He Bought an Entire Zip Code: St. Louis Real Estate Investing Strategy
Show summary
In this episode, Kevin Smith shares his journey from New York to St. Louis, his strategies for real estate and construction, and insights on building a successful business network. Discover how he navigates market challenges and leverages his diverse experience to grow his ventures.
Key takeaways
- Kevin Smith bought an entire zip code of low-cost homes before the pandemic, buying houses for as little as $1,000, which he says contributed to government program rule changes (he calls it the "Kevin Rule") now requiring investors to buy outside the programs first.
- He funded his St. Louis expansion by selling a New York townhouse on 71st Street for just under $750,000, noting that one New York house sale buys a large volume of property in St. Louis.
- His typical low-end deal structure: buy for about $1,000, invest roughly $150,000 in renovation, then refinance out at $300,000 to $325,000.
- He set up funding and financial infrastructure before launching his construction company in St. Louis, specifically to avoid past problems getting capital.
- St. Louis is a non-attorney state, so deals close in 7 to 14 days directly between agent, seller, buyer and title company, compared to New York's roughly 90-day attorney-driven closings.
- He runs two companies: Wexford Real Estate Inc. (property management/brokerage, with a licensed broker since Kevin himself is unlicensed) and Access Construction, which partners with three to four subcontractor crews.
- Current revenue is about $10,000 to $20,000 net per month, reached after about four to five months of operating in St. Louis, and he is now working to recruit more agents and has a client lined up for a ground-up duplex build.
In this episode
- 00:00The "Kevin Rule": buying a whole zip code
- 02:47Introduction to Kevin Smith and his St. Louis focus
- 03:17Two-to-four family remodels and tornado damage work
- 03:46Setting up funding before starting construction company
- 05:58Deal counts: New York brokerage vs. St. Louis
- 08:24Funding the move with a $750K New York townhouse sale
- 10:43Current revenue: $10-20K net per month
- 13:17Company structure: Wexford Real Estate and Access Construction
- 17:22The $1,000 house strategy and refinance spread
- 19:59Attorney state vs. non-attorney state closings explained
About the guest
Kevin Smith has about 27 years of real estate experience, starting in New York where he still owns a brokerage with seven agents doing rentals and sales. He later lived in Texas for about four years, where he learned property management from a man who had 300 single-family homes under management, and he has now relocated to St. Louis, where he runs Wexford Real Estate Inc. and Access Construction, focused on two-to-four family remodels, tornado repair work, and make-readies.
Listen to the audio
“I bought one, I bought ten, then I ended up buying a whole zip code. So because I did that, they changed the game when I moved here.”
Kevin A. Smith
“Buy it for a thousand, put a hundred and fifty into it, and you refi them out at three twenty-five, maybe three hundred. So, you know, that's a big spread.”
Kevin A. Smith
“St. Louis is a non-attorney state. You can close a deal in seven days. You can close a deal in fourteen days, whereas in New York you're looking at ninety days.”
Kevin A. Smith
Questions answered in this episode
What is the "Kevin Rule" mentioned in the episode?
Kevin Smith says he bought so many houses inside government programs (buying one, then ten, then an entire zip code) that the rules were changed because of him, which is why he jokingly calls it the "Kevin Rule." As a result, investors now often have to buy outside those government programs before they can access them.
How did Kevin Smith fund his move from New York to St. Louis real estate?
He sold a townhouse on 71st Street in New York for just under $750,000 and used that capital to start buying property in St. Louis, noting that one New York house sale could buy a large amount of property in St. Louis.
What's the economics of the low-end St. Louis homes Kevin Smith buys?
He described buying houses for around $1,000, putting about $150,000 into renovation, and then refinancing out at $300,000 to $325,000, calling it a big spread.
How does closing a deal in St. Louis differ from closing in New York?
New York is an attorney state, meaning attorneys handle the contract and closing and the realtor is largely out of the process until closing happens, which can take about 90 days. St. Louis is a non-attorney state where the contract goes directly from agent to seller to buyer to a title company, allowing deals to close in 7 to 14 days.
What companies does Kevin Smith run and how are they structured?
He runs Wexford Real Estate Inc. and Access Construction. He doesn't hold his own real estate license and instead has a broker who holds the license for the firm, while Access Construction partners with three or four subcontractor crews to keep them working on remodels and make-readies.
How many deals has Kevin Smith done recently and in the past?
In the past one to two years since moving to St. Louis, he's done just shy of ten deals (maybe nine), scaling back from a much higher pace in New York where he previously did about four to five deals a year personally through his brokerage of seven agents, in addition to having bought an entire zip code of properties before the pandemic.
