Mat Zalk

Mat Zalk is the President and Property Manager at Keyrenter Property Management which has offices in Tulsa, Oklahoma City, and Arkansas. He focuses on the acquisition and management of single and multi-family residential properties on behalf of himself and a small network of investors.

Before founding Keyrenter Tulsa, Mat was a Strategy Director at The Property Finder Group, where he worked closely with the CEO and senior management team on various international acquisitions, scaled local teams in the group’s Saudi Arabia and Egypt offices, and executed a number of strategic projects in the business’ core market of Dubai. Mat has been an active investor since 2014 and is a licensed real estate agent in Oklahoma.

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Here’s a glimpse of what you’ll learn:

  • How Keyrenter Property Management helps clients with their real estate assets
  • Keyrenter’s biggest challenge when conducting a renovation
  • Mat Zalk shares how Keyrenter recovered from an over budget renovation project
  • Common mistakes investors make when purchasing a rental property
  • Mat’s tips for investors

In this episode…

Investing in rental properties requires the careful consideration of factors, including budget, renovations, and tenant concerns. Yet, investors often lack regard for these factors and, as a result, struggle to manage their properties independently. So, how can you make informed purchasing decisions to maximize your ROI?

Keyrenter Property Management helps you buy, renovate, and operate your property assets. With their expertise and guidance, you can evaluate the most cost-effective properties to invest in and conduct sustainable renovations. Keyrenter also hires contractors to help maintain the property following its purchase to minimize landlord/tenant disputes.

In today’s episode of The Same Day Podcast, Dr. Jeremy Weisz sits down with Mat Zalk to discuss profiting off your real estate investments. Mat talks about Keyrenter Property Management’s most significant challenges when conducting a renovation, how Keyrenter recovered from a renovation that went over budget, and common mistakes investors make when purchasing a rental property.

Resources mentioned in this episode:

Sponsor for this episode…

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company who helps their clients buy, renovate, and operate real estate assets.

They help clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to or send them an email at [email protected].

Episode Transcript

Intro 0:05

Welcome to the Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Mat Zalk 0:20

Mat Zalk here, I’m the host of The Same Day Podcast where I connect with top business leaders and real estate experts. Today I’ve got Dr. Jeremy Weisz, here on from Rise25, who has done 1000s of interviews with successful entrepreneurs and CEOs. And we’ve flipped the script and he’s going to be interviewing me. But before we get into it, I’d like to point out another couple of episodes from the podcast, check out Scott Reeves from Chickasaw community bank, Mike Bosch from a tendo. Capital. Over to you, Jeremy.

Jeremy Weisz 0:51

Now, I’m excited. You know, because you this episode is about going over budget, right? No, no mistakes ever happen. There’s never an over budget in the world, right? And so, but we you are totally one of those people when you meet. You are totally open and honest. And I’m like, Are you sure you want to talk about this? Mat? You’re like, yeah, no problem. So we’re actually gonna be talking about a project that went over budget before we jump into it. Today’s episode is brought to you by Keyrenter Property Management and a Keyrental Property Management. They are a full service property management company, helping clients buy, renovate and operate real estate assets. And ultimately, Mat, really what you do is you help clients build wealth while taking the headache out of property management. And you’re telling me a story of when you help Ryan and Jason turn nonperforming 14 unit property into 100 plus unit portfolio of renovated single family and multifamily property. So I know you help a variety of different types of properties. It can be single family homes, condos, townhomes, apartments, you have the management solutions that people need. And if people want to check this out, you’re like, I don’t want headaches, I just want to build wealth, right? My time is very valuable. You can go to, keyrenterOklahoma, or And you can also email their team info at So before we dig into the overall budget, just tell people a little bit about your company and how it came about.

