From Side-hustle to Full-time Career
On this episode of Next Level American Dream, Abigail and Sean are joined by Tessa Kennedy. Tessa and her husband are a real estate team that started with small multi-family properties and recently scaled up to land development and arbitrage. On this episode, they discuss her journey into land development, and how they view their new real estate careers as more than just a side hustle.
Key Topics
Land Development
Real Estate as a Career
Connect with Tessa Kennedy:
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SUMMARY KEYWORDS
land, American Dream, people, multifamily, real estate, development, Corporate America, husband, day, projects, talk, business, started, communities, single, commercial real estate, years, big, small, good
SPEAKERS
Sean Thomson, Abigail Thomson, Tessa Kennedy
Abigail Thomson 00:01
Welcome to the Next Level American Dream Podcast brought to you by Thomson Multifamily Group. Your hosts, Abigail and Sean, will discuss how you can take your American Dream to the next level through real estate investing, business practices, and personal development. Join us as we share our experiences as a father daughter duo who are trying to accomplish our goal of financial freedom. We hope you learn more about how to define and achieve your American Dream. Here's another episode of Next Level American Dream. Welcome to the Next Level American Dream Podcast. We have an incredible guest for you today, but first please make sure you have subscribed if you have not already. We also love getting your feedback through likes, comments, ratings, and reviews. Today, Sean has a conversation with Tessa Kennedy. Tessa and her husband are a real estate team that started with small multifamily properties and recently scaled up to land development. On this episode, they discuss her journey into land development and how they now view their real estate careers as more than just a side hustle. If you found any value from today's episode, then please share it with a friend and help us grow. For more information on our sponsor, visit thomsonmultifamilygroup.com to start taking your American Dream to the next level through passive investing.
Sean Thomson 01:14
Hi, Tessa. Welcome to the Next Level American Dream Podcast. Thanks for coming on!
Tessa Kennedy 01:18
Thanks for having me. It's exciting!
Sean Thomson 01:21
Well, let's get started by just telling everybody where you come from and your career and where you guys are today.
Tessa Kennedy 01:27
Perfect! Yes, absolutely. So, I am born and raised in Minnesota. Right now, we live in the outskirts of Minneapolis. It's a Northwestern suburb of Minnesota, my husband moved all the way up here from Dallas, Fort Worth, Texas. So we're kind of combining the South and the Midwest together, working on my barbecue skills. Right now during the day, I work at a corporate job that I will celebrate 19 years at this July great company great benefits. And I will say it has taught me a lot about where I want to go and how to get there. And so by evening right now, and by weekends, we have slowly grown our real estate, our commercial real estate investing company. So we started out small with single families and Airbnb went to small multifamily. And now we were lucky enough to meet a partner group, that we are solely now focused on commercial land development. And so we have several projects going both in Minnesota and Texas that strictly focuses on land development. So we quickly scaled up from single family into this space. And we have been doing this for approximately five years, my husband and I and the company itself as we're doing it for over 40.
Sean Thomson 02:32
We'll talk a little bit about what it is that just the land development I mean, I'm I'm pretty versed real estate guy, but land development is one of those things. It's It's It's not a lot of people know about it, explain a little bit about what land development what it looks like.
Tessa Kennedy 02:45
So, that's why it's been really exciting for a for us because it is kind of an untapped or unknown very few people get into it. But right now we're specifically focused on undesirable land and converting it into usable land. So we have projects in the pipeline that are in either floodplain areas, or other land drenched areas where according to a map that you and I would look at are not developable. So there's no commercial real estate and nothing can happen there right now. So we do that piece of it. So we come in, we negotiate with the city and the municipalities to get the land under contract. And then we start to do what we call the horizontal development of it. So we start to do the due diligence of understanding what has to happen to the land to make sure that it can become developable. And the brilliant thing about it is it takes about 18 to 24 months to do that piece of it. And then in theory will be shovel ready for a developer to come in and purchase it to develop the land vertically.
Sean Thomson 03:43
So there's a very long timeline in those projects, then?
Tessa Kennedy 03:49
Well, it's right now I mean, I looking at all the different ways to do real estate. So when we start a project, our the horizontal piece of it, the thing that we do the best is about 18 to 24 months. So it's actually very quick from that perspective. And then we start going right into marketing to the commercial development side for someone to purchase it to build upon. So within two years ish. That's land that was previously not developable is developed is turned into apartments, retail offices, townhomes, what have you, depending on what the developer wants to do with the land?
Sean Thomson 04:23
Yeah, but that's that's quite a wait, that's so you're looking at from acquisition day to pay day? Two to three year timeline?
