

Yeah, yeah, yeah. So, I mean, we got started about six months beforehand. I, do a lot of the underwriting. Right. And so I got about six months of good underwriting practice in before, you know, Quiver started. We kind of stopped. So I know other people were still getting deals, but we kind of shut down for a little while.

>> Vish:

Right. So tell us. So is that your favorite? Is that your asset class? Go to asset class. Multifamily.

>> Kit Mixon:

Yeah. So multifamily right now. you know, but for the past six months or so, I've been looking into some other things. I've been looking at storage units, flex, workspace, rv, parks. so trying to develop the education without having to go out and pay for it. Ah, for those three, learning, quite a bit about storage units. you know, there's some things about that that I like and don't like. one of the main things I'm really interested in right now, is RV parks. I'm kind of waiting a little bit for multifamily to see what happens here over the next, you know, six months to a year. I'm hoping that there's a price reset, for a lot of these properties that, shot up in value, and I think they're overvalued right now. So multifamily is the main thing I'm interested in, but, I'm interested in RV parks, too.

>> Vish:

Well, that's interesting. There's absolutely nothing wrong in doing other asset classes. That is your primary focus being multifamily. Now since, 2016, I know you and your dad have done multiple deals, and, can you, can you share one of your projects which. Where you had a challenging experience, a couple of setbacks, which has made you a better investor?

>> Kit Mixon:

I would say every project I've worked on has had setbacks. You know, I think, if anyone who thinks everything's going to go to plan in real estate, you're dreaming. Nothing, nothing goes to plan. I mean, but a lot of stuff does work out. A lot of stuff does go to plan, but there's always a setback. I would say, you know what one of the main things was, is how hard it was for us to, to raise money for our first multifamily deal. you know, when you go into some of these educations, they make it sound so easy. but our first deal was in a tertiary market and that's, it might be the first and last time I ever do that. but being in a tertiary market raised a lot of you know, hurdles for us to raise money for our deal. we've also had, you know, some struggles and things with property management. we, you know, now we're self managing our multifamily property just because of the struggles that we face with third party property management companies.

>> Vish:

Well that's interesting because like what you're telling every project is a challenging project in itself, but I've had my set of failures as well. But we all go with a certain plan. But the finish is something else. But what really happens in between, we don't have any control over it. Like in your case, you went to the good intentions of outsourcing the property management, but little did you know that there's a big disconnect between what people talk and what people do and with that given. So were you an accidental property manager or have you done any property management in the past?

>> Kit Mixon:

Oh, very little property management with our single family homes that we have now, you know, the couple of rentals and I mean it's very little as in, you know, we've had good tenants where we haven't had to go out chase money, chase rent and you know, fixes have been very small. it's a lot different when you go from one single family to you know, 70, 80 units that you got to m manage. That's, that's a huge difference.

>> Vish:

Right?

>> Kit Mixon:

Even, even the tenant class is completely different here in a, you know, in a tertiary market where it's more blue collar. and the experience before that was more, you know, the Houston area and more nicer suburban areas where it was more white collar. So just the difference in tenant base in dealing with that has also been a learning curve.

>> Vish:

Well, that's a lot of learning experience. I'm sure, this experience, what you're undergoing Right now will not go waste because you're going to come way ahead of a lot of people who only don't manage self manage, who don't manage properties. Like, like me. I want to be an investor. I don't want to manage properties.

>> Kit Mixon:

Neither do I. But you have to do.

>> Vish:

But if it comes to a situation either, you need to save the project, you need to take care of your investors money. But I would do it. But that's not my first priority.

>> Kit Mixon:

That's pretty much what happened with us. It's not my first right thing. But you know, sometimes you have to do what has to be done.

>> Vish:

Well, I'm sorry you guys got into that situation but what is your plan? How do you apply that experience? what you had going forward. If you were to do another multifamily deal, how would you qualify that property manager? What are the steps would you take to mitigate your risk?

>> Kit Mixon:

Well, first I'd have to decide if I actually want to do a third party property management company again. you know, it'd be tempting to start our own property management company but I mean, so I've been here, you know, I thought one of my properties now on site, living and managing for the past two and a half months. I don't think I'm an expert yet but I'm getting pretty close and just by being hands on, thrown in the deep end, you know, figure it out. I think that the experience that we've gained the knowledge what we know what to look for in a property manager and especially property management company. I know a lot of the things now that I didn't know before not managing the property.

