Moneeka Sawyer

Author Archives: Moneeka Sawyer

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.

Monick Halm On Building A Strong Passive Income

REW 35 | Passive Income

 

Building your finances is mostly dependent on your day job or business, but having a strong source of passive income is always a welcome addition to your books. Nothing beats having your money work for you, even if you are sleeping or relaxing at home. Moneeka Sawyer is joined once more by the Founder of Real Estate Investor Goddesses, Monick Halm, in dissecting how to make money through real estate syndication. Monick explains how this industry works, how to choose the people to collaborate with, the risks every realtor must be wary of, and how it can help lower tax bills.

Listen to the podcast here

 

Monick Halm On Building A Strong Passive Income

Real Estate Investing For Women

We are going to do things a little bit differently. I am bringing back to the show, Monick Halm. We’ve had her on the show before. I had an interesting conversation with one of you guys. The question was, “I have money in my retirement program. I cannot afford to lose it, but I want to have high returns because you’re 65 and you want to retire soon. You can’t afford to lose the money, but you want to get high returns with very low risk and you want to be very hands-off.” That was a tall order and I had no idea how to answer you, but I do have resources. Monick is the resource that I reached out to because I know that she talks about ways to invest with high returns, low risk, and hands-off.

I wanted her to share her expertise with you ladies. It was very funny because I got that one question and then in the same week, I got a very similar question from somebody else. It’s funny how things come in groupings. This is the topic that people want to hear about. I’m excited to present this to you. I’m going to have her introduce herself. I know you ladies have met her before because she’s been on the show.

I’ve also asked her to do a full presentation because I want to make sure that I’m not interrupting and she captures everything important for you ladies to know. It’s going to be a little different than normal. She’s doing a presentation and I will interrupt with some questions. The other thing is she is doing a slide show. If you’re a visual person and you want to see the slides, you can go to YouTube and look at Moneeka Sawyer or Real Estate Investing For Women, and then you’ll be able to find this. You can also go to Roku with Real Estate Investing 4 Women. Monick, welcome back to the show.

Thanks for having me back to talk about one of my favorite things. I love to invest in real estate. I found it a little bit by accident, which I’ll talk about that. I’m going to be talking about real estate syndication, how to passively invest in real estate, earn double-digit returns, and not have to deal with the 3Ts. The three are tenants, toilets and termites. This is a way of possibly investing in real estate that is high return and lower risk. Nothing is risk-free, I want to start by saying that. I can’t guarantee you returns. If anybody says that they will guarantee you a return, then run in the opposite direction and we will guarantee it. This is a relatively lower risk investment and I will share why.

Before we get going, I’m going to briefly introduce myself and why I talk about this. I am a real estate investor and a syndicator. Syndication is crowdfunding real estate. I bring groups of investors together to purchase real estate. I’ve been in real estate for many years. I have a little over 1,300 rental doors in seven states. I’ve raised over $35 million with my partners since 2016 for a real estate portfolio worth over $220 million. I’ve written the book, The Real Estate Investor Goddess Handbook, Wealth for Women: Conversations with the Team That Creates the Dream and Investing in Real Estate from $1 to $1 Million, which is available as a digital download for free on my website, REIGoddesses.com. I also have a podcast, Real Estate Investor Goddesses Podcast. I’m a real estate investment mentor, educator and coach. That’s me in a nutshell and a little bit of my background for why I’m talking about this.

First, let me briefly describe what is real estate syndication. In the simplest term, syndication is a structure or relationship between multiple investors pool money together to fund a project, real estate or otherwise. Investing in real estate syndication is investing in a real estate enterprise as a passive investor alongside multiple other investors. We crowdfund or bring together a group of investors that will passively invest. We’ll talk a little bit more about what all of those different roles are.

First, is syndication something for you? Maybe you can relate. If your real estate vision is big but you’re not sure if your bank account balance is big enough to fund it, then you might be interested in syndication. If you have some money set aside but you’d like to be able to leverage it and spread the risk, you don’t want all your eggs in one basket, then syndication might be a good fit for you. If your life is full and you’re not sure if you will have the time or other resources necessary to successfully invest, syndication could be a fit for you.

REW 35 | Passive Income

The Real Estate Investor Goddess Handbook: Everything You Need To Know To Invest In Real Estate Like A Goddess

If you fit any of those things, I understand because that’s where I was. I wanted to share my story, which you may relate to. Like Moneeka, I’m a first-generation American. My parents are from Haiti and I have super supportive parents who are always like, “You can be anything you want (as long as you’re a doctor, lawyer, professor, engineer).” I wasn’t into Maths and Sciences. I went to law school. I ended up at Columbia Law. On my slide, I have a picture of me in Japan, walking to my firm there. I was working for a big international law firm, partnership track, six-figure income. I checked all the happy immigrant parent boxes. I’ve done everything right.

I was miserable that at one point, I found myself in the emergency room. I remember the Tuesday morning when the doctor told me that my appendix had ruptured. I had to spend several days in the hospital. I ended up spending nine days in the hospital. He said I’d have at least 30 days afterward to recover. My first thought when he said that was, “Thank God, I don’t have to go to work for at least 30 days.” I had this incredible sense of relief.

It didn’t hit me until that second how unhappy and miserable I was. I couldn’t take it for granted that I was meant to be that unhappy, but it took that moment to give me clarity that it’s not normal, not good and not okay. I had done exactly what I was told. I had followed the path exactly and I was miserable and unhappy. I knew I had to find a different way. They don’t know what causes appendicitis, but I was sure it was stress from my job. That job was killing me and I had to find a different path. That was not an easy thing to do because I did the path that I was told would lead to success.

I did the path that my parents believed would lead to success. They didn’t know better. They taught me what they knew. I fell into real estate completely by accident. The only thing they had ever taught me was to buy my own home. That was what they knew about real estate. Moneeka, you were lucky because your parents knew about real estate investing. You were born into it but I was not. All my parents knew was get a job, trade your time for money, and buy a house that you live in but it gives you no money.

