Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books "Choose Bliss: The Power and Practice of Joy and Contentment" and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
We always want to find bliss, but we have no control over the things around us. How do we do that? How can we control our lives despite the busy day-to-day of business? In this episode, Zach Oehlman, the founder of Valley Investment Club, shares his insights on developing yourself through a Vision To Reality strategy. Zach dives deep into personal development and personal responsibility, particularly in his real estate business. He tells us that when we are changing our life, we must change the context first. When life sucks, we don’t blame life; instead, we must be responsible for how to deal with it and empower ourselves in the process. To find the world of bliss and become the CEO of our lives, tune in to this episode.
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From Vision To Reality: The Strategy To Become A CEO Of Your Life With Zach Oehlman – Real Estate For Women
Real Estate Investing For Women
I am excited to have you on the show, Zach Oehlman. This is what Zach has to say about himself, “I grew up in a small town in Northwest Indiana and went on to college at Indiana University for Finance and Business. I started a career as an evaluation consultant and became a published author in this industry before starting my own business.
I have spent several years growing multiple businesses and traveling the world with my wife. We own and operate three businesses, a real estate investing community, a software and automation company, and a VA business development company. We find great people with great companies and help them scale themselves out of the day-to-day business.” Zach, welcome to the show. How are you doing?
Blessed and highly favored.
I’m excited to be talking to you. I don’t know if you know this about me, but I personally have traveled to 65 countries. Travel is my deepest passion. Here’s one of the things that happened over the last few years. We know what happened during the pandemic, and that was a different reason, but since I started this show and this business, I haven’t been able to travel. The business has owned me.
You and I were talking about in the green room that it’s time for me to get back to the blissful life that I created. I want to get back to that. I love doing this show. I love serving my ladies, but it’s time for me to pay a little bit of attention to my needs too. I’m excited to be talking to you who’s doing that thing. You’re traveling the world and running businesses remotely, and it’s not taking a huge amount of your time. I’m excited to be talking to you about it. Could you tell us a little bit about your story and how this all started?
Way back when, in the little town of Kouts, Indiana, I’m a farm kid. I didn’t value anything other than being outside. My dad died when I was twelve. I took over the family farm before and after school, but I always had this deep desire to travel the world, help people and make a lot of money. I didn’t know how to do it. I started looking into this world that I wanted to get into. What I found was it takes money. I listened to some of your stuff. It’s like, “Money creates choice.” I love the way you say that. I was like, “I want to learn how to make all the money in the world so I could do whatever I want.”
They said, “Become a business owner or an investor.” Fast forward, I went to college. I took college very seriously. I graduated, from IU with a degree in Finance and Business in 2008. If anyone remembers 2008, that is not a great time to be in the finance market. I sent out 3,500-plus resumes over 3 years. I worked down at the Chicago Board of Trade.
I became a consultant in the valuation industry, six figures a year, every bell and whistle you could think of. I was like, “I made it. Here it is,” and I was miserable. I pulled the curtain out. I got to see the underbelly of this, and I was like, “This is going to be the rest of my life, 60 to 100 hours a week, 2 weeks a year, and high stress. A big error could cost millions of dollars and someone’s going to replace you with that. This isn’t what I wanted.”
A friend invited me down to a meeting and say, “Why don’t you come and check this thing out called real estate?” I was like, “I wanted to do it.” I sat through a presentation. I was super interested. I join their community. I got to work. It took me about eighteen months to do my first deal. I didn’t have any money. I had to borrow the money to get into the training and development program for my mom and I’m thankful for her.
I knew that this was the solution because I tried everything else then I was able to quit my job. We started our own real estate investing community because one of the things I’ve learned is you are a product of the people you hang around. I’m like, “I need to bring the resources to me instead of going and getting them.”
Fast forward, we’ve created a nationwide community of over 1,000 people that are connected to 32,000-plus people. In developing that, there are needs. People need access to capital, software, and all these ancillary services. I wanted to make sure that they were well taken care of, so for some of the more business development companies, I created that because I needed it.
I was paying big bucks to all these consulting firms and third-party people. They weren’t in alignment with the other people. I brought all in-house, learned how to scale businesses, learn how to document the process, and then learn how to put people in that. My big vision was to travel the world, then I had this great opportunity called COVID because I ran an in-person meeting twice a week, with 2 to 300 investors every Wednesday and 100 to 150 investors every Saturday. We had training. We moved all of that online. We had this beautiful apartment in Downtown Phoenix on the twentieth floor we just moved into. We were excited about the nightlife and restaurants, and we were in there for a week, and everything got shut down.
I was like, “What are we going to do?” After about four months of doing Zooms every day, I looked at my wife and said, “We don’t even have to be here.” We went to Hawaii for two months, tested that out, loved it, and didn’t like the time change. We came back. We got some things in order, then we went on a two-year world travel like in Columbia and a bunch of different countries. We go and stay for 2 to 3 months. We work during the week, set up our office, and then on the weekends, we enjoy the fruits of labor. It’s trial and error. Eventually, we figured it out.
What I’d love to share with the people is how we did that because it’s different for everybody. It’s a simplistic process if you’ve been through it. If you haven’t been through it, it’s wild. We ended up making it happen. We came back to the United States. We bought another house. We’re getting that up and ready for our personal flavor, then we’re going to short-term rent that out and head to Asia.
People need to understand what it takes to get started in a business. Could you give us your perspective on that?
There are a couple of perspectives on getting started in a business. I’m an analyst by trade. I used to be the most socially awkward person you could ever see. I would break out in sweats, stutter, and stammer. My mind would go blank. I was not a people person. It still takes something for me to get in front of people. I have to call it forth and be intentional about it. What I’ve learned is there are a lot of people that want to go into business, and they don’t even understand what that means like, “I want to start a business. I want to quit my job.” Even the phrase, “I want to be a real estate investor,” what does that mean? There’s such a simplistic to complex conversation around that.
What I tell the people starting off in business is to go find a great product or service that someone else is already created and then sell it. That is such an entry-level, low-risk, learning time of your life because you don’t have to worry about fulfillment, product creation, and all of that stuff that goes with running and managing a business. There are a lot of moving parts to this. What I tell people is, “Go find something great and learn how to sell it.” Once you make some money and understand the processes of business, selling, and making money, then you can start replacing yourself and moving into that. I tried to move to owning and running a business way too quickly, and I didn’t understand all the other variables of it.
Vision To Reality Strategy: Go find something great and learn how to sell it. Once you make some money and understand the process of business, selling, and making money, you can start replacing yourself and moving into that.
In the context of real estate, what I would tell people is you could do real estate with none of your own money and none of your own credit. It’s very true. Here’s one of the easiest things for people to do. I neglected to do this. I was a high six-figure earner, great credit, and I didn’t use it. I was focused on getting these crazy discounted properties and doing it with none of my own money or credit that I neglected doing the simple thing called, “Go get pre-approved. What can I find off the MLS that cashflows?”
I want to highlight that. Even in reading this blog, a piece of me sometimes feels like I want to apologize to my ladies because there are many cool ideas and things that people bring to this show, and it’s cool to read. It can be a little bit confusing, especially when you’re starting because when you’re starting, you want to start the business with the least moving parts and complications. That is what will get you moving. You want your first steps to be the easy ones to feel good because once you have success, then you have more confidence to do the next step. You’re more willing to work harder too.
First of all, they get confused by all the options. When they finally jump in there, it’s hard that they burn out within the first couple of years and they can’t do the long-term, which in real estate, the money is in the long-term. Dealing with the simplest path, which is getting regular credit and buying something on the MLS, I recommend you make sure it’s your first home because you can put the least amount down.
The loans are the easiest to qualify for. You can get the most money. It’s the lowest rate. All of those things are in your personal resonance. If you want to cashflow it, now you can house hack. Rent out a room, Airbnb, and all of those things. I’ve done it all in my primary resonance because it’s the easiest way to get started, and then, “We did this. What can I do next?” Now there’s room for expansion and learning. It’s fun because you’ve already had success.
At that simplistic level of MLS and using your credit and a realtor, you got the realtor and broker or the finance person guiding you. In this world of real estate investing, it’s fast-paced money and high-risk rehabs. I know you own your own construction company. Rehabbing? Understanding that skillset is a big journey. If you take the opportunity cost of high-interest money and timeline to rehab stuff, they’re probably better off getting out of the gate and buying straight off the MLS.
In the very beginning, you’ve got pros that you get to take advantage of them. You’re getting into the business in the most intuitive way like the way that we all understand. The other thing that’s also interesting about that is you’re getting into the business in a way that your community will support you. You’re not going to hear all the fear factor of everybody saying, “That’s hard. That’s risky.”
People might be saying now because we are afraid of a recession and interest rates have gone up. In general, people understand that it’s a good idea to own a house. Until you’ve built a community of other real estate investors that understand where you’re headed, you’re not going to be dealing with the naysayers in general when you start in this way, which is super helpful not to have to fight that.
I did tell anybody for one year and a half I was doing this because I didn’t have the confidence. I was a six-figure earner college degree. I had the proverbial dream life. Everyone is like, “Why are you wanting to quit that?” I didn’t even tell anybody because I didn’t have the confidence to deal with the naysayers.
You don’t want them pulling you down. This topic is deep and close to my heart. Can you talk about personal development and personal responsibility with regard to your business in real estate?
I’m an analytical guy. I understand discount rate cap rates. I’m a published author in finance. I’m like, “I’m going to make so much money. This is going to be great,” then nothing was happening. I was focused on the tactical and practical side of it. I can do spreadsheets. I’m the numbers guy, but in my bank account, it wasn’t happening. My mentors and the people I hang around are like, “We have a personal development guy coming in this weekend. You need to be at this training.” In my mind, I was like, “What is that? What’s personal development?” It wasn’t even in my vocabulary.
I remember I came to this training and cried for six hours. I was in the front row. It was the first time in my life that I was like, “Here is the door to this room I’ve been trapped in. It’s called personal development.” I signed up for his program. I got his coaching. I went straight to the library and was like, “Do you have any books on personal development?” They looked at me funny and go, “Yes, that whole section over there.” It’s like this whole world that I uncovered.
I’ve never been talked to like this. On one of my first coaching calls, he was very respectful, but I was paying for a guy to help me get through something that I didn’t know what it was. He laid it out like this, and I’m going to paraphrase, “Quit blaming everyone else for your lack of success. You’re at where you’re at because of you, and no one else. Take responsibility for that. Own it. Let’s move forward.” He had a couple more choice words in there. I remember where I was. I was angry. I was like, “I didn’t want to hear that.”
It was like, “What do you mean that’s my fault.” Five minutes later, I had this breakthrough. I was like, “If it’s my fault, that means I could do something about it. Personal responsibility. I’m responsible. I don’t have to wait for the raises or for someone to offer me deals. I can go out there and hunt instead of waiting for things.” Over time, this concept of personal development and responsibility, anytime something isn’t going right or isn’t going the way I want in my life, I go, “How am I responsible?” and then I can do something about it. I’m constantly in programs. I have coaches that don’t coach me around real estate. It’s all personal development, and there are many different flavors of it.
I wrote a book called Choose Bliss. I talk about the flavor of bliss with regard to everything that I teach. Here’s one of the things that I say over and over again, and people have heard me say it so much that they don’t even hear me say it anymore, “We can’t control what happens outside of us, but we must control what happens inside of us because that’s all we can control.” It’s all we have true access to.
I can see where you’re coming from, and I’ve come from this same place. We’ve got this amazing education. It’s, “You can’t tell me it’s my fault. Do you know who I am? Do you know how smart I am?” I didn’t say how smart I am, but we could. We’ve got these college educations and all of this stuff. The reality is, “Do I know who I am? If I don’t take responsibility for who I am, it doesn’t matter what anybody else thinks, says or what education I’ve got because that education doesn’t mean anything unless I am utilizing it for what I want in my life.” In my book, I have a whole chapter about 100% responsibility.
If people took personal responsibility, we would have a different world.
You’re not blaming people politically, the recession, your boss, your children, or your spouse. You’re taking responsibility for how you’re responding to these situations. From that book, that is the chapter that makes people the most upset. I get emails on this all the time. For instance, I’ve had horrible things happen to me, “Are you responsible for what that guy did to you?” “I’m not responsible for what that guy did to me, but I am responsible for how I choose to respond and how I choose to have relationships and live my life afterward.”
I have coaching calls with my coach. She’s like, “How are you responsible for something?” I was like, “I’m not even privy to the relationship.” She goes, “I know, but if you find a way to be responsible, then you can do something.”
People think that because you’re responsible, it’s your fault, but because you’re responsible, you can affect change. It’s empowering. It’s not depowering. Thank you for bringing that to the table. Could you talk a little bit about knowing where you’re going and who’s coming with you?
This is an evolving conversation. A lot of the training I do is from life experience. I run as fast and hard as I can. I go through the roadblocks and the challenges, and then I’m like, “What did I learn from it?” We share that with the people following us. I remember when I first started our real estate investing community. It was like, “I’ll take anybody. I need some help.”
Everybody is welcome. As we have grown and developed our personal lives and businesses, the more money we make, the more intentional we have to be, and the more we have to select who we’ve spent our time with. We have to make sure that those people’s ethics, principles, and the way they conduct themselves align with the overall mission and vision of where we’re going.
First off, if you don’t know where you’re going, we always hear that you’ll float around. The other aspect, and I’m learning this as we scale where I put people in my place, is I don’t train on the practical and tactical stuff as much as I do the principles because I want them to be trained in sound principles so that they can attack anything that comes their way, which means they don’t need me because they can do the critical thinking. One of the things I see a lot of the time is people coming in, and maybe for you or me, this is hard to fathom, but people don’t have a vision.
I’ve learned this over the years. I’ve been doing this for many years. We’ve helped thousands of people. We’ve created this process called Vision To Reality. We help people in their businesses and get started in real estate. When I ask them, “Where do you see yourself in 5, 10, or 15 years?” I’ve had people break down and cry. They’re like, “No one has ever asked me that question. I’ve never put any time into it. I don’t even know.”
What’s critical is knowing where you’re going. I didn’t understand that. I just wanted to learn the tactical and practical. I hear people, “I want to make $5,000 a month so I can quit my job.” Some are, “I want to make $10,000.” My question to them is, “What is that money paying for? If it’s a dollar value, you will lose motivation.”
What I recommend people do is create a vision. We do it through vision boards. We have training and development programs for it, but it’s as simple as a vision board. For me, it was to travel the world, help people and make a lot of money. That’s been that for eighteen years. I constantly bring that down to more of a reality. One of our ways to give back is I want to create a content creation studio in every country. That’s why my list. I want to have a house in all the countries that we love to visit because we travel. I break it down into that.
I put a timeline to it. What that does is that help us manage the day-to-day because we can get stuck in the day-to-day of being busy with zero intention. We waste so much time being unintentional, yet at the same time, we need to make sure all of our activities are in alignment with the grand vision. Too many times, I see people say, “I have this vision. I’m doing this.” The first two are taking you backward, and then you should put all your attention on the third one because that’s what’s going to get you there the quickest.
If they’ve never laid that out, they’re going to be busy being busy. I get stuck in that. I revert back to my plan, “What does the plan say? It has nothing in there about this. I’m going to take that out and I’m only going to focus on what my plan is.” I found that to be such a critical component of our success because I’m a person that wants to do everything. I mean everything to the detriment of my bank account and having success in one thing. I’ve taken the task to be an expert at 1 or 2 things and stay committed to it.
You are doing the things that you love to do, and that is the best use of your time and your energy. They’re the things that you’re passionate about and good at, but then you’re going to have other people that do these other things. You’ve built a business around your rock stars. Talk to us a little bit about that.
Hiring people is such a critical component. I’ve hired bad people and I’m still cleaning up the messes. We’ve all been there. I believe in people, in the human spirit, and that anyone can accomplish anything. The challenge is sometimes I believe it more than they do. There are these many different phrases like hire slow and fire fast, whatever.
One of the key components I found about hiring people is if you do not have documented systems and processes, they’re going to do whatever they see fit. You can’t blame them for it because you didn’t show them what to do. If you want to transition from this world of self-production and self-employment to this world of a business owner or CEO, you have to understand and document every process from how you check the mail and do your bookkeeping.
Vision To Reality Strategy: If you want to transition from this world of self-production and self-employment to this world of a business owner or CEO, you have to understand and document every process.
How do you handle emails that come in? All of this little stuff that we do without thinking, when you’re moving somebody in, they have to be able to replicate your thinking. The better you have this process documented with training, the cheaper you can get somebody to fill that. Almost all of our team are overseas. We have people in the Philippines, multiple different countries, South America, Africa, Bangladesh, and the Netherlands. We have people all over the world. My competitive advantage is I have bulletproof systems and processes that I put my team in then those people that I’m looking for to fill that need, I have to make sure that their attitude fits who I am.