Mat Zalk 2:30

Yeah, so kind of, as you said in the earlier it’s Keyrenter helps clients buy, renovate and operate real estate assets, that could be connecting our clients with real estate agents that could be connecting our clients with wholesalers. And that’s given a perspective on a property before that property gets purchased. In fact, today, we had a I had a conversation with a young lady who is trying to get out of a property that she recently purchased. And I called her and I said, if you just called us and asked us before you had purchased the property, whether this property was a good thing to buy, I would have told you no. And you wouldn’t have made the mistake that you made. Now you’re trying to sell it. Sure, you might make a couple of dollars. But your long term objective is not to make $10,000 on the sale of a property but rather to have a property that cash flows monthly for 10 or 15 years, I wish you had just called me she said Well everything’s you know, clear in the rearview mirror. That’s it. That’s true. And next time you buy a property, you want to just call me and talk to me and I’ll tell you whether I think it’s in a good neighborhood that’s going to yield long term value. So we help our clients buy, renovate and operate real estate assets. That means we can do all the renovation we can take a property down to the studs and bring it back we can do you know minor make ready stuff painting carpet, flooring, whatever it is. And then obviously we manage the property once it’s renovated. And if it’s not renovated and we can manage it also right doesn’t have to be renovated, you’re just gonna get more, you get more rent for renovated property.

Jeremy Weisz 3:51

I wasn’t even thinking of that Mat. That’s a good point people should call you before because you have your finger finger on the pulse of these areas and you you know, what is market rate you know, actually what people can get. So that’s you are kind of their, their expert consultants in the beginning, I imagine right. And

Mat Zalk 4:09

the problem in this case wasn’t that we can’t get good rents for the property. The property is nice just in a bad neighborhood. So they stole some vagrants came through and stole all the all the copper out of the AC unit. That’s It’s unfortunate. It’s hard, really hard to stop that even though the AC and it’s sitting in a cage, it’s hard to stop them from stealing the copper. And she said, Well, I get good rent, I said, Well, that’s okay, you can buy that same property if you’re buying it for the right price, than knowing that you’re gonna have to spend $1,000 every two years or three years to fix something can be budgeted into your financials, right. So your pro forma of the property doesn’t mean you can’t buy it, it just means that the price that you’re willing to pay probably goes down a little bit to account for that. That increase in operating cost. So you know, as long as you’re buying something for the right price, there’s obviously there’s a price for everything. You just want to make sure that you’re not overpaying thinking you’re buying one thing and in fact you’re buying.

Jeremy Weisz 4:55

something else. So Mat does this project that went over budget. And first of all, How did this company how did this person find you? And what was their situation when they first came to? Yeah, so