Tessa Kennedy 04:30
Yes, well, 18 months to 24. So usually, the longest we've seen it goes about 26 months. So a little bit over two years has been Yes. And then and then the other nice part about it is sometimes there's an exit before we complete everything. But yes, historically, our strategic vision is to do the horizontal development from you know, start to finish. And then you know, market it to a commercial developer. You're looking at about you know, 18 to 24 months before before you're going to see any payday. Yes.
Sean Thomson 04:57
Yeah, and you're not cash flowing that property so there's no residual income during that time period either. So it's an acquisition, and it's all work. And then and then a payday at the end. Is that right?
Tessa Kennedy 05:07
Yes. Yep. And then the nice part about it is it's a significant pay day at the end. So it's delayed gratification, but it absolutely, yes, you're definitely people have come to us saying I need monthly cash flow. And at the outset, at least, this is not the path for monthly cash flow right away.
Sean Thomson 05:23
Right. It's a big, it's a big pile at one at one time, you know, the payment? Yeah, that's interesting. Yeah, you know, I'm in multifamily and single family previously, you know, single family, you're, you're flipping houses all the time, right? It's just, you know, you're paid every, every time you flip a house, and you can buy a house, flip it 30 days, get your money and move on to the next one, right. So it's a constant, it's a constant churn through the projects. And multifamily is slower than that. Land developments, like even slower than that. So it's just it's interesting how that works. Well, let's talk about so you're coming out of corporate America, you're still sort of transitioning out of that. And I know there's a lot of people that listen, our show that that, that that's their some of their, that's their goal is to kind of find their side, hustle and move and move into an independent business. Talk about some of your challenges, or some of the things that you are finding moving from corporate to your own business that that you would recommend somebody to pay attention to, or look for challenges or those kinds of things.
Tessa Kennedy 06:21
Yeah, it's a really good question. And I mean, it be as a as a mother, too. I mean, you kind of have to look at it holistically, not just from my husband and I and our business, but our family too. So I would say the biggest thing, you the biggest challenge that we have, obviously, is, is the insurance side of it. So looking at your different options, and I've just been really vocal with everybody I meet talking about, you know, what does your insurance look like? And how do you do this. And so when I even when we go to the chiropractor when we do that, so trying to learn what options or opportunities there are with insurance, because I know that that's a big reason people stay at their jobs. So I think that's been, you know, a big learning for me having to having the smaller route multifamily that we own, you know, you're responsible for everything. So, you know, being in corporate America, which I am by day, I'm only responsible for my team and my output and my responsibilities. And you know, as an as an owner and landlord, you're responsible for everything. So I was getting calls, you know, for everything, and I've easily managed place. So it was an eye opening for me of how much you actually have to manage when when you're in real estate. So it's it's a good thing. But I was, you know, pleasantly surprised at how many things can happen to just, you know, one apartment complex that you are then responsible for so coming from corporate America, that was, you know, a bit jarring for me that then had to understand how to how to go through that. So that was been an interesting thing. And I would you know, and I guess the biggest thing is just knowing what you want. So I you know, what do you want? Can you manage both? You know, can you stay in corporate America, and you know, work on real estate, or whatever your passion is on the side? Or does it need to be a full time for a to get you where you want to be? So I mean, kind of just understanding that and you know, my husband and I do a really good job of writing out our short and long term goals and kind of what does this week look like? What is next week look like? And you know, then you have to allocate the time towards that to say, does that mean I can have a full time job and do this on the side? Or does it mean I need to go into this full time. So being honest with yourself about how much how much time you need to dedicate towards what your ultimate goal is, I think that was a big aha moment for my husband and I have just how long everything takes to do so. in corporate America, there's a lot of things that you go to a folder for, and it's already pre done for you presentations and other things like that. Well, when you're, you know, when you're in your own business, you have to create all of that. So how long all of that stuff takes to do to get that foundation started? You need to be honest with yourself in terms of, you know, what, what do I want to do? And how do I do it, and what how's the time going to be the best allocated? So, I mean, those are, those are a few things that come to the top of my mind, you know, things that I've had to balance by writing both the corporate side of things and the business side of things.
Sean Thomson 08:52
Yeah, that is, that is a true point in that when you have a job, a lot of stuff is sort of taken care of by other people on the job or on in the business. And so you don't see the full picture. And then when you become your own business owner, it's all you know, so you have to handle books, you have to handle the advertising, you have to handle all those components. So it's not suddenly you're doing 50 jobs and not not the one job he used to have. Yes, and it's a lot I don't think a lot of people figure that out until they get into it. And you know, if you if you go and watch podcasts or learn about being a real estate investor, it's rarely talked about, hey, by the way, you're going to have to be an expert in marketing, you're gonna have to be able to do your own it work and it has to be, you know, all those hats, you're gonna have to wear it's really kind of a shocker. If you're, if you're if you're not, if you're kind of coming out of that, that world, I would think so.