This is key. I do a Vision To Reality strategy session with them. I was like, “What do you want out of life? What do you see your next 3 to 5 years being? What is your vision for whatever you want?” I then tie that vision of theirs to the position, and how they make the money. The better they do in that position, the more money they’re going to make to help fuel their dream so they’re no longer coming to work. They’re going to work on their vision and their plan to accomplish whatever it is they want. I’ve tied myself as the source of them getting fulfilled on their vision.
That’s how rock stars work. They are bigger than just the task. You’ll notice that anybody that’s good at what they do never say things that people use frequently, “That’s above my pay grade.” Entrepreneurs will say that jokingly. When you hear it, you’re like, “Oh.” It’s not about boundaries. It’s about their attitude about what they’re doing in their world. Many people will be like, “I need to set strong boundaries because,” and you’re right, you do, but you should not have boundaries on your dream. You can have boundaries on how much time you put in and all of those things. That’s healthy, but you don’t want to put boundaries on your capacity to work and be a rockstar and achieve your dreams.
What I tell people is we have an attitude of, “I don’t know. I’ll figure it out,” even my wife. My wife is a COO. Her background is social work. She was a Director for the Ricky Martin Organization down in Puerto Rico. She is an expert at that, not an expert at finance, real estate, and business ownership, but she has the attitude that she could figure it out. She goes on there and does it. Everyone on my team has the attitude to figure it out. They come to me and go, “I want to make more money.” I was like, “Let’s figure it out. What do you want to do? What lights you up?”
They are like, “I want to try copywriting.” “Let’s put you in a copywriting position and slow roll you into that. See if you like it and if you’re good at it.” We have people who are like, “Let’s move you up into managing a sales team.” They get to come to me and I create that safe space that, “You can make as much money as you want in my business. If you’re great, I’ll find a way to help you get what you want.”
Talk to me about changing your life by changing your context. This is something that you do for the people that work for you and yourself.
First off, what does context mean? This is the world that I live in. If you’re reading this, I want you to imagine me sitting here with my hand holding up in the context of human body parts, a finger. In the context of body parts, this is a finger. In the context of numbers, it is one. In the context of direction, it is up. It’s like, “To the conversation you’re telling yourself, what is the context?” Instead of saying, “Life sucks, all of this stuff happens to me,” change the context to like, “Look at all these problems I get to solve to become a better person.” In the context of business, “Everybody has a problem.” I use words like disempowering conversation. Is the context you have about your life disempowering you? Mine used to be. Now, I have an empowering context in an empowering conversation.
I have many different contexts for different parts of my life, but one of the things that I want people that are around me to understand is I’m here to empower people to have amazing life. That is everything I focus on. It’s not just around your finances because I know a lot of people have great finances but their marriage sucks or they’re not getting fulfilled.
One of my biggest things was travel. I used to say, “I’m going to have to work 50 years even as an entrepreneur, business owner, or whatever, fill that in, then one day I’m going to get the travel.” My coach said, “Let’s create a context of you can have it all.” I was like, “I could. Couldn’t I?” What’s that founding storyline you guys tell yourself? One of them is, “You can have it all. You can travel, run businesses, and have epic motorcycle adventures, which I love. I love doing all this adventure stuff and I love running businesses. I love making money and helping people do it.” I’ve created the context if I can have it all.
One of the things that you said but led to somewhere else is you started with, “I have different contexts in different areas of my life,” but then you move to the overriding context of, “I can have it all.” Part of what creates bliss in our lives is to have that overriding context. It’s like the culture of your life.
For me, the overriding context or the culture of my life is blissfulness. Everything that I do needs to feel blissful to me, whether it’s my relationships, working out, building my business, doing this show, coaching, construction, or whatever it is. To any of those things, the overriding context is, “Does this support bliss in my life? If not, how can it?” The, “I can have it all,” is an overriding context, but then you take that into the different areas of life and you create a context that will make that area successful based on the overriding context.
That’s the bowl that all the other ones fit in.
This is a great segue into changing because into being at cause. Talk to me a little bit about that. I love this because the cause concept already said it that way. I want you to share that with my ladies because it’s valuable.
All I do is talk to people. I’m getting training development. I ask people like, “What do you want in life?” They start sharing with me, “I want to travel the world. I want to do this, but I can’t because.” Anything after the because is fear. We call it a tear barrier. If you want that thing you’re saying, “I dreamed of traveling the world since I was eighteen, but I couldn’t because I had a job, I didn’t have the money, and the world is scary.”
I wanted to travel, and people are like, “Don’t go there. They don’t like Americans.” We let people lead us. There are all of these becauses. What I’ve learned in the world of personal development was if you want it, you can have it. Transform because to two separate words, be and cause in your life. If you want something, you say, “How can I get this?” It’s the questions that we ask ourselves. You will get an answer.
Vision To Reality Strategy: If you want it, you can have it.
“How do I travel the world?” My answer was, “We got to get out of this job.” Entrepreneurship and real estate investing showed up. We became great at that, but I became successful at it, so I have to be here now. I’ve worked myself back into this thing I’m trying to get out of. COVID came. We moved everything online, “How can I travel the world?” “We’re online, let’s go for it.” Start asking yourself, “How can I?” instead of immediately cutting it off with a statement.
Immediately cutting it off with a statement can be valuable, too, because that shines a light on what it is that is deep inside that makes you feel like you can’t do stuff. You understand your obstacle right at the very beginning. If you have a because, for me, it’s because I feel like I need to have certain audio or video quality, I need my studio and all of these things. If I want to do a podcast and release it every single week, even if I do, then I need to be in my studio long enough to record this.
I can batch my recordings, in this many episodes, but I still need to be in my studio because I’ve got all these ideas of what the quality should be like. What I’m starting to discover is if I’m at a speaking engagement and I’m going to record somebody, and that’s the only time I can get them, I have my laptop, the audio quality is not awesome, but it’s still a great conversation that’s going to benefit my audience. The because statement taught me what my hang-up was.
You deal with the because. It’s like, “I can’t because I don’t have time,” then I took that and I found out how to be a real estate investor. Thank you for distinguishing that because that’s the topic that we need to focus on.
The ‘because’ topic and issue now allow you to be at cause for fixing it. Be a cause to fix that issue, that was the because. We use the word victim. People hate to hear this victim word, but the because is the victimization of yourself, “I can’t because.” that’s a victimization of yourself. Being at cause releases you from that victimization. You don’t know what you’re a victim of unless you can qualify it. The way that you say this about changing ‘because’ into ‘be cause’ are these beautiful transitions from the because statement becomes the be cause solution.
You unwrapped it. We are in the context of because and we do need to know why, but then we could do something about it. In the world of real estate investing, we have this conversation of, “I need to learn how to comp. I need to learn how to run my numbers.” I call them hard skills, like sales marketing, operations, and the business of it. I also have discovered what I call soft skills, like being compassionate, being able to critically think, and doing all of these other things. When somebody tells me they don’t have time, what they think is they need more time. What I think is, “No, you need to get trained and developed in the organization and delegation.”
We all have the same amount of time. I’ve also learned everything. Everything is training and development, from learning how to put a task in your calendar to tying your shoes to everything. I say that because we run a national organization that trains people to become real estate investors. I have this mentality that, “People know how to schedule, follow up and manage a calendar.” Some people don’t. We can’t get wrong because I didn’t one day either, but I got trained and developed in this thing called managing the calendar. I’ve taken that on and helped people learn what they need to get trained in development so they can transform because into be cause.
The other thing that came to me as you were saying that is there are a lot of people out there that are very successful that don’t have these skills. If you’re one of those people, and I will say that I have been one of those people, understand that success is an ever-growing and evolution possibility. Even if you’re super successful now but don’t have these skills by growing those skills, success, bliss, and your capacity is limitless.
It’s always good to be in a constant state of learning and skill-building so that you reach the limitless place that you’re capable of. I tell people all the time, “I’m not as blissful today as I will be tomorrow.” It’s a never-ending upward spiral to the next level. It doesn’t mean that I never get to rest. I mean, who wants to rest from being blissful?
I was having this conversation when my brother got married. I was thinking about my marriage, the context of marriage, and it’s like, “That was the happiest day of my life.” I want to say, “No, it’s not. Have today be the happiest day of your life. Have tomorrow be even happier. I’m working on being happy.” It’s a never-ending game.
You can always be happier. My husband will say to me, “I don’t understand how I’m more in love with you now than I was many years ago. How is that even possible?” I’m the kind of person that I never have anything in my life for long periods of time. My relationships, yes. Even when I was dating, people would last 3 or 6 months in my life. I don’t know how he’s managed to stay that long and I’m still bonkers about him. It’s because we have this expansive it-keeps-getting-better attitude about our relationship, the desire and the priority of keeping that as the context of our relationship.
You’re intentional about it, “I’m very intentional about me being happy.” If we are not intentional about it, we fall for the wind.
“Hope it works.” Hope is not a plan.
We had a beautiful training down in Costa Rica, and one of my friends said, “Hope is horrible.” I was like, “What?” He’s like, “Let me tell you why hope is horrible.” He was going through some stuff in his business. He kept hoping. How he shared it is, “It’s external.”
It’s out of your control. You’re not a cause.
I was like, “This creates this thing that you don’t have control over.” Who wants to have that? You find something more internal.
Ladies, in the green room with Zach, we were talking a little bit about his Vision To Reality process, which he has shared with you a few times already on this show. I’m intrigued by it. I want to deep dive into that. Based on what he’s shared, with everybody in his company and in with himself, he reviews that, wouldn’t you like to know more about it? I certainly would. We’re going to do that in EXTRA. We’re going to talk about the actual process. He’s going to take us through it so that they can help you to create your vision of reality. Did you want to add anything, Zach, before we move into the next pieces of this show about the Vision To Reality?
What I’ve learned is this process we called success or wealth is simply a process. It’s a replicable process if you can follow the process. The challenge that I have had is in this world of everyone wants your attention and everyone has something for you, I’ve learned to narrow it down and know what I need to do so I know what not to do. I’m at a different level now, but I’m still facing those challenges, “What to do with my time? Who should I hire? How should I use resources for this new level?” Creating that plan and having a bulletproof plan is critical. You’re not going to know how to do it because if you did, you would.
You’re not going to the next level if you already know how to do it. You have to learn to go to the next level by definition.
People can talk to and guide you. I recommend getting someone that’s been down the road you want to go down. Get some wisdom and direction from them on how to do it and stick to it. Don’t get another person that tells you something else because you’re going to be all over the place. Stay at it. Here’s what most of it looks like. If you’re starting to this, it’s going to be talking to people. You’re going to be selling something. You’re going to be either buying or selling deals, sneakers, or whatever. Stick to it until you’re a professional at that then deviate and make it your own. Don’t try deviating and make it your own until you have success because you don’t know.
We’re going to be doing this in EXTRA and diving deep into the Vision To Reality process that Zach is great at helping people get through. Is there a way that people can reach you? Could you tell us a little bit about that and your free gift?
Our main thing is real estate. We do have a Facebook Group. The best way to reach me is my website, ValleyInvestmentClub.com. That is where we have a lot of our meeting schedules and you guys can schedule training. We have free training every week. That’s the entry point. We have a free gift. It’s discounted access to our deals mastermind. I’ve learned the challenge for most people in getting into real estate is they’ll say, “I need money and I need deals.” I’m like, “That’s all of it.”
We sell some very advanced masterminds and not everyone’s ready for that. What we did is we started a super entry-level, but at the same time, high value. We have people in there that are full-time real estate investors all the way down to people that are working at a job and are brand new to real estate. It is $97 a month. You get a discounted price if you use the promo that Moneeka is going to share.
What we do is we have software. It’s Patent Pending. It’s from a dear friend of mine, and it helps you find properties on the MLS. It does a lot of the analysis for you to tell you what not to look at, “Don’t look at these 300 properties over here. Focus on these 5 because they meet the parameters that have the potential to be a good investment.” It gets rid of the noise.
We help you if you have questions. We have a Facebook group. We do weekly training and have ten-day challenges. We show you how to use the software, and then we do have access to some capital or lenders if you’re ready to do that. It’s something for everyone, whether you’re brand new and you want to get your dip your toes in with high value, low cost, or if you’re experienced and the only thing you need is looking for deals, an entry-level mastermind is great for that.
To get that, go to BlissfulInvestor.com/Deals. In order to get 20% off of the Facebook group, use the code, ZACHO. Thank you for that, Zach.
It’s my pleasure. The key is getting started. Whatever we can help you guys do to get started and continue that conversation, we’re here to do.
Are you ready for our three rapid-fire questions?
I am.
Give us one super tip on getting started as a real estate investor.
Surround yourself with real estate investors and find a place where they hang out and be around that conversation of real estate.
Vision To Reality Strategy: Surround yourself with real estate investors. Find a place where they hang out and be around that conversation of real estate.
What is one strategy to be successful as a real estate investor?
Cashflow. I look at the properties that I fixed and flipped and what they’re worth now. They served a purpose at that time, but there is nothing like cashflow. Understand what cashflow is and how to generate cashflow because you can generate cashflow with none of your own money if you know how.
What is one daily practice you would say contributes to your personal success?
He shares, “These are all the things that successful people do.” If I do all of them, I should have a pretty good shot of being successful. The biggest one for me is that vision because there are days I do not want to wake up, get out of bed, or I do not want to have to deal with whatever it is I got to deal with, but then I get that glimpse of, “Thailand’s coming up. Let’s deal with this so I can get to Thailand. I want to go ride my Can-Am, but I’ve got to deal with this first. Let’s go deal with it and I can go do my fun stuff.” It keeps that fire in you burning bright so you don’t forget why you’re doing this.
Thank you so much for everything you’ve offered in this portion of the show. It’s been phenomenal.
Thank you for the opportunity. I feel we have a responsibility, at least I do. How many people can we bring with us to this world of bliss? You call it bliss, I call it amazing life because somebody did it for us. Thank you for the opportunity and for your commitment to helping all these amazing ladies out there because I listened to your story and it’s inspiring. It is having the choice to do whatever you want in your life. Thank you for continuing the mission.
It is my pleasure. Thank you. I feel like we’re aligned. Ladies, thank you for joining us for this portion of this show. We do have more. We’re going to do the Vision To Reality in EXTRA. If you’re already subscribed, we’ve got that coming. If you’re not but would like to be, go to RealEstateInvestingForWomenEXTRA.com, and you can check out this Vision To Reality portion that we’re going to be doing.
For those of you that are leaving Zach and me now, thank you so much for joining us. You know how much I appreciate you. Have a great week. I’ll see you next time. Until then, remember goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.
Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
What is the latest on interest rates today? In this episode, Jen Du Plessis, the leading expert in creating world-class teams, shares her perspective on this topic. She shares an investment strategy for investors that draws a line between what you will and will not do. You should know your home avatar and shouldn’t time the market. Jen also mentions that you should date the rate, divorce the rent, and marry the house. Tune in to this episode to know why Jen Du Plessis urges renters to stop renting and start buying regardless of the rates.
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Watch the episode here
Listen to the podcast here
A Perspective On Interest Rates: Stop Renting And Start Buying With Jen Du Plessis – Real Estate Women
Real Estate Investing For Women
I am so excited to welcome back to our show, my friend Jen Du Plessis. For those of you who don’t remember Jen, let me remind you a little bit about her bio. Jen is referred to as the leading expert in creating world-class teams. She works with high-achieving leaders and entrepreneurs who are stuck at 6 figures and want to reach 7 figures per year. Through her masterminds and private mentorship, she dramatically improves leadership skills to build powerful teams and enable multiplied results in record time while designing a balanced and exciting personal life.
One of the things that I love is her focus on this balanced and exciting personal life. She has been in the financial services industry for four decades, and during her 35-year career, she was listed in the Top 200 Mortgage Originators Nationally and has funded over $1 billion in mortgage loans. Jen is the author of numerous Amazon number-one bestselling books, the host of two top-rated podcasts, and the producer and host of her own TV show, Tell Me I Can’t, which reaches over 350 million homes monthly. She is a charismatic speaker, having shared stages with such icons as Tony Robbins, Les Brown, Darren Hardy, Jeff Hoffman, Sharon Lechter, and many more.
Also, been featured in numerous articles and covers of nationally recognized magazines, including LA Weekly and Success Profiles Magazine. Jen believes that entrepreneurs can live their legacy while building it, and it’s time to break free from the daily grind with strong leadership skills and powerful teams. Jen believes it’s time to move from working in and on your business to working above and beyond your business.
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Jen, welcome back to the show. It’s so nice to see you. How are you?
Thank you so much. I’m great. I’m always excited to talk to you, Moneeka. I don’t even remember how we met, but we’ve always had such great respect for one another. I love watching what you’re doing from afar because we don’t get the chance to talk all the time.