Resources and links
- Wexford Realty’s Website
- KMTS Holdings’ Website
- Kevin A. Smith’s Email Address: ksmith@kmtsholdings.com
- Kevin A. Smith’s Phone Number: (314) 681-9969
Full transcript
Kevin A. Smith (00:00)
I’m part of the reason that people have to buy outside the government programs because I bought too many houses before they changed the rules, and I called it the Kevin Rule, why they changed it. Because I bought so many, you know, inside. I bought one, I bought ten, then I ended up buying a whole zip code.
Joseph Crooms (00:29)
Hmm.
Kevin A. Smith (00:30)
So because I did that, they changed the game when I moved here.
Joseph Crooms (02:12)
Hey, everyone. Welcome to Investor Fuel Real Estate Pros Podcast. We have a very important guest today. I’m your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to chatting with.
His name is Kevin Smith, who’s making some serious moves in the construction industry in the town of St. Louis, and he’s gonna share with us, you know, what he’s been doing lately to make things easier for himself and his business. So, Kevin, say hello. Glad to have you.
Kevin A. Smith (02:47)
Hello, everybody.
Joseph Crooms (02:56)
All right. Thanks, Kevin. I think our listeners are really going to take something away from this on how you’re approaching business, especially when you said you’ve gotten progressive in taking care of the marketing, all right, and taking care of the funding, more or less. So first of all, for people who may not be familiar with the world, give us the short version. What’s your main focus these days, and what markets are you operating?
Kevin A. Smith (03:17)
We’re operating in the two- to four-family range and dealing with a lot of the tornado stuff that happened and doing a lot of remodels and things of that nature and make-readies for owners and that type of stuff.
Joseph Crooms (03:38)
Mm. And you talked about you took care of the capital already. Can you explain that to me a little more?
Kevin A. Smith (03:46)
Yeah, we had problems in the past with getting funding. So what I’ve done is, before we even did anything with the construction company, I set up the funding, so it’s kind of easier for us to get funding that way because of setting it up prior, opening up the company.
Joseph Crooms (04:13)
So when you say you opened up, or did you open up a private funding company, or—
Kevin A. Smith (04:19)
No, I just got the funding, you know, for the other businesses, just for—and to help facilitate all of the stuff that we’re doing. And I wanted to make sure that the companies were solid before we even got started in St. Louis. Because I don’t know if you realize this, but my background is real estate in New York. I own a brokerage still in New York.
And I’ve done tons of deals in New York, and I’ve actually done some stuff in Texas. So I got a very vast knowledge of the real estate game in my twenty-seven-some-odd years doing this.
Joseph Crooms (05:51)
Mm-hmm. How many deals have you done over the past one or two years?
Kevin A. Smith (05:58)
About ten.
Joseph Crooms (06:02)
Okay.
Kevin A. Smith (06:03)
Just shy of ten, maybe nine.
Joseph Crooms (06:06)
And is that for the total for the past two years? Okay. And what—
Kevin A. Smith (06:11)
Yeah. Prior to that, it was a lot more. But we moved to St. Louis from New York, and I just had to do more, you know, scale back a little bit. So I only had time for nine because I was setting up the infrastructure here.
Joseph Crooms (06:32)
Mm-hmm. And your business that you left in New York and in Texas is—how many deals, how much deals did you do with them? Say in New York.
Kevin A. Smith (06:41)
I’ve been doing deals my—for the last—up until seven months ago when we moved here. I was doing maybe—because it’s an attorney state, it takes ninety days. So I do maybe four or five deals a year with the brokerage myself, but I got seven agents, and they’re doing rentals and sales, and I’m hoping to bring that work here to St. Louis, to do it here just like I did it in New York.
Joseph Crooms (07:18)
Do you still have the brokerage in New York, or—
Kevin A. Smith (07:20)
Yes, I do. A lot of the agents, they’re slowing down, so I don’t know how much longer I’m gonna keep it open. But they’re bringing me deals every once in a while now.
Joseph Crooms (07:35)
Mm. And, Kev, what about your business that you had in Texas? What, what, what, what—
Kevin A. Smith (07:41)
Well, it wasn’t really a business. It was more—I learned how to deal with the property management side of the business from a gentleman in Texas when we lived in Texas. He had three hundred single-family homes under management, and I really learned a lot how to deal with that, and I’m bringing it here to St. Louis, and I used it in New York.
I went to Texas because I met my first wife there, and I stayed there for about four years. Had a son, and now we’re in St. Louis.
Joseph Crooms (08:24)
So, Kev, how would you say your business has translated? How is it supported? Was it supported by your finances that you have from New York, or had from New York?