Tessa Kennedy 09:41
And I mean, I wrote we wrote down everything that we had to accomplish in like the next 30 days, or 45 days or whatever. And it was, it was amazing how long it was, I mean, to your point, CRM, all these things that you know, as a corporate person, it's already set up for you. I just log in and it's right there and I add my information and then I go on with my day. Now I actually have to build out this program. Now. I actually have To do this, I mean, you, you really respect the processes that are in place already at other places. Because now you can see it You mean you know what's in the soup, you know, the proverbial what's in the soup in terms of like how much it takes to create all of that to make it look so seamless.
Sean Thomson 10:14
So ask people, I guess what your, what your recommendation would be was as people are transitioning or thinking about transitioning, make sure you account for all the additional, not just tasks, you're gonna have to do as a as a as a number of tasks. But the variation of those tasks to the wide variety of skill sets you're going to have to sort of learn or take on, and make sure you're prepared for those. But let's talk about so I want to circle back to the chair land development. So we talked about, you know, kind of the, the basis of the land development, but what is it that So what was your What was your sort of path to getting into land development, it sounds like, like you said, it's kind of an obscure thing. But you you were in corporate America and you decide to become real estate investments, you talk about that path that led you to land development.
Tessa Kennedy 10:55
So I will give a plug to anybody in anything in terms of like your local RIAs, I'm sure everybody that listens to this podcast, or you know, your local groups have anything you want to do, if you want to go be a chef, if you want to go into real estate, whatever it is, you know, all of those local groups on meetup or wherever you find them. So I was already you know, my husband and I were already actively in real estate and going to a lot of those meetings. And so and then we had, you know, kept going kept talking to people kept kind of talking about what our vision was, what our pathway to what, you know, generational wealth was, and just being as vocal as we could about what we really wanted to accomplish. And by that, you start to meet the right people. So then we ended up meeting this other group that said, this is what we're doing, we have 40 years of experience, and we've run the gamut. So they had already, you know, done the space, doing it for 40 years, obviously, you've you've done small, you've done large, you've done medium, you've done all of those things. And they said, you know, we're just, you know, starting to look at land development, this was five years ago, you know, if you're interested at all, let's talk because it sounds like the space that you're in, in the space that we're going are similar in terms of the goals and the integrity of the relationship that we wanted. And so we just started doing more research, having more conversations with them meeting up all of those kinds of things. And this, this beautiful relationship just formed with this other Real Estate Group. And we started to help with all the due diligence, and you know, started and really started to dig deep into what this look like from a land development perspective. And it made sense for my husband and I and them, so then that's where it went. And so, five years ago, we started this process to your point, it's not an overnight success story by any means. But we do have, you know, you know, to land projects that are done and complete, and then we have an off road Park now too. So based on all of that relationship building, and due diligence and time, you know, five years later, we've got two, two land projects completed and you know, an off road Park that's up and live. So it's basically I mean, everything I would say is based on relationship building, and being clear about what you want out of life and finding those mutually, you know, abundant people that are looking to join forces and have the same outcome.
Sean Thomson 13:00
In your path to get to this land development, did you do single family or any other form?
Tessa Kennedy 13:07
I did, we my husband and I had two single family homes, and which we still have today, and then we have a small multifamily. So we had been in the space, then, you know, talking about our successes and our learning curves and everything like that. And what we ultimately wanted to do you know, the the hot topic now is how do you scale up? And how do you do it quickly. And so we were just very vocal about, here's where we are today. And here's where we want to be. And this group that we met, the the managing partner of the group said, it sounds like this might be a good path for you, let's talk and see if there's any, you know, synergies that we could form. So yes, we had done small, you know, a small multifamily and a couple, a couple of single families before we dove in headfirst to land development once we once you start to research something and it makes sense. And the numbers look good. And the relationships look good. And the you know, the returns look good. It's hard to stop that momentum.
Sean Thomson 14:01
Yeah, and that's the beauty of real estate too. If you're if you're getting started and starting a business, real estate has a lot of different avenues you can go down and they fulfill different I guess, results or requirements, you know, for your lifestyle or for your outcomes or whatever it is. So it's interesting how you found your path. Most people they start you know, a single family and they transition into something else. And it seems like you kind of shortcut some of that you started there but you didn't you didn't like go all in and you kind of went you find kind of found your ultimate ideal spot in the real estate markets that fulfill both your work requirements and your outcomes. So that's good.