At least they said, “Buy a house.” I don’t know how many people whose parents didn’t even know that much. You had so much. It sounds like your parents adored you and wanted the best for you.

They’re great parents. I love my parents. They did the best they knew to do. They taught me the best they knew and were they very supportive.

I wanted to highlight something that you said which I think is valuable. Ladies, this is something to think about. We’re talking about real estate, but one of the things that Monick found in that hospital, and I know I’ve been here too, is how do we define success? She did everything right. I did the same thing. I did everything right. Our parents told us what success was going to look like and how we were going to get there because that’s the best that they could do. That’s what they knew. The way that they define success is different than how we define success. We have had to create a new life based on our vision of success. That’s an important key for you ladies to keep in mind. How are you defining success? I love that Monick was talking about, “This might be for you if.” If that is you, how are you defining success and what are the next steps? I want to highlight that success looks different for everybody.

Success is doing what you love, with whom you love, and when you want to do it. Click To Tweet

For me, success is being able to do what you love with who you love when you want to do it. After having spent lots of time doing things that were killing my soul, that was what it felt like being a lawyer, and it’s killing my body too. After having spent that much time being miserable, having now the freedom to do work that I love and I’m passionate about. I have passive income streams and I don’t have to work if I don’t want to do. I get to make a difference, spend time on vacation, and do all of those things that I want to do when we’re allowed to leave the country, then I have freedom. That is success, but I didn’t start there. I got there by a series of happy accidents.

I was sharing that when I went to go buy my home. This was in 2005 towards the top of the last bubble. I live in Los Angeles, a very expensive market. You understand being in an inexpensive market. Those of you out there in the much cheaper markets can conceive of the prices that we have to pay. Even back in 2005, a starter home in a semi-decent neighborhood was upwards of $600,000 to $700,000. I had a low six-figure income. That was challenging for me. A friend of mine who was in a similar boat suggest that we buy a duplex together. He would live on one side, I’d live on the other side. The original plan was to get a property with two equal sides. We ended up finding this old craftsman that had a larger downstairs unit, a two-bedroom unit upstairs. It had a converted garage in the back with a one-bedroom. We ended up each taking a bedroom in the bigger unit. We’re renting out upstairs, our back house and even our basement. We started the house hack before I knew that was a thing. I went, “This is awesome.” People are paying our mortgage and I got tax benefits.

I met my husband. He had a duplex and we got a single-family rental together. After the market crash, we started to flip houses when houses were on sale. Houses are bound to be on sale again, so get ready. It’s going to be a very good time to be a real estate investor. By 2015, houses were not on sale. It was getting frustrating. Flipping houses is a short-term job. It’s like a short-term contract. You do it, fix it up, sell it at a profit, and then you have to start over. I wanted something more passive. I started to look for a fourplex, which at that time was the largest thing I could think of. In LA, you cannot find anything that cashflows. It was impossible because it was going to cost a fortune, and there was no money coming back from that. I ended up being introduced to this man that would become my mentor, Robert Helms, who is the host of the Real Estate Guys Radio podcast.

He’s done over a billion dollars’ worth of transactions and we had a mutual friend. When I was telling our mutual friend, Kyle, how frustrated I was. He said, “My friend Robert Helms is going to be in LA tomorrow. You should come and meet him.” I met him and he’s the one that changed everything. It’s one ten-minute conversation and it’s why I’m here talking to you. He is super nice. He asked what I was doing. I told him about the flipping and how that was getting challenging, and that I’m looking for fourplex in LA that would not cashflow. He said, “LA is a tough market. Live where you want to live, but invest where the numbers make sense.” That makes total sense after you hear it.

I always thought you had to invest where you could drive to your property, touch it, self-manage it. It never crossed my mind that I could invest outside of where I lived. That opened up the world to me. The other thing he said was, “You can buy that fourplex by yourself, but you’re limited to your own capital credit. Alternatively, you could bring a group of investors together and you get 100 or 200 units.” He started telling me about the benefits of that. My brain exploded right there. I was like, “That’s a thing? You could do that?” Everything in my body got chills. I’m like, “I want to do that.” That was very exciting for me to find out. I went home and told my husband that night, “There’s a thing called syndication. We need to learn how to do that.”

The Real Estate Guys, Robert Helms and Russell Gray were teaching a seminar on it in January 2016. We went to that seminar and signed up with their program. We met Brad Sumrok who was our apartment syndication mentor. We signed up with him. We went to tons of different events throughout that year and since to learn how to do that. I invest over $60,000 just to hear that education but it paid off. We ended up syndicating and getting into a 109-unit mobile home park in North Carolina. We did 318 units in Dallas, 514 units in Atlanta, and then 50 to 51-unit townhome community, and then 77-unit apartment community in Albuquerque all in that first year. Over 1,000 units in that first year through syndication, through bringing investors together.

You take things slowly, don’t you? Are you saying only two of those were passive?

REW 35 | Passive Income

Passive Income: Syndication allows you to spread the risk because money is not all unused.

We syndicated the mobile home park and the two in Albuquerque. We still passively invest in things as well as actively invest. There are benefits to both which we’ll talk about. Other than the mobile home park, all of those things have been sold. We have new ones. We have a little over 1,300 in different asset classes, different states. It’s allowed us to diversify, to scale and grow in a quantum leap and ways that I had never imagined possible. I’m very passionate about it. I have a picture of a slide. I’m wearing a Tiara, but I’m surrounded by a bunch of men, which was the mastermind that I was in.