>> Vish:

All right, so that's a, that's a new skill you are picking up on the way and do you think that is a super power?

>> Kit Mixon:

Oh yes, very much so. I mean it's, it's, it's, it's been, I've actually enjoyed it so I thought I would hate it but I've actually really been enjoying it and yeah, it's definitely a superpower, especially if you're in the multi family investing world.

>> Vish:

But. Well, is your, is your partner on the same page with you or your partner wants to bail?

>> Kit Mixon:

No, so my dad is, he's at home. So it's just me here. one of our other partners on the project is here as well. So it's me and him are the ones who are here doing the day to day management. you know, and again being in A tertiary market. It's really hard to find help right now, especially when it comes to like maintenance people, plumbers, electricians. It's, it's, it's hard to find good work right now. So it's, it's me and him working in the office during the day and doing maintenance requested months.

>> Vish:

Well, I'm I'm with you on that one because we have a property between, between Austin and Dallas and it's a tertiary market. I'm not going to say the market name but I'm with you on this. Finding challenges in terms of finding the right tradesmen. given a passion for real estate, we would do real estate all day long because we don't think it's a job and we don't look at the watch because we feel time goes by really fast when we are doing what we enjoy. But at the same time we all need to take a break. So what is that one thing you do every day where you don't need any motivation, inspiration other than real estate.

>> Kit Mixon:

sleep motivation for that. But you know, when I worked my corporate job and having to work 10 hours a day, it, it drained me. but there's times here when I'm working 12 to 15 hours a day and I don't feel drained. so actually you know the, I enjoy this a lot and you know, working out the corporate job, I was sitting on my b*** all day in a cube here you're actually up moving around, doing things, taking care of. It's a little bit of everything. It's hands on work, it's, it's customer relations, it's, it's a little bit of everything. But you know by the end of the day though it's nice just be able to sit back. We do close on the, on the weekend so I do get some time on the weekends to, to go home and watch football.

>> Vish:

Oh, okay. So, so if, if you're not doing real estate, you would be watching football.

>> Kit Mixon:

During this, during the fall and winter. Yeah, we'll see what happens in the spring. I wasn't having to self manage in the spring in the summer. But hopefully we're not going that long. But yeah, I mean just, just to sit back and relax, you know, find a good movie, find some good college football or NFL games. And I like to you know, smoke, smoke pork and smoke beef on my smoker, back home. So that's, that's why I like.

>> Vish:

Well just just smoking pork or beef is not good. Good enough. So it has to go along with some cold beers also, right?

>> Kit Mixon:

Sometimes.

>> Vish:

Sometimes.

>> Kit Mixon:

But no, when you smoke meat correctly, that's all you need.

>> Vish:

That's all you need. So are you an expert at that?

>> Kit Mixon:

I'm pretty good at pork. pork, pork butts and pork ribs. I'm pretty good at those. beef. I'm still working there. It just takes a little bit different.

>> Vish:

So do you have any secret sauce?

>> Kit Mixon:

Yeah, I mean, I love, so for my pork, I use a heavy brown sugar rub. So I use brown sugar and a few other seasonings and apple, cider vinegar as my. As a, as a way to keep it moist through the smoking process. And that's my secret, is the brown sugar and the apple cider vinegar.

>> Vish:

So how long do you need to marinate them?

>> Kit Mixon:

Well, I usually don't marinate. I put on a dry rub and put it in there. And also like to use some maple, bourbon, wood chips. Oh, well, like you said, maple, bourbon, wood, and then, brown sugar. And then there's about five other spices that I use my rub, but just rub it down. Then I put it straight out the smoker.

>> Vish:

Oh, that. Boy, that's a good recipe. It's making me hungry.

>> Kit Mixon:

Oh, yeah. Well, next time I smoke some, I'll give you some.

>> Vish:

Right, okay. That sounds good then. That sounds good. So are you working on any of the projects right now or. No.

