How to purchase your first hotel while working a full-time job | Alex Kang E7

In this episode, we dive deep into the inspiring journey of Alex Kang, who purchased his first boutique hotel with no prior experience while maintaining a full-time W2 job.
Alex shares his step-by-step process, from leveraging his skills from his MBA and software tech job, to joining a mastermind group that accelerated his learning.
He emphasizes the importance of mentorship, partnership, and leveraging his W2 network to raise funds for his $9 million hotel project.
Kang provides practical advice on time management, setting clear goals, disciplined prospecting, and staying motivated through challenges.
Whether you're juggling a full-time job or looking to dive into hotel investments, this episode is packed with invaluable nuggets for aspiring hotel investors.

About Alex Kang:

Alex Kang’s journey is a testament to perseverance and adaptability. After immigrating to Vancouver, Canada, as a teenager, Alex pursued a business education in Montreal and earned his CPA while working for a Big 4 accounting firm. Seeking bigger opportunities, he moved to Los Angeles to earn his MBA, which opened doors to management consulting and eventually a career in the tech industry.

Alongside his professional journey, Alex developed a passion for real estate, starting with an ADU conversion at his primary residence and expanding to Airbnb properties in San Diego. Most recently, he co-acquired a boutique hotel and is actively involved in its rebrand and stabilization. Alex’s current pursuits span entrepreneurship, fitness franchising, small business acquisitions, and continued growth in the hospitality space.

Connect with Alex Kang:
instagram: @s.alex.kang
https://www.primeridgeinvestment.com/

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Transcript

Michael Russell 0:00

Do you have the dream of owning a boutique, hotel, or hospitality asset, but feel it's nearly impossible to do while working a full-time job? Our guest today, Alex King, will demonstrate how he was able to purchase a nine million dollar project with zero prior experience investing in hotels. Through strategic partnerships, acquiring the right mentorship, and leveraging the financial resources of his professional network, Alex proves not only is it possible to purchase a hotel while still working a W-2 job, but by following the blueprint outlined in this episode, it's entirely probable. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate.

Speaker 3 0:52

Get in the game.

Michael Russell 1:12

Thanks for having me, Michael and Nate. Yeah. Yeah, we're we're stoked to have you, man. So what we want to do, we want to start right off with a great question, which I think is really relevant to a lot of our listeners. So here goes it. Um, we want to know how the heck were you able to purchase your first hotel with relatively zero experience while still working a full-time job?

Alex Kang 1:40

Yeah, yeah. That's a that's a question I've been getting relatively often, since I did buy my first hotel six, seven months ago. So just to give you a little bit more background, I do have my WTO, work in the world of software tech space. Um you know, strategy and partnership as my day-to-day day, you know, that's my day job. And you know, when I got my MBA, I was told that in order for you to make the career switch, you can either switch industry or you can switch function, but switching both would be very challenging, right? So kind of keeping that in mind, you know, running and buying a hotel, it felt like I was new to the industry. You know, I had some experience in real estate, but relatively basic. Um, but I felt pretty good about all the functional areas that I had worked in in my, you know, work W-2 and other areas of my life, uh, where, you know, whether it be acquisitions, financial modeling, you know, doing the strategy and planning, managing folks, and so on and so forth. So I felt like if I can work on filling the gap for industry real estate hotel perspective, you know, I felt reasonably confident that I could, you know, make stuff happen. Right. So that was just kind of a dream that I had one day. And I was like, you know, how do I fill the gap? Right. How do I actually fill the industry there? Like I can probably study and do it myself, or you know, that might have taken three, four, five years, who knows? Um, or I can accelerate it through others who've done it in the past, right? And then I, you know, met with the uh other folks who are trying to do the same thing, joined the same mastermind group where we'd met and might go in late. Um, and that really accelerated my learning, right? So my first couple months, I was just all about, you know, just learning the lingo, you know, thinking about how to talk to the right broker, how to use the right language, you know, putting together my personal financial statements and resumes and you know, all the kind of stuff that's really required to learn about how to have the conversation with the broker all the way to uh you know having the right strategy in terms of prospecting looking for D alls.

Nathan St Cyr 3:49

So I'm gonna call that Alex. I'm gonna call a timeout because you dropped some absolute frickin' nuggets that I want to go just go back to for a second, and then we'll we'll keep going. Because dude, I mean you just like you just breezed over them like no, okay, but they were they're absolute freaking nuggets. And I want to start with what you what you said that you were you were bringing to the table. There was this new concept of all right, I'm gonna go and purchase this hotel that maybe that industry I don't have experience in. I got an MBA, I've I've got all these. But what you just said was I brought to the table through my W-2 and through my life experience, I have skill. Like I come to the table bringing skill. And I think that that's I think people miss this. They they go in and they're like, okay, I have to know everything about everything to do this thing, but but the reality is if somebody's life experience, if they're W-2, if what they've learned and what they've done, that in doing that, they're bringing to the table something of value. And you knew that coming in. You're like, well, look, I've I've got these skills, I can build teams, I've got lead, I can do these different things, and I can bring that to the table, that value to the table. So, number one, I think that that's really important to just call that time out and say, look, that's if you're in a W-2 right now and you're thinking, man, what the heck? I gotta learn everything about everything to do this. That's I I just believe that that's the wrong mindset. And I think the mindset that you just shared with us is really the important one. And that's, hey, what is it that what do I bring to the table? What what am I good at? What are my strengths? Because if I and then we can get to this second part, but uh which is surrounding yourself with people that have done it before and compressing time, right? Hey, I could figure out how to do this whole thing three to four, you know, I could take the next three to five years to figure this thing out. Or and then you put drop, you just like kind of nonchalantly drop the second nugget, which was I'm gonna surround mentorship. Yeah, if I if I go surround myself with people that have done it before and are trying to do it themselves and have mentorship, have a blueprint, that that's where I want to go put myself, and then that's what you did. You went and said, I've got skill, number one, through my W-2, and number two, I'm gonna go put myself in the room with people that are doing it, and that people that have done it before. Yeah, 100%.