Being surrounded by many men in that field. First of all, 90% of our investors were men. I had been working with women, but it came as this divine download to bring women into this game, especially invite them into syndication. I created Real Estate Investor Goddesses to bring women into this game. My mission of helping one million women create financial freedom through real estate investing came as this divine download, not the how of it. I’m still figuring out the how. I’m ways from that, but the what of it has come. It’s been great. Little words have been going out. I’m very passionate about getting more women into this wealth-building lucrative game.

One of the ways that’s great for women with syndication is because a lot of us are busy. We have jobs where we have to homeschool. We have parents to take care of, kids to take care of, and all of this stuff. This is a way of being able to get into real estate that is passive, that doesn’t take time past vetting. Some of you might be interested in being on the other side of it too, where you get to bring groups of investors together. You can benefit a lot by being on the active side, which is the side I mostly play on. Either way, there are a lot of benefits. Why would you want to do that?

It allows you to buy more than what you can afford by yourself. As a passive investor, you get to leverage OPM, Other People’s Money. It’s not just your money, it’s the money of all the other investors, and often a bank too. We usually get financing, as well as all of these investors that come in. You’re able to leverage OPM to get something much bigger than what you could afford by yourself. You also get to leverage OPT, Other People’s Time because somebody else is going off, finding the deal, putting it together, and bringing all the investors together. You have to vet the deal and then send in your money and wait for it to come back with friends. It allows you to spread the risk because it’s not all on you.

The risk is spread. Also as a passive investor, you have very little to no liability. You spread the wealth. As a syndicator, I get to create an opportunity for many people to benefit. As a passive investor, you get all the benefits of being a real estate investor like the tax benefits and otherwise without the work. With a real estate syndication, there are a lot of benefits. It gives you the benefits of passive cashflow. You get a share of the monthly cashflow. You get a share of equity at the end when we sell. You get federal tax benefits. A lot of people don’t realize that. You have the assumption that the more you make, the more you pay in taxes. That’s what we’re told.

Higher-income, more taxes except when it comes to real estate investing because of the way it’s structured in the tax code. You often end up paying less. A lot of people will get into real estate, especially when they have businesses and they’re successful. A good stabby CPA will say, “You should start investing in real estate because you’re paying too much in taxes.” Even though you’re making money with your real estate, because of the way real estate looks like a loss for tax purposes, you’ll pay less.

I have a very good friend. He’s a successful businessman. He found himself one year owing $500,000 to the IRS. He had always assumed, “The more you make, the more you pay in taxes.” He was very successful with multimillion-dollar businesses. He found out about real estate. He bought an apartment building in Memphis. It was an apartment that he was making six figures a year of income, but it brought his tax bill from $500,000 to $0. He was making more money. Not only did he make money, but he saved on the money that did not have to go to Uncle Sam. It’s not just what you make, it’s what’s you get to keep. In real estate investing, even as passive investors, you get to keep more.

Live where you want to live; invest where the numbers make sense. Click To Tweet

I’ve said on this show many times that no matter how someone became rich, the rich always invest in real estate. That’s where they make the majority of their money. They make a huge amount of money in real estate. They also save a lot of money in real estate, which they can then grow in other ways, whether it’s in their business or real estate. Monick has given you a cool breakdown of why the rich invest in real estate. What’s cool about real estate is that you don’t have to be rich. This is available to everybody, especially here in the United States. This is the most amazing country that way because this is not through elsewhere. The government supports everybody from a single mom, all the way to the richest person on the planet and investing in real estate. We’re supported to do that. It helps us to grow well, and it helps to lower our tax bill. There are many good reasons to invest in real estate.

The government wants you to invest in real estate. That’s why they give these incentives in the Tax Code. It’s to get more people to invest in real estate. There’s a book called The Color Of Law. It started in the 1940s after World War II. They thought that if people owned real estate, they would be capitalists but they would not be communists. It was a way of helping stop communism. Whatever the reason, it’s a good thing if you’re a real estate investor. It helps you out. People who have a lot of money shift from being about income to being about wealth preservation. Real estate helps you preserve wealth, not just because it appreciates some of these other benefits, but because of the enormous tax benefits that help you not just save money off of your real estate income, but it helps you pay less on more of your income. It is beneficial tax-wise.

I was talking about you can leverage OPM, Other People’s Money and Other People’s Time. When you’re in syndication, you’re able to do much bigger properties in their economies of scale and leverage in that way. Retirement savings came up because people are saying, “I have this money in my retirement account. I’d like to be able to find investments that make sense, that are lucrative, that are relatively safe, and with self-directed retirement accounts.” Not the account that your work’s going to put you in normally, which gives you a very limited menu of things that you can invest in some mutual funds and bonds.

It’s like this little menu, but if you can self-direct your money, then you can put it into real estate and get better returns. Also, with appreciation. I start with real estate. You get appreciation over time. Properties tend to go up in value, but you can also force appreciation by doing targeted rehab, which is what we do with syndication. We have a business plan and we buy property. We have a plan to add value to that property and appreciate the value. It’s worth more generally after a certain number of years. We’ll sell and be able to recapture that. Even on paper, as the value of the building grows so does your net worth. It allows you to leave a legacy, which I know for many of us, one of the main reasons why we want to do this. Real estate since time immemorial has been the main way that people have built, preserved and passed down wealth.

It remains the same way. That’s one of the best ways to build and leave a legacy, and it’s a feel-good business. It’s a win-win. I only invest in ways in which I can leave a property in a community better than we found it. Our syndication is a focus and it feels good. It’s a wealth-building opportunity for everyone touched by our deals. That’s why I love it. Those are the benefits. Think about what are the benefits for you? What’s your why behind real estate investing and syndication? Depending on what are the whys that are important to you, there are certain deals that will give you more of those benefits or less. Tap into your why behind them.