Tessa Kennedy 14:38
When I found to just listening to what is around you. So I this this person in this group had talked about what they did a couple times at meetings and for whatever reason, it didn't it didn't. I didn't listen, I didn't internalize it well enough. So I just think a big learning for me was had we had we listened to earlier and thought, you know, hey, we might be smaller than them right now that maybe there's a good opportunity to you know, join forces, we could have been doing this for seven years instead of five. So, I mean, a tip for me or any of your listeners to is to, you know, make sure that you're really taking in when you're at any of those networking opportunities or dinners or if you're invited anywhere, it's really think, you know, really listen to what's being presented to you. Because there could be a hidden opportunity that you that you are missing by, you know, not fully listening to what other people are doing. because like you said, there's so much in the real estate space, that, you know, now I look back, and I love the path that we're on. I'm like, but what else did we miss that we just weren't, you know, that we thought, oh, we're too small, and we can't we can't play in that space. What else did we miss that, you know, we that we could have been doing for the last five years too.
Sean Thomson 15:37
Yeah, I've had that conversation with a lot of people at events where they're setting their, they're setting their bar, just way higher, and it's like, Look, you can get started today, you don't have to be worth $50 million, you know, like, like these guys that are successful are, you can start down here, right today, right now, I think a lot of people are waiting to kind of get all the pieces of the puzzle in place before they take the action to get started. And I think that's mistaken. A lot of times, they're not listening to what's happening, what they're like you said what they're being presented. And, and kind of following advice. They're looking for that big hit, and they're not finding the way they can get started with what they have now. So I have that conversation with a lot of people. It's like, Look, what do you have? What do you have today? You know, and people will explain it to me, Well, I have some investors and it's like, go go take those investors put them in a deal right now. And you can you can be started, you're you're off to the races right away, you know, you don't have to wait until you have $5 million worth of investments, and you know, all these other deals and things you can get started with your half a million or whatever, you know, investors. Yeah. So a lot of people have a lot of people can get started immediately. They just don't even know it.
Tessa Kennedy 16:44
I mean, I think I see that all the time to have you know, and go home, it was something I heard at one of the meetings was go home and write down your value. What can you do? Can you be a bird dog? Can you do this? Do you have any contacts? Do you have family money? It doesn't necessarily have to be money. But you know, but can you can you build something? Can you build a deck, like go home and write down all the random skills that you have, so that when you hear presentations and meetings, that you can raise your hand to say, like, no, I can help you build that deck, or I can help you do this, because the value that you bring might be something that's really random, and that you would never think is a value, but to somebody else is critical. My husband is amazing at Excel, creating Excel, like very detailed documents with all these cells that are locked and unlocked and change. Never in my life when I think that that would be such a big deal. But in the company that we're in with the real estate, he's the only one that knows how to do that. So anytime we want a financial model to an investor, he has to create these beautiful documents that never once what I wrote that down as a specialty, but for sure now, that is something that's huge, like, people call him and want to consult with him on that never once would, I have thought that that would be something that would be this critical skill, but it is. So go write down all these random things that you're good at or you enjoy doing. And I bet you can get into a deal based on just that.
Sean Thomson 17:57
Right, find the right partners that need that stuff and make that like you said, the synergies that you guys have make that work? Yes, I think that's great advice for everybody. Let's talk about so I asked everybody this question, just because this was part of the theme of the podcast, but what does the American Dream mean to you? And then what do you kind of doing to take it to the next level?
Tessa Kennedy 18:17
Good question. And hopefully everybody thinks about that as especially as they transition into any type of, you know, second, you know, second or third career, but my husband and I have a blended family. So he started out with somebody else. And I was a single mother. And so when I you know, close my eyes, and you know, when I found out that I was having my son, that's going to turn six next week, I started to think of you know, everybody wants a better life for their children. So the American Dream looks for me is now our blended family of four that they don't ever have to worry about money. We don't ever, you know, we're it's that balance, and we want them to respect money and to you know, earn it themselves. But the American Dream is having that security and safety for generations to come so that there isn't the worry of, can they go to college? Can they do this? You know, what about this? Or I don't know if we can, you know, manage all of this. So the American Dream financially, is that our kids are in a place where we don't have to base decisions on how much things cost that we can base it on, does it does that align with the values of our family? Is that something that that our son is passionate about? So not having to make decisions based on financial ability is a huge part of the American Dream. And with me growing up with a single mother and Mark growing up, you know, relatively like low income, trying to figure out how to pay it forward with the people that have helped us the village that has helped create us Mark was able to get a full ride scholarship to college. I've been able to do many different things based on the relationships that my mother formed in our neighborhood and doing different things from a teacher perspective. So the American Dream for us is having stability and safety for our children and not making decisions based on finances. And then also how can we pay it forward into the community. Mark coaches, Little League and football and all of those things to build better communities. So how can we help do that financially, socially, emotionally? You know, how can we do that? So the American Dream for us is, you know, stability and safety for our children, and building better communities. That's via real estate investment in certain communities. And you know, just just being being being a part of the community that we're in and helping in any way that it needs to, whether that's being on boards or monetarily, emotionally, however, that looks is just paying it forward to the communities that helped create who we are today.