Michael Russell 6:41

Yeah, I want I want to dumb tail on that because you nailed it. Yes, man. Alex, you were just spitting this stuff out like, like, oh yeah, this is just normal, right? Like, but I think that the one of them self-reflection, because you're working this W-2 job, you have built up these incredible skill sets, and it just so happens that you are applying them to your full-time job, to your employment. Your employer is getting tremendous value. But to, you know, when you recognize, well, wait a second, I I've built these skill sets and I can also then apply them to my own endeavors, but maybe I don't have all of the experience necessary. So if I take my individual skill sets, which might be business management, organization, you know, I don't know, you have an MBAI, you might have all these skill sets we can we can draw, we can dive into and drill down to, but but you recognize like this is what I bring to the table. And then you recognize, well, where am I maybe deficient? Like I need mentorship. You started with the lingo, right? Like learning. Well, let me start at the basics. Like I need to be able to communicate with people and have credibility. So let me start by what I can do on my own is I can self-study, I can learn the fundamentals, and then I'm gonna go get mentorship on really developing a plan and a strategy. But there's one more element. So those are the first two, right? Identifying your skill sets, finding mentorship. And number three is partnership. You just kind of rolled right into that. You just started talking about partnership. I went and partnered with people. So, like, let's just like to Nathan's play, hey, take a timeout and go, whoa, yeah, okay. Yeah, yeah. Three bullet points right there that are that we could just we could use as like the framework for this podcast because I think those are those are incredible points.

Nathan St Cyr 8:21

Yeah, and can I ask a so I'm like I'm pumped. Can I ask a couple questions? Yeah, it's great. So having an MBA, having skills, having a little bit of of experience in real estate. What made you choose, and you use the word dream, but what made you have the dream of purchasing and owning and operating a boutique hotel?

Alex Kang 8:50

Yeah, yeah. So I you know, really my real estate journey is as short as maybe a year, year and a half, right? So I, you know, I found my primary home in 2021. My first ever real estate project whatsoever was to buy our home and then convert our garage into an AD yield, right? So that was a very mini-scale, you know, construction project that was really cool to do, right? And now we're getting rental income. So I saw a very small piece of what it could be. And then I was like trying to figure out, okay, what could be next? I, you know, I really liked real estate, you know, even though it was a small thing. Like, how can I scale? How can I do other things? Like, what do I enjoy doing? Then I started kind of reflecting on what I've enjoyed doing in my W 2, which was you know client service, adding value. So I was like, okay, what of that can translate to real estate? And then I stumbled upon in hospitality. I think a lot of folks also, there was a boom in Airbnb. I was kind of part of the boom to start a couple Airbnbs down in San Diego. So we opened two Airbnbs in San Diego. That was my introduction that gave way into hospitality, you know, understanding using the same asset depending on what you do with it. The value and the output and the outcome will be very different. So I saw that and I that was very intriguing. So, you know, did that for, you know, open two, two Airbnbs that were doing pretty well. And then after that, I was really trying to figure out asking myself a question like, do I do three, four, five more Airbnbs? Because I, you know, that was it was starting to get a little bit more easier, right? Or is there a different way to like really supercharge what I'm doing? I didn't know what the answer was, and I was just kind of asking my questions and trying to figure out. And then um, you know, I think it was just randomly one day I was, you know, heard about baby boomers retiring and all these opportunities that are coming in the US and hospitality in the hotel space is one of the you know beneficiary of what this trend would be. So that made a lot of sense. And then I was, you know, trying to figure out what the value it would play, uh kind of, you know, the how it is similar to what I've done in the past in my W2. I kind of keep going back to my W 2 because I'm trying to relate to what I've done in the past and trying to, you know, do a similar thing in the new thing I'm trying to do. Right. So, you know, I think a lot of people, W 2, you know, get a pretty bad rep for a lot of cases. But like I actually think that W2 is one of the best opportunities to try out different things. You know, you know, yes, your salary, but then that also means your downside risk is that much lower. So I think it's really up to you in terms of what you're trying to get out of your W-2, right? It is just consistent paycheck, which is fine. Or are you trying to learn a new thing? Are you trying to experiment a new thing? Uh, because I had a fortune of working in a variety of different functions. So, you know, I did accounting, I did finance, I did strategy, I did partnerships, I did operations, I did MA. Um, and all that kind of all led to where I am now. I didn't know that was going to be that case, but I think if you're a little bit more intentional about what skill set, what is the thing that you're trying to get out of W-2, and you can kind of relate to the vision or the version of yourself that you're trying to create. And also, you know, it may not be something that you're trying to do yourself. Like I think, you know, climbing up the corporate ladder is completely fine for a lot of folks. And I think a lot of people do it just fine and they get the personal and professional growth coming out of it. Uh, but in my case, I was trying to kind of you know translate that into my own thing. I, you know, saw and I had a joy of building my little Airbnb businesses. It felt like it's a business. It's a business.

Nathan St Cyr 12:47

Yeah. And I want to, I want to tell, I want to touch on that because you said something in the beginning that was really powerful. You you as you said, I'm not exactly sure the exact words you said, but you made the point that what you recognized in starting with your short-term rentals was you said something like, I recognized that if I could do some things right, if I could control that what I got out of that is if I could control the experience, which then made ultimately my product successful, that wow, I have I have control over this. You said something like that. I don't remember the words that you used, but but go back and then and then that ended up uh it sounds like turning you to well, how could I how could I scale that concept? So can you dig back into what you meant by that that comment that you made about your experience with STRs and how you were able to control the value?