I love our relationship because I feel like we exemplify the power-woman relationship or when we’re together, we’re best friends. It’s like we didn’t see each other. We just don’t get enough time together. I’m with you on that and I so appreciate our friendship. Thank you so much. Jen, I want to talk about a topic that I know my ladies have been thinking about a lot because I get a lot of emails about this. What is going on with interest rates and is this a good time to buy? It’s all of those questions around interest rates.
I want to start by interjecting that when I started my own investing business years ago, my rate on my primary residence was almost 8%. It was 7.875% or something like that and this is not a non-owner occupied. We were ecstatic. We were like, “The rate is amazing,” and then the rates drop and we had these amazing rates, which is fantastic, but it’s also not sustainable.
When we look at the markets now, I feel like we’ve gone back to normal. Even though that 8% rate was amazing in those days, we balanced it out a little bit. What I’m trying to say is that when we were low, there was always this anxiety inside of me that, “It’s not going to stay this way.” We’re stabilizing and we can count on the markets in the place that we’re at right now. Does that make sense to you? Do you agree or disagree with me? I’m here to learn your perspective.
I totally agree with you. For years and years after the Great Recession, when rates plummeted and everybody was all excited and buying, we kept saying this is not a normal rate environment. We had the Chairman of the Feds and they were doing quantitative easing. The reason they were doing that is that we had supply and demand issues. When you think about supply and demand, it’s a yin and yang. It’s a teeter-totter effect.
They put a cushion of buffer in between so that it wouldn’t adjust. Slowly as they sold those off on their balance sheet, now what became was the real raw piece of this. We knew that this was coming. We’ve been talking about it for years. Many people have been talking about it for years and years. We also know that traditionally rates and markets are cyclical for anywhere from a 24 to 26-month period. We’re in a cyclical piece that came at a time when quantitative easing was being let go. We get a double whammy on it.
Supply and demand can never be equal. It’s always being adjusted. It’s a living, breathing thing. It’s never 50-50 and stays there. That was happening during that time. We had this safety net that the government and the Federal Reserve are putting around us to give us a false sense of security. Buying real estate from 2012 to 2018 was killer. That’s the best time. That doesn’t mean it’s not a good time. There are a lot of reasons why we’re positioning ourselves in our portfolio. I speak at a lot of investor conferences.
I’m that bridge between financing and real estate because I do both. This is a perfect time to be looking at financing or investing in all kinds of things. There are lots of opportunities out there. There are some new types of financing that are out there. Some build to rent because there’s not enough inventory. We see a lot of investors are now buying land, parceling it off, having the houses built, and creating their own little neighborhood of rentals.
Some are doing buy and holds. Some are doing land contracts and things, but we’re seeing all kinds of financing and ways to invest. To our benefit, when interest rates went up, all of the owner-occupied went away. Now there were more opportunities, but a lot of investors didn’t take that on because they said, “The rates are too high.”
The thing that we have to remember about investing is it’s a business decision. It is not an emotional decision. If the numbers work, the numbers work. If you’re buying at a higher amount, rents are going up. Now we’re over 8% year over year. It’s going to continue to go up. It means that those of us that have that are going to make money on our rental properties. If the numbers work, buy the property. That’s the bottom line. We don’t have the same situation. We don’t have the same pain points that we had when we had the bubble that everyone talks about. We’ll have inflation for a while, but we’ll be in a recession for a longer period of time.
It won’t be the quick ones that we’ve been seeing or, “We had one. We’re out of it.” We’re going to be in it for a little bit longer as the market adjusts and everything. Now is definitely the time to be looking and investing because our values continue to rise. My house is $1.5 million. My value has gone down 1.3% in 2022. That’s the higher end. When you look at the mainstream, you’re going to see values are continuing to increase because everyone wants to have the opportunity to have home ownership. There are a lot of sayings going out there with lenders. This will be the last point of this. Date the rate and marry the mortgage or the house.
If we can say, “Let’s stop renting for the renters. Let’s start looking at a temporary rate increase, but let’s buy the house because that is elevating.” If we can combine all those pieces for the people that are looking at buying or renting houses from us, this is the perfect time to be buying. I know everybody says that. That’s always the perfect time in real estate, but if ever there was a time, it’s now. With COVID, there were a lot of people that didn’t have to make their mortgage payments. We had some of that in the market where the government said, “You don’t have to make your mortgage payment.”
The realization is that’s coming due now. Regardless of whether someone has good equity or not, if they owe $30,000 in back payments on their mortgage because they took that easing, they’re going to have to sell it quickly, which means they’re going to have to lower their price and it’s going to be available for more of us to get. We have to have our eyes and ears open for every opportunity right now.
Could you break this down a little bit more for me? That was a high level. I understood everything you said, but I know there are a lot of ladies that have not been in the mortgage industry. They’re not going to know a lot of those terms and how that comes together, that trifecta that you talked about. Talk a little bit more about that piece that you said. Date the rate, marry the house or the mortgage and divorce the renter. Let’s break that down a little bit more.
I’m not one anymore, you know that, but my family still is in the business. I coach loan officers. What they’re saying, this is speaking from the owner-occupied piece of this or the primary residence piece, is to divorce your rent because your rent is going up 8%. People are getting forced out of the market even for rentals. That’s supply and demand again.
If someone is selling their home, they might be looking at renting instead of buying again because they’re waiting for rates to come down. What’s happened is a big supply has come into non-owner-occupied investment properties. Rents are now going up. This is because of low inventory across the country anyway. We have such a lack of housing. This is why we have more homeless people too. That’s that part of it.
We’re telling owner-occupied primary people to stop renting and start buying regardless of what the rate is. Date the rate because you’re only going to have it for a period of time but get the mortgage. The bottom line is I don’t care if your rate is 2.5% or 3%, you will refinance at some point because you will have a life event that requires you to refinance.
Interest Rates: Stop renting and start buying regardless of what the rate is.
Take out that equity that you created or get a home equity line. Those are at 10%. When you look at your blended rate, it’s better for you to refinance and take cash out than it is for you to have that low first and that high second. It’s better for you to do that. People will let go of these great rates that they have. I know they’re holding onto them so tight, but your house is sitting there with equity.
It’s doing nothing other than gaining equity, but it’s not in the flow of cash. That’s the problem. It’s, “Great. You have equity. Look at me.” It’s not in the flow of developing more cash and creating more wealth for you. That’s part of it. The other part of this is that when people buy houses, they were in their homes for 5 to 7 years. Now we’re looking at 7 to 10 years because we’re holding on longer. We’re afraid of the competition. It’s like, “Where do we go? What do we do now?”
There’s a little bit longer hold but people historically only keep their mortgages for 4 or 5 years. Call it a holding strategy. You have an entrance holding and exit strategy. Your holding strategy is how long will you have the house and the mortgage. For investors, where the challenge comes in when rates are higher is that it’s a fixed cost. It’s a fixed expense. You run your numbers and the numbers work. You buy the property and rents will go up over time anyway. The challenge is that if you buy a prior interest rate, then you have to refinance it at some point to have a better cashflow. That is costly. It’s difficult to do through traditional methods. It’s available in non-traditional methods, but it’s going to be at a higher rate.
When rates go down, you may find yourself refinancing to something that’s slightly lower, maybe not as low, but slightly lower, even in the Non-QM world, or Non-Qualifying Mortgage world. Again, we buy properties for a couple of reasons, cashflow, appreciation, and tax benefits. If the cashflow is there, buy it. If appreciation is happening, buy it. If you’re getting the tax benefit, buy it. What are you waiting for?
Regardless of what’s happening, the odds are you’re going to refinance at some point in time as equity continues to grow. That’s more of a breakdown of it. Again, you talked about your loan. When I got into the mortgage business in 1983, rates were 18.5% and people were still buying. It’s crazy. People say to me all the time, “Inflation was lower, the values of homes and our income were lower. Every bit of it is all relative.” People will still buy. People still need a place to live.
People are still going to have credit challenges and have to rent. That is to our benefit. People will still have the inability to qualify for a mortgage. That’s where we come in and can help provide them with housing. I look at investing as not only creating wealth and a legacy for myself, but I’m at that point in my life and age where I’m giving back. We learn, earn, and return. A lot of the investments that I do are for helping people get into homes where they normally wouldn’t have been able to.
I’m doing very similar things. I love that. Learn, earn, and return because you and I are at that same stage of life where we’re more on the return side. The way that we view investing is very different than what we did years ago, for instance.
When you were talking about supply and demand, ladies, this translates into buyer’s markets and seller’s markets. There are always cycles one way or the other. Right now, even though we’re seeing inflation and stuff like that, it still feels like it’s a seller’s market because of inventory. Would you agree with me on that?
In certain pockets, because I coach across the country and I hear a lot of different things. We call this cycle the silly season. Anytime when the cycle happens, when you know you’re getting to the peak of the seller’s side of this where the sellers are in control, when you have a seller’s market, when everything starts getting a little silly, then you’re going to see that we’re going to go down in. It’ll start turning into a buyer’s market. For a certain period of time, it was a buyer’s market because sellers were so greedy. There’s this thing called Fear and Greedy Index that you can look up on Google where sellers were so greedy because values were up, rates were down, it’s COVID, don’t even look at the house.
We went under contract in a minute and they got greedy and then rates went up and the buyers backed off and then they got into fear. Now that the buyers are coming back out and saying, “This is what the market will be, where you get it, we’re more normal. We understand it. Maybe I can walk through this a little bit better.”
In some pockets, we are seeing some unbelievably silly things. In fact, I’m accumulating some of the things that we’re seeing. There was a contract that was written on an owner-occupied house not too long ago that I saw the contract. In the contract, it said that the seller could name the family who was moving in their first dog. That’s not allowed.
There were offers on a home and one of the clients that made the offer called the listing agent and said, “How much credit card debt does the seller have? Instead of offering more money, we’re going to offer to pay off all of their credit card debt.” Buyers are clients, which means when we see these silly things coming in, these videos of, “We love your house and if we don’t get it,” this is what we’re starting to see now. You know you’re in the silly season and you’re at the peak of the seller’s market.
It’s a good idea though because it affects taxes instead of paying more for a property to pay off their credit card debt. Now we don’t have property taxes on that but they get more money. That’s very clever.
However, the value doesn’t go up either.
That’s true. It’s all a balancing act but you work the numbers. What I’m hearing from you is that if we’re in the silly period and we’re at the top of the seller’s market, then there will be a pullback. How do we justify purchasing now as opposed to waiting for that pullback? You know this. Everybody is trying to time the market. If you don’t have to buy as investors, you are going to try to time the market. Let’s talk a little bit about that conversation we had about this possible turn.
Interest Rates: There will be a pullback, especially if we’re in the silly period and at the top of the seller’s market.
The disruptor in me is I don’t try to time the market anymore. I learned that if I hold it long enough, it’ll come back. You never know when it was the best time until you’re past that. You go, “Now the values are up, I miss that time.” When they go down, you go, “I missed that time.” You’ll never know that. Trying to time the market is difficult. The investment strategy for investors is to put a line in the sand on what you will and won’t do and don’t pass that line. For me, it’s the bottom line. For us, we have a certain cashflow, appreciation, and rooms. We all have this certain 3 bedrooms, 4 bedrooms, 2 baths.
We have certain things that we look for in the avatar of the home that we’re purchasing that we’re going to invest in. Many of us cross over that line by trying to time the market and saying, “Normally, I wouldn’t buy this but it’s a good time to buy so I will.” That’s when you get into trouble. Date the course, know exactly what the home avatar is for you, and don’t try to time the market. Again, if the numbers work, the numbers work. We’ve had to do this maybe once or twice. We didn’t lose our portfolio during the Great Recession or anything. The worst-case scenario is that we have converted rentals into our own wrap.
We’re doing our own wrap around our own mortgage to a subject to and sell the property. If we have them free and clear, we offer it as a land contract and say, “With more rentals, let’s go with land contracts so we don’t have to worry about all the expenses, etc.” I’m not concerned about appreciation or depreciation. We had to do that with two of our properties that were in quirky areas. Generally, if you’re buying in the right area that does, we already know the East Coast, West Coast, and Mid-Coast. In the Mid-Coast, you’re safer than any place else to make your investments because they don’t succumb to the highs and lows of what’s happening in the market.
Interest Rates: If you’re buying in the right area, you’re safer than any place else to make your investments because they don’t succumb to the highs and lows of what’s happening in the market.
I agree with you. I never timed the market and even when I bought my very first property years ago at 8% or whatever, everybody thought we were crazy. The market had gone up 50% in two years. I was paying this rate even though it looked great. We couldn’t afford the home. We were scraping for dimes to make this mortgage. We had to get a roommate. People thought we were nuts.
For us, it’s always been, “They thought you were buying at the peak of the market or whatever.” It did correct a little bit. I always say to my ladies, make sure you’ve got the time to be right which is the way that you are saying. Hold it. You need to be in the market long-term. Whatever you buy now, even itself out and over the long-term, it’s going to go up, at least in good markets. Do your research on the market. That’s an important thing.
It’ll go up over the years anyway. A lot of people get into investing where they’re like, “I’m going to buy a house as owner-occupied. I’m going to live in it for two years, sell it and buy more investment or another house and sell it. That’s how I’m going to make money, or I’m going to buy it and rent it out two years later.” That’s when you get into trouble. You need to go in with the thought of, “I’m holding this for the long haul and what is that holding strategy so that I know what my exit strategy is.” That’s so important for people to understand because this is in any market. I see it in the lending business.
I’m sure anybody who’s a real estate agent tuning in sees it as well. When it’s good, everybody flocks to it. They all want to be part of it. In this case, right now, it’s a horrible time for mortgage lenders. Many of them are leaving, “I’m done. I can’t do it anymore.” Some are self-selecting. They’ve been in the business for 20 or 30 years. They’re like, “I’m done. I’m going to move on to something else.”
We also have whole-hearted people that came in and said, “I heard you guys make tons of money so I’m going to get in,” and then immediately, they’re out. I celebrated 40 years in that industry in 2023. Forty years of staying power is where I’ve reached all the great heights. You can’t reach those great heights doing shots of, “I’ll try this.” It’s all shiny object syndrome, which is SOS for help.
Jen, could you talk a little bit about some of the newer products that are showing up on the market? I know the answers and they’re exciting. I was hoping you could share some of those.
The first one that comes to mind is the one I mentioned a few minutes ago. I feel that because of the lack of inventory, there’ve been a lot of private investors or private lender investors, I call them investors too, that are allowing for new construction, buy and hold, buy and rent. If you have some experience in that or you can team up with a builder, that’s a good place to go. It sounds like you know more about the products that are out there than I am.
I’m in the market, looking right now.
One of the things that the lenders are doing is trying to be more flexible, offering extensions without penalties and things like that. We know that what looked good maybe isn’t good. It’s funny because I personally invested in a fix and flip for my money, not me, down in Florida with a guy who’s got 1,000 properties under his belt and like, “I’m going to fix it. I’m going to flip it and I’m going to sell it quickly.” It went quickly. It was a 12-month thing, I got my money back in four months. Someone right down the street who was doing the same thing has had to have two extensions.
It’s like that movie Twister where it hits your house and not another and this market but not another. Lenders have been very flexible at making sure that we maintain this industry of investors by allowing for very creative ways to not foreclose on properties for investors. We don’t want the property. We’re not in the business to hold property. I’m seeing a lot more flexibility in that. There is a tightening on the DSCR. It used to be that we could do 1.1 and stuff like that. I’m seeing, “It’s got to be at 1.2 or higher.” That’s what I’m seeing there.
Explain what you mean by that.
It’s the Debt Service Coverage Ratio. We look at what your gross rents are minus all of your expenses and get to your net income or adjusted gross income if that’s what you want, and then compare that to the rent. We want to have a 1.25 ratio, meaning that you’re collecting 0.25 over the expenses. Whereas before, we had a little crunch because we didn’t care so much. You may not be getting a lot of cashflow, but you’ve got a good appreciation. It’s a solid property and it’s in a solid area.
Now they’re like, “We want to see that stretch a little bit more to give us a little more cushion.” There’s a little tightening up of qualifying ratios basically. That’s what I see on the bad side of things right now with most of the property. Syndications are growing exponentially. They’re growing from multifamily into medical buildings because medicine is a big thing. Veterinarian buildings because more people got pets during COVID. That’s growing and storage facilities. That’s also growing for syndication. Those are the things that I’m seeing out in the market. What are you seeing? I want to know what you’re seeing.
I’m in the market to refinance a construction loan. We’re finished up on a construction project and I would like to hold one of them. We’re selling. We’ve got two on the market. We’ll sell one and I want to hold one. For the very first time in my entire life, I’ve got a commercial piece which I have some little experience with. I want the time to get it right as far as who I’m going to put in there.
