- Today, Kenny Simpson and Krystle Moore have amassed a 47-unit real estate portfolio valued at $19 million.
- They share their top four book recommendations to help aspiring real estate investors.
- These include wealth accumulation, money-saving tax strategies, negotiations and business deals.
Before Kenny Simpson and Krystle Moore met in late 2008, they both had previously different real estate investing ambitions. When the pair finally teamed up to buy their first property together in 2012, it seemed only natural that it was just the beginning of a hugely successful journey – one that has led them to where they are today with a portfolio of 47 $19 million worth of units, according to official documents verified by Insider.
Simpson, 42, and Moore, 38, now live in San Diego with their two daughters. Together, the two have over 35 years of real estate experience and estimate that their real estate investments now bring them over $360,000 in annual cash flow.
Simpson and Moore’s first piece of advice for any aspiring investor is to do your research before you even venture into real estate. “You need to know what you’re investing in, especially if you want to protect your investment,” Moore said in a recent Insider interview.
Here are four of the couple’s favorite books that helped them get to where they are today.
1. “Rich Dad Poor Dad” by Robert T. Kiyosaki
This is Simpson’s biggest book recommendation — one he’s read four times, he told Insider — and “the easiest book to read,” according to Moore. While the book isn’t a tactical guide to investing, Simpson said its importance is in comparing how the average person thinks about money and how investors think about wealth creation. In this way, the book teaches readers how to transition into the investing mindset.
“We’re taught to go to school, buy a house, get married, put our money into a 401k, retire, that’s it. Kiyosaki says, ‘No, no, no.’ There’s this whole different thing about building wealth,” Simpson said. “If you’re thinking about getting into real estate, you have to read ‘Rich Dad Poor Dad.'”
2. “Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes” by Tom Wheelwright
“This book may be a little more advanced, but it really goes into strategies around buying real estate and how it can save you millions in taxes over time. The author, Tom Wheelwright, is a chartered accountant for some well-known real estate investors,” said Simpson, who also recommends investors check out Wheelwright’s podcast, The WealthAbility Show.
Simpson and Moore, who raced against time to wed in March 2014 to take advantage of a tax break before the sale of their first property was completed, getting married comes close to understanding different property tax strategies.
The US Taxpayer Relief Act of 1997, which lowers capital gains taxes on home sales, exempts single homeowners from only $250,000 of capital gains, while married couples can exempt $500,000. Thanks to this law, Simpson and Moore’s half-million gain from the sale of their first property was completely tax-free.
According to 27-year-old attorney and real estate investor James Walker III — who owns a $1 million real estate portfolio by insider verification — understanding specific tax strategies can be crucial when deciding whether to pursue cash flow or capital gains investing strategies be. Depending on certain factors such as state law and length of ownership, capital gains may be taxed at a higher rate than passive cash flow income.
By doing their research, investors can use these tax laws to their advantage, including by offsetting property depreciation, repairs and utilities against taxes to reduce total taxable income. It’s even possible for investors to offset a capital gain against a passive loss, leaving them with no outstanding tax liability, Walker said.
3. “The ABCs of Real Estate Investing: The Secrets to Finding Hidden Gains Most Investors Miss” by Ken McElroy
This book provides a comprehensive overview of real estate investing and is especially useful for beginners, especially given author Ken McElroy’s experience and success with real estate investing, said Simpson, who also listed McElroy’s “Real Estate Strategies Podcast” as one of his favorites.
“Ken McElroy is great; he’s like the magician behind Robert Kiyosaki. Ken is the one who really took the money and built a huge portfolio,” Simpson said, citing McElroy’s experience managing real estate, buying and owning syndications and building lots.
4. “Trump: The Art of the Deal” by Donald Trump and Tony Schwartz
“Love him or hate him, the man is an excellent negotiator,” Simpson said. “This is good reading for negotiations and how deals are made.”
Learning best practices for negotiating and closing deals is especially important because real estate is also a relationship-based business, Moore said, and building a network is important to doing good deals.
“Typically, most people have good relationships with brokers. If you are a good buyer who is easy to work with and has a name or reputation – that helps. That’s how we buy most of our deals,” Simpson said.
Investors also often need to work with other parties to be successful, especially when cash-poor or looking to partner up to scale their investments, whether within a consortium or with private lenders.
Simpson and Moore also recommended a handful of podcasts, including BiggerPockets for its large community of beginners to advanced investors; Grant Cardone’s “Cardone Zone Podcast”; the Old Capital Podcast to learn more about loans and syndication; and her own podcast, Get in the Cash Flow Game with K&K.
Additionally, they suggested aspiring investors read old interviews with real estate legends Sam Zell and Barry Sternlicht. “They’ve been doing this for 50 years, and sometimes you’re like, ‘What are they doing in a market like this? Are they retiring? It’s good to get everyone’s perspectives,” Simpson said.
But according to the couple, the best way to learn is through trial and error. “Books and podcasts are good, but you’ll never learn more than how to buy and manage a property,” Simpson said.