Alex Kang 13:49

Yeah, I think I think you're referring to you know having the same asset, but depending on what you do with it, like the output of the asset becomes tremendously different, right? Like we currently refer to as a you know return on assets, right? So you know you can run it as a long-term rental, which you'll get hypothetically $2,000 per month, whatever. But if you are able to add all kinds of value, doing more design, more furnishing, or you know, creating the right experience for the same house, same location, now all of a sudden you can make $3,000, $4,000, $5,000 with it because you're putting that much more effort and value in creating that asset and elevating that asset into something else. So I saw that through SDR and Airbnb. And then with all the trend that was coming into the hotel and hospitality space, I wanted to, you know, really just supercharge it and scale it quickly. And I, you know, I think the similar project that I'd done in the past when I was in management consulting before was really typical private equity play, right? Like private equities, they come in, they try to look for the underperforming discharge assets, they do bunch of value at, they turn it around, they sell. Like I saw the similar playbook and I consulted those PE firms in the past where they get just tremendous value from doing so, right? I mean, there's a lot of use case studies and business schools and so on and so forth. And I saw that with the uh, you know, very little bit of it through the SDR, but definitely more in the boutique hotel space where, you know, maybe it hasn't been renovated last 20 years, and owners are not really looking to put any effort into it. Systems are outdated, you know, assets are just not optimized, right? So I saw that. And when I saw and understood the possibility of doing that, I think it literally took me a day or two until I decided to join the community group that we were all part of and decided to fill the gap that we discussed in terms of kind of hospitality gap, knowledge gap that I had. And I wanted to fill that as quick as possible, uh, knowing that that is a possibility and you know, not in the same setup in my previous W-2 life, but I've done similar types of scope of project in the past to where I felt comfortable. If I get smart on the industry and can execute and rely on some of the experiences I've had in the past, this can really be something. You know, I didn't have like a crazy amount of conviction by any means, like, but I was like, you know, I would if I'm gonna put any spare time I had in this one, this made this made a lot of sense for me.

Michael Russell 16:30

Yeah, I I think what you're describing, I uh I would assume a lot of our listeners are in the same boat, right? They're presumably working a full-time job and then dipped into short-term rentals and have recognized, well, uh there's the ability, and Nathan talks about this all the time, like to get the highest and best use out of an asset, out of a property is you know, the residential properties, the rents compared to short-term rental. It just makes, from a financial perspective, way more sense to rent it short-term because you can get a higher uh value, you can get more revenue by renting short-term. And you recognize that pretty quickly. But what you're describing is you recognize from a business mindset, your your own work experience, having experience, whether studying while you were an MBA student or in your professional life, be you know, observing how private equity companies can take assets and flip them, essentially. You said, well, this concept of adding value or getting the most value out of an asset, you recognize very quickly that with commercial real estate in general, this is possible. But if you could apply this to the boutique hotel market, there's an opportunity here that I think many would say is up and coming, that it's, you know, we we've we've talked about this uh previously, but there's a lot of um, you know, in this $10 million and under kind of market, there's a lot of people that are, you know, been doing this for 30 years. You said that they're not operating the properties as efficiently. And that's the same kind of concept that a private equity company might take as, well, where are the where are the ways where we can squeeze out more juice out of this asset? And you applied that with saying, hey, I think that rather than me continue down this path of short-term rentals, where can I apply my skill sets to be able to get the the the quickest and the largest gain? And similar to a private equity company, let me scale up.

Nathan St Cyr 18:23

Yeah, and okay, there was one other thing that you said in there that was like that I've been I've been fortunate that we hit very, very quickly. And because Mike and I, you know, bootstrapped our hospitality company that that really almost from day one, it was like, I can leave my W-2. Like it the cash flow was magnificent, right? So, but what you said in keeping your W-2, you made the comment of if I was going to spend time on the side doing something, right? If I was gonna spend my time on the side, and and that's kind of what I'm what I've been wondering is, okay, well, crap, you've you went out there and did it, man. You went out there and bought a hotel and raised the capital and went through this entire process while you had your W-2. So, how much time were you? I I'd like to just know how you operated your time. Like, where did you put your time? How much time were you spending um to make this accomplish? And you did that in less than a year, correct? Did in six months, correct? In six months. So in six months from from starting having this idea and this vision, in six months you purchased a hotel and now you're going through this journey. So how how much time how did you spend your time?

Alex Kang 19:44

Yeah, six months from took it comp uh uh clear. So it took me, I think, literally about a year from the day that I decided, hey, I'm gonna do this, and and close. Like I think was literally by like it was like a day difference. So that was a little bit crazy, but it's you know, it says a lot about the mindset too, right? Like I was like, you know, within a year, I really want to own a hotel. And then that was like I was just reminding myself every day, every time I wake up, you know, every morning, I was like, and I want a hotel within a year. I want a hotel within you know, year, right? In terms of you know, answering your question directly though, so it is it is a challenge, right? Like it's not, it's definitely not easy. I think I had uh, you know, I was fortunate enough to be able to have some flexibility in my time so long as my work gets done, right? Like my boss or whoever stakeholders that I was working in, you know, they didn't care that I was available nine to five, they care that things got done. So, you know, and also setting the right expectation and working at a company or the, you know, have the right manager, the boss who respected, I think is very, very helpful and important. Not a must-have requirement, but it definitely helps tremendously. So, what that did was, you know, I was able to chunk out, for example, every morning, 7 a.m. to 9 a.m. I'm gonna do, I'm gonna be doing just nothing but studying on hotel, right? Like lingos and understanding prep materials and maybe you know prospecting strategy and what have you. And being able to really just block that off, I think I did 7 a.m. to 8:30 every single day for as long as I found, you know, until the day I found I found the hotel. And you know, you spent a little bit more afterwards, but that was dedicated time in my calendar that I did nothing else but focused on hotel. It did get hard, right? Like, you know, I think by my four or five, I was starting to doubt myself a little bit. Like, I'm spending all this time, but I'm getting no B's, I'm getting no results. There's a couple conversations we are having, but like nothing's really penciling. You know, I'm not I'm not sure, right? Like I could be doing something else and making more money or maybe relaxing or more. Like, what have you? But having that accountability, so that's when I started working with you know a couple other folks in the mastermind group and really creating that accountability system, right? Like we are in the meeting, 7 a.m. today, 30 a.m. every morning together. If I don't show up, like shame on you, right? So I think having that and just understanding and talking through what we are all going through together, I think tremendously helped. And, you know, just being able to focus on just one next thing at a time was I think also helpful in terms of mindset in that I don't have to worry about operating a hotel when I don't even have a lead or I don't have a property that I'm underwriting. So if you're starting to think about 1500 different things that you have to do, like it's a little bit demoralizing, right? It's almost like you know, blessing him in disguise that like I it was almost better that I know what I what I signed up for, you know, in a sense, because I was just focused on the next thing, which was prospecting, talking to brokers when I get financials, underwrite it, making sure that you know things work or not. So I think that definitely helped in terms of managing time. And you know, I had to cut some things, right? Like I love, I golf, right? Like it's you know, I love golfing, but during that period of time, I don't think I ever golfed, right? And you know, that opened up a lot of time. Like I cut down what was least critical to me in that stage of my life. That was just cutting out a hobby that I had, which I love doing, but for to feel my professional or personal goal that I had, you know, something something had to give. So that was something that was cut from my lives during that period of time.