What types of properties can be syndicated? Anything can be syndicated. You can syndicate debt. Sometimes, it’ll be a fixed return. It’s debt and a loan that we’re syndicating. You can syndicate equity. Ownership’s take in a property. You can syndicate raw land, single-family, residential properties. Syndication is for larger commercial projects. There are a lot of expensive legal works that has to be done. I’ll talk a little bit more later about the legal ramifications of this. It’s not something that I would recommend you to go out and ask a bunch of people to give you money for a deal.

It’s governed under the Securities and Exchange Commission and it can be pricey to put one of these together. The deal has to be large enough to justify the legal costs of putting together syndication. You won’t find a single-family residential property syndicated usually unless it’s going to be used for something like a residential assisted living facility. A facility where people are paying upwards of $4,000 a bed to be there and it’s a very high cashflowing business. You’d see those get syndicated, otherwise, it’s just a house to flip. You normally won’t see that, but they could be if somebody wanted to do that. Multifamily apartment complexes are common, office space, retail and industrial can be syndicated.

REW 35 | Passive Income

Passive Income: As a passive investor, you get all the benefits of being a real estate investor without doing all the work.

Who’s involved in the syndication? You’re going to hear the terms syndicator sponsor, active investor, general partner. Those are all used interchangeably. That is to describe the individual, company or team that’s finding, acquiring and managing the real estate. They’re going to have a history of real estate experience. They should. If they don’t, do not do this with them. They have to have extreme real estate experience, and the ability to underwrite and do due diligence on the properties. The active investors are the ones doing the work. There are joint venture equity partners. Sometimes that’s my role in deals. We have a group of investors and we’re not on the operation side, but are bringing in funds for the investment. We’re connecting our investors to operators that were part of the sponsorship team. With JV or equity partners, it might help with financing, reporting communications and tax documentation.

Last but not least, there are passive investors, sometimes called limited partners. Those are individuals who will invest in the syndication. They own a percentage of the real estate as a result. If it’s an equity deal, they’ll have a percentage. They’ll be part of the loan if it’s debt. You get all the benefits of property ownership, not involved with acquiring the property, arranging to finance or doing any of the day-to-day management. They cannot be. Think of it more like if you’re buying stock in Apple. You own a piece of Apple when you have a piece of their stock. If they do dividends, then you would get your dividends. Otherwise, you have that ownership stake, but you’re not going to call the company and say, “I want you to change this feature on the iPhone.”

You could just like our passive investors can call us and tell us what they’d like to change, but in terms of like, who’s managing it, who gets to decide, when to sell, what to do, who’s the team, that’s on the active investor side. I’m going to share a typical example of a 100-unit apartment building. I’m going to round out the numbers to make this easier to understand. This is not a guarantee of results, but this is not atypical for syndication. It’s fairly typical in terms of returns.

This one was a deal that was a $5 million purchase price. The rehab budget was $500,000. We were buying this apartment building. We’re fixing up the units and getting them nicer so we could raise the rents to market rates because it was underperforming. We got a loan, 75%, $4.1 million to $5 million. The interest rate was 5% at that time. It’s lower now. We had a down payment of 1.375%, closing costs of $200,000 and the cash starts with the $75,000. We were raising $1.6 million to $5 million. Rounded at 33 investors at $50,000 each.

I won’t go through all of the various numbers. I’ll highlight the end result for the readers. After the total cashflow, the whole profit was $51,575 after five years. More or less doubled the money of the investor after five years. About $23,500 was in cashflow. Sales proceeds were close to $78,000. That was the profit. Not bad for something that is passive. That is not atypical for these types of syndications. On the active investor side, that also invest $50,000, the same deals as an active investor that you get a share of the cashflow and the acquisition fee. There’s also an asset management fee, and you get a share of the equity and cashflow for putting together the deal, and then there are fees for managing it.

In this case, as an active investor, we’ll also put in $50,000, which had the same profit that the other equity investors did, $51,575. There’s a 3% acquisition fee of $49,500, 1.5% asset management fee, $60,257, 15% deal sponsor equity share of $116,700. The total sponsorship return was $287,032 on a $50,000 and sweat equity. There’s a lot of sweat equity in that, but that’s the return. If there was a team doing it, then all the acquisition fee has some management deal sponsor equity. It would be split amongst the team members. You can get three times or more of the returns by being on the active side and doing the deal. It can be very profitable either way. Does this sound like something you might like to try?

One of the nice things about it as a passive investor, you have to vet the deal and then wait for it to come back with friends. For those of you who are interested in being on the active side, do not try to do syndication without a qualified securities attorney. You could win yourself a hefty penalty, an orange jumpsuit, and some jail time. You want free housing but not that way. Make sure you know what you were doing when you take on other people’s money. You can’t advertise an opportunity there. It’s very regulated in terms of who can invest with you and how. Generally, it’s going to be people with whom you have a substantial pre-existing relationship, and they have to be sophisticated enough to understand the deal, or you’re only dealing with accredited investors.

Only invest in ways in which you can leave a property in a community better than you found it. Click To Tweet

For those of you who don’t know what an accredited investor is, some people think it’s like, “I’m not accredited. I haven’t taken the test. I don’t have a certificate.” There’s no certificate nor test. You qualify either through your income or through your net worth. If you have an income as an individual of $200,000, or as a married couple of $300,000 per year, you’ve had it for at least two years with a reasonable expectation that you will in the subsequent year, you are an accredited investor. If you have a net worth of $1 million or more, not including your primary residence, then you are an accredited investor. You are part of the 8% only of the population who are. Most people do not fall under that. If you do, you’re an accredited investor. That will allow you to take advantage of more of these types of opportunities.

Some of them are for accredited investors only. Some are for both, but you do have to have a preexisting relationship with the person bringing the deal. If you are trying to syndicate, then you need to understand when you can do and take accredited investors or when and how you can take people. If somebody is talking about this on Facebook, unless it’s accredited investors only, they could do that. You can’t just take anyone’s money, even if they want to invest it with you. I’ve had certain deals where we had to have that pre-existing relationship. They come and I’ve met them after I have already the deal. They’re like, “I’ve wanted to put money into it.” I’m like, “I wish I could take your money but I can’t. We’re going to get to know each other now. Next time you could if you feel like it, but I can’t now.”