Mat Zalk 5:07

let’s call this let’s call this gentleman, Tom. And we’ll say Tom’s from Arizona. I’m going to protect it. I’m going to protect the our client for for obvious reasons here as we get into it, Tom, it gets introduced to us through a wholesaler, Joel, Cadillac from fixed properties. Great wholesaler has lots of deals. He’s always looking at interesting stuff. And Joel sells Tom a property Tom calls me and says, Hey, Joel referred Keyrenter to me. I need some help doing the renovation. I also, by the way, have 27 other properties that I’m under contract for and when those 27 units come under, when we actually when the deed actually transfers over, I’d like you to renovate those, or help me renovate those and manage those. I said to Tom, Tom, that makes total sense. What are you going to do on the first one, he said, Well, I’m going to bring my crew from Arizona, I’m going to bring them out there, and I’m going to have them renovate the project that that’s first coming under contract. And I said, okay, that doesn’t really make sense to me. First and foremost, bringing your crew from Arizona means that you’ve got to house them, you, you know, sure, you might pay them $1 or two per hour less. I don’t think that’s actually the case, because I don’t know if Labor’s that much cheaper in Arizona, but you’re gonna be let’s, let’s consider for a moment that you’re gonna pay him a couple of dollars per hour or less. You’ve got to house them, you’ve got to feed them while they’re here. Maybe they stay in the property while it’s being renovated. I don’t know it’s kind of strange, especially if a season that up and the plumbing isn’t working. Depends how deep the renovation is. But I said, Look, why don’t you let us do the first one. If you like the way we do business in the way we do the renovation, then the 27 will be a natural extension of the first one. If you don’t like the way we do the first one, then the 27 will naturally go somewhere else you’ll have you’ll you’ll reconsider who they go to and why they go to that different company. And after thinking about it, he said, you know, you’re right, let’s not bring the crew from Arizona. Let’s rather let’s rather have you guys do the budget. Sorry, you guys do the renovation. So as we naturally do, we put together a budget. And I should say I should take just one step back at this point. Originally, five years ago, when we started a Keyrenter, we did a lot of renovation projects. And it was on me I did it. We were we were running through renovations. And that really ran the gamut from, you know, stuff that I own. Personally, we’re taking down to the studs, and I used to buy stuff for 12 $15,000 and put in 7580 grand and have a really nice renovated property. And it went from that into you know, just doing a little bit of interior exterior painting and having to make ready, you know, a made ready house. Last summer, summer of 2021, we inherited a portfolio of 64 properties 25 of them needed to be renovated, and it became evident that I needed help in this I was you know, at the time, we had been in a 40 or 45 people now we’ve 75 people in the organization. And I didn’t have somebody that I could that I could outsource or that I could you know, delegate the responsibility for the for the make readies. And these are again beatmaker it is it can be you know 25 30,000 $40,000 worth of work. So, I heard Seth Rice on my team was a great he was a journeyman electrician was tired of being an electrician knows the construction industry really, really well for the last 2025 years. And he does all the renovations. So when Seth joined Seth join right about the time that that Tom’s property was coming on. And I had started I had started with a budget and I had started the the Make ready process. I started with a little bit of plumbing work that had to get done. And I in the process. Pass it over to Seth. Well Seth had this great spreadsheet and everything got approved Tom said yep, I like this I like this like this, like we’re doing interior painting, extra painting, gotta replace windows, whatever we were doing. He was okay with. The challenge was we didn’t have a line item for materials. And that’s painful. Because materials in today’s world are astronomical right supply chain constraints. And in general supply chain issues have really driven material costs up I mean, OSB used to be $12 A sheet now it was up at $5 A sheet is back down and $50 right now in June of 2022. Its backup at $85 A sheet. So they’re just huge fluctuations, huge variability, and we didn’t have a line item for for the materials. So we get to this renovation, we put a new garage door on we borrow some shutters from another project that we were ripping them off of that look good on this house. We painted them they look great. We did the interior the extra granite new counters, we extended the countertop, the whole thing it was beautiful can lights did a really really nice renovation and we go through and we get like $1,550 for the for the rent, which is in Tulsa, Oklahoma for a three bed two bath and broken arrow is really nice for that price, much more $200 more than anything else in the neighborhood and anything more than in excess of what what Tom was thinking we would get for it. So comes down to it and he goes, You guys did a great job. I didn’t have to think about it. I didn’t have to make any decisions besides the initial budget. I didn’t have to, you know, pick paint colors or swaths or anything else watches whatever they call it, whatever else and you got great rep. The only problem is your $20,000 over budget and on a on a $65,000 total project we need to do some foundation work. It’s not as if that’s 30%. You guys are 30% over budget. That hurts me. And I was like, you’re totally right. And he called us one day and gave us a real stern talking to basically said, You guys screwed up. And we said, we did. It sucks we did. You’re absolutely right. And what we’re gonna do about it is we’re going to make sure that material costs because we can’t really estimate them on the front end, we don’t have a scientific way of estimating, taking a contractor and going to bid out all the prices. Besides being an a complete waste of time is also in today’s environment, a futile exercise because prices go up and down, up and down, up and down. If I don’t need cabinets until well, cabinets, bad example to six week lead time or so. So you’re gonna buy them early anyways. But if I don’t need sheetrock for four weeks, the price of sheetrock could very easily be 50% or 60%, higher or lower than it is today. So it makes no difference to give you a price on sheetrock. If I need 70 sheets, right? It just doesn’t, it just doesn’t matter. So we say cool, we’re gonna make, we’re gonna make an estimate that the material price is going to be 80 to 100% of the labor cost. And that’s what we do nowadays. That’s how we estimate it. So we, you know, we’ve done it for a year now. And it’s worked perfectly. But Tom came to us afterwards and said on the 27 units, it’s going to a different property management company, because I can’t afford in this scenario for 27 units to be 30% over budget, I don’t have faith that you guys are going to be able to, to, you know, tighten in rein in what you’re spending over the course of those stories of minutes. And it was that was a painful moment. I mean, it hurt it, you know, we had to establish a great relationship. He trusted us on doing the right thing. And, you know, and using his resources judiciously, he trusted us on getting the work done quickly. And, you know, doing it well. But he didn’t trust that we weren’t going to spend more than he was expecting us to even if it was for, even if it was an honest mistake.