Right now, commercial is such an interesting market. I’m having to learn a lot. I’m in the market for a refinance on this loan. Ladies, I don’t know if you know anything about construction, but normally, in a construction loan, they have this buyout rollover where it goes from construction into a permanent 15-year or 30-year loan.
It’s called construction to perm.
This particular loan that we got, they did not do that so I keep getting an extension on my construction loan, which is a very expensive way to go. We need to do our own permanent loan to get out from under that. I don’t want to say it that way, but change the way that the asset is being financed. For us, we’re looking at a couple of things. We don’t qualify personally for the actual loan that’s going to require buying that out. What do we do then? There are a couple of things we are looking at. One is the bank balance loan, which is a new product on the market. Have you heard about this?
No. I haven’t heard of this one.
This one is they strictly look at cashflow on your bank statements.
I know bank statement loans. I thought you were doing some other way of saying it. Bank statement loans have been around for many years.
They’re becoming much more accessible it seems. They’re being marketed more to all of us. They were one of those things that only certain people seem to know about or were told about. We’re starting to hear a lot more about bank statement loans in the market, which is nice. For a lot of us, real estate investors, our taxes show significantly less income because we’re depreciating. You add those numbers back again. A lot of lenders won’t do that when they’re qualifying you. They take the tax returns as they are. The bank statement loan allows you to see your true inflow and outflow, which is cool.
Some other things we’re looking at is the possibility of going to self-directed IRAs where people have these self-directed lump sums but they haven’t done anything with them. Going to the custodians and asking them to put together a pool of investors that might have $100,000 each or whatever and syndicating that. You don’t have to do an SEC syndication. You’re doing it through the custodian, you pull that together, and you make that alone. These aren’t cheap options. You’re usually going to pay a little bit higher rate for that, but it gets you to the next step, which is what we’re looking for. Those are some of the things that we’re looking at.
It’s solutions. That’s why my mortgage company is called Solutions because mortgage solutions are situational lending. I want to make sure we back this up a little bit. On the bank statement loan, what you’re referencing, and I believe I spoke about this last time we talked, but in the world of lending, there’s QM, which is a Qualified Mortgage, which is traditional Fannie Mae, Freddie Mac, FHA/VA.
After the Great Recession, the Dodd-Frank Bill was elevated. They elevated the government to say, “As long as you have this set of criteria met by your borrower, Mr. Mortgage Company, or the bank that’s doing lending, that’s considered a qualifying mortgage. We, the government, will back that mortgage. If it goes into foreclosure, we’ll help you get out of it.”
Remember we had all these short sales and we couldn’t figure out who owned the property because we all owned them in our 401(k)s? That’s a qualifying mortgage. In traditional financing, you go qualifying mortgage. When you start getting into the investor world, there are a couple of different options. Most people leave the mortgage company the QM and now it’s difficult. There’s no cash out available in that market. That’s why I said there’s no cash out there. They’ve lowered the loan-to-values, meaning you have to have more money invested in it. They don’t want to do investors right now.
Most people will go to their bank looking for a commercial loan. Now that’s nails on a chalkboard for an investor, especially if you own a lot of property. They want everything. They want every lease. You name it, they want it. They go for a commercial loan. Let’s say the rate here is X. This rate and the bank is going to be X-plus. It’s going to be slightly bigger or higher, but it’s going to kill you to figure it out. Good luck qualifying.
We then go to non-QM and this is the market that I play in. This is where the fix and flips are. You can’t get fix and flips by calling the mortgage person that you got your primary house from unless they have non-QM financing. These are properties and borrowers that don’t fit into the traditional qualified mortgage. They’re non-qualified mortgages. I own too many properties. My credit score doesn’t fit the criteria as a non-owner occupied with QM. Now I have to go here because you may have your credit pulled all the time looking at houses.
You don’t fit that. You don’t have the reserve requirements. The property is funky. It’s quirky and has more than four units. That’s non-QM. The bank statement loan that you’re talking about has been in place for many years in that world. It’s always been there. It is a great program for self-employed and investors. I’m familiar with that. The way that you said it made me think, “What is that?” It’s a lot of terminologies and understanding that non-QM is for investors in those bank statement loans. I have a client who has funded over $20 million a year in mortgage loans in non-QM.
By the way, it’s owner-occupied over here too. If you don’t qualify over here, you’re a day out of bankruptcy or foreclosure. You’d have to wait. Over here or here, you can get that loan pretty quickly. It’s X-plus-plus but the difference is, how long do you want to wait? 7 or 5 years and miss a gazillion different cycles of markets, miss all the tax benefits, miss all of the appreciation and the pride of homeownership as well. That’s where we’re saying don’t look at this in all consumers. Please don’t look at everything as what you’re seeing on the news or what you did when you were owner-occupied because it’s totally different.
If you can’t get a loan through non-QM, then you go to the back alleys and look for the hard money and the private lending that is X-plus-plus-plus. You don’t go from, “I went to my bank. They won’t approve me for a non-owner occupied, so I’m going to go to a back alley.” There’s a path you should be going through to find the right terms to fit you.
What other kinds of non-QM loans are there? Are there some other products other than the bank statement loan?
There’s a bank statement and equity. They look at equity. For the investor, they’re mostly run by DSCR, the Debt Service Coverage Ratio. We go from ratios of income to ratios of property now that we’re looking at the property. What’s great here is that there are adjustable-rate mortgages and 30-year terms. That’s fairly new because a few years ago, there weren’t 30-year terms. It was a 30-year due in 5. That’s 30 due in 15, a 25, or a 5-year.
Now we’re seeing a lot more buy-and-holds in that arena. Mostly because the non-QM world has figured out that it doesn’t have to be private money. It can be securitized on Wall Street the same way that a commercial loan and then an owner-occupied or QM loan, even if it’s non-owner are all securitized by Wall Street. Now they have more money behind them and those investors want stability. They don’t want short-term gain. They want a long-term. They’ve opened that up for long-term investing in that side.
There are adjustables, interest only, 30-year fix, owner occupied, or non-owner occupied. What I do with my company, situational lending is non-owner occupied and non-QM. I don’t do anything else. I’ve got some sources for private and back alley hard money. That’s the financing I do now. I don’t get involved in any of this anymore. If you’ve been turned down, then you can come to me. I would say skip over your bank if you don’t want to go through hell. It is a pain in the butt.
I want to get to EXTRA. We’re going to be talking in EXTRA, ladies, about this whole idea of not working in and on your business but working above and beyond your business. This is a pretty high-level strategy. Jen is amazing at it. I do want to cover it because it’s not something we’ve ever talked about. We’re going to say goodbye on this portion of the show and we’re going to go to EXTRA. Jen, how can people reach you or reach your company and your other mortgage brokers if they want to get in touch?
The best way is to text JEN to 26786. That starts getting us connected. You can always reach me at JenDuPlessis.com and someone on my team or myself will reach out to you no matter what your questions are. I’m a speaker, a coach, and a mentor. I have masterminds and all of those things going on. If you want to find out more about how to work with me or how you could work with me, if this resonates with you, send it to [email protected] and then I’ll sort you into which company works best for you.
Thank you. Stay tuned. We’ve got more. For those of you who have not subscribed to EXTRA, you can do that by going to RealEstateInvestingForWomenEXTRA.com. For those of you that are leaving us now, thank you so much for joining Jen and me for this portion of the show. I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon. Bye.
Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
Maximizing your real estate investment potential means not only building wealth through property ownership but also strategically managing taxes with the help of trusts. Trusts provide a powerful tool for tax mitigation, giving women investors the ability to take control of their finances and create a brighter financial future. In this episode, we welcome back Dr. Gina Gaudio-Grace to discuss tax relief through trusts. As real estate investors, taxes are always on our minds, especially after finishing tax season. Dr. Gina gives helpful advice on tax reduction using trusts, sharing tactics for those dealing with current taxes and those seeking future mitigation. As a trusted friend of the show, Dr. Gina lends her knowledge on trusts and provides practical advice for women pursuing real estate investment. She also touches on the importance of asset protection strategies, the utilization of your money in foundations, and more. Join us as we explore the possibilities and benefits of trusts.
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Watch the episode here
Listen to the podcast here
Tax Relief Through Trusts With Gina Gaudio-Grace – Real Estate Women
Real Estate Investing For Women
Ladies, I am so excited to bring back to the show my close friend, Gina Gaudio-Grace. You met her before. She talked about trust in October and I’m bringing her back on this episode because I want to talk about trust again but I want to keep a focus on taxes and how we can handle tax mitigation with trust. I know taxes are on many of your minds because we finished tax season.
Many of you had to write a big check and are still smarting from that and so, I wanted to give you an opportunity to see that there are possibilities for relief in the future. Also, for those of you that didn’t write a big check, better ways to make sure that you’ve got tax mitigation. I’m going to read Gina’s bio again, so I can remind all of you who she is because many of you haven’t met her.
I do want to mention that in the past, we’ve had Chris Larsen. His whole thing was about the make, keep, and grow. We make a lot of money and we grow a lot of money. Those are the two things that most of us know about. Make it, get a better job, get a raise, get a side hustle, and grow it so that you can retire or leave a legacy or all of those things. That’s what we usually use real estate for.
We can use it for the make part two but usually, that’s how it goes. What we forget about is that keep part and just because of the simple concept of compounding, keeping part is so important. A lot of times, we don’t talk about it because it’s boring. I had somebody tell me, “Moneeka, I love your shows but even as entertaining as you are, I can’t watch your tax shows. They’re too boring.” I’m like, “That’s fair.”
I know taxes can be overwhelming, boring, and all of those things but if we don’t have that conversation, you’ll never reach the heights that you’re able to reach. I’m here in service to you to give you guys that blissful life. Part of that is working less. Let’s work less on the make piece. Let’s work less on the grow piece and we can do that by managing the keep peace. That’s what this conversation is about. Before we head into that, let me reintroduce Gina to those of you who have not met her before.
Dr. Gina Gaudio-Grace is a retired attorney and a 1991 graduate of Notre Dame Law School, where she was the Lead Note Editor of the Notre Dame Law Review. Dr. Gina holds a PhD in Entrepreneurship and Business Strategy. She’s a Certified Wealth Management Specialist and a Licensed Document Preparer. Dr. Gina is also the Founder of Abundance Group Trust and the Cofounder of the Abundance for All Foundation. Her personal mission is to touch the life of every person on the planet in a meaningful way. Welcome back to the show.
Thank you for having me.
It’s so nice to chat with you. We’re going to be talking about taxes.
If we’re talking about the keeping part, it’s one of my favorite things. It’s all about leverage. The key more than anything else is leverage. Decades ago, clients started calling me Leverage Gina. As a disabled woman, I can’t live life without leverage and I certainly can’t build businesses without leverage. Leverage is important and that’s what we’re going to be talking about. How do you work smarter, not harder? How do you make more and keep more so that you can then make that much more?
Leverage is one of our favorite real estate terms and I know you work with a lot of real estate investors.I want to emphasize that again, David and I have been able to grow our portfolio. He’s the main breadwinner of our family. He’s been a software engineer. His income has grown at the rate that incomes have grown, which is significantly slower than inflation and the appreciation of a property, so housing costs, all of those things, without the keep strategies. Without the whole thing along the way, we would not have been able to grow the way that we have.
Now we’re fine-tuning that as we’re looking at retirement. This is why you and I have been having so many conversations. We’re in the fine-tuning stage. That growth can continue to happen exponentially without us doing the make phase any further instead of trading time for money, which is what my husband does and I do it too.
Instead of doing that, we’re transitioning into real estate which is going to make the money for us. We are not going to be spending that much time with it. We’re going to be keeping more. Real estate’s going to grow anyways. It’s a beautiful hedge against inflation. Also, anything that comes in now is going to grow exponentially faster because we’re keeping more. Does that make sense?
It sure does.
Tell us a little bit more. Why don’t you explain how this all works?
Trust can be so powerful. As we talked about in the last show, we’re not talking about that living trust that you get for a lawyer for $3,000. That will help you avoid probate and probate taxes but that’s about all it’s going to do. It’s a very different trust. Even in law school, we didn’t learn about this trust. We learned about living trust mainly.
If you go out and start googling trust, there are so many different kinds of trust. It will make your head spin and because there are so many more, understanding how different kinds of trusts can be grouped together to get that much more leverage from them, that’s what I’ve done. I’ve figured out how you combine different trust structures to get exponentially more leverage.
With the trust structure that we recommend and use and both Moneeka and I have this for our lives and our businesses, it allows you to completely and totally eliminate capital gains taxes legally. It also allows you to get up to 100% deferral of taxes and any passive income. Passive income comes from rent and lease income.
If you’re a coach, speaker, author, or infopreneur, all of that is considered passive income. It’s income from intellectual property, which the IRS says is passive. If you didn’t have to pay capital gains taxes ever and you could defer taxes on passive income in perpetuity, which means many generations from now when everybody’s gone is when the tax man gets paid. How much more would you be able to make and grow because you’re not sending 40% to Uncle Sam or more?
Ladies, I want you to think about that. She has a workflow report that she wrote. It’s a white paper that describes the differences between when you pay all of these taxes and when you don’t. Instead, you can invest or help them to compound and appreciate what the numbers work out to be. If you ladies want that, you can go to BlissfulInvestor.com/MoneyFlow.
That way, you can get that report downloaded and take a look at the way the numbers work. However, you ladies know the basic concept of compounding. The sooner the money goes into your resources to be investor or grown, the longer it has to grow and therefore, the faster your wealth grows. It’s a very simple concept that all of us have heard a lot about.
Many of us understand it. Some of us don’t but it’s the basic idea of compounding. Now because of the way that we structure things with Gina, it’s much faster than that. It’s that simple idea of making sure the money stays with you and goes into investments sooner rather than later because time is gold when it comes to investing.
When you read this article, Moneeka, the case study is what it is. That gave you the link, BlissfulInvestor.com/MoneyFlow. It’s a case study of an actual client who has a dental practice. Before we set up our trust for him, he was spending over $320,000 a year in taxes. Now, that was from a combination of his dental practice as well as his real estate investments.
Once we set the trusts up, we’re using a two trusts structure for this client. It’s what we call a personal trust which holds the majority of the assets, and then a business trust as well. The business trust is running his dental practice, his short-term rentals, and things like that. Once everything was set up for him and he could operate completely out of these two trusts, he’s now only paying around $100,000 a year in taxes instead of $320,000 a year in taxes.
If we had set up a third trust, which is a charitable trust structured as a private family foundation, we could literally get them down to a $0 tax liability. Making around $656,000 a year is great but if you’re spending $320,000 of that every year in taxes and now you get $320,000 more to invest, what would that do for you 10 years from now or even 5 years from now?
Even on a moderate return, you’re going to expect at least 12% to 14% per year, wouldn’t you? Let’s say at 12%, that $320,000 a year is going to add an extra $38,400 a year to your income or to what you’ve got. Imagine instead of $320,000, next year, it’s going to be at $358,000 because of that extra piece. If we take the $358,000 and do the same thing at 12%, what are we doing there? We’re going to do about $39,000 the next year in growth.
I’ve experienced that compounding effect personally. I invested $100,000 a little over a year ago now. I’m watching it grow and it’s growing well but not quite as well as I had hoped. When I got that $100,000 turned into $1 million and that $1 million started growing to get it to $2 million, it took about a quarter of the time it took to get from $100,000 to $1 million because of what happens with compounding. The more you have, the more you make and if the trust is making it, it’s making it all either tax-free because there are no capital gains taxes or tax-deferred if it’s passive income. It compounds way faster.
Let’s talk specifically about the structure and what people would be doing. How does this whole thing work?
You’re going to make a list of all of your assets and any liabilities attached to them. A liability would be a mortgage, a note on a car, or things like that. We’re going to help you take all those assets and liabilities and convey them to your trust in an actual sale. Now, if you’ve got a house that you paid $200,000 for, that you’ve owned for a number of years and it’s now worth $1 million, don’t worry. You’re selling that house to the trust at $200,000, so there’s no taxable gain for that tax here.
You’re not selling it at $1 million but literally, you convey every asset to the trust. The trust owns everything. The trust is then able to take care of any expense associated with any asset it owns, whether that’s your mortgage payment, a new roof on your home, or new tires on your car, if it owns the car. All of those expenses now belong to the trust.
Ideally, you’re not putting the assets that are just sitting there, those things that you use but you’re putting assets in that appreciate and grow. That’s where the trust is helpful because any income that comes into the trust first gets used to take care of any valid trust expenses. All those things related to your home, your car, and other things like your medical expenses can be paid for by the trust. Your life insurance can be paid for by the trust.