If you want to find out more about these passive investing strategies, we have an investor club at Real Estate Investor Goddesses. I created this club because I wanted to get more women in knowing about these types of opportunities. The investor club doesn’t cost anything to be part of it, and you’re not obligated to do anything, but it allows us to get into that pre-existing relationship, and you then get access. A lot of people are like, “How do you find out about this? How do you get access?” You have to get into a relationship with a syndicator. I deliberately set out to get more women into this game because when I started, 90% of our investors were men. Now, I’m happy to say 90%-plus of our investors are women. I love being able to get more women into this because they’re great investments. I’ve done better on my passive investments than I ever could have done investing in LA or these expensive markets where I was doing all the work. They can be lucrative.

Let me talk a little bit about the risk for a minute because there is a risk. Here’s where the biggest risks are and how to mitigate the risk. They can be great opportunities. It’s important that you invest with the right people because a team is everything with real estate. There are three things to look at in order of importance. First is the team, next is the market, and next is the property and the plan. It’s in that order of importance. Your team is very important. You want a team that has a good track record and trustworthy. A good track record does not mean they’ve never lost money. Robert Helms would say that he would not invest with anyone who had not lost money before. He wanted to invest with somebody who had lost money and stayed in the game. He wanted to know, what happened when it went bad? How do they deal with it? Are they still playing in the game?

Things happen like in 2008. It was very bad for lots of people. There might be some deals that people bought, but not quite as right in 2019. It might not be doing so well right now. How are they handling it? How are they going to get through it? That tells a lot about somebody. It’s not necessarily that people have a perfect as they’ve never had a miss. That’s not a bad thing, but you want to know that they’ve been able to handle it. They have a long track record. They know what they’re doing. They’re trustworthy, following the rules and doing it right.

The team is important, then the market. Where are they investing? You start to look at their business plan. What is the property they’re looking at, and some of the assumptions they’re making? Some people make some assumptions like I like to be underpromised and overdelivered, but not everyone has that. How are they underwriting? Those are the things. You’re going to want to be able to vet the people or get the deals. Make sure it makes sense for you. If it does, then you raise your hand and say, “I’m in.” You invest and wait for your money to come back with friends. That’s how you do it. It’s a good deal. A lot of these deals are because we tend to buy properties that are ready cashflowing. They’re already stabilized. They’ll plan to increase cashflow, but when things tend to go bad, you may not meet the mark that you wanted to, but it’s unlikely that you’ll lose your money. That’s why they’re great investments.

Are most of your projects five years?

REW 35 | Passive Income

Passive Income: Realtors save a lot of money in real estate, which they can grow again in other ways, whether in their business or more real estate.

Five years is a fairly typical polled plan period. For the past few years, we were getting out more quickly because of the way the market was going. We’re paying more money for the same amount of income. It became a very good time to be a seller. I liked to be a seller when it’s a seller’s market and a buyer when it’s a buyer’s market. We started to sell because we could hit our returns more quickly. If you hit your number quickly, it’s better if I could get somebody 100% return in 2.5 years versus 5. We were selling more quickly when it made sense.

Now, looking at where the market is going, it might be closer to our five-year period or it might not make sense to sell in five years, and we may hold on for 1 or 2 years. As the sponsors, we’re going to do what’s best for our investors and we’ll sell when it makes the most sense. If it doesn’t make sense to sell it, we’re going to sell it down at a loss, then we hold off because we’re always cashflowing. That five-year plan might become a seven-year plan depending on what’s happening in the economy. Sometimes it’s a 2 or 3-year plan if that makes sense.

Is there a particular class that you invest in?

Most of our investments are in class-B multifamily. We’re also doing a lot of industrial. We’re doing more industrial right now. There’s a lot of uncertainty in the rental market because more people are losing jobs and not able to work. That’s harder, but industrial is one asset class that has been least affected by what’s going on. One of the things that we’re doing a lot of are types of deals called Sale-Leaseback. It’s a company that has a facility. In 2020, we did a frozen pie company and we ended up getting a baby food company. We have a couple of others. They are business that are doing super well in this crazy economy. They have these facilities that they had built and they wanted to get equity out of them.

They couldn’t refinance to get the equity that they needed. They’re selling it, but then they lease it right back as our tenants with these triple net leases. What’s great about triple net lease is they tend to be very long. These are twenty-year leases that we have with our sellers/new tenants. Not only do they pay rent, but they also pay property taxes, insurance, and all of the maintenance. They take care of all of the expenses with the exception of any debt service. If we have loans on the properties, they’re not going to pay for that, but all other expenses they cover. There are no surprises.

We have built-in rent increases in the leases as well year over year. You know what the income’s going to be, what the expenses are going to be. The plan is we sell them to institutional buyers after 3 to 5 years, and very similar returns to multifamily, cash-on-cash returns in 8% to 10% range with cumulative annualized returns in the high teens, low twenties. They liked them. They feel safer and more stable, especially in this type of climate. We’ve been doing these.

How do you find those?

We have partners that have been doing this for close to two decades. They’re one of few people who do this. It’s a very niche segment of the market, which is great. I don’t like going where the herds go. I try to look away from where the herds go, into places that are a little more open pasture. These companies will contact our partners. The big part of the due diligence on these is on the company to make sure that it’s a company that’s going to last a long time. The good thing about these long triple net leases is you have a tenant in there and it’s super easy. There is almost no property management and very little to do. If you do lose a tenant, it can take a while. Sometimes months or a year or more to find a replacement. The important thing is to have a steady tenant that’s not going to go anywhere. We do a lot of due diligence on those tenants to make sure the seller/tenants, the company is solid, and then we do the deal.