Michael Russell 23:54

Can I um I want to go back to that was first of all, that was goal. There's a lot of nuggets in there. And and I was writing notes as you were talking, but then the beginning there. So what Nathan was saying was, look, how you know, you've got this job, how did you go and do this? And what you started with is it starts with expectations, right? With your work. The expectation was not how much time your butt was in an office chair. It was, well, you know, how how are you getting the job done? And the expectations were, look, the communication that you had with either your manager or just your employer in general was I'm gonna get my work done. And they were receptive to the idea that as long as you got your work done, they weren't gonna manage it to the point where they needed you present there or you know, you had to fulfill a certain amount of hours. It was just related to results. And so for anyone listening, you know, you mentioned, hey, it's about finding the right balance. Initially, you're talking about W-2, what what your expectations are, what you want to get out of your W-2. And in this case, with you, it sounds like what you wanted was you wanted a little bit of freedom and flexibility to pursue things outside of your W-2 job, and your work was willing to accommodate you in that regard. But that's only part of the equation here. So it starts with communication and expectations, but what then you immediately followed up with was discipline. You talked about how every day, the first, I would assume one of the first things you did for seven in the morning, you set out an hour or two each and every single day, and you had that discipline. And then you went through those periods of self-doubt, and you know, you were maybe having the limited belief syndrome of, well, gosh, could I be spending my time elsewhere doing something that is going to yield me some, some, you know, some money right now? I'm putting all this effort into this, but you stayed the course and that discipline, oh my gosh, to me, that was like that really resonated with me. We've um, you know, Nathan and I read the book by James Clear, Atomic Habits, and that was pretty eye-opening to us, where it starts like, look, if you want to be a marathon runner and you've never done that before, it starts with one step at a time. And it starts with acknowledging, look, I I'm gonna do this. I'm gonna be a marathon runner. I I'm not going to be. He actually says, I am a marathon runner. So you just start, you said, I am a real estate investor. I am going to look for deals every single day, and I'm going to stay disciplined and I'm going to limit myself down, and I'm just going to stay focused. And to me, that was like, wow, okay, those two things combined for someone that is in a job, how can they start immediately now if they want to get involved in hotel investing and they have other responsibilities, communication and self-discipline to start, that that's the direction you go.

Nathan St Cyr 26:37

Yeah. And to piggyback on that, you know, the other powerful thing that you said was when you were about four months in and you that self-doubt, you know, started occurring, you also found that by finding some guys in the group that that you could be accountable to, now it's not just about you. And I think that that's so important when, especially if you can't do something full-time and you're like, look, I have value, I'm bringing it to the table, I'm gonna bring it to uh a partnership. And part of that is saying, this is not just about me. This is there's a bigger thing here at stake. This is about as people being able to depend on each other and having camaraderie and teamwork and accomplishing something together. And it I'd love to hear a little bit about that kind of journey as you started to create that partnership, the different strengths that the different partners had and were bringing to the table. Was everybody the same? Did you have complementary skills? How did that kind of shake out?

Alex Kang 27:45

Yeah, yeah. And you know, I think without the partners, honestly, I don't think that I could have found the hotel, not to mention to you know, help operate it, you know, after the acquisition. So, you know, that was the most pivotal thing that I had in my, you know, my journey to buying and operating my first hotel. Um, in terms of how we kind of got together, it you know, it happened a little bit more organically, right? You know, I saw a couple other folks in the in the group that are showing similar energy, you know, they're discipline, they're you know, underwriting, they're doing deals. And I was like, hey, we are all kind of struggling to find, well, not struggling, but it's taking, you know, maybe longer, and you know, it's it's it's it's proven to be a little bit more challenging than we thought it was going to be. And we are also very strict on our body box, and maybe that's why it took us a little bit longer than what I thought it was going to be. But I saw them and we started just talking to each other, right? Like we're getting to know them a little bit better. You know, where do they come from? And I do think that it ended up working out in a sense that our skill sets are truly complementary, but that there's also very much of a commonality when it comes to kind of ethics and beliefs and you know our fundamentals. Um, you know, I come from more business background, a partner that I'm working with, also in the world of tech, by the way, uh, but he's an engineer, a software engineer. So, you know, by virtue of that, I think there's different skill sets that we brought to the table. And you know, it's not like you have to find a perfect partner either, right? Like I think you have to find the right partner at that right time that are sharing similar goals and the visions that are aligned with what you're trying to do. Another thing that I got a lot as an advice was that you know, that partner doesn't have to be a permanent partner either, right? So, like just think about again, like kind of going back to what are you trying to do now? You're trying to buy a hotel, you're trying to operate a hotel. You don't think about finding a partner that's gonna be building you know $400 million hostel uh empire that you guys are building, which is fantastic, by the way. But like if you start like too grand and too big, like I'm sure that happens as a result and the virtue of you guys working together, right? Like when you first met and you guys taught Mike as May, like, hey, if you want to build a 400 million hospitality business on day one, you'll be like, you know, what is this guy saying, right? But like, you know, we are focused on the first milestone and the goal. By the way, I'm you know, we're now thinking about longer-term businesses, you know, in terms of hotels and other small business aquages and opportunities that I'm super excited about. You know, I'm working with one of the partners in a more longer-term capacity. Again, but that was more a product of we work to we're working together in the first deal. I love what he's doing. You know, hopefully he's liking what I'm doing. And we see something in the longer term together, and that's you know, how we are still forming our partnerships. But that was, you know, definitely a critical part of you know how we got the first first hotel.