There are only three things that the trust cannot pay for. They are food, fun, and fashion. Those three things you have to use personal monies to pay for but everything else, the trust takes care of. If you’ve got children under 21, even their food and clothing get taken care of by the trust. If the trust has income, that income gets used to pay all the bills. Whatever’s left over, so long as it came from either capital gains or passive income, the trustee declares it as what’s called an extraordinary dividend.
All that means is it’s getting added to the corpus of the trust. The word corpus means body in the Latin phrase. It’s monies from income that got kept in the name of the trust, whether it’s in an investment, buying a piece of real estate, or in the trust bank account. All of those are corpus. Anything added to the corpus from passive income or capital gains income at the bottom of the tax return where it says how much you pay in taxes, we’ll say zero. It is legal.
I have to confess, that’s the thing. I don’t want to be thrown in jail, Gina, because of tax fraud. You hear all these stories. It is all legal, correct? Let’s emphasize that.
Is it ever? In fact, I should know this off the top of my head but I’m going to go look it up. There is a little thing called Circular 230. Circular 230 is a very powerful thing. It is the rule for anyone who’s a member of the tax bar. Now, I’m not a member of the tax bar but we have a number of attorneys that work with us that are and when someone’s a member of the tax bar, they are allowed to write what is known as an opinion letter.
Circular 230 tells them that they’re allowed to do that. If you, as a taxpayer, rely on a written opinion letter that follows a very prescribed format, then later on the IRS should audit the trust and say, “It doesn’t work that way, Moneeka,” and they want to assess back taxes plus interest. They are not allowed to issue penalties.
The attorneys that work with our clients, all of them are required to have at least $1 million of errors in omissions insurance. That is important because of the fact that as long as they’ve got that million dollars in coverage, you’re able to go against the E&O policy should the IRS ever suspect taxes plus interest. In my opinion, the only way to get into this trust thing is to plan on getting an opinion letter from someone who is a member of the tax bar right in the Internal Revenue Code. I was trying to look up the section number but I’m not putting my finger on it very quickly.
Tax Relief Through Trusts: The way to get a trust is to get an opinion letter from someone who is a member of the tax bar right in the Internal Revenue code.
What if that part-time, for instance, you go through an audit then that person that gave you the opinion letter has either retired or has been disbarred?
The likelihood that that would happen is extremely slim but if they are disbarred and that were to occur, the IRS still is not allowed to issue penalties. It’s straight out of the Internal Revenue Code. I wish I had the section. I wanted to read you what it says in the Internal Revenue Code. I’m going to have to do it from memory.
It’s going to say something to the effect of, “You are an innocent taxpayer because you had justification to rely on the opinion of someone.” It says it right in the Internal Revenue Code. In that case, they cannot issue penalties. They can’t issue either civil penalties or criminal penalties. Don’t worry. You and I don’t have to worry about looking awful in orange so long as we get a written opinion letter and so long as the opinion letter follows the prescribed format.
Interesting because my husband was like, “We don’t want tax fraud.” We don’t talk about tax fraud.
That’s the whole point. This stuff is straight out of the Internal Revenue Code.
We did this in the first call but I’d like to do a compressed version of what keeps it legal. You were saying, there are two different kinds of trusts that are written. There are contractual and statutory. One of the questions that come up for me is when we’re talking about tax law, everything is based on code. We want to make sure everything is legal.
Not everything in tax law is based on the Internal Revenue Code.
Clarify.
This type of trust is called a complex trust and it’s not because it’s complicated. It’s one of two types of trusts. A simple trust is a trust that must distribute 100% of its income at least annually to its beneficiaries. That is not this kind of trust. A complex trust is anything that is not a simple trust. That’s the legal definition of it.
If you have a trust that is allowed to retain earnings the way that a corporation could retain earnings, that’s a complex trust. It has its own tax ID number. It is completely separate as a taxpayer. Now it files a tax return. As individuals, we file on a 1040 return form. The trust is going to file on a 1041 return special, specifically for complex trusts right in the tax form itself, the 1041.
On page 2, there are 3 sections. The second section talks about deductions from income and line eight of that section, section B, asks for the taxpayer to insert accounting income as calculated based on the trust instrument and local law. What does that mean? What it means is local law is referring to something called the Uniform Principal and Income Act. It governs fiduciary accounting, which is the accounting that a trust does.
It’s fiduciary accounting as opposed to gap accounting or some other type of accounting. When you do accounting that way, the Uniform Principal and Income Act trumps the Internal Revenue Code when it comes to how things are taxed. Line eight is saying the trust instrument itself even trumps the Uniform Principal in Income Act. Technically, could you write a trust that says, “You have no taxes ever?” You probably could.
I’ve never figured out how to do that. I don’t want to do that. I want to work within the framework that the IRS has created. Even in a handbook that the IRS has created for auditors in the estate division, that’s who would be auditing a trust. There’s a whole page devoted to saying something again, in almost every case, taxes are governed by the Internal Revenue Code and Tax Regulations but there is an exception.
That one exception is when it comes to complex trusts. Again, complex trusts for tax purposes are governed first and foremost by the trust instrument. Secondarily, by the Uniform Principal and Income Act. Third, whatever the IRS says, the Internal Revenue Code but it’s in third place. The other two trump it all the time.
Now, there are two kinds of trusts. There are statutory trusts like a living trust. Every single state has a statute that says you can have a living trust but from one state to the next, the rules of what that trust needs to look like are going to be different. There are contractual trusts. Anybody can say, “I’m setting this thing aside in trust for my heirs when I die.” It’s not written down but it’s a trust.
It has to follow the rules of contract law and nothing but the rules of contract law. It’s a contract like any other contract between any other people, so because it is a contract and it’s governed by things like the Uniform Commercial Code, with our trust, I decided to take that to another level. When I started looking at this thing called the Uniform Principal and Income Act that governs fiduciary accounting principles, most states have adopted it but from one state to the next, they have butchered it badly.
In many states, they have made so many modifications to it that it doesn’t even look like what the actual Uniform Act looks like. It made me start thinking, “How can I get the actual Uniform Act to apply to every client’s trust?” It was easier than I thought it was going to be when I started checking into it. It turns out that if the situs of the trust is the United States of America, the geographic region and not the state, not the country or the corporation, it’s a common law trust.
What does situs mean?
Situs means the location. It’s the body of law that’s going to apply to this trust, the basic. In a statutory trust, it’s going to have a situs in the state whose laws it followed. In a contractual trust, like in any other contract, you often see a clause that says, “This contract is governed by the laws of fill in the blank with the state.”
Common law is created when you say that the trust’s situs is the united states of america, the geographic region, and not either the country or corporation, which makes it a common law contract. I was a little bit concerned about whether a court might not honor that. In reading the Uniform Trust Code, which has also been adopted in this case, in every state, it allows having two different choices of law.
You have the situs, which is the location of the trust, which is what laws govern the trust. There’s a clause in it called governing law that also states if any judge should ever refuse to honor this as a common law contract, the choice of law should apply to South Dakota law. We did that because South Dakota’s laws related to trust are extremely favorable. They’ve been around a very long time.
They’ve been put through plenty of cases to come out with a great body of work that can help to give meaning to the trust in the event a judge doesn’t want to honor common law. That’s how we set it up. It’s a common law contractual trust that has the trust instrument and the Uniform Principal and Income Act governing it. Now because of the situs being the United States of America, the version of the Uniform Principal and Income Act that applies isn’t any state’s version of it. It’s the actual Uniform Act, so for tax purposes, that’s a good thing.
It protects us because it’s more universal. Have any of your clients had to go through any audits?
Yes, I have.
Could you talk about that?
One client and only one client. State division trusts or tax returns don’t get audited very frequently. In fact, it’s the least often type of return, 1041s. Nonetheless, we had a very weird set of circumstances. A client’s personal return was audited for one tax here. It came back with no change. She hadn’t set up her trust yet. A week later, she gets audited on the next tax here. Again, she hadn’t set up her trust yet. Again, it came back, no change.
This auditor’s getting mad that he can’t find anything to say about her returns. He moves to the third tax year. The third tax year on January 2nd of that year, she set up her trust. The audits, that personal tax return gets the return and says, “How did your income decrease so much and you didn’t have a change in the living situation at all?” She proudly explained that she had set up a trust for estate planning purposes and it was only a couple of days before they audited the trust for the first year of the trust.
I oversaw that and worked with the CPA that was representing her in front of the auditor and I am very happy to say that both the 3rd year of personal returns as well as the 1st year of trust tax returns both came back with no change and finally, the auditors left them alone. That happened and June of 2022 is when it finished.
If the trust were to get audited or anything like that, for instance, do we need your help? Can a regular CPA, whoever we’re using, handle it? Are there any specifications around that?
If your CPA is intimately familiar with complex trusts, then by all means, you can use whoever you’ve been using and in fact, that was the case with this particular client. She used the guy that’s done her tax work for many years but he had a lot of knowledge about complex trusts. You will have someone on my team, whether me or someone else on the team, overseeing whoever’s representing you in an audit.
If you go the route of the opinion letter, you’re also going to have the tax attorney that wrote the opinion letter overseeing things, which is even better. On the first year of the trust, we include the tax returns that will be done by a CPA or an enrolled agent, and by all means, contact them immediately if that return gets audited. They have a vested interest in making sure that that audit is going to come out well so you’ll have plenty of help.
Is there anything else you wanted to share about tax mitigation specifically around this trust?
Quite often, I talk to people who will end our consult by saying, “I love everything I hear but I’m not big enough yet to be ready for this trust.” I laugh because trust has several benefits. The tax mitigation piece is the one we’re talking about now and it’s a biggie. It’s what’s going to give you a return on your investment but it’s one of many benefits. There are asset protection benefits. If you drive a car, you need asset protection.
Trust me when I say setting up an LLC to run your real estate is not a solid asset protection strategy. I was only a third-year law student the first time I was able to penetrate an LLC and get the assets within it and go after the owner’s personal assets. It is not hard to do at all. Don’t rely on your LLC for asset protection.
Tax Relief Through Trusts: Setting up an LLC to run your real estate through is not a solid asset protection strategy.
This trust gives you ironclad asset protection. If you drive a car, you have risk. Someone that you hit unintentionally but nonetheless, it was your fault. They’d come after you for everything, your house, cars, bank accounts, brokerage accounts, or any of the real estate that you own. You do not want to be in that position.
When are you ready for trust? As soon as you buy your first car, have the car owned by the trust. Have everything else owned by the trust and get yourself this ironclad asset protection. Because of the unique structure of this trust, someone who’s a judgment creditor cannot reach the assets held within the trust other than in one instance.
If you knew that a car accident had taken place, you hadn’t been sued yet but you were still wondering. They might sue you but I got to get asset protection. Now you set up your trust and put all your assets in it. That’s called a fraudulent conveyance because you knew the cause of action had occurred. If you wait until that point to set trust up, nothing is going to be done to help you. They’re going to be able to unravel the trust and get to anything and everything that’s in it.
If you’re thinking about real estate investing, you haven’t started yet, now is the time to set up your trust for asset protection purposes if nothing else. I promise you, working with my team, we’re going to find ways to help mitigate your taxes. If you don’t have any passive income or capital gains income yet, there are so many different things we can still do going to vary from one person to the next but there are still so many things we can do to help mitigate your tax liability, give you that ironclad asset protection, and help you grow through what you keep. It will compound that much faster.
I love that.If we don’t have capital gains income or passive income, which are where we get relieved of our tax liability, what are some of the other strategies? You said it’s per person but could you give us some examples?
Let’s say you have a W-2 income. I have a client who’s a pediatric oncologist. He is paid directly by the hospital, not a practice. He gets $1.2 million a year. That’s a lot of W-2 income. That poor guy. We were able to have him go into the hospital.
I try to interrupt and say, “That poor guy, wouldn’t we all want to be that poor?”
Yes, but $1.2 million a year, he keeps less than $600,000 of it before he talked to Dr. Gina. It’s painful so that poor guy. To work as much as he does and as hard as he does and take the risk that he does, that’s awful. Uncle Sam wasn’t right next to him helping him do all of that for the $600,000 that he got. I had him go to the hospital and ask the hospital if they would be willing to pay him on a 1099. They said, “We can do that if you have a PLLC,” which is a Professional Limited Liability Company.
We set him up with a PLLC. With a PLLC, the trust can become a 90% limited partner of it. He’s the manager of it, so 90% of his $1.2 million now belongs to the trust and it’s 100% tax deferred and perpetuity. He went from having to spend $600,000 a year on his tax liability to pay out about $120,000 a year in his tax liability. How much more will he grow because he is got an extra $580,000 a year or $480,000 a year to invest?
In that case, what happens with malpractice and all of that? How does that work?
All were handled by the hospital and his PLLC. The hospital’s been paying the premiums. He’s not had to pay any premiums out of pocket from it.
That’s someone who can do that. You and I have had this conversation. My husband works for a tech company. They said no way. Let me tell you quickly what they said and I want to hear what you had to say. They would do it but he loses all of his benefits. We have a six-figure benefit package. Does that make sense?
Yes. Does his W-2 also show a portion of the benefits package that you’re then taxed on?
It does not. It’s regular. We’ve got our medical. We have to match in our 401(k), so there’s no tax.
If there are benefits of more than $100,000, it is treated as imputed income and you are supposed to be taxed on it just so you know.
This is going to be our first year, so let’s see what happens.
It’ll be interesting. What can we do with poor David? The one thing we can do is to use our third trust structure, which means a charitable trust set up as a private family foundation. When we obtain the tax ID number obtained as a 501(c)(3), it is a legitimate charity. You can donate up to 30% of your adjusted gross income to this type of nonprofit and it is a dollar-for-dollar reduction of adjusted gross income.
Now let’s use $300,000. If you made $300,000 in W-2 income, he could have up to $90,000 donated to his nonprofit each year and now he’s only going to get taxed on $210,000 instead of $300,000. That’s a big difference. At $300,000, he is probably paying around $120,000 or a little more every year in taxes. At $200,000, he’s only going to be paying $80,000 a year in taxes. That’s an extra $40,000 a year. Put that to work for you in your personal trust and grow it tax-deferred in perpetuity but what do we do with the $90,000 he put into the foundation?
This type of foundation is an amazing thing. It is legally allowed to provide fringe benefits for the trustees and their families. It could pay for things like life insurance and even medical insurance. You can go on a family retreat up to once a quarter. It’s a vacation to solidify the family unit. Moneeka, you at least go on vacation once a quarter, don’t you? You could use that 90,000 for that. I don’t know if that’s going to be enough for you but nonetheless.
In between those family retreats, you can go on an unlimited number of what are called site visits. Say Moneeka comes and visits Dr. Gina in Fort Myers, Florida. While she’s here, she looks around for good work that her foundation can do. That’s a site visit. Don’t think that money going into your foundation is going into a black hole, never to be used or touched. There are plenty of ways to make use of it.
For those of you that have businesses, that foundation is huge in terms of what it can do for you. Illegitimate nonprofits can get up to $10,000 per month in advertising credit from Google. That’s $120,000 a year. When I talked to some of my clients, people like Jay Connor for example, Jay has a fairly sizable advertising budget.
If he got an extra $120,000 a year in advertising, he wouldn’t be able to handle the volume of business it would bring in. That’s huge and that’s one thing you can do because of the foundation. That foundation doesn’t have to use advertising, just advertise the foundation. If you were to use it, you can have that advertising advertise Blissful Investor, as long as whatever you make from that advertising, you have a little baby piece that you pay back to the foundation as a donation. It’s a totally legitimate use of advertising dollars.
There are so many things you can do with the money in that foundation in addition to doing good in the world. If you need more than a 30% reduction in adjusted gross income, then we set up a second foundation that’s a public charity. I have both a private family foundation and a public charity. Why would I do that? In my private foundation, I cannot get donations for more than 40% of whatever donations it receives each year.
I would’ve had to have matched it plus some. After Hurricane Ian last September 2022, I wanted to raise a bunch of money to do a lot of good in and around my local community. I couldn’t do it out of the foundation that I had, so I set up the second foundation as a public charity. No restrictions on that When I’m giving, which I did. I gave $250,000 to help the relief efforts that we did. I donate that money to my private family foundation. My private family foundation gives a grant to my public charity. It’s easy.
My public charity then goes out and raises all this other money. You can’t get the fringe benefits out of public charity, which is why you want both. The private family foundation is there for you to give donations to, whether from your trust or you, but your personal ones are going to be limited to that 30% of adjusted gross income.
Your trusts can donate up to 100% of their income to the foundation if you choose to but if you’re that doctor with the $1.2 million W-2 income and 30% is going to help but not enough and you add the public charity, you can also personally give another 30% of the adjusted gross income to the public charity. For that $300,000 example, $90,000 could go to the Private Family Foundation. Now it gets you down to $210,000 and another $90,000 can go to public charity getting your taxable income down to $120,000 instead of $300,000. That’s enough to not only reduce the dollars that are getting taxed, but it also reduces your tax bracket big time.