How big is a deal like this usually? How many investors are you looking for and how often do you do these?

They will vary. We’ve done syndications where we’ve raised as little as $500,000 and as high as $8 million. It’ll depend on the raise. A fairly typical minimum investment is $50,000. We have had somewhere that was $100,000 minimum, and we’ve had a couple where it was a $25,000 minimum. Generally, $50,000 is a fairly typical minimum.

How many of these do you do per year? How often can someone get into this?

Always know what your resources are, what you can invest in, and where your funds are. Click To Tweet

Our goal in 2020 has been to do two a quarter, but because of COVID, we’re about to do our fourth one for the year.

At least, they’re coming through. That was amazing. There’s so much information. That was super helpful. If you had one tip to give my ladies about investing in syndication, what would you say?

If you want to do this, then you need to get on the list of people who do syndications. Connect with people. We have our women’s intuition. Tap into that as well as you’re learning. Find people that you think you know. Get to know them who you can like, trust and can do a good job with syndication. If you’re passively investing, that’s the only way you’re going to get access is to get into relationship with people who have these types of deals. This is part of the conversation I have when people apply to get into the investor club. We can help them over the phone.

I get clarity on their why. Why do they want to do this? Depending on their why, different investments will be a better fit for them or not. It’s important to tap into your why. It’s important to know what your resources are, what you can invest, where your funds are, and have that clarity about where your money is, and when you need it. If it’s money that you’re going to need in 1 or 2 years, if you’re 65 and you want your money in two years, a deal where your mind’s going to be locked up for five years is probably not the best fit for you.

If you’re going to need it that quickly, there will be cash. If you’re okay with the cashflow or something happens, then that’s fine. It could be 5 or 7 years, depending on what’s going on. It could be less, but it could be more. You need to get a sense of when you’re going to need the principal back and make sure that it all makes sense for you. We would have that conversation on our call so I could get clarity and make sure that you’re getting into deals that make sense for you.

REW 35 | Passive Income

Passive Income: You can’t just take anyone’s money when syndicating, even if they really want to invest it with you.

Why don’t you tell everybody how they can get in touch with you?

To join the investor club and get into a one-on-one passive investing strategy session with me, ladies can go to REIGoddesses.com, and gents go to Vip-Assets.com. When you go on there, you’ll understand.

That’s helpful. Thank you for coming back to the show and sharing all this information with us. It’s valuable as always.

It was my pleasure. Thank you for having me.

Ladies, thank you for joining Monick and I for this conversation. I hope it was helpful. I know we did a little bit of a different format, but I hope you got a lot of great information. Contact Monick if this is a strategy that you’re interested in. I look forward to seeing you next episode. 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. Bye.

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About Monick Halm

Monick Halm is an expert, educator and advocate for women real estate investors, with a personal mission to help 1 million women create financial freedom through real estate.

She is herself a real estate investor, syndicator, and developer with over 15 years of real estate investing experience in single-family rentals, multi-family residential, mobile home parks, and flipping. Her current investment focus is on syndicating under-performing residential multi-family apartment buildings and mobile home parks. She delights in adding value for her investors and tenants through improved management and the targeted remodeling and rehabbing of properties. Together with her investors, she owns over 1300 rental doors.

She is also the founder of Real Estate Investor Goddesses, an online community and educational platform for women real estate investors. She is the #1 bestselling author of The Real Estate Investor Goddesses Handbook and the host of the Real Estate Investor Goddesses Podcast.

Prior to becoming a real estate investor, Monick Halm practiced corporate litigation at Morrison & Foerster, LLP and Gibson, Dunn & Crutcher, LLP in Los Angeles. She earned her Juris Doctorate degree from Columbia Law School in New York. She is also a certified interior designer, feng shui expert, #1 bestselling author, keynote speaker, certified NLP and Money Mastery coach, and former co-owner and Chief Creative Officer of the Checklist Parent, mobile app and parent community. She is passionate about real estate, design, and helping women to thrive.

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Creating Notes And Doing Good In The World With Laura Gisborne – Real Estate Women

REWE 10 | Creating Notes

 

Too often, many people make real estate investing seem harder to get into than it actually is. In fact, for Laura Gisborne, you don’t necessarily need to know everything. You can just start by buying a property, adding value to it, and watching it take you to the next. In this episode, she joins Moneeka Sawyer to help simplify the process for us. As a highly successful business expert with over 20 years of experience from structuring and selling small boutique businesses to owning a multimillion-dollar wine and real estate empire, Laura has the wisdom and insights that could help us find our path towards success. She shares some of those with us and how, more importantly, she is giving back. Tune into this conversation to learn more about creating notes and going the owner financing route, all the while doing good in the world with it.

Listen to the podcast here:

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Creating Notes And Doing Good In The World With Laura Gisborne – Real Estate Women

Real Estate Investing For Women

I am excited to welcome you to the show laura Gisborne. She is a highly successful business expert with many years of experience. From structuring and selling small boutique businesses to owning a multimillion-dollar wine and real estate empire, she has owned nine businesses. Her first, when she was only 23 years old. She is an internationally recognized speaker and serves as a business consultant for business leaders and entrepreneurs in a wide range of industries. The innovative business model of her company, Limitless Women, exemplifies that companies can be both profitable and purposeful.

Through her initiatives, thousands of women and children are receiving regular contributions in multiple countries across five continents. She has served as a Guardian Ad Litem for foster children through CASA, Parent Education Coordinator for Family Outreach, board member for Habitat for Humanity, The New Peaks Foundation, and is on the Business Engagement Team of the Pachamama Alliance. They’re all important and relevant for what Laura stands for, that’s why I wanted to let you know what she’s about around all of this stuff. She is the author of the books, Stop The Spinning: Move From Surviving To Thriving and Limitless Women. She has been featured as a guest expert on both CBS and ABC, as well as on the national bit show, The List. Laura, welcome to the show.