>> Kit Mixon:

You know, I actually submitted an LOI for a project last week. we'll see how that goes. I'm not, not too confident that, my offer is going to be accepted. again, it's, it's in a tertiary market, bigger than where I am right now. but I put the offer to where I know we're not going to be losing money. Well, I know it's going to be cash flowing. I know I'm going to be able to pay my investors their returns. And I know that if, even if our occupancy drops down to 70%, still not losing money.

>> Vish:

Right.

>> Kit Mixon:

so I'm not too confident that my offer is going to be accepted just knowing what the seller is wanting and knowing that there's still people out there who are paying more than what they should. So. But other than that, you know, I'm also getting more educated on RV parks. So current projects, what loi out there and education.

>> Vish:

Right. Okay, that's good. So you got into real estate because your dad, invited you to check out the single family investing. And, then if only your dad had not invited you to real estate. What do you think you would have been doing? Do you think you would have gone back to W2 or.

>> Kit Mixon:

yeah, I've gone back to the job I hated. and I didn't realize I hated it until I got into real estate, and. But more than likely, I'd be sitting in a cube underneath fluorescent lights, getting excited to wear jeans on Friday. That's what it was. I couldn't believe it. I was like you. The movie Office Space, I often laugh at it. You know, it came out in 1999, right when I was graduating high school. And, I thought it was just a comedy. I didn't realize it was actually a documentary, so.

>> Vish:

Well, I still remember watching that movie in Office.

>> Kit Mixon:

Yeah, I laugh about it now, but, I mean, that's what the Office like, was like to me. I didn't realize how much I hated it until I got out of it.

>> Vish:

Like you, I'm an outdoor person. I could, as much as I love technology, but, I can't be by the computer all day long. I need to step out. I need to talk to real people. I need to do the real things.

>> Kit Mixon:

Yeah, I've had people tell me. I was like, man, you're looking. You're not as pale as you used to be. I was like, yeah, I wear shorts to work and T shirts, and I'm outside probably about, you know, three to four hours a day now. So, yeah, I feel much better. Yeah.

>> Vish:

So that's good then. So what is it for real estate? What are you looking to achieve in real estate two years from now or one year from now? You want to be at the same situation or you want to add more properties to your portfolio?

>> Kit Mixon:

Definitely would add more properties. I would hope and like to be more of an lp, more of someone who is. Maybe can sponsor properties, who can sit back and let someone else do the, leg work that I'm doing? right. That'd be the ultimate goal, is just be able to be more of the person who's overseeing it and giving more guidance as to the person who's, like me now, who wants to learn and who wants to do the grunt work.

>> Vish:

Right.

>> Kit Mixon:

right now I'm enjoying doing the groundwork, but I know there's gonna be a time where I'm gonna prefer, being able to be the sponsor, be able to be the lp, be able to give the guidance.

>> Vish:

So. So do you think, with your experience in investing and now managing properties and, but at some point, you would like to have your own property management company and, have people work for you.

>> Kit Mixon:

I don't know, maybe.

>> Vish:

Maybe another way to scale your business.

>> Kit Mixon:

So it is, you know, when we first got started, there was, there was property management companies that would pitch themselves to us by saying they got started as a property management company because they were investors and got tired of the way third property property managers were working. but then they ended up being just like the other third property property management companies. So, I don't know. you know, it'd be nice. It'd be nice to do that. It would be. but right now it's not really something I'm planning towards. But the way things are going, it might be just a natural progression. And that does happen.

>> Vish:

All right, so that's good. So, so what do what, what is your financial. What is your goal in terms of real estate? Is it the freedom or is it the money or time or, or is it. You want to take a step back? You want to do something else?

>> Kit Mixon:

No, it's the freedom. I want to be able to get, you know, 100 acres in the Texas hill country and, and sit back and watch the sunrise and set, set in the Texas hill country. That's the dream. Get some cows out there, make some pigs. A little farm going. that'd be the ultimate goal. I hope that I, I never stop. I hope that, you know, to the day that I die, that I'm still involved. I don't want to sit, back and do nothing. I was unemployed for a while where I did nothing, and that was, that was worse than working in a corporate job. so I hope I'm always involved with it. You know, I'd like to keep on expanding and find different asset classes, you know, the. Be part of a little bit of everything.