Nathan St Cyr 30:51

Well, and I think that especially in like, you know, I I've been able to be a part of multiple communities now, and I think that that's a really, really, really good point. Like in the beginning, when you're bringing to the table some skill, that the reality is being aligned with people that number one, you just you gel with, right? You've got you've you're aligned with your goal, you're aligned with your, you know, the the the mission of what you're trying to accomplish, but not needing to look at it as, okay, we're gonna be with each other forever. It's like, look, do we have the right values? Do we have the right, are we aligned like from the core of just we're good people trying to accomplish the same thing? And can our skills come together and be better together as we would be one? But then, because I I think that that's so key when you join a community is to to to bind that, to network, to dig in, to find the people that you do find that just natural organic connection with and that your your skills can can multiply. But on the same token, it doesn't just because you you accomplished this first thing together doesn't necessarily mean that, all right, we're gonna go and create a company together that's gonna, you know, be tied at the hip for, you know, many, many years. It's like, okay. And I think that that's just a really um because I think that creates hesitancy in in what I've witnessed in some of the communities is like, oh man, well, you gotta really, really to have a partnership, you gotta really be damn sure that you're gonna I don't I I think on this on the first one and accomplishing just that aligned vision and being organically in enjoying each other and the process aligned in in that vision, I I think that that's enough of a foundation to really to set off that that that first accomplishment. 100%.

Alex Kang 32:44

Yeah. I mean, if you know, if it ends up being that yes, everything works out great, then like yes, of course, like I'm trying to build a company with with a partner now, but it doesn't have to be, you know, your that commitment doesn't have to be made on day one.

Michael Russell 32:58

Yeah. I love that. That's so good. Yeah, because I think, Nathan, you really like you hit the nail on the head. A lot of times people are sitting on the sidelines waiting to get started, and they'll come up with objections in their own mind as to why this can't work. And part of it is, well, gosh, do I really know this person? Can I trust this person? You know, but when you compartmentalize this, wait, what you guys have done is it's look, it's different than what Nathan and I are doing. We've got this big grand vision. You've pointed out our $400 million company, right? But like if someone's listening to this and they're like, I'm working a job here, man, like I'm just trying to get started. I want to go buy a hotel, I don't have any experience. And and you know, I don't know that I'm necessarily gonna like get married with the the this group or a partner here. Like, we're I just want to go buy a deal. How do I do this? Just compartmentalizing that. Well, look, you go buy a hotel, you merge your complementary skill sets, something you you you you hold each other accountable, and that's another great piece. That accountability piece, oh my gosh, I'm gonna just segue here for a second. But you were saying like each week you guys would have these meetings and you know, you feel like, well, I don't want to be the guy that didn't do his work, right? So you would you would stay more disciplined. You'd you'd follow up, you'd presumably call X amount of brokers or you'd analyze or underwrite X amount of deals so that when you had that weekly meeting, you know, no one's gonna be like, oh well, you're not carrying your weight. And that is so important to keep progress moving forward. So yeah, but back to my point is look, if if you're thinking about you want to get started with a deal, these hospitality assets, you can partner, you can buy the asset, and then you can have someone manage it. And as the general partner of the deal, you're you're you're of the property, you're not necessarily involved in all the operations day-to-day thereafter. Like you can go on with your life and do other things. You yes, you're you need that collaboration for this specific property, but you shouldn't allow that like waiting to jump in, like when is the right time? Who is the right partner? What is the right deal to block you from just getting started? And I think that you guys recognize that look, this particular property we're gonna go and buy together, but that doesn't necessarily mean right out of the gate that we're gonna do everything together thereafter. And and I just I wanted to make sure that that was uh acknowledged.

Nathan St Cyr 35:11

Yeah. Can I ask a couple of questions? Okay, yes, great. Yeah, all right. So I I I know that some of the guys in this your group are data driven. Did you track the data as to your KPIs as as how many how many brokers did you need, did you end up speaking to before that six months hit and you went under contract with your your current hotel?

Alex Kang 35:40

Yeah, I think yeah, we have the data somewhere. I can pull that up at some point, but I think it was in the hundreds, and it's not maybe crippled into thousands, right? Like I think it was definitely in the collectively together, three of us were doing very heavy prospecting. I think we were trying to talk to at least I was trying to talk to two or three or maybe four a day. Like that was kind of my goal. And then that got translated into weekly goals and monthly goals. And you know, if I didn't do it, why didn't I do it? And if I didn't reach my goal, I was trying to make up for the following week. Um, so it is, you know, it is not the easy job, right? Like it's not like you can just watch Netflix and browse on Craxy, and one day you're gonna find a deal. No, I think it's it's you know, you gotta be really invested. And if you are willing to make a short-term sacrifice in terms of your time, and again, like, you know, maybe letting go of your hobby, uh, what have you, or maybe sleeping one or two hours less, uh, an hour, a night, until you get to a certain milestone. What really drew me was that I knew it was a short-term thing, right? Like it was not a permanent thing. Like once we found a hotel, like all the things that I and I'm starting to pick up golf again, by the way. Right. So, you know, things like that. Like things are a little bit getting normalized in my like my life, but like at that time that was required. So, you know, talking to brokers, we did on-market, off-market, you know, we you know did all kinds of prospecting strategy that's pretty known in the real estate space, whether it be, you know, the skip tracing and trying to get to the owner and like trying to like knock from the door. I know you guys found your property knocking on the doors. I've certainly done it in my kind of area in LA. Like I just literally drove around and like try to see, you know, what their occupants look like. Is it tired? Like, can I get the owner's information? So all of that, you know, I think it just takes one deal. Like, yeah, it does.

Nathan St Cyr 37:34

It just takes well, it does. It takes one, right? So, and it's hard to see that when you're going through. And that's why I I I think this is a great, I wanted to ask about some of this data. So if you had the goal of, hey, I want to call at least two per day, and you know, if that ends up being, you know, hey, that's 10, you know, 10 to 15 broker calls per week, and there's three of you guys doing that. If you go and do the math on this and it's just call it a minimum of 30, right? And it and it took 26 weeks, you're right. That that approaches, you know, that's almost 750 broker calls that were made. What about underwriting? How many, how many properties do you feel like you looked at the financials and underwrote? Do you have any pen?

Alex Kang 38:19

Yeah, I think every five to ten deals that I risked out to were we, you know, receive at least on the paper and the surface, compelling enough that we would go through the emotion of underwriting. So I think we were trying to do at least one or two underwriting a week per person, right? Like, so that's 10 broker calls, 1015, one or two underwriting, you know, maybe zero to two warrants follow-up conversation with the broker. So out of the calls that we are making, you know, some are follow-up calls, you know, some kind of getting into more information, some we are meeting with the seller. So, you know, there's different motions that come out of that underwriting. But that was kind of roughly the data point. Um or two.