Thank you, Moneeka.

Laura and I are part of a community called The Thriving Women in Business. We met at a luxury retreat with a bunch of other women in Hawaii and hit it off immediately. We have much in common. I wanted to have her on the show to share all of her wisdom with you. Laura, why don’t you start by telling us a little bit about your real estate journey? What’s your story around that?

First of all, thank you for inviting me. I’m super excited to serve you and to help however I may. Ask away whatever questions you’d like to ask. For the real estate journey, it’s interesting. I started back in 1996, I went on a timeshare tour. I don’t know if you’ve ever been on a timeshare tour or not, but it was a fascinating thing. I had no idea what it was. I said to my husband at that time, “We’re not going to buy anything. Let’s go look.” The woman who was our real estate broker, which is like you and I, we hit it off. We had a great affinity right away. The story behind the story is at that point, we had owned three restaurants in Texas.

We sold them and moved to Arizona with the idea we’re going to open up a different kind of business. A bed and breakfast or something that we could do with small hotels. Something we could do while one of us could always be with our children. This woman who sold us a timeshare said, “You should get a real estate license. You’d be great at this.” I said, “I’ve never sold anything in my life.” My background is hospitality and law.” I thought I’d be a lawyer when I grow up. God had another plan to get all these adventures, but that’s a whole other story. It took about two months at the time to get a license if you went full-time.

I got my real estate license. I thought, “This would be a good side hustle to do in the meantime. I’ll get into real estate and do that for a little while, while I’m building my next business.” I started selling, doing well in real estate. I started taking my commissions from real estate sales and buying real estate. Leverage was a beautiful thing back in the late ‘90s, early 2000s. I would buy one piece of property and then get it ramped up and then borrow against that property to buy the next one and so one thing led to another.

It’s intuitive investing. That’s what I did too. I did not become an agent, but once I started buying, I would fix it up, have it increased its value, and then take money out and buy the next one. It’s such an easy way to go. What I love about your story is that it shows women that this thing is possible in an intuitive, flowing way. There’s no magic here. You made some extra income. You decided to invest in property. That property was appreciated because you added value. You take more money out and then you bought another piece of property and just rinse and repeat. What I want ladies to read at this moment is how easy this can be because many people out there are talking about the cool ways or exciting ways to make money in real estate. You could buy everything and no money down. You can do these options and syndication. You don’t have to know all of that stuff. You can just buy a house.

That’s the piece, start with one. My first husband that I got divorced, almost two years after we’d moved to Sedona, I met my current husband. When he and I got married, he moved into my house. We turned his house into a rental. It was that piece. He said, “I can buy you a diamond. I can buy this empty lot.” I was like, “No, buy the lot. Diamonds later. Let’s get some real estate.” It’s a little hedgy. You want to start collecting and our strategy was to cashflow properties. I went to a real estate investing bootcamp in 2004 with John Burley, who was a great guy. Burley looked at what were the different strategies that were working and what works best for us over the years. I would say, it has been that cashflow that we would buy a house and then we would carry the note for somebody who was having a challenge with financing. We do owner finance for them. It worked out great. When they were ready and they were able to qualify, they were able to buy us out and it always became a great win for them too.

If you drive out of the epicenter of your city, the farther you get, the lower the prices of the houses become. Share on X

Let’s dive a little deeper into that because that’s not something people have talked a lot about in this show. When we talk about cashflow, usually what people think is you buy a place, rent it out for more than what you owe on it and that’s how you make cashflow. There are lots of different ways to do cashflows. Let’s dive a little deeper into the owner financing route. We haven’t had anybody talk about that. Could you break that down for us a little?

One of the things you always have some questions about is, “What do you need to get started?” Good credit is a great asset. It’s not necessarily the only asset because even if you struggle with credit, you can bring in partners. That’s also been another strategy that was successful for us to joint venture with other investors so that we can pull our money together. We’d put in 10%, they’d put in 10%. We get our 20% down, and we would go in and do a project. That was a whole other side. Generally, we would buy a house. The strategy behind this was that we live in a high ticket area.

As real estate investors, the rule of thumb that we’ve found over the years is that if you drive out for the epicenter of your city, the farther out you get, the lower the prices of the houses become. We’ve always done well with cashflow properties from blue-collar type of families like firemen, school teachers, people that have great jobs. They may not have high revenue, but they have consistent income. They have a good job history. People fall on hard times. I talk about that in my first book. I went through my journey when I got divorced. It didn’t make my life easy with my credit. I made some mistakes, but I cleaned them up and was able to move forward.

When somebody’s gone through some life situation like death or divorce or disease, you can look at their credit and find out, “Was it an isolated time? Do they have a better history before?” Banks are not always forgiving, but as a lender yourself, you can be forgiving. You can find those people that you trust and work with them. A lot of times, that gives them the opportunity to get into a house, and our structure was, let’s say somebody who normally would pay $1,000 for rent if they were doing a lease option which is the owner finance with us who would have them pay more. Maybe they’re paying $1,300 or $1,400 a month, but a portion of that would be going towards the purchase of the property.

If they could get it together and then get their own financing, which happened for every house we ever had in Arizona, they always ended up cashing out which was great. You think as you keep them as high ticket renters for a long time, but the goal is to help others get into their own homes. You figure out a price, you buy your house for $100,000 and you decide to sell it to them for $120,000. They live there for a few years, pay the rent, and because they had an ownership in the property, they would take better care of the property first and foremost. They wouldn’t call you for every like, “I need a new light bulb,” because it’s their property. They had pride in that.

Did you get a down payment and what percentage would you normally get?

It depends on where they were. That’s the idea too. I know a lot of people that do resell houses with no money down and 4 or 5 high ticket leases. Our intention was always to have a win for them and have them be able to get to a place that they could afford.