If it goes into the public charity trust, you can’t personally utilize that money. That goes to a charity.
Public charities are considered operating associations. They’re the boots on the ground doing good work kinds of people. They can make grants but that’s not what their intention is from the start. The Private Family Foundation is a grant-making organization only but both can also receive grants. In fact, with my public charity, within a couple of weeks, I got $9.2 million in grants, which was fantastic. I’ve been able to do so much good in my local community.
When you have a private family foundation, is there a certain percentage that you have to give back from that? You can pay for the trustees but you must have to go out and do some work. We do anyways.
Not how the Internal Revenue Code is written. It must spend at least 5% of the assets under management or the endowment. Whatever it has, it must spend at least 5% of it per year but the costs of the foundation are also included in that spend. All those fringe benefits, what you spend on them, counts towards the 5%. Now if from one year to the next and on and on, the only things that were being reported on the tax return were things that were fringe benefits.
The IRS is probably not going to like that too much. I would make sure that each year, you’re doing some good work and giving some grants to do something. Even if you’re just giving money to your local church, that’s enough to make it legitimate and you get these other huge benefits from it. There are many ways that we can help mitigate this.
My whole point in even starting that conversation was it’s never too soon. Don’t think that you are not yet big enough. If you’re even contemplating real estate investing, now is the time to get this foundational stuff set up. It’s going to help you get into the investing part of real estate so much faster with the things that we’re doing to help mitigate your tax liability.
In my own household, we’re looking for ways to have a little bit more and not a little bit more to spend on us. Our lifestyle is not growing but we want that extra money so that we can then invest it somewhere or donate it somewhere.Leverage it in one way or the other.
Even donating it is leveraging it. As you said at the beginning of the episode, my mission is to touch the life of every person on the planet in a meaningful way. It’s not something I can do on my own but working with people like you who are setting up foundations and are out doing good work in the world. Together, we can touch every life on this planet. No problem.
I am certain of it and I realize in 2022, we’ve helped so many people start foundations now. It’s not even about touching the lives of every person alive now. It’s touching the lives of people who aren’t even born yet and all of them in a meaningful way. That’s what my mission is. I’m so thrilled that you, your clients, and all of our readers are likely to be a part of my mission.
Ladies, I hope that you have a little bit more clarity on how this structure can benefit you, your business, and your family and the stuff that you want to do in the world and all of those wonderful things. If you want more information, there are a few things that I’d like to share with you. Gina and I did another episode where she did a lot more in-depth explanation of the details of the trust. If you want to know that, go to my website, BlissfulInvestor.com, and do a search for Gina.
Put her in and you’ll be able to find that old episode and you can read that. The other thing is we did a webinar and it was about an hour and a half webinar. Lots of good questions and that is also up for you to take a look at. You have to go to BlissfulInvestor.com/trusts. When you go on there, you’re going to have an opportunity to see that webinar. It’s in two parts.
You are also going to get to see the webinar and show that Gina originally sent to me to let me know what is going on and got me interested in this conversation. It is very good and it comes from the perspective of someone who had made a lot of money in stock. It’s a little bit different conversation, so it gives you a bigger perspective on what’s possible, the legalities of everything. I know a lot of us hear so much about taxes and all our obligations and the possibilities if we don’t fulfill those obligations.
I have to admit, it’s even scary for me. That rested and I know Gina would never do anything to get me in trouble. We’re close personal friends but for me, I need to do my research too. Due diligence is very important. You’re going to get access to that too. There are four hours of information. After that or before that, depending on where you’re at, you can reach out to Gina. Gina, why don’t you explain how this works for you if they reach out to you?
After you get to the interview that I did and the webinar Moneeka told you about, at the bottom of the page, there’s a button where you can set up a time to talk. We get together on a consult. I’m not here to sell anybody anything. It’s truly a consult. I need to know more about how you make your money so that I can then help guide you. I call it I serve and strategically monetize but I’m here first and foremost to serve.
I’m going to bring my Leverage-Gina hat that day so that I can look at ways that you can get more leverage so you can make, keep and grow the way that we’re all intended to. If at the end of that conversation, it looks like the trust is a good fit for you, we’re then going to send you a written proposal. It’s going to outline all of the details for you. It will show you everything that’s included in the deliverables. It will show you what the pricing looks like and if you talk about it with your spouse or you decide on your own that you want to move forward, you sign that and send it back to us and we move right along.
There is a time element to this. The time element is this. From July 23rd through July 26th, 2023, we are doing our first annual wealth-building mastermind and networking event. To say I’m excited about it is an understatement for so many reasons. One of the biggest is I’ve never met my clients in person. I’ve never even met Moneeka in person.
I’m going to be there.
I can’t wait to go and get hugs from you especially, and all of my other clients. Don’t sit there and wait. Go through the material, go get on the consult schedule, and come join us in July. It’s open to clients only. That means you’re moving forward as a client but those tickets are sold for $2,000 if you’re not a newer client, so go do it.
The thing is, we are finishing taxes and every year, taxes keep going. It’s better to get this all prepared so that you’re not scrambling with all the other stress that taxes can cause for us. You don’t want to be scrambling at the very end of your tax planning.
Moneeka, it’s worse than that. Until your trust tax ID number is set up and we get a couple of basic things done, your income is still outside of the trust. If you waited until December to set this up, you’re not going to be able to take the income from January until December and have it be in the trust and therefore tax-deferred. Every day that you wait, you’re paying more taxes.
Tax Relief Through Trusts: Every day that you wait, you’re paying more taxes.
I didn’t realize that because there is a lot of stuff that you can do at the very end and it’s retroactive.
The only thing you can use for that is you can use the foundations as we talked about, to reduce it by 30% but that’s it. The trusts you can’t do retroactively.
I didn’t realize that. Ladies, I know this sounds complicated.
I promise you, it’s not.
Ladies, do you remember I talk about this conversation I had with my dad when I was a very young woman debating, whether to get into real estate? My dad said to me, “Moneeka, everybody has stress, fear, and money problems. You want poor people’s money problems or do you want rich people’s money problems?” What do you think I chose? What are you going to choose? I don’t want to say that this trust is a money problem but this poor guy making $1.2 million, that’s a money problem.Rich people’s money problems are significantly better than the alternative.
I had the complete opposite of Moneeka. When I was younger, my dad was President of North American Operations for Oman Electronics, which is a huge Japanese electronics company. He was making big bucks but he lost his job in 1989. After that, he tried a couple of different ways of doing startups. He got into day trading for a while.
I was doing day trading and teaching day trading very successfully. Dad lost his whole retirement. My dad is now 82 years old. He worked full-time until he was 79 and physically couldn’t do it anymore. I never ever had conversations with my dad about rich people’s money problems or poor people’s money problems and I so wish I had. Your dad, I love him. That was awesome.
What a gift, right?
If you didn’t get that in your early years like I didn’t, please listen to what Moneeka is saying because it’s very true. I’ve been on both sides and it’s a very different money problem.
It changes your mindset because my original thought around that was, “What? Rich people have money problems?” There are a lot of people that will say, “I don’t want rich people’s money problems.” I hear this all the time too. What do you want? You’re going to be dealing with money in life. It’s a reality of life. How are you going to be dealing with it? For me, I wanted my life to be blissful. I wanted it to be with ease and flow.
I worked very hard. I have worked very hard for my money in the past too but everything that I do is to support my bliss. Part of what makes it a reality is having rich people’s money problems. A trust allows me to do that better. Even though in the beginning, there’s a lot of stuff to learn and it feels a little bit complicated. I will admit, I’m in the learning phase. It does continue to feel complicated but I’m getting there. I can see progress.
Progress, for me, is the big thing. As I see progress, movement, and benefits. That learning curve continues to be okay with me. There is a learning curve also on how am I going to get out of credit card debt because I don’t make enough. There’s a learning curve on my credit got shot because I couldn’t make my house payment or my car payment.
There’s going to be a learning curve on one side or the other, whether you’ve got not enough money or you’ve got too much money. You want to set yourself up for the better money problems. If you’ve got them, there are obvious reasons. If you don’t have them yet, get yourself set up so that you’ve got more time for it, you can relax into it, and you can grow in that way, which will help you to grow a lot faster. Does that make sense?
It sure does. Don’t worry. We will hold your hand every single step of the way. Abundance Group Trust is not just Dr. Gina. There’s a whole team supporting all of our clients, so we are here for you. Whether you like it or not, we’re here for you. We do calls now four4 days a week, usually 3 days a week. The extra day is a new training I’m putting out. It finishes up but I always will do three calls a week. They’re Q&A calls and they’re meant for people to come in and get the help they need to implement and operate out of their trusts.
Tax Relief Through Trusts: Abundance Group Trust is not just Dr. Gina. There’s a whole team supporting all of our clients, so we are here for you.
They’re all recorded.You can get access to them, so you’ve got this huge wealth of information that you can listen to until you are able to repeat all the information right in your own brain.
You get it in audio, video, and text format. We don’t give it to you one way, so whichever way helps you the best, it’s there for you.
I love that. Did you want to say anything before we close, Gina?
No, I can’t wait to meet your people in person in July even. Come get on my calendar. Make sure that I know you came from Moneeka so I can say, “Oh, my goodness,” and tell her, “Thank you.” We hope to see you in July. In fact, we’ll even do this, Moneeka. I have some room for breakout sessions. We can even do a breakout session with your ladies at the event since we’re both going to be here. Might as well, right? That would be awesome.
Ladies, you know I’m traveling a lot for fun. I am not leaving David behind anymore. I’m not traveling a lot for business stuff because he’s not going to take time off of his job to come do my business travel but I am going to be there with Gina in July. That’d be a fun time to meet and put our heads together on how we can utilize the trust to benefit the growth of our lives.
That will be fun. I’m going to be in that breakout session.
I’m with you. I’m so excited.
Me, too. Thank you so much for having me, Moneeka and to remind everyone, it’s BlissfulInvestor.com/trusts. You’re going to have a blast.
Ladies, thank you so much for joining in with this conversation and hanging in there. I love hanging out with you. I appreciate you so much and I’ll see you next time. Until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.
Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
Our personal experiences in life have an impact on our business, relationship, and parenting. These experiences may sometimes be good, but they can also be disruptive in our lives. How will you navigate life after a shocking discovery? Moneeka Sawyer welcomes our guest to highlight how her life experience impacts other aspects of her life. Debbie Olson, co-host of DNA Surprise Retreat, shares how she became a life coach and how fulfilling it is. Grow from your experiences, navigate life, and tune in to this episode today.
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Watch the episode here
Listen to the podcast here
DNA Surprise Retreat: Healing Trauma from a DNA Surprise With Debbie Olson
Real Estate Investing For Women
I am so excited to welcome to the show my friend, Debbie Olson. This is what Debbie has to share with us. I was adopted by my stepfather, and I was told my biological father did not want me and was later told he was dead. I decided to take a DNA test in hopes of connecting to a paternal relative. I received an email from a connection via Ancestry that turned out to be my half-sister. I learned my dad is alive and I have a half-brother.
It is this moment right here that turned my life upside down. For me, the shock was happy and something I had wanted for so long. From this shock, going to therapy and working with a life coach, I became certified as a life coach to help others in similar situations. I met and connected with Alexis Hourselt, and we have united to co-host a DNA Surprises Podcast. Together, we are also hosting our very first Surprise Retreat on May 4th through 7th, 2023 in Tucson, Arizona. You are invited. Debbie, welcome to the show. How are you?
Thank you. I’m great. How are you?
I’m good, thanks. I’ve known Debbie for a while. We’re part of a mastermind that has powerful people in it. Don’t you think, Debbie? Amazing people. I’ve never had this experience in my life before, but every single person you meet has so much to offer. A lot of us are real estate people and a lot of us are not. It’s incredible to me the exchange of heartfelt support and business support, and the things that we bring to each other, whether we’re in the same industry or not.
You know that because bliss is such a big core value of me, this show, and my business, I’m very acutely aware of how our own personal life and our personal experience of life affects our businesses, our lives, our relationships, our parenting, our learning, and all of those things. I often bring life coaches on, and Debbie is one of those people that as she has talked about her experience with this surprise DNA test, it’s been incredible to me to watch her experience and how she has grown and her incredible strength, but also to realize that this is the experience that’s surprisingly common now.
There was no Ancestry.com or 23andMe 5 or 6 years ago. I don’t know when it all started. During COVID, all of us were getting our 23andMe test. I found out that my heritage is exactly from the town where my mom was born. There were no surprises. It was funnily boring. I did find out that I’m a higher percentage Neanderthal than many people, which was a little disconcerting, but whatever.
The point is that I didn’t have that experience, but Debbie did. As I started to talk to people, I realized more and more people do. For some people, it’s this amazing experience. For some people, it’s heart-wrenching. In all cases, it’s disruptive because you’ve got this surprise. A surprise, whether it’s good or bad, can be disruptive. It can disrupt your life. It can disrupt your goals in life.
I had another girlfriend that found a whole family she didn’t know about. She had found a sister. She lived in Southern California, and her sister lived in Santa Rosa. She moved to Santa Rosa to get to know a sister of hers that she never knew she had. They have this amazing relationship. They’re blissfully happy that it all happened, but it completely disrupted her life. It turned out to be the most amazing thing. It has turned out to be an amazing thing for Debbie also, but it was disruptive.
As we’re navigating this brave new world that COVID has created for us, as we’re coming out of it, as we’re doing all these new things in our lives like discovering our ancestry, new relatives, and all of those things, I felt that it was valuable for Debbie to come online and share her experience in the way that she does, which is so lovely. See if this touches any of you, ladies, because in real estate, if we have blockages and if we have disruption, it’s going to affect our business. I’ve seen it. It’s been such a big disruption for so many people.
I hope you, ladies, find this valuable. I do want to say that Debbie is holding her first retreat, and I’m super excited about it. I won’t be going because I don’t have this issue. As much as I love Debbie, I don’t travel unless I have to anymore. I know that this will be valuable to some of you, ladies. Stay tuned with me and let’s get going on this show. Debbie, you gave us a little bit of your story, but could you give us a high level of what that experience was like for you? What happened?
Growing up, I was adopted by my stepdad. He was the only dad that I ever remember being in my life. I have two full older siblings who did have a little bit of a relationship with our biological dad. They’re 6 and 7 years older than I am. I was about one year old when my biological parents divorced. They have some memories of him and they had some experiences with him. I only ever had a father-daughter relationship with my stepdad.
As we were growing up, we weren’t allowed to talk or ask questions about our biological father. We were always told, “He didn’t want us. You have a great dad. Be happy for what you have and get on with life.” I do think some of that was the thing that you did back in the day. That was what was socially acceptable to do. As an adult probably in her early twenties, I think my mom wanted to put the final stamp on it and told us that she had heard our biological dad had passed away.
I never had the desire to find him until I had the desire to find him. He was always in the back of my mind. There were always little things I would do here and there. I decided to do the DNA test with the goal in mind that I would find the one person who would know something about my biological dad and would say something kind about him because I’d never heard anything very kind.
Why was that so important?
When you have a parent that you don’t know and you’re not told kind things about them, you feel a little bit like there’s something wrong with you as well. I wanted to hear something good. After taking the DNA test, I took it in 2018. I didn’t get any matches that were high enough or that I could equate to my biological dad. I stopped looking at it. I gave up hope.
I got a message from my half-sister, who I learned from my half-sister. She was asking me very specific questions about where I was born and if I knew my siblings. She was using their first and middle names, things that people wouldn’t necessarily know to ask. I was on vacation with my husband, Shane. I looked at him and said, “I’ve got this weird message. This girl knows some things.”
I was a little freaked out, but at the same time, wanted to talk to her. We had probably 1 or 2 very brief messages. She finally said, “I’m your half-sister. We’ve been looking for you for so long.” The next message, I said, “I understand our dad’s passed away.” She said, “No, he’s alive. You have a brother as well. We live in Canada. We’re so happy.”
They’re happy to have found you. That’s lovely.
That was a nice feeling because the more you learn about people that have these DNA surprises, some of them are rejected. Oftentimes, the results of affairs or different and things like that. Wives or families aren’t told and they’re rejected. I was very much accepted. Not only accepted but, “We’ve been looking for you. We wanted you in our lives.” For me, it was an incredibly wonderful experience.
DNA Surprise: Some people that have DNA surprises are rejected. Sometimes they’re the results of affairs.
What happened next?