Nathan St Cyr 39:04

And I just think that that's just what if you take six months, right? And you're like, all right, 26 weeks of underwriting two, it's 50, around 50 per person, that's 150 deals that were to the point where you were looking at financials and underwriting deals for one purchase. For one purchase. And that uh the reason that I want to bring these numbers up when you're in it and you're uh you know, you've now underwritten 30 30 deals, you feel like there's nothing out there. This is pointless. But it it it took 150. Like you there you don't know I think the most important question you have to ask is has somebody else done this before? And if the answer to that is somebody's done it and proven this, and we know that there's a lot of work, there's, hey, look, it's, it's, you know, that this could result, you could do a thousand broker calls and underwrite 150 deals to get one. I think it makes it easier for for your mind, for the person that's like, man, am I just wasting my time? Am I just spinning my wheels? This is is this ever going to happen? Maybe it's not, maybe it's not the right thing. Well, it's not that it's not the right thing. It's just you're not there yet. And you don't know where you're you don't know when you're gonna get there until you get there. And so if you just keep going, keep doing, I just I wanted to bring those KPIs kind of to light because I think it's really important for for those that are working, especially like you, you were doing this, you you were working your full-time job. And you were, this was extra time. You were you dedicated, made the sacrifice. Hey, things in my life that I enjoy doing. I'm gonna sacrifice. I think you said, I'm gonna, I'm gonna sacrifice short-term pain for long-term gain. You chose that over the knowing and the mindset of this will lead to long-term gain. And I just I want to commend you for that. And then I want that to be inspiration to those that are in this journey that that you just keep pushing forward. It's all good. It's yeah, you appreciate it.

Alex Kang 41:24

And I do want to make a comment there, right? I think that for me, buying the first hotel, right? I think you have to be clear about what you're trying to achieve by the goal that you do have, right? Like for me, example was buying a first hotel. It was never about financials for me. Like, yes, it's great that we're gonna be making money. Yes, of course, we're gonna be compensated for all the work that we are doing. But to me, it was more about building the foundation and then the learning was the biggest objective for me. Like going through the emotion of buying an operating hotel was the number one North Star and the goal in the KPI head. And everything else was kind of secondary and tertiary, right? So every time I'm a little bit doubt, doubt, you know, doubting myself, like, hey, like every hour I'm more spending, I'm making less money, or you know, you could you can think about that way too. Or every hour that you're spending, you're learning something, you're you're building towards something. I think that definitely helped. Uh, because again, like I could be working 1500, 200 hours on something else and making a lot more money, um, but I'm doing something that is not producing any monetary return. But that was okay. Like that was a very conscious choice that I made. Um, you know, I wasn't gonna make a home run. Uh you know, that was not a goal, right? Like, I'm not gonna, you know, optimize for that. Um, but you know, I think it's working out pretty, pretty good so far. But like again, like I think you've got to be really clear about what you're trying to achieve by all the sacrifices that you're making, because otherwise it became it becomes very challenging.

Michael Russell 43:02

Did you have any moments where you know you kind of felt yourself drifting where maybe you were settling, you were you're kind of leaning into a property where hey, you've looked at so many, you kind of just you you have the impulse that you just want to freaking buy something, you know? And did you ever have that feeling where you're like, hey, let's let's try to pursue it, but you knew like, well, it's really not the best deal. That maybe emotions were kind of getting, you know, getting the best of you. Did did you go? Did you experience that at all?

Alex Kang 43:27

100%. And I too many times, right? During that period of buying our hotel was not not leading your body any stress. It was very ups and downs, and very ups and downs, where like one day our body box is a little too large, another day your buy box is too tight, that maybe we shouldn't be training ourselves to certain things. Um, but I think that as as I went through the emotions and visited a few properties, and you know, when I just picture myself operating subpar property that I could have bought, but like, do I really see myself like running and being running this property and being passionate about it? Am I proud to share this with my friends and family? Are they gonna be happy to visit this property um after, you know, even after renovations and other values are done? Um and that was kind of a check for me, right? Um, and if that didn't check off. And there are probably uh a couple properties where I got really close to, okay, like it's not like you know what we're looking for, but like, you know, five, you know, the sellers trying to sell, and we got, you know, we're negotiating and the terms are pretty good. Um, but at the end of the day, I just didn't feel like I could be proud to our investors and friends and family, and also just don't see myself um you know running it for a period. Like it's not like a six-month commitment, like you're committing to a multi-year journey with the with the assets. So um, you know, that is something that you have to be very clear on.

Michael Russell 45:03

Yeah, this investment class is definitely a passion project, right? A lot of people can look at alternatives and mobile home investing, affirmative, you know, storage or whatever. And and those all do well, they have yield good results, but the I feel like those that invest in hotels, the ones that are successful oftentimes have a passion for it.

Alex Kang 45:23

Yes, 100%.

Michael Russell 45:25

Can you tell me a little bit about how you divided the workload? I mean, you talked about with searching for a property that you guys you know, you you split the workload in terms of calling broker, put you find this property, you underwrite it, you feel like, hey, this is a good value, I want to pursue this. And then to go from the deal finding to ultimately acquire it, raising money, closing the deal, hiring a property manager, the whole deal, like there's a lot of moving parts. There's a lot, there's a workflow there. I know I've seen that you're very organized, you use technology, whether it's Notion or you have you know different software applications that you've either created or you you use, but but at the end of the day, there there's project management and certain people are assigned to certain tasks. And I just I'd like to know with your partnership group, you know, kind of how you divided that workload. Once once you identify the deal, the next steps afterwards, how did you divide them?