Jeremy Weisz 11:50

Yeah. And it was more like a communication thing. Like you had to factor in those, you know, the line item materials later, because there’s no point estimating where right now you tell them upfront, hey, by the way, we’re communicating upfront, instead of after like, hey, there’s actually this is for what we’re doing. But this other is just for the actual cost of us buying the materials itself. Right. So okay, so that’s painful, you’re like you see, okay, 27 properties. We’re not going to deal with you what happens next?

Mat Zalk 12:27

So the 27 properties went away, managed by another company. And I was talking to Tom every once in a while Tom would call me I’d call him and he’d asked me for advice. Who do you think I should use for H fac, could you think I should use for what do you think the right you know, processes for? Should I put in sheetrock before I do the foundation work? Whatever the question was, he asked me, I chat with him. And I give him my honest, my honest perspective. At some point, he said, Hey, the I’ve got one more property that’s coming down the pike, and I want you to do the renovation work. And we said cool, we’d love to, we’d love for you to, we’re happy that you’re willing to give us another shot, we’re happy to do the work. And make sure it doesn’t go over budget. So again, we did a beautiful renovation, we pulled out a shed from the backyard, we we you know, added a phenomenal bathroom where there was just a junky piece of you know, just a total mess with bathroom added can lights, redid the kitchen in its entirety, pull down a wall and made a pass through bar area. Added a laundry room just made a master that had two bedrooms and was really configured made it an appropriate bedroom, we just did a great renovation and again got killer rents, it was out in support. But we got like I don’t know, $1,150 for for a small, three bed, one bath. So great rents. And again, Tom said, wonderful, I know that when I give it to you guys, all I have to do is fund the account. And I don’t have to worry about the quality of the renovation, I don’t have to worry about it renting for what you say it’s gonna say what it’s gonna rent for all I have to worry about finding the account. I love that I don’t have to manage it. I’m not in the business of managing rental properties. I’m not in the business of managing construction projects. I want to do my core business so that, you know I can I can make enough money to fund these projects and build wealth over the long term. We said great, so we did that project. And then he called me and he said, I’d like to bring over the 27 units. What does that look like if we bring over the 27 units? And I said, tell me what’s going on? And he said, Well, fundamentally, we got in a little bit over our heads. We’ve got you know, I don’t even remember the numbers, but we we bought them for a million dollars. We have $200,000 of holdback money. And I’m like halfway through my second renovation and I’ve spent $150,000 I’ve got to renovate 27 projects, 27 properties. This is obviously not sustainable. This doesn’t work. We’re upside down on the project. But I don’t have a good solution. Obviously we had a very long I spent an hour with him on the phone talking about raising external capital and how to fund the accounts so that you can actually do the work and the merit of doing the work and how much did you give away of the of the total deal in the event that you’re actually going to raise You know, another million dollars to do at work, et cetera, et cetera. But I said to him, I don’t know if it makes sense for you to bring him to us. Maybe one by one, it makes sense. But I just don’t know, if we have a better solution, considering you don’t have the financing lined up, because I fundamentally, this is a financing issue. He said, Well, the current management company, they haven’t, they haven’t, you know, collected all the rents haven’t even brought over everybody from the tha the Tulsa housing authority that, that we wanted them to bring over. So they’re just, they’re just so behind, I can’t get communication from them, I can’t get a clear understanding and a picture of what’s going on, etcetera, etcetera, is 100 problems. But in the end, I said, I think you should just leave them, we’re gonna, you know, we charge $100 per occupied property to bring them on. So you’ve got some that are occupied, that we’re going to charge you for to bring them on, of course, there’s a ton of work and bringing on a project set a property, especially if there’s a Tulsa Housing Authority tenant in the in the property. But in addition to that, it’s going out and meeting the tenant, putting a notice, getting them into our system, making sure that the ledgers are correct. It was just a lot of work that goes into bringing on those tenants, I said, keep them keep the properties where they are, might not be the best management company, you made that decision. And I respect that decision, given the information you had at the time, and the way you were feeling about us with our with our with that specific project and the budget overrun at the time, but let’s leave them where they are. And let’s talk in a couple of months and see how you feel after that. That’s that’s where they left? Yeah. Yeah, it’s