You did take some down payment so they felt like they had bought?

Let’s say that you’re doing a security deposit on a rental. You do first, last and one-month security on a $1,200 property, that’s $3,600. Over time, they came up with $5,000. We didn’t charge them much more. The round numbers we love working-class neighborhoods as families. Those are the ones that get the hardest hit when the economy goes south.

REWE 10 | Creating Notes

Stop The Spinning Move: From Surviving To Thriving

With a lot of the owner financing that I’ve seen, they’re structured a little bit differently. What kinds of percentages do you normally give them towards their house, for instance?

People that are credit challenged are used to paying a little bit more interest. The interest didn’t come into the equation so much. If I could give you a base rate, it would be like interest rates you’ll see out there is 3%, if I charged 5% or I charge a little bit higher interest rate because it was a higher risk. It was more tied into the lease option.

You would charge an interest rate and everything else went towards paying down their house?

Correct.

Did you normally still have a loan on that property when you did this?

Yes.

That is such an interesting structure. I’ve never seen it like that before.

It worked well for our family and it made us feel good to be able to help people get into houses that couldn’t get in otherwise.

They’re the ones that usually get hit hard when things go bad and it’s not that they don’t want to own homes for their families, nor that they don’t work hard enough for it.

We want to be with people who inspire us, the people who lift us up, and see us when we have a hard time seeing ourselves. Share on X

It’s the idea of 10% down payments. It’s hard for them versus if they can come up with a little bit down and then pay a little bit more each month. It’s like a savings account for them to move towards where they have the equity. The house is also appreciating at the same time. It was all these years in Arizona. When they go to refinance and qualify for a more traditional loan, they’ve got some equity in their other down-payment and they would cash us out.

How quickly do they normally cash you out? How quickly do they normally buy?

It’s an average of 2 to 3 years. That’s in a market where lending was more flexible. We don’t know what’s going to happen after COVID. It’s going to be interesting to see what the banks do. Interest rates are at an all-time-record low and certain things are easier to get financing for than others.

Do you help them with getting their credit fixed if they’ve had any problems or you allow it to season its way out?

No, I think they season. If they’re motivated to buy, to purchase, they know they have to make their payments on time. I’ve met a lot of people over the years when they go all-in on hard times are good people who needed a chance to pull it together and get back on their feet.

One of the things that I love about Laura is her whole outlook on life is she wants to be a limitless woman herself. She believes in time, emotional freedom, financial freedom and true freedom. Being truly limitless and lifting the people around her. She reaches out into the world in many ways whether it’s being on boards of charities or that she finances people in their homes or the way that she coaches her business, coaching clients. Everything that Laura does, her aim is to lift those people around, to be better off than they were before.

Part of what struck me about Laura in the very beginning when I first met her is she’s always, “How can I be a service for you? What can I do at this moment to help you?” She comes from this place that I call one of my bliss tenets, which is to give back to the world, to be of service. When we’re out there and serving, it’s hard to feel bad inside. We’re being of service, but it also fills us up. It gives us more to think about, to do, to feel good about. It also helps us to raise the vibration around us because anybody who then is going to come around us are going to be people that have that same vibration, intention, and blessed in their life. Wouldn’t you say?

I would. I went to a yoga class right before you and I have this interview. I was listening to a sermon on the way. One of the things he was talking about was how much we can be around people that pull us down and how important it is for us to always surround ourselves with others who lift us up. I feel like I’m hearing it twice. God must be giving me a message. This idea of who we surround ourselves with is important. We want to be with people that inspire us, that lift us up and see us when we have a hard time seeing ourselves.

That’s kind, generous and uplifting. I know much of the time when I’m not down as often as I had been. A lot of my journey to bliss was because my life experience was very unhappy. We often focus on the things that have challenged us ourselves. I remember learning early on this thing that everybody says, you become the five people you spend the most with. It sounds trite. The truth is the most time that you spend with people, those are the people that are going to influence you the most. It’s important that you decide who you want those people to be and you do have control over that.

REWE 10 | Creating Notes

Creating Notes: Banks are not always so forgiving, but as a lender yourself, you can be and you can actually find those people that you really trust and work with them.

 

We don’t have control over the family and don’t dump your family. You don’t want to do that. You want to make sure that when you’re out there in the world, when you have the choice, you’re choosing people who are going to support the joy in life, help to uplift you and support your values. I can’t imagine Laura ever hanging out with someone that did not believe in philanthropy.

It’s not a new journey for me. The work that I do is all about business training, to lift women so that they can use their profits for purpose. All of that’s come as a typical overnight sensation. I started volunteering many years ago. While I was building my private sector life, our restaurants, our retail stores, our real estate and our wine business, I was always volunteering as a separate. I felt like I had one foot in either world. I had a private-sector world and my volunteer world. What’s been beautiful is over these last few years, we put our stake in the sand and made our whole business about fundraising and raising awareness.

Even prior to that, even when we were percolating this business starting about 2012, that was always a common theme. We’re good. We’ve raised our children. We’ve traveled the world. My husband had a terminal diagnosis many years ago and now he is healthy and on track. We’re thrilled. We try to celebrate every day that we get to have together. For us, the motivation is not about how do I make more money. I’m more curious about how I can use my experience and my voice to lift up other women that they can find sufficiency and freedom for their families, and then join us in the contribution phase. What we know from experience of doing this work now is it’s difficult for women to see themselves as philanthropists and givers when they’re struggling financially. We need to help them get to sufficiency first.

You and I both started at a place where we weren’t in a financial place that people would normally think of us as givers. I started my philanthropic journey when I was sixteen living in India. I didn’t have a lot of money and we started to volunteer time, and a little bit of money for me. It was $10 a month. It’s important that we feel lifted up enough. You don’t want to give when you don’t feel like you have. You never want to give them more than you feel you can give. That is true whether it’s of your heart, time, or money.

There’