Alex Kang 46:18

Yeah, uh, I think in the beginning it was all just honey bag, just call as many brokers as possible, underwrite as many deals as possible. Um, maybe that is not the most efficient approach, but that was what was needed to find our first deal. So, you know, three of us hand on hand on back, calling, underwriting, visiting as many as possible. After we got it under contract, though, I think that's when we started to have and feel the need to have more, a little bit more loosely defined roles and responsibilities and what our areas of the ownership look like. Um, so we did lean harder onto what our strength looked like. So, for example, um, you know, in my I was a CPA before, I was a management consultant, so I was very comfortable. I feel very comfortable with numbers and underwriting. So all the numbers-related stuff that I was um you know happy to take a responsibility for. Um, and we had, you know, someone who's coordinating on the back end, you know, whether it be with the lawyer or the CPA, to making sure like kind of back of the house stuff is organized. We also had someone who's kind of in charge of just talking and negotiating with the broker and the seller and just heading that lens um and just focusing on that. Um, and then we also collectively thought about how we're gonna be doing, you know, capital raise as an example. Um, so strategy was put together, but then actually executing on the rating of the fund, you know, every person on the team had to go out and do. So, you know, some parts we're doing in different, you know, areas, but some parts were giving up the responsibility to get to the same outcome. And um, you know, somewhat organic. Um, and I think it's getting a little bit more defined after the close. Um, but you know, in that in that in the time, like whatever that's required. Because another thing was everyone had a W-2 income. So a couple other a W-2 jobs, right? So a couple other partners. So one scarce thing that we had was time. Like we were trying to just juggle our W-2 and just trying to make stuff happen, um, and you know, whatever that made sense. That's why I think finding the right people that you know that you can I don't know, vibe with you can, you know, live with. Um I was fortunate enough to have you know that happen a little bit more organically, especially in the beginning. Otherwise, I think it could have uh it could have been the other way around. Um but yeah, I was I was fortunate enough.

Nathan St Cyr 48:52

Yeah, that's that's awesome. I I'm you said something that made me go back to the W-2. And that's so you guys all had the three of you had W-2s, and you had to capital raise, right? Were you able to source any money from people that you've met through your W-2s?

Alex Kang 49:16

Yeah, 100%. I mean, you know, I think most of my part of capital raise came from my past W-2 network. Right. Um, and we talked about mentorship in the beginning too. All of my mentors basically also invested, and they were biggest investors into my into our deal. So, you know, I think mentorship is something that I learned in early in my career that I really needed to be able to get from A to B within uh within the career, and then I saw the same thing within you know my vocal journey. Um, but yes, like I tapped into all my network, you know, friends and I don't really have family in in the US. Um, so it was all friends and my professional network. Um, I had reached out to my town was somewhere between 300 and 400 people on my master spreadsheet. Someone that I talked to, maybe haven't spoken in the last 10, 15 years, some in Canada, some in the US. Um, you know, some had a very light relationship in my W 2, but you know, I was like, I just gotta get, I just gotta do whatever it's required to be able to raise a fund that's required to uh you know uh optimize this property asset that I feel very passionate about, right? Uh this this this property that we that we are trying to buy. So W2.

Michael Russell 50:47

What was the reaction, right? Like, look, you're you're W2, I got a full-time job, I'm plugging ahead. I went to school, got my MBA, I'm working a full-time job, and then bam, I'm out of nowhere. Hey guys, I'm a real estate investor. Uh, you want to invest in my deal? What was the reaction from these folks? Obviously, the folks working with you may have an idea, but like to your extended contacts that you're reaching out to to represent this, what was the feedback that you got from people?

Alex Kang 51:13

Yeah, you know, I I was positively surprised how you know encouraging everyone was, even if they didn't invest, right? They're like, oh, it's really cool that you're doing this. I've been thinking about doing something on the site. I saw that you're doing Airbnb. Like, can we chat? Like, I think a lot of conversations came out that way too. Um, you know, but if they are not, I mean, there's some a lot of no replies to, I think that is just kind of reality of what it is. But like the folks who responded, who came to the webinar, uh, who were, you know, contemplating, you know, considering going into it. Um, I, you know, just thank genuinely was thankful for everyone to really just spending half an hour, 15 minutes, an hour to even review the deal that I was trying to put together because I know everyone's busy, right? And they may or may not have interest in hospitality. I know for a fact some people only looked at the package that I put together because it was me asking them, right? And because we had certain relationships in the past, not because they were super interested in a hotel and set class. So I think there is a mixed uh mix of reactions and feedback that I got. Um, but ultimately, if you know, the folks who invested, I'm thankful for it, folks who didn't invest but were close. I do think that I'm trying to keep in touch with them. Um and it also just becomes a very fun topic, right? Like every time I catch up with them, hey, like everyone's asking, hey, how is it how's the property doing? Like, what are you like how are you juggling between the two? Um, you know, and some organic conversation around like I know I couldn't do it last time, but you know, whenever you're ready to do it, I'd love to consider doing it, right? So I can see a path to becoming this, you know, this becoming easier moving forward. Um now that um, you know, because I, you know, I think a lot of folks say like choose your heart, right? Like, shoot, I I feel like I chose the hardest, which was going from one tiny, two tiny SDRs to a boutique hotel first time syndicating, first time fundraising, first time buying a boutique hotel. The purchase price was 5.9 million. Uh-huh. Um, 4.7 million was a hotel. It's a 24-unit hotel up in Solvent, California. And then we also bought a duplex on the same lot that we're thinking of converting into. It's a long-term rental right now, but we're thinking of converting into you know short-term rental, maybe do like a uh wedding event and things like that uh for both of the properties.

Michael Russell 53:52

So the all the all-in cost, here's what I'm what I'm drilling down to is you're Alex, you you you you're working your job here, you've got a couple side hustle things with the Airbnb rentals, and then bam, you got this big old boutique hotel, and it was what's the all-in all-in cost?

Alex Kang 54:08

Uh 5.9 was the purchase price. We raised about 3 million total.

Michael Russell 54:13

But then there's there's rental costs, right? So, like what what's the what's the total number?

Alex Kang 54:19

Yeah, all included in the fundraise included the reno. Um so eight point five point, so eight point nine was really the all-in cost. That includes debt, equity, renovations, closing costs, lawyer fees, and you know, everything that's required to make the transaction happen.