>> Vish:

Well, if you really enjoy or you're passionate about something, it's really not work. It's just, I mean, it doesn't tire you out. It sort of charges you. It's like your batteries, right? It's out of fully charged even after 12 hours, 12 hour days, you're not great.

>> Kit Mixon:

I no longer have the Sunday scaries. You know, when you have the corporate job, it'd be Sunday afternoon. It's like, oh, my gosh, I gotta go to work in 12 hours.

>> Vish:

You gotta get back.

>> Kit Mixon:

I gotta get back. Oh, my gosh, how am I gonna do this? And now it's just like, all right, I'm going to the properties, let's do some work.

>> Vish:

I'm like, you and suddenly I'll be thinking, I

just started the day at 9:00 and it's already 5:

00pm where did the day go by?

>> Kit Mixon:

Yeah.

>> Vish:

So, so that's good, kid. So, so what is your involvement of your dad in your business right now? Does he, Is he hands on or is he taking a step back and making you do all the work, or.

>> Kit Mixon:

No, no, he's. He's been hands on. It was, it was actually funny the other day. We had a laugh. He was like, hey, how come I'm not, Am I not invited to the, the weekly call anymore? And I was like, no, you are. You have the invite. He was like, I haven't seen it. And I was like, here it is, here's your name on it. And he was like, oh, I must have missed it. I thought y'all didn't want me on the call anymore. And I was like, you know, well, we still want you there. he's good at, you know, driving me to say, you know, hey, we need to, you know, or. How's this property doing? So I'm the underwriter. so when a property comes across to us, if I don't have it underwritten and have my feedback to him within 24 hours, he's. He's on me to remind me, how's this property look? How is our offer going to be? When's the offer due? so he's probably been the one that's been behind you saying, you know, I guess, you know, kind of behind me cracking the whip, making sure that I'm doing my job right.

>> Vish:

Yeah. Okay, that's, that's interesting. And then, so you, you live in Houston, right?

>> Kit Mixon:

Yeah.

>> Vish:

You, you, where did you do a schooling in, ah, Houston?

>> Kit Mixon:

I mean, you know, that's, that's, that's where everything else from. So, Right. I grew up in Sugarland, which is right outside of Houston. And, I did some junior college and I went to U of H, University of Houston for a little while. but, you know, it wasn't for me. I didn't finish. I didn't graduate. But yet here I am working in real estate as if I did.

>> Vish:

Well, you. You find your true passion, what you, what you like to do?

>> Kit Mixon:

Oh, yeah.

>> Vish:

And that's.

>> Kit Mixon:

It took a while to do that. It took a while. You know, I thought what I was doing in corporate America was what I was going to do for the rest of my life. but I'm glad I'm out of that.

>> Vish:

Well, at least you found Your passion. Pretty early because most of us have spent 10 to 20 years doing something, which, And then after 20 years, we realized, no, I could be doing something else. I think I don't like this anymore. But 20 years has gone by. I'm not going to get that time anymore. But in your case, at least I'm glad you quickly realized what your true passion and what is it you enjoy doing without getting stressed out.

>> Kit Mixon:

And, it was kind of by accident. You know, I had no idea that I would love real estate this much, but here I am.

>> Vish:

Yeah, that's a great kit. And then. So do you belong to any mastermind groups or.

>> Kit Mixon:

not currently. there's, I guess you could call semester is me, my dad and a couple other guys who have got to know each other over the past, two years. And we have a weekly call with each other and we discuss, things that kind of, you know, the stuff storage and RV parks. And we brainstorm and try to figure out what we're. What we're looking at and where we think we should be going.

>> Vish:

Right, so that's good then.

>> Kit Mixon:

So.

>> Vish:

So you have a team, group of people or a team of people to invest alongside?

>> Kit Mixon:

Yes. Yeah. And we've all. We've been. Been working hard and again, I'm kind of the underwriter for the group. So if, I find something I like, I send it over to everybody and we discuss it. just, you know, unfortunately that not much stuff is pinning out right now.

>> Vish:

So right now you think that not a lot of deals are not penciling.

