From W-2 Engineer to Full-Time Investor: Adjusting After Interest-Rate Spikes with Lane Kawaoka

Lane Kawaoka’s Journey: From Engineer to Syndicator

Lane Kawaoka began investing in real estate while working full-time as a civil engineer. Over time, he transitioned into full-time investing and found significant success in the syndication space. However, when interest rates surged and lending tightened, he had to make critical adjustments to his strategy.

Faced with higher borrowing costs, Lane paused new acquisitions, revisited every assumption, and pivoted from quick cosmetic rehabs to ground-up multifamily development 🏗️. By building units at approximately $150K and targeting exit values around $200K–$250K, he now benefits from wider margins and stronger downside protection.

🔍 Topics Covered

• Post-2008 insights: Lane noticed rental cash flow appeared more stable than stocks, motivating his first investment.
• Engineering mindset: He relied on spreadsheets, reserves, and strict underwriting assumptions to guide decisions.
• Rate-driven pivot: A 20–30% market price reset—triggered by rising rates—made old underwriting models obsolete, forcing him to adapt.

🚀 How to Scale Your Business While Working Full-Time

• Early tactics: Morning underwriting sessions, lender calls during lunch, and weekend property tours.
• Market shift: Lending tightened, with most lenders now topping out at 60% LTV, requiring investors to bring more equity.
• Positive signal: Deals with DSCR ≈ 2× are re-emerging, signaling healthier spreads and safer investments.

⚖️ Balancing Life, Family, a W-2 Job, and Real Estate

• Delegated day-to-day operations to property managers and virtual assistants, protecting family time.
• Batched site visits on weekends and scheduled business calls during work breaks.
• Built a 4–7 year investment pipeline to ensure consistent cash flow, even through market volatility.

🔑 Current Business Focus (2025): Strategic Growth

• Conservative underwriting: Accounts for increased debt costs and reduced leverage.
• Ground-up development: New construction provides greater control and longer asset life compared to 1970s rehabs.
• Selective diversification: Exploring mobile home parks, self-storage, and hotel conversions to balance portfolio risk.

⭐ Key Takeaways for Busy Professionals 💼

• Track DSCR opportunities: A 2× debt service coverage ratio isn’t required, but when you find it, it offers excellent protection.
• Expect lower leverage: In inflationary periods, plan for 60% LTV and secure extra equity in advance.
• Don’t force thin deals: If the numbers don’t work, pause. Waiting is better than locking into a weak investment.
• Think long term: Build a 4–7 year pipeline so one downturn doesn’t derail your strategy.
• Quit your job last, not first: Secure consistent cash flow before giving up a steady paycheck ⏳.

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