Sean Thomson 20:29
Yeah, that's awesome. Yeah, financial freedom is the number one theme, I think, for the American Dream. And someone told me the other day, I was talking, and they were able to send their kids to college, and they had no no student debt. You know, the graduate that she, she was telling me that she was watching graduation, she was just in tears, because she was so proud of herself for being able to provide a college education for our daughter, you know, so many kids have to go to college these days and get student loans, and they come out of college with $100,000 - $200,000 in debt. And being able to provide that for your kids, for her was a personal like a personal accomplishment. And she did it through through her hard work and her business that she built and all these other things. So that's being able to being able to take care of your family, I think is a big part of the fee, trying to achieve the American Dream and financial freedom for sure.
Tessa Kennedy 21:15
Well, and I just hate you know that anybody who anybody that has to make a decision, and we've all been there, based on finances, like, Can we afford to do this? I, you know, it's, I want I want to shift the conversation with our family and future and our grandkids and all of that stuff to? Does it align with the values and what you want to accomplish in life? Not can we afford it, it's like, if this is something that's going to get you to the next level of whatever you're trying to accomplish, whether that's being a chef or a racecar driver, whatever our kids are going to end up being, is this going to help you do that? Then let's invest in it not, you know, well, we don't have the $1,000 to take you took that class right now. Like I, I just I want to wipe that away from any of the vocabulary in the future, if possible, where you just base your decisions on like, Is it the right thing to do for what you want to do with your life? versus you know, do we have the finances for it?
Sean Thomson 22:01
Right, exactly. Yeah, I'm not there yet, either. But at least we still have conversations about well, I don't know. Yeah. But we definitely don't have to worry about is as many problems as we used to for sure. So as you build it gets easier and better. So that's good. Well, I talk about how people can reach out to you or maybe get in touch with you, I think you're You said you had some things going on for educating people and things like that?
Tessa Kennedy 22:28
We do. So we I am an owner of several of the meetup groups that are local. So probably the best way to reach out to us is at our at our website. It's www.tenacityholdings.org - So it felt like it sounds and that has passed projects on their information on how to reach us what we do what we're passionate about. And then the off road park that's live right now for anybody that loves to, you know, take their side by side or their Jeep or anything like that. So it's in the greater Dallas Fort Worth area, and it's www.lonestaroffroadpark.com. And there you'll get to see you know, a lot of pictures of very muddy jeeps and people experiencing what it is. So part of the land development that we do that we can develop into commercial real estate, we've now transitioned into off road parks. So now we have one of those lives so people can see. That's where the passive income is going to come through faster to your point than the 24 months. So once we can get more of those off road parks live, then we'll have more passive income to share with our investors quickly. So ones live right now. And we've maxed out capacity, I want to say probably 30 days of the of the 120 that we've been open, so people love it. I've never dipped before but apparently it's I'm missing out is what I'm told. So that's a big one to go to. And then we're on all the socials too. So Tenacity Holdings is on LinkedIn, Facebook, and YouTube, so we're on all of those kind of spaces as well.
Sean Thomson 23:49
Okay, awesome. People can reach out, learn more about land development what you guys have going on? That sounds awesome. Well, thanks a lot for being on the show. I appreciate you coming on and sharing your story, your journey with everybody and, and talking about something interesting, like land development.
Tessa Kennedy 24:03
I appreciate the opportunity, what you guys are doing and sharing with this large community that you've fostered is amazing. So I just appreciate you, you know, inviting me and doing this. So thank you!
Sean Thomson 24:13
Yeah, thanks a lot. We'll talk to you soon!
Tessa Kennedy 24:15
Okay, thank you!
Abigail Thomson 24:16
Thanks for joining us for another episode of Next Level American Dream. If you would like to learn more about what we talked about today, want to contact the team directly, or are interested in passively investing and being a part of our deal room, head over to our website at www.thomsonmultifamilygroup.com -- Before you go, please leave a review! Your comments help us create more episodes for you to enjoy.