>> Kit Mixon:

Yeah, yeah. They're just not meeting the right criteria that we want. It's one of the reasons why we've kind of started looking more at storage units. And then, you know, we started looking really hard storage units. And then the kind of thing that kind of threw off all that a little bit was, you know, if public storage moves in right next door to you, you're done. And, it was one of the things that kind of looked at. Then we started looking at Flex Spaces and then, RV parks. So right now it's just multifamily is A lot of the deals that I'm getting are not penciling out at all. They're not even close, especially when you're wanting to do a syndication. All right.

>> Vish:

I think that Publix is like, where is like, Walmart. And Walmart comes to your neighborhood, it'll crush businesses.

>> Kit Mixon:

They can charge a dollar a month, you know, for your first month, $1.

>> Vish:

And you can't do that getting paid. You might grow broken.

>> Kit Mixon:

Yeah, yeah, that's one of the other things too is that we don't want to buy a place just so we have a job. We want to be owners, we want to be investors. We don't want to be, we don't want to buy a place just to have a job.

>> Vish:

I mean, as an investor, you want a cash flow at the end of the day, I mean, it is okay upfront, you're doing some value add, but, sooner or later it has to pay you back.

>> Kit Mixon:

Yeah. And a job is not going to do that. That's why you need an investment.

>> Vish:

Right.

>> Kit Mixon:

That's why I look at it.

>> Vish:

So that's good. That's good, kid. So what is in it for, ah, going forward now. Going forward, you just continue what you're doing, plugging away and yeah, so I.

>> Kit Mixon:

Mean that's, that's really the plan is just, just, just to keep on looking. Hopefully, hopefully things start getting a little bit better with, some of the deals that are out there. you know, it's just keep on, keep on going and just, just can't stop. You can't stop doing it. It's got to keep going. And

>> Vish:

Yeah, but at this point in time, are you working on any new projects or.

>> Kit Mixon:

No, like I said, you know, I submitted an LOI last week for a multifamily project. other than that, just I'm educated, educating myself now in RV parks. So looking in like, you know, in between Houston, San Antonio, Austin, that kind of like little triangle area, trying to find the right, you know, deal for us, if it's RV parks, if it's flex space, if it's storage units, or if it's multifamily. All right, so.

>> Vish:

So do you have any background in, ground up development or just.

>> Kit Mixon:

No, no, no, no, no. History development. I mean it's always one of those things that's always in the back of my mind saying, hey, it'd be kind of cool to do this.

>> Vish:

Right.

>> Kit Mixon:

But I think the, not now, maybe later.

>> Vish:

Right. One day.

>> Kit Mixon:

One day. You know, I think I could GC it. but when it comes to actually figuring it out, saying this is a good spot to develop something, I would rather go into it right now as an investor knowing that there's an existing one that has done well and either we can continue it, continue making it go well, or we can make it better as opposed to trying to create something saying, hey, I can go here and build this and Then not be a good idea. Right.

>> Vish:

So, Kit, given your, experience in, investing and, becoming an accidental property manager, what is your, advice for someone getting started in multifamily apartment complexes?

>> Kit Mixon:

education. Know what you're doing. Learn how to underwrite and partner with people that you want to work with over the next three to five years.

>> Vish:

Okay, next. Next three to five years or 35 years.

>> Kit Mixon:

I mean, I mean, each project depends on how long your hold is. I mean, if you. If you can survive 35 years working with the same people, great. I do. I look at it by project. You know, things happen, things change, people get older, people move. But I look at it by each project and just make sure that you know that there's a whole lot of advice you could give to somebody. But knowing how to underwrite, understanding what the underwriting means, knowing how, if you're doing a syndication, have. Know how you're going to pay your investors back, and, yeah, make sure you partner with people that you. That you like, that you. That you want to work with.

>> Vish:

So do you think, communication and credibility is, important in doing a deal? You do a deal?

>> Kit Mixon:

Oh, yeah, yeah. You gotta be in constant communication. Right.

>> Vish:

all right, so that's great, Kit. It was, great having you on the podcast. And once again, thank you for joining us on, outrunning Failures. And, let's all not forget that, setbacks are only opportunities in disguise.

>> Kit Mixon:

Oh, definitely.

>> Vish:

Let's keep pushing forward. Thank you, thank you, thank you.