Kevin A. Smith (08:37)
Yeah, yes. It started with that. I sold a townhouse on 71st Street, and I made a little under seven hundred and fifty thousand dollars. So I took that because, for that number, that’s one house in New York. For that number, you can buy, you know, a ton of stuff down here.
Joseph Crooms (09:06)
Mm-hmm, mm-hmm.
Kevin A. Smith (09:07)
I can get stuff for a thousand dollars down here.
Joseph Crooms (09:13)
Gotcha. So how would you say that’s translating for your year of business now? How would that translate for revenue?
Kevin A. Smith (09:26)
Well, it—on several fronts, because we have such a pipeline with the construction concern and the real estate brokerage itself, and me buying stuff that I find, you know, that needs the help with. I’ve mainly been doing that to give my crew, the construction crew, more work.
And it’s actually been going pretty well.
Joseph Crooms (10:35)
Mm-hmm. And how would that translate to revenue for you? How would you say you’re doing?
Kevin A. Smith (10:43)
I’m saying maybe ten—ten to twenty grand a month net.
Joseph Crooms (10:49)
Okay, great. And how long have you been operating at that level, Kev?
Kevin A. Smith (10:55)
I’d have to say about four or five months now. It took me a couple of months to get started, but about maybe four months.
Joseph Crooms (11:07)
Mm-hmm. So that really caught my attention, Kev, that, you know, how you transferred your business. And so, you know, I know every operator I know had a moment when things got real. Maybe a deal that went sideways or a time that they had to pivot fast. Do you have one of those moments with me, Kev?
Kevin A. Smith (11:26)
Yeah.
Yeah, I’ve had a bunch of those deals. I actually had a deal go on where a gentleman at the closing table asked me to cut my commission in New York.
And he wouldn’t close unless I cut my commission. So of course I did. But, you know, that type of stuff happens all the time.
Joseph Crooms (11:58)
Hmm. And I should ask this first. What’s been the key to keeping your machine running now? What have you been doing that’s really been instrumental to—
Kevin A. Smith (12:12)
It’s basically learning St. Louis and finding the spots where we can actually make money and facilitate stuff.
Joseph Crooms (12:25)
Okay. That’s the kind of stuff people don’t talk about enough. And honestly, it’s what separates folks who’s just dabbling from the ones who stay in this game long term. What would you say is your next focus on solving at this particular stage for your new business?
Kevin A. Smith (12:35)
Yes. I would have to say I wanna bring in more agents in St. Louis. I myself don’t have my license. I just run the company, and I have a broker that has his license here. So I’m trying to bring more agents into our firm so we can get more deals out there for agents and make people money.
Joseph Crooms (13:17)
Mm. So describe your firm. How is it made up? What would—you know, you have an agency, and you have the construction. What do you have?
Kevin A. Smith (13:24)
Yeah, a property management company and the construction. One is Wexford Real Estate Inc., and the other one is Access Construction. Uh-huh. And Access Construction mostly has been dealing with subcontractors. So we have, you know, partnered with three or four contractors, you know, people—contractors looking for work and to get their crews working. That’s what we’ve done for that end of it.
Joseph Crooms (14:02)
Mm. So that’s bringing your total revenue now up into about the ten thousand dollars.
Kevin A. Smith (14:09)
Yeah. Yeah, because, you know, we handle anything under the sun when it comes to the construction, and I have a client that’s actually looking for us to build a ground-up construction.
Joseph Crooms (14:12)
All right, well.
Mm-hmm.
Kevin A. Smith (14:29)
You know, in St. Louis here. He wants to put a duplex.
Joseph Crooms (14:34)
Mm-hmm.
Kevin A. Smith (14:36)
So—
Joseph Crooms (14:37)
Okay. So that’s big. So your next moves with getting more agents is very—is gonna be very instrumental to your business as a whole. Yes, yes. So what people have you been meeting in the St. Louis area that’s really helped you move forward?
Kevin A. Smith (15:04)
Just getting to know the areas and the agents and people that I’ve done deals with and I’m in the process of doing deals with, that type of stuff.
Joseph Crooms (15:17)
Now, I know a lot of people listening are either early in their journey, looking to level up, Kevin. I think they’ll benefit from hearing this. When it comes to building relationships and growing a network, what’s made the biggest difference for you?
Kevin A. Smith (15:34)
The biggest difference is knowing who to go to and who to stay away from in St. Louis.
Joseph Crooms (15:45)
And can you elaborate a little more?
What does your eye and your ear listen for to say, hey, somebody I wanna keep a relationship, I don’t want to keep a relationship?