My sister and I did a lot of emailing back and forth. Within a few weeks, we did some video calls with my sister and my dad and his wife, my stepmom, which is my half-siblings’ mother. Getting to know each other, learning about things, and finding out how we got lost from each other. My dad was very worried that we were going to hate him or be upset with him, which was nothing like that was true. I told my two other siblings that I had found him. They both said the same thing, “We thought he was dead.” There was that dynamic of trying to build a relationship and get past the past.
It was disruptive to your life. Talk a little bit about that, if you don’t mind.
Not at all. It was disruptive. At first, it’s pretty euphoric. You think about it 24/7. You stop sleeping at night. You think about everything that you’ve been told in the past. You think about what could have been. You think about what it will be like now. There’s nothing that you don’t think about. It’s constant. I was able to go to Canada in September 2019. I found them in May. I went in September and met them. By the next May, I was in therapy.
I think once the euphoria, the newness, and so many things wore off and life gets back to normal, the honeymoon phase was over. I call it the honeymoon phase. It was at that point that I recognized that I needed some mental help to help me cope, deal with, understand, and what to do with all the things that had happened.
For you, even though it sounds like it was very euphoric, there was quite a lot of anger around that too, wasn’t there?
Absolutely.
Tell us a little bit about that. I’m sorry to put you on the spot, Debbie, but I want to make it real because I know that with any other person that has gone through this, even my girlfriend being reunited with her sister, there was a lot of pent-up anger inside about, “Why was this stolen from me my whole life?” She had to go through a lot to get past that, even though the whole experience for her was what you might call euphoric. I know that people are going through this and so I want them to understand what your story is too.
I don’t feel like being put on the spot at all. I’m very comfortable talking about this now. That is one thing I will say. At first, it was difficult for me to share these things. When people would ask me questions, I oftentimes wouldn’t know how to answer them. It’s partly because I was ashamed. You feel ashamed that you didn’t grow up in a perfect nuclear family. There’s shame around that. I think that people don’t want to feel angry.
You have this great thing that happens to you and you don’t want to feel that anger. The fact is I was angry. I was angry at my biological dad for not trying hard enough to find me. I was angry at my mom and my stepdad for taking us away from him. You are very angry. You’re angry that you missed out on Christmases with your siblings, birthdays, and the traditions that they’ve created that you’re not part of. It’s a lot to think about and a lot of it does make you mad.
Do you feel like it’s possible to get past that?
I feel like it’s possible to get past it. I sometimes don’t know if it’s possible to completely forget it. Sometimes things will be sad or things will happen. That will bring out some feelings and some emotions in me. I’m learning and I’ve learned to allow those feelings. I allow myself to be mad. I allow myself to be frustrated and to feel like it’s not fair or it wasn’t fair that I didn’t get to have some experiences. Feeling your feelings, allowing them, and not being ashamed of them is important. I’ve tried to do that.
I know you’ve given us in your story and you’re a life coach but define specifically what you’re qualifying for your work a DNA surprise.
A DNA surprise when generally someone will take an over-the-counter DNA test. You said you did 23andMe. I did Ancestry. I’ve done them both now. At the time, I did Ancestry and generally had a surprise. Similarly to you, I know about a half-sister that I didn’t know was out there. People are sometimes finding out they’re adopted if their parents don’t confide that in them or they’re donor-conceived.
A lot of donor-conceived people are finding hundreds of siblings. Some find a few and some find hundreds. A new thing with DNA testing is donor conception. It’s any type of surprise like that where it might not be that often, “Your dad is not your dad.” At least in my communities and things, that seems to be the most common thing. Oftentimes, that’s not it. There’s another person in the community that her biological dad reached out to her and said, “I think I’m your dad.” They did a DNA test to confirm and he was. Usually, it’s with a DNA test, but not always.
How did you decide to go into this work? Let me qualify that a little bit. There are a lot of people that are having these surprises that did not become life coaches. What drew you to this work?
As you said earlier, DNA surprises are becoming more and more prevalent. The more people that are testing, the more it’s happening. There are not a lot of resources in the community for people that are having these DNA surprises. There are not a lot of people that feel comfortable going to therapy or talking publicly.
When I first had my DNA surprise, I would not have done this show. This was not something I would have done. That’s what drove me. It was knowing that there was a need for it. I have historically worked in legal land. I’ve been a paralegal for a long time. I’ve done family and criminal law. That’s a lot of working with families and their dynamics, good, bad, or otherwise. I felt like I already had some experience in difficult family situations, which assisted me in choosing to do life coaching.
Are you loving it?
I’m loving it very much. It’s very fulfilling for me as much as it is. I hope I’m helping others. I believe I’m helping others, but it helps me as well. It’s great.
As life coaches, that’s always true. You grow from your clients as much as they grow from you, which is amazing. How did you meet Alexis?
We went to a different retreat and connected there. We connected on social media. I don’t do the podcast with her. She does it on her own. We had met at a retreat and connected that way and continued talking after the retreat and decided that doing our own retreat would be something that we would be interested in. There are not a lot of resources in the community. There are not a lot of those opportunities out there for people. We started bouncing it around and the next thing you knew, it was being planned.
Talk to me about the idea of this retreat that’s coming up.
We want to create a community of healing and wellness. We have a ranch-style facility where we’re going to be holding the retreat in Tucson, Arizona. It won’t be snowing like it is here, hopefully. It’s May 4th through 7th. Think Airbnb style. There are some shared spaces. We’ll be providing the meals. We’ll be there for Thursday to Sunday. Thursday night, we’ll do a big dinner, get to know each other, and share why we’re there, and where we’re from. We have people from all over the United States that are coming, which is exciting. We have expert-led sessions with different facilitators that are going to speak about different things. We’ll have three facilitators each day, Friday and Saturday. Sunday, we’ll have a little brunch type of experience and go back home.
Could you talk to me a little bit about what the experts are going to be sharing and talking about?
Yes. We have one that’s going to talk about grief. We have someone that’s going to talk about trauma, Big T and Little T traumas. We have someone that’s going to talk about RAIN, which is Recognize, Allow, Investigate, and Nurture. We have someone that’s going to do a right-to-heal where we’ll do some writing exercises. We have another gal who’s going to do a little art project with us about being broken and putting yourself back together. I’m going to do a session What’s Next? working on the strengths that you already have.
I got tingles listening to that. It sounds amazing.
It’s going to be fun, I think.
For a first retreat, that’s ambitious too. I’m proud of you for putting together this special the first time around. That’s amazing. There’s something magical about the first time. Ladies, have you noticed this? The very first house you buy or the very first man you kiss. The very first time you go to a dance. There’s something magical about that first experience doing something. I’ve done a lot of retreats myself that I’ve put on.
The first one, it’s not always as put together. Yours is put together. Mine wasn’t, but it was so magical. It was like that first time. It was my first experience. I’m still close friends with every single person that came to that retreat because we had this amazing creation together that changed all of our lives. It was amazing. I’m super excited for the people that are going to be joining you, Debbie, for this creation.
Thank you.
What I’m so impressed with, ladies, is she’s capping it at 30 because she wants there to be personalized attention for everybody that’s there. Sometimes when we’re going through hard things, we don’t want to be in a big group. We want to be held in a smaller community. I know that Debbie was feeling that too. She wanted to create that for people. She will only have 30, but it’s May 4th and she’s already half full, which never happens for anybody that runs retreats or events. Usually, people buy their tickets in the last week or the last two weeks. To have it half full does speak to how prevalent this is out there.
When I went to my first retreat, I was nervous. I didn’t know anyone. I do feel like this environment we’ve created and we will create will be welcoming and loving. It can be a little intense with emotions. We want people to know that they can take time out if they need to. There’s no expectation of them to attend every session if they’re struggling or if they need a minute by themselves. That’s absolutely something that they can do. We want to create that space for them as well as the community and togetherness and hold each other in a safe space.
As many women are, I am the victim of sexual assault. When I’ve gone to retreats to heal that and when I need that time out, sometimes I need someone there to help me through the time out. Do you feel like you’ll have that kind of support there?
Absolutely. With our facilitators being around and with Alexis and I co-hosting, there will always be one of us that can handle whatever is happening in the socialized part of the retreat. While if someone needs a hug or a timeout, we can do that as well.
That’s valuable. Thank you for that. Who do you think should attend?
Anyone who’s had a DNA surprise. If you’ve taken a DNA test and you’ve found a father, a sibling, or maybe you’re adopted. Alexis specifically had an ethnicity shift. She found out that the dad that raised her wasn’t her biological father. She was raised to be half Mexican and half White. She found out she’s an African-American and White. She’s had some ethnicity shifts with hers. That’s been something that she’s had to work through. DNA surprise is hard to just say, “This is what it is,” because it is vast. The best definition is if you’ve had a DNA surprise.
You’ve told us a little bit about the facilitators and what they’re going to be teaching, but could you talk about each of them as a person a little bit and introduce us to them?
I can. I don’t have their names in front of me and I’m terrible at this. I know off the top of my head, Christine Wolf is doing the Write To Heal. She is a writer in Chicago and lives in Chicago. She helps people write memoirs. She’ll be teaching that session specifically. I’m doing a session on What’s Next? building on our strengths. It’s my hope that I can listen to and take from what the other facilitators have taught at the retreat and then I can build on that for everyone.
That’s one of those things that you’re good at. It is the What’s Next conversation because we’ve had this conversation. This is another thing, ladies, that you might want to know. Debbie and I have all these group activities that we do with this mastermind. Debbie was one of the very first people that I had a group activity with. I laid it all out on the line. I’ve got some fun “I love my life,” so I’ve got some fun secrets that I don’t share with the broader world, but it was relevant in this particular exercise.
It was so fun to look into her eyes and speak that truth without fear. I didn’t know if I was going to be judged or whatever. We’re all afraid. We’re in that vulnerable space about being judged, and how kind and generous of spirit she was, and the way she held me, and the way that she was gloriously happy for me. It was amazing. That’s why we became friends. It’s because of her as a coach. My thing was, “What’s next?”
I have to confess. I believe I’m this amazing manifestor. I’ve created this blissful life that I can’t even believe is mine. I want that for all of you, ladies, which is why I do this show. I want it for the whole world but I’ll do what I can do. There’s always a “What’s next?” It’s my belief that if we’re not wanting, we’re dying. It’s not wanting like, “There must be more. I want more. I want more money. I want a bigger house.”
It’s not like that, but there has to be something that we’re being pulled forward toward in life that we’re working toward, that we’re blissfully inspired by, that keeps us alive and keeps us growing and evolving, not just in our businesses, but in our lives, our relationships, and everything that we’re doing. I’m very much a what’s next person. Not because I’m not satisfied. You, ladies, know that I do, but I’m always like, “Thank you for this and what’s more? What’s possible? How could I be more blissful?”
It was fun to talk to Debbie about here I am in this place and I don’t even know how to set a goal for the next thing. How to feel that inspiration moving forward? I’m feeling stuck. Poor me, I was stuck in my bliss. It sounds so goofy, but it’s true. I had gotten to this place where I wasn’t sure where I was headed next. Debbie helped talk me through that. That was a ten-minute exercise, ladies. I know what her capacity is, and I’m so looking forward to you guys experiencing that.
Thank you. I appreciate that. The other people speaking, Megan Irwin is going to talk about the trauma, The Big T and the Little T.
Talk a little bit about the Big T and the Little T.
With traumas, there are big traumas and little traumas. I’m certainly not an expert on this, but this is what I know Megan is going to speak about. I believe she’s going to speak about working through the big traumas and the little traumas and how to work through those things. Maybe how to identify them as well.
I think that’s the thing. My question is how do I define the Big T and how do I define a Little T? To me, it’s all T.
She’s going to speak about how they affect our bodies and our minds, and she’s going to give tools to manage those things.
I love that.
We’ll have Jennica Klemann. She is an advanced certified grief recovery specialist. She’s going to talk about brief recovery methods. She works with people who have lost spouses, pets, children, friends, and any grief loss that way. When you have a DNA surprise, there can be grief in it as well. I did find my dad and he was alive, but I’ve grieved 50 years of not having a relationship with him. That’s how that can play into that, or if you’ve been rejected by family or if you’ve found a biological parent or sibling and they’ve already passed. That’s where the grief can lead. She’s going to talk about that.
Jennifer Spencer is going to talk about radical acceptance. Oftentimes with the DNA surprise, you can lose your identity. Alexis is a perfect example of that. She was raised Hispanic and then found out she was African-American. There’s some identity crisis in there. With that, I was never raised with any biological paternal side of my family. Having found that, it’s interesting to see our likenesses and our differences, and different things like that. The radical acceptance is interesting when you’ve had a DNA surprise
DNA Surprise: Sometimes with the DNA surprise, you can lose your identity.
I’m sure what she’s going to be talking about is radical acceptance of yourself. Is that true?
Yes.
We can’t expect anything from anybody else. We’re all going to have our own experiences around this. Radical acceptance Is about self-acceptance.
We have Lindsay Johnson, and she’s the one that’s doing RAIN. RAIN is Recognize, Allow, Investigate, and Nurture. She’ll teach us how self-compassion is an important tool in healing after you’ve had a DNA surprise or anything similar to it. Christine will do the Write To Heal session with us. She helps people write their memoirs and different things like that for her job. It’ll be an amazing experience. I’m so excited about her session with us.
I’m by no stretch a professional at this, but I have walked people through putting together their own memoirs, and pieces of it. I had a girlfriend who was going through cancer, and she was writing through the process. That book, when she’s finally completed it, will be an amazing resource for people going through similar things.
It was incredible to watch her growth and her examination of this disease, her own will to live, her capacity, strength, and resilience, and to honor those things. I don’t know that she would’ve put any focus on that if she hadn’t got a great mindset. She’s got a great mindset so she would have, but I think that it was so much more powerful for her to write it.
I think sometimes just getting it out, whether you share it, you don’t share it, journaling, or any way of getting it out is incredibly important.
This has been so much fun, Debbie. Thank you so much for coming on and sharing about this new world of things that we’ve never had to deal with before.
I appreciate you, and I appreciate your audience for allowing me to come on and talk about something that is not related to real estate.
I think that clearing these things out of our life creates more clarity and opportunity for us to succeed. I think it’s valuable. I appreciate you sharing with us. It’s a conversation that nobody has. You don’t hear it out there in the big wide world of small talk when you’re out there.
DNA Surprise: Clearing some things out of our life creates more clarity and opportunity for us to succeed.
No one usually walks up to another person and says, “I found my dad. Do you want to hear the story?” Everyone would probably be, “Absolutely. What an incredible story.”
This is a great topic that I brought especially to my ladies. They got to tune in to it. How many shows do you ladies read this on unless you’re pursuing it and looking for it? Thank you for joining us. Is there anything, Debbie, that you wanted to say before we sign off?
If anyone wants more information, I have my resources on my website, DNASurpriseNetwork.com. That’s my personal website information about coaching. I have resources on there, different books, podcasts, and things that people can refer to if they’ve had a surprise and don’t know where to turn. Alexis’ podcast is DNASurprisesPodcast.com. Obviously, that’s where you can find her podcast.
Do you have a free gift?
I am happy to do a free coaching session with anyone. They can email me through my website. My email is [email protected]. If they want to mention that they tune in to this show, I’m happy to do a free coaching session with anyone at all.
That was so generous. Thank you.
It’s my pleasure.
The dates for the Surprise Retreat again are May 4 to 7, 2023. For those of you that are tuning into this and may have missed that retreat, definitely go to her website and check what’s going on now. Maybe there are some other resources, another retreat, or something else that you can plug into so you can get the support that you need to create your blissful life even through all of this.
Alexis did do little bonus episodes on her podcast from all of the facilitators. If anyone is interested in hearing the facilitators speak for themselves and what they’re going to share at the retreat, they’re available on her podcast as well.
That is the DNA Surprises Podcast so you can learn more about the facilitators. That’s awesome. Debbie, thank you. This is amazing and so good to see you again, not in our mastermind but in person, face-to-face. Thank you so much.
Thank you. I appreciate it.
Ladies, thank you for joining Debbie and me for the show. I so appreciate you. I look forward to seeing you next time. Until then, remember, goals without action are just dreams, so get out there, take action, and create the life your heart deeply desires. I love you. See you later.
Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
Distance should never be a barrier to building a successful real estate portfolio. With effective processes and a strategic approach, anyone can achieve financial independence through real estate investing. In this episode, Kimberly Kesterke, Founder of The W2 Landlord Community, discusses how to invest in secondary markets from a distance. She shares her expertise in managing a rental portfolio from a distance. With years of experience and effective processes, Kimberly has built a six-figure cash flowing rental portfolio while working a full-time job and raising a child. She shares her real estate journey, how she achieved this, and now coaches others to invest in real estate aligned with their strengths and minimize evictions and vacancies. Tune in and learn all about secondary markets to start your real estate journey now.