Jeremy Weisz 16:16

a tough conversation in the beginning, when you go over budget, just because of the materials not being communicated. And then, you know, then they want to bring all the business to you. And it’s a tough conversation, because you’re looking at that portfolio, like it’s your own and looking at to see what actually makes sense from a financial perspective. But, you know, in long term, like he, if he raises finance, you know, raises funds, then, you know, he just sees you as a trusted adviser. And that’s what what that could be, he sees you as I’d love to hear, you know, on that topic. What are some, you know, people make mistakes along the way in this process, right? And so what are some of the mistakes you see people making, either on the front end during or on the back end when someone’s buying a rental property for investment?

Mat Zalk 17:09

So I think one thing that people do, people often say, I’ll hear a husband or wife say to my husband, or why I was telling my husband or wife, you know, you don’t have to live here. It’s just a rental property. It’s here to generate income. I think that’s true. You don’t have to live there. So if your house if you’re a doctor, and you’re trying to invest in rental properties, your house at home, your primary residence might be a really nice home, you might have marble floors, and you might have granite countertops, and blah, blah, blah, and that doesn’t need to be the case and rental property. But that doesn’t mean your rental property can be a total piece of crap, either. Right? I mean, it needs to be livable. So I find that people buy houses that need renovation that need upgrading, and refuse to do them on the pretense that I’m not living here. It’s a rental house. And that’s true. But if you want high quality residents that pay rent month after month, and that except rent increases at least resigning time, they need to be nice houses. So can you add, can you upgrade a little bit, can you sure, so paint that’s fresh door trim that doesn’t have dog bite marks from the previous resident and their pets, carpets that don’t smell like pet dander and everything else. I mean, upgrading a house, there are simple things you can do to upgrade a house in a way that makes it far more livable. Again, a fresh coat of paint, a little bit of wood trim, fresh flooring, some light fixtures, we put canned lights into all of our houses now, because it makes it so much brighter and nicer, the environment is so much better. And it doesn’t cost that much to take out the old crappy, you know, light fixtures that hang down and put in canned lights, it’s really just not that expensive. So I think one thing is you don’t need to live in the house. But it also can’t be a piece of crap. If you want to rent it, you want to get top dollar, and you want people to stay, it needs to be nice. So that and that kind of cascades through the second part, which is you as a landlord who might not be paying the utilities, but the resident of the property understands the all in cost of living in that house. And if the windows are old aluminum windows, and they’re leaking air and you’ve got holes in various places, potentially because a mouse or a rat chewed through places and you know, and it never got fixed properly. But if you’re if you’re leaking a lot of air from the overall envelope, the resident will feel that their heat bill will go up, their gas bill will go up and they need to heat the house. their electric bill will go up significantly when they need a cooler house. And they’re going to look at the end of the month or two months or six months or 12 months of a lease and they go it’s my rent is 1195. But I’m paying $300 a month in electricity because there’s no insulation in the attic. I’m paying $150 in gas, because there’s no insulation in the attic. I’m paying you know all these ancillary costs because there’s a there’s a leak in the water line from the main on the House side of the meter from the main meter into the house. There’s a leak somewhere. So I’m paying exorbitant water bills and they will move as a result of that. We one thing we did years ago is we hired a plumber on staff to help us out with smaller stuff because I knew You couldn’t get a licensed plumber. Sorry, a contractor as opposed to a licensed licensees can also be a journeyman just to be clear, but a contractor that needs you know, that is doing 567 $1,000 got plumbing, the redo jobs, right that’s running all new, all new pecs and all new PVC into a house, they’re not going to want to do a $65 hose bib change out on the back of the house. But a tenant that knows that we’re dripping $40 of water a month because their hose bib hasn’t been fixed in 15 years. And it’s just dripping out understands that that’s probably

Jeremy Weisz 20:31

happening to me right now, Mat.