Kevin A. Smith (16:36)
It’s basically instinct. It’s basically if I don’t get a good feel for the person right off the jump, I, you know, I know where to keep—where to put them in my realm, anyway.
Joseph Crooms (16:56)
Do you go to many outdoor—like Chamber of Commerce? Have you gotten—
Kevin A. Smith (17:03)
I haven’t joined the Chamber of Commerce or done any of that stuff yet. I’m mainly dealing with getting houses that are on the lower end.
Joseph Crooms (17:20)
Mm-hmm.
Kevin A. Smith (17:22)
And fixing them up because you need—down here, the way to scale your business is to deal with the city and other people to get the low, you know, the thousand-dollar homes. And to do that, you have to have stuff outside of the programs before you can go in the program.
Joseph Crooms (17:48)
Mm-hmm. Things such as—so say, how many of these homes—how much would a thousand-dollar home, what kind of revenue would that bring you, Kev?
Kevin A. Smith (18:00)
Well, let’s put it this way. Buy it for a thousand, put a hundred and fifty into it, and you refi them out at three twenty-five, maybe three hundred. So, you know, that’s a big spread.
Joseph Crooms (18:17)
Mm. And how many of those deals have you actually done? Was, you know, was included in your revenue—I know you mentioned your revenue—but how many of those deals have been live for you?
Kevin A. Smith (18:27)
Before I moved to St. Louis or now?
Joseph Crooms (18:31)
You can talk—you can build this up.
Kevin A. Smith (18:33)
Well, I thought I’m part of the reason that people have to buy outside the government programs because I bought too many houses before they changed the rules, and I called it the Kevin Rule, why they changed it. Because I bought so many, you know, inside. I bought one, I bought ten, then I ended up buying a whole zip code.
Joseph Crooms (19:04)
Hmm.
Kevin A. Smith (19:05)
So because I did that, they changed the game when I moved here.
Joseph Crooms (19:15)
You did that prior to moving here. You had already purchased some land in—
Kevin A. Smith (19:19)
Yep. I had bought, you know, a whole zip code here in the early twenties, right before the pandemic.
Because the thing is, I always knew that New York wasn’t gonna be the place where I could make money because, being that it’s an attorney state, it’s hard to do deals there. So St. Louis is a non-attorney state. You can close a deal in seven days. You can close a deal in fourteen days, whereas in New York you’re looking at ninety days.
Joseph Crooms (19:59)
Kevin, we’re about to wrap this up, but explain the attorney deal. How’s the versus no attorney—attorney state versus no attorney? What does that mean?
Kevin A. Smith (20:13)
An attorney state is—attorneys in New York handle the closing. They handle the contracts. Basically, as a realtor, you put a deal sheet, you give it to the attorney, and basically you’re out of it until the closing happens. In St. Louis, there’s no attorneys. It goes right from the agent to the seller to the buyer. They put the contract together, they put it in, they give it to the title company, and you close through the title company.
That’s the difference.
Joseph Crooms (20:46)
I understand. Kevin, this is—I can really see how relationship building and having good instincts are important in St. Louis. And thank God you got a zip code. All right, before we wrap things up, if someone wanted to reach out to you, connect with you, Kevin, maybe collaborate or learn more about what you’re doing, what’s the best way to reach out to you?
Kevin A. Smith (21:13)
Best way is email, and—or I have people that call me directly. My cell phone number, you know, I don’t mind. I have a certain cell phone number I’ve been giving out to people in St. Louis. Anybody that wants to call me for advice or call for help, I’m willing to do it.
Joseph Crooms (21:36)
You can share, if you feel comfortable sharing your email and that cell phone, and you can do it right here to our listeners.
Kevin A. Smith (21:43)
Okay, ksmith@accesshomes.net, and the cell phone number is 314-681-9969.
Joseph Crooms (21:54)
Kev, run it one more time for those that was fumbling for a pen.
Kevin A. Smith (21:57)
314-681-9969 is the cell phone, and the email is ksmith@accesshomes.net.
Joseph Crooms (22:09)
Thank you, Kevin. Thank you very, very much. Perfect. Well, listen, I appreciate your time, your story, and your business instinct. We need more people in the spaces who are doing it the right way. Thanks again for being here. For those of you tuning in, if you got some value, which I’m pretty sure you did, make sure you subscribe. We got more conversations coming with operators just like Kevin Smith who are out there building real business. We’ll see you on the next episode of Investor Fuel Real Estate Pros Podcast. Kevin, say goodbye.
Kevin A. Smith (22:51)
Goodbye.
Joseph Crooms (22:52)
All right. Thank you very much.