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Watch the episode here
Listen to the podcast here
How To Invest In Secondary Markets From A Distance With Kimberly Kesterke – Real Estate Women
Real Estate Investing For Women
I am so excited to welcome the show Kimberly Kesterke. Kimberly is the Founder of The W2 Landlord Community and has many years of experience managing her rental portfolio from a distance. Kim built a six-figure cashflowing rental portfolio all while working at a full-time corporate sales job, raising a daughter, and managing our properties herself. Through that experience, Kimberly has created effective processes that resulted in only one eviction during the years and very few vacancies.
In 2019, she finally hired a property manager and, in 2020, started a Facebook community with four real estate investors with full-time jobs. Finally, in 2022, she quit her corporate sales job in order to focus on her real estate business full-time. That’s so exciting. She now works with coaching clients to help them build foundations in place to hit their financial independence goals and confidently invest in a real estate strategy that aligns with their strengths. Kim, welcome to the show.
Moneeka, it’s so good to see you.
It’s good to see you again. We’ve been on a couple of other panels together with real estate organizations, so it’s so much fun to finally have Kim meet you ladies and get to share her with you. Thanks, Kim.
Thank you.
Kim, it’s impressive that you have quit your job and now you’re fully into real estate, but how did you get started?
I got started back in 2006. I purchased my first home. If you remember that time, it was such a buzz. It was the responsible thing to do. Everybody was buying a house whether we had money or not. I was about 25 years old at the time, and I purchased my first property in Augusta, Georgia. That’s where I was living. I was working there.
Fast forward to 2008, we all know what happened. The economy crashed and at the same time was transferred to the Atlanta market, which is about three hours away from Augusta, for my sales job. I became an accidental landlord at that time. I decided to put tenants in place, rent the property, and managed everything from a distance, which back then it was unheard of to coordinate everything via phone and email, and not be onsite for all of those tasks and things.
I started to gain confidence. Over the years, I started acquiring a duplex here, and a triplex there and started building my portfolio. When 2019 came along, I decided to hire a property manager. I had about eighteen units at the time, and that’s how I got started. Consistency is what helped me build my portfolio over time.
Are all of your properties in Augusta, then?
Not anymore. Originally they were, but then as I started learning different strategies and investments, I branched out to other markets. I have properties all over. I have one in New York and a couple in North Dakota. In terms of managing secondary markets, I’ve expanded my portfolio that way.
How did you hire a property manager? Do they do everything remotely?
The property manager that I have is for my Augusta units. That’s where a bulk of my units are, and then the other properties that I own, I self-manage.
Talk to us about how you define a secondary market.
I define a secondary market as a market that is typically about 150,000 in population. It may have 3 to 5 industries within that market. What that tells me is that there’s a lot of support in that economy that would support people to move in, to rent, to buy all of those different things. In a secondary market, I also take a look and make sure that it’s a place that people want to live and that people would want to move to.
The reason why I look at 3 to 5 industries is because you don’t want to put all of your eggs in one industry. For instance, if that corporation or whatever that industry is, because every market is different, leaves, you don’t want to be caught with a property that depreciates very quickly. Those are some of the key things that I look for.
There’s a variety of different ways. There’s a free tool that I use online called NeighborhoodScout. Let’s say I’m reading an article online, and it says, “Top 50 best places to invest.” I see that all over the place all the time. If I’m curious about it, I’ll go on to NeighborhoodScout. It’s a free tool. I’ll poke around, I’ll put the city in, and I’ll start looking at the different things to see if it’s a place that I’d want to dive in deeper and actually invest.
Why did you decide to do secondary markets?
I stumbled upon it with Augusta. Augusta, Georgia, is a secondary market. As I was building my portfolio, I looked around at all of the competition that a primary market brings, whether it’s hedge funds moving in or it’s a lot of investors competing for the same properties. Also too, for me, the secondary market fit my budget personally because I was at the time doing conventional loans that would be 20% down after you get a certain amount under your belt.
The price tag was a lot more attractive to me. It turned out that what I was putting in as a down payment to what the rents were worked out where I was still cashflowing, still making money, still getting the appreciation. It may not have been as broad as the Atlanta market, for example, but it was where I could afford it. I could continuously do it and still see good results.
You fell into that. How would you say other people can get started in a new market?
If there’s a market that somebody hears about or there’s a lot of buzz or maybe it’s not so much buzz, but they personally know a family that lives there who knows a little bit about it, then I would say start doing your research. The question is, “How do I research if I live half a country away?” Basically, what I said a little bit earlier is I’ll go on NeighborhoodScout.com. It gives a lot of information in their free tool.
I’m not affiliated with it. That’s what I’ve used. You can drill into different ZIP codes, you can check crime rates, where the industries are, or what kind of industries. You can then take that information, walk over to Zillow, and then start seeing what the rents are. If it’s starting to look like a market that matches the type of tenant avatar that you’re renting to or if it’s matching all of the different check boxes that you have, then it’s one to start exploring further by calling some property managers or getting on the local city Facebook group and start diving in that way.
Talk to me a little bit about calling property managers. I’ve heard that before. It’s a great tool to utilize and get to know new markets. Tell me a little bit about how you managed that process.
I personally did this for a property that I was looking at in Port Charlotte, Florida. I ended up buying it. I had never been to Port Charlotte. I love the area now, knowing more about it. What I did before I put an offer in and closed on the property was I called a couple of property managers and gave them the details of the property. I said, “This is it. This is what I’m thinking of renting it at. What are your thoughts?” They gave some good advice.
I was even looking at renting a little bit lower than I should have, which was nice. I was able to up my rate and learn a little bit more about how snowbirds are coming down. It’s more information than I ever would’ve known. If you think about it, property managers are going to obviously know the area because they have dozens, if not hundreds, of properties that they’re managing. If they understand who you’re renting to and what your investment strategy is, they can give you good advice.
Secondary Markets: Property managers are going to obviously know the area because they have dozens, if not hundreds, of properties that they’re managing. If they understand who you’re renting to and what your investment strategy is, they can give you good advice.
Do you ever feel obligated to hire them?
If I personally buy there, then yes, I would because it’s a fair exchange that way.
With that Florida property, did you hire a property management company?
Yes. We ended up hiring that property management.
What strategies would you say work well for managing at a distance? For some of the properties you have a property manager, but what are some of your strategies for being far away and still managing properties?
For my rentals, where it’s more of a landlord-tenant relationship, long-term rental, those properties are managed by a property manager. I also have another strategy in place where I will acquire a property and then I’m, in essence, the bank. What I’ll do is I’ll buy the property and sell it either with rent-to-own terms and/or, depending on what price, I get that property seller financing, where it might be a land contract or land installment contract for deed. I’ve done a lot, a wide variety of different ones. I’ve even done a seller finance where, at the closing table, the deed transfers.
There are a lot of different ways that you can do it. What I like about that and why I think it’s very attainable to invest in secondary markets anywhere is you don’t have to do the maintenance. You’re, in essence, the bank. The biggest thing you’ve got to make sure of is you collect the payments, and there are loan servicing companies that can do that. They’re only $10 to $15 a month. It’s one of those things that if you’re looking for creative ways to get out of your market but don’t want all the hassle of the maintenance and the risk, selling properties as the bank is a good way to go.
That was a lot of information. First of all, with the loan servicing companies, if they need to collect late rent or anything like that, do they charge extra or is it that flat fee?
Yes, you have to put your terms upfront, whatever your terms are. If it’s after the fifth you collect 10%, you’ve got to give them that, but that is how they process it.
What happens if someone doesn’t pay?
It depends on how you structure it. If you structure it more in a contract-for-deed format where the deed transfers after everything is paid off, then you can go through an eviction process. You don’t necessarily have to foreclose. If you structure the deal that the deed transfers at closing, then you would have to go through a foreclosure. Keep in mind that every state is different. If this is something you’re interested in, talk to your local title agency or your real estate attorney and understand what works for your state because everybody’s slightly different.
When you mentioned that there were several different ways to be the bank, you mentioned three right off the top of your head. I understood everything you said, but most of my readers probably will not. Can you take that down a little bit more?
The first one is contract per deed. I like that one because if you imagine somebody goes and gets a car loan, you don’t get the title of the loan until you pay it off. Basically, that’s what you’re offering as the seller. You don’t transfer the deed until it’s paid off. You could amortize that for 30 years, 15 years, or whatever you want to do. The deed transfers after the fact. What’s nice about that strategy is that you get a lot of tax benefits. You get good cashflow. There are some good strategies for that. That’s one of them.
Secondary Markets: A contract per deed is a nice strategy that allows you to get a lot of tax benefits and good cash flow.
Do you take a down payment for that one?
I do.
Do you have an idea of the percentage of what you take, or is it a flat rate? What do you normally do about that?
What I do personally is 10% down. I’ve tried a wide variety of different ones. I’ve done, depending on the area, $2,000 down. I’ve done a wide variety. A 10% down, I believe, attracts a person that wants a loan or a mortgage and is going to pay on time. It’s a good qualifier, in my opinion.
You’re the rent to own. They’re paying principal and interest. What kinds of rates do you normally charge?
It all depends. Usually, I take what the prime is and add a couple of points to it because there is a premium to being able to offer the terms. If they could go down and get a conventional loan, then go get the conventional loan. As the investor, we’re taking on a little bit more of the risk, so we can charge a little bit of a higher interest rate.
Now go to the second strategy.
The land installment is another way of saying contract for deed. That’s how I clump those two together. The rent to own, that one’s a pretty cool, unique way to do it because you collect a non-refundable option fee upfront. What that is, is that is also a down payment but non-refundable. It will go against the final principal. At the same time, as an investor, you can manage the monthly payments any way you want. It’s not a straight amortization like a contract for deed or land installment. A rent to own, you can charge the rent and then, as the investor, you can choose how much that rent payment goes towards the principal.
At the very end, they have what we term a balloon payment, and the non-refundable option fee is obviously taken out of that principal. Whatever you decided as the investor with the tenant-buyer, how much each month was going to be applied to it. Rent to own is a cool strategy because there are a lot of exit strategies. They can cash you out after 2 to 4 years. You can redo the lease for another 2 to 4 years, however long you want, and then negotiate with them how much of that payment is actually going to the principal.
The contract to own and the rent to own are similar, but there are some subtle nuances it feels like. Is that true?
It is. It all depends on what your comfort level is, your state, and what the different rules are for evictions and contracts. I’m operating where I operate. The rules could vary. Understanding your specific areas is what my advice would be.
I love that question because I did a Facebook Live about that. When you look at the way that the economy is now, it’s completely different than what it was from 2006 to 2008. You could get conventional loans at very low-interest rates. Nowadays, what I personally would do is I would purchase a property, and I’m doing this right now, and I would basically flip it without doing much of anything. What I’m doing is I’m flipping the paper. I’m offering either contract for deed, I’m offering rent to own, and then I’m holding that property as long as I can in those specific terms.
What I like about that is, especially where I came along in my investing journey, I like to take a more conservative approach. I guess I’m boring that way, but I like the conservative consistency. In this approach, you know what your cashflow’s going to be on a monthly basis as long as they pay. There are alligators in every water, but let’s say they always pay, you’re getting that cashflow and maintenance isn’t eroding your profits. That’s a great way for people to start and understand real estate investing.
What kinds of properties are you buying, or how are you finding the properties?
I’ve found them in a variety of ways. Now, where I’m getting my properties is I’m sending out letters to sellers and people who own the property but don’t live in the property. I’m sending out letters on this is what I can offer and what I’ve been slowly acquiring but acquiring them that way.
How are you determining the sale price for the properties?
It’s a combination in terms of what I’m selling after I buy it. It’s a combination of looking at the comps and also knowing that I’m also providing a premium for people to purchase, not having to go to the bank. I’ll take a look at comps and pretty much price it where I’m still making some profit, but it’s still within line with what the local comps are.
Let’s say, for instance, you have a contract that’s five years and you’re selling this property with a five-year contract. In five years, that property would’ve appreciated. You’re basically giving up that appreciation in favor of a little bit of a higher interest rate. Is that what I’m hearing?
Not entirely. It’s what is reasonable. Let’s take the Florida property, for example. Looking at the local comps, the higher comp was around $600,000. What my business partner and I did was we took a look at it and we’re like, “Let’s price it more around $599,000. Let’s see if we get some interest.” We got a tremendous amount of interest. We were able to purchase it at a lower price, the way that we were able to work with the seller and work with the wholesaler that brought that property to us. We still made a profit that way.
In that sense, you never know what’s going to happen in five years. You could say you are foregoing some appreciation for the higher interest rate, but we still ended up making money. It was one of those win-wins where we were making money. We were able to get a tenant buyer that was happy with it and, at the same time, everyone is winning out of the situation.
You quit your job to go full-time into real estate. We’re going to talk about this in a deep dive in EXTRA, but could you give us a high level of what it took for you to make that transition? I know so many of my ladies want to make that transition but don’t even know it’s scary. How do you get started even thinking about that?
For the record, maybe because I’m a slow learner, it takes me a while. It took me two years after I decided I wanted to do it. The reason why is because I put some processes in place. I wanted to put some goal marks in. I wanted to hit certain things before I felt that I would be ready to leave my corporate job. I was doing well, and it was something that I wanted to do in real estate full-time. That’s where I was at.
What I ended up doing is I first took a look at my portfolio in its entirety. I took a look to see which ones are the more profitable ones and which are not. I sold the ones that were lagging a bit, the 1031 exchange into some higher profitable property. That took a little bit of time. I had to take a look at what my true expenses were.
Not the bottom of the barrel if I’m surviving expenses, but I wanted to know what does my life cost when I’m doing the things I want to do and going where I want to go. I’m living feeling free and abundant. I wanted to know what that number was and then I wanted to make sure that my cashflow either hit that or was there enough that if I had to do some active income, I still was living the life that I wanted to live. There are more things that I did, but those were two major things I wanted to make sure happened before leaving.
Secondary Markets: Be aware of the cost of doing the things you want to do and going to where you want to go. Make sure you’re aware of the costs and benefits, and if it’s enough, before you proceed.
All that prep and stuff, we are going to talk about that in EXTRA, and I’m excited about that. Nobody’s talked about that on that show. We’ve met a lot of people that made that transition, but they haven’t talked about that process that actually happens between being a W-2 employee and being a real estate investor. I’m super excited about that. We will talk about that in EXTRA. This has been awesome. Is there anything else you want to share that I haven’t asked about?
If people want to get in touch with me, I do have a free Facebook group. It’s the best place to go and have investing conversations with other people that have full-time jobs. It’s called Real Estate Investors with Full-Time Jobs at Facebook. I wanted to make it obvious. That’s the name of the group. They can also come to my website, TheW2Landlord.com. I’ve got different resources up there as well.
Thank you so much for that. Are you ready for three rapid-fire questions?
Yes, absolutely.
Tell us a super tip on getting started investing in real estate.
I would say don’t overanalyze because taking action and jumping in sometimes is the better way to go. What I love about real estate is there are dozens of exit strategies that even if you feel your plan A isn’t working out the way you wanted it, there are a lot of different ways that you can still monetize and earn a profit on that deal.
What would you say is one strategy to be successful as a real estate investor?
I would say consistency. It’s not always about the big home runs. A lot of times, it’s about taking a deal that you know you’re going to make money on and letting that be okay. It doesn’t necessarily have to be the big grand slam because you’ll get those from time to time. Like in corporate sales, you always get those big sales, but it’s the small and consistent wins that help you build your portfolio and your net worth.
What is one daily practice that you do that you would say contributes to your success?
I’m constantly networking, and I think that the group helps. When I say networking, it doesn’t necessarily have to be sending DMs. It’s more about being on the Facebook groups, dropping if there are questions, and answering them. Maybe you see somebody who’s a lender. I had a conversation with somebody who lends in all 50 states. We ended up having a good conversation on the phone. It’s connecting with people. You never know who’s going to approach you with an opportunity or you might even be able to help them and send them a lead. This particular business is such a win-win industry if we’re all supporting each other.
This has been amazing. Thank you so much. You gave us so much information in this bite-sized episode. I loved that. Thank you.
Thank you. This has been great, Moneeka. I’m glad that we were able to connect, and thank you for the invite.
Thank you for joining Kim and I for this portion of this show. We’ve got more right on EXTRA. We’re going to be doing a deep dive on how to prepare for that exit out of your full-time job into becoming a real estate investor full-time. What’s fun about becoming a real estate investor full-time is that it’s not full-time. You get so much time freedom once you make that transition. We’re going to be talking about exactly how Kim did that, from her high-paying corporate job to real estate investors. We’re going to do that in EXTRA.
If you are subscribed already, stay tuned. If you’re not and would like to be, go to RealEstateInvestingForWomenEXTRA.com and you can subscribe there. For those of you that are leaving us now, thank you so much for joining us. I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.
Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.
Moneeka Sawyer