Mat Zalk 20:34

Say that, let’s go check. But a tenant that’s paying $800 a month in rent, that pays an additional 5%. For water, wastage knows that they’re going to leave the house. Now the owner doesn’t know that they’re leaving the house because there’s that that problem, most likely, I know, the owner doesn’t know whether they moved to Dallas, because they got a job or they moved down the street because they moved in with their in laws or anything else. But I know, and I wasn’t able to solve that problem, or our main big plumbers weren’t able to do those small jobs, they just didn’t have the capacity, the time got worse than COVID. But even before COVID, we hired our first plumber, and now we have to to be clear. But when we hired our first plumber, it was because we couldn’t do those small jobs that I knew I needed to have the small jobs fix. And if I couldn’t triage the jobs and say, I need your time over there spent on this small job. You know, I was doing a disservice fundamentally to my to my owners.

Jeremy Weisz 21:23

Yeah, so it sounds like the upgrades is not just for aesthetic purposes, but it’s actually for functional purposes. And my I also on the front end, you know, people probably more times they should they don’t at all come to you before they even purchase a property. And what are some of the front end questions they should be asking themselves before even, you know, purchasing.

Mat Zalk 21:49

So I think a big one is, is the neighborhood long term going to be going in the right direction. There are plenty of cash flowing cheap properties in Tulsa, Oklahoma, you can buy them in neighborhoods where like I said earlier, you know, you can buy a house for 40 or 50, or 60 or 70 grand that will rent for, you know, 567 800 1000 1025. And in fact, the person I spoke to this morning, said, I’m getting great rent, I paid $75,000 for this house, it was moving ready, and I’m getting great rent, it’s 1025. The challenge is the challenge fundamentally, is that I gotta turn this guy got something buzzing in my ear, even though so So for somebody that buys a house for $75,000, that thinks that 1025 is a really good, a really good return on that investment. It should be in isolation, it definitely would be. But if you have to go through and make repairs, unnecessary, or otherwise unnecessary repairs, because the neighborhood, other residents in the neighborhood or outside of the neighborhood are breaking in and are destroying things or stealing copper from the AC units or doing whatever else, then obviously, it reduces your return on investment, you’re having to pay for those things over and over. So one important thing is contact us before you buy a property. And we don’t always make friends in this in this industry, right? Sometimes people call us and say so and so referred me to you because you can do the property management. And I say please don’t tell him I told you this, but don’t buy that property. And it’s happened so many times there’s 60 person in Peoria is a rough area of Tulsa. And it probably happened three times. So we were under we are in discussions with an owner that wanted us to manage the property property wasn’t doing well enough for them to feel comfortable with our fees on the management side. So they managed it themselves for a little while. But it was a terrible property. And they were really struggling. So they’re trying to sell it. So every time they would try to sell it and have an active buyer, they would send that person our phone number. And I had three or four people call me and I eventually I suspect that they got they figured out what was happening. And they stopped sending people to me, and I don’t know if the property ever sold. But every time they call me, I would say I don’t know why they send people to me, I’m the person that says don’t buy that property. And I’ve told them and sell the property that property is a terrible property. That’s it’s never going to be in a better neighborhood. It’s never going to have fewer problems with the boiler and the chiller system, it’s never going to have the caliber of resident that you want. So sell the property. So I don’t know how many times they sent me through people by four times before they figured it out and stop sending me people or the fourth person didn’t listen to my advice and bought the property anyways, never call me again. Whatever. But that happens frequently. People call me and say you know I’m under contract for something. This location I say why you should not buy there. That’s where people that’s where locals do their best to make you know to put lipstick on a pig and sell it to people from out of state that don’t know any better. Don’t do it.

Jeremy Weisz 24:37

The general rule first of all, Mat, this is great. Generals call them first before you do anything to get their advice because they’re experts and I want to just point people Mat to check out more episodes of the podcast and you know what, depending on the state or city you can go to or to learn more and Mat, thank you for for having me.

Mat Zalk 25:06

Yeah, appreciate it.

Outro 25:11

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