Michael Russell 54:39

So nearly $9 million project, right? And you're coming from relatively little real estate experience, and next thing you know, you're immersed in a $9 million project. And I want to circle back on, you know, Nathan brought up this point about um your your your W-2 job. Like he asked how many, you know, how many people um uh pretty exactly what he asked, but basically, like, you know, what was the how many people from your W-2 did you source investors from your W-2 job? And you said, Oh, yeah, an overwhelming amount, basically. But I think this is relevant because look, to go and make this $9 million project happen, you had to go and raise money. And who are the most qualified folks to be able to contribute to this were the people that know, like, and trust you. And the fact is, you're not an internet celebrity, you're not you know, uh an influencer on Instagram, you're just a guy working a W2 job. And the people that want to invest in you are the people that know you from work, that that that trust you, that know that you're credible. And not only do they want to invest for their personal financial gain, but I believe that human nature, people want to invest in others because they want to support them, they want to contribute, they they're rooting for you. And so I think that this you know, coming back full circle again is if you're working a job and you're wondering, like, how can I go and purchase this asset? How can I get into boutique hotel investing? You gotta look at that as uh that's a positive, that you're still immersed in that network, that you've got resources that have income, presumably disposable income, that they can go and they contribute to your project, that they can benefit from you know, financially, if you're passionate about what you're doing, you feel strongly that this is gonna result in a positive gain, you're helping them and they're helping you. So there's this symbiotic relationship, and you've just you've got this network of earners, of people that are working that have the money. So it seems like you're strategically positioned in a W-2 job to go and raise that that money. And with all those things that you've talked about, your time management, your collaboration, your mentorship, your partnership, and then now having the financial component, right? That's the last piece of this puzzle is where do I get the money for the down payment or for the rehab or what's required to make this project work? Well, tap into your your job, your your network.

Nathan St Cyr 57:00

Yeah, Mike, this is tying it back to this is like I think one of the challenges that people have is they think of their this is a reframe. To me, this is an absolute reframe. I think many times in the conversations that I have with with individuals that are considering going into this space, they have their W-2 as a a limiting belief, a yeah, but yeah, but I'm in my W-2, yeah, but right. But I believe that the most powerful thing that I'm getting out of this um conversation with you, Alex, is that we need to reframe that from the yeah, but into my, you know, one of my greatest strengths in starting this endeavor on this first opportunity is that I have a W-2 because of what it can do for me, because it provides me with the ability that I may be a little bit limited by time, but I can fill that with partnership. I may be a little bit limited in my experience, but I can fill that with mentorship. And while I'm doing it, I'm mitigating my risk by having my W-2 and having income. And it provides me with an automatic source of people that know me and trust me, and that I can provide access to them to some awesome returns and a super fun project that they can invest in, and I can get the support of their financial capacity because they have W-2s. So to me, this conversation really um it's really gonna help, I believe, our our listeners and in conversations that I have where it's a limiting belief to actually turn it into, I'm grateful that I have this W-2 to start this endeavor.

unknown 58:44

Yeah.

Alex Kang 58:44

100%. I think I think it's one of the biggest assets I have to this day. Like if I didn't have my W-2, I I have zero idea where the funds that I raise would come from. I really don't. Like I would have to, you know, figure something else out, right? Like, you know, social media and all the other marketing, but like I was able to do this organically, which I'm very thankful for. Um now as I kind of think about you know the second and the third and the fifth hotels, you know, there will be a time where there will be a limitation in terms of, hey, that actually only reach out to so many W-2 folks and so many friends. Um, so I'm thinking about different long-term strategy for that. Um, but for the first one, I think it's very, very doable just to do while doing doubling between W-2, tap into your network, whether it be W, you know, W-2 folks or otherwise, um, and and try to see them and and and in you know, leverage them to your benefits, right? Um, and I think it's uh, you know, it's it's doable. We have multiple folks in our community who've done it. Um so you know, if you're putting the right effort and if you're disappointed enough, um it will it will happen. Yeah.

Michael Russell 59:58

I think we got big things to come, you know. You you you explained that now you're looking at alternatives and you're going to keep going. But the the point here is look, you got started. You had the courage to go out and put yourself out there and in many ways be vulnerable. Reach out to people that you work with or friends or anyone in your contact list and say, hey, this is what I'm working on. And anytime you put yourself out there, you're you're liable to, you know, someone might provide some criticism or they might doubt you or whatever. And you you just you went out there and he did it and you did it with confidence. And now that you've got the first one under your belt, the next time as you expand your horizon, whatever you invest in next, people are gonna be like, oh, okay, he's a player, he's in the game. So, you know, uh, I think this is probably a great point to to wrap this up. Um, man, I I really enjoyed this this conversation. Um, Alex, uh, thanks so much for for being on the show. Nathan, is there anything you want to add before we wrap up?

Nathan St Cyr 1:00:48

Yeah, no, I just uh again, I just think it's a this was an inspiring uh episode to me. Um I'm super just watching your journey. I I got to be a witness to it. So um, and man, you and the partners that you you chose, man, I was it was it was really it was really cool to watch you guys, watch you work, watch your success, your teamwork, the camaraderie. Um, I think within the community, watching the community celebrate you guys as you were going, you had a whole community of freaking cheerleaders that were like, What's the update? And then updates would come out and they were behind you. And um, so I just I just want to compliment you for having the courage to to listen to the the vision that you saw and then to put the action in and to sacrifice, uh, make the sacrifices that you did to to get this thing to the finish line. And I'm I'm really excited to continue to watch uh the success that you have moving forward, Alex.

Alex Kang 1:01:46

Appreciate it. Yeah, this was uh great time to just take a little bit of pause and reflect on you know what has happened in the last you know a year or so. So thanks for thanks for having me.

Michael Russell 1:01:56

Yeah, yeah. I noticed that you uh just posted a new website for your investment company. So if you want to plug that now, or if you want to provide uh you know a contact point where if the listeners want to get a hold of you, um how how can people get in touch with you?

Alex Kang 1:02:12

Yeah, uh I'm not as active in social, but um s.alex.kang on on Instagram. I'm available um and LinkedIn, I'm pretty active, uh Alex Kang, or my company website is uh www.primeritzinvestment.com.

Michael Russell 1:02:31

That's prime what?

Alex Kang 1:02:32

Prime Rich R-I-D-G-E Investment.com. Gotcha.

Michael Russell 1:02:38

Sweet. All right, well then we'll end there. As always, guys, if you're enjoying this show, please go ahead and subscribe, give us, you know, rate us and review us. It goes a long way with uh building our following so that we can continue to uh get exposure, and that leads to more guests wanting to be on the podcast, which ultimately we will provide more information for you guys. Please rate and review our podcast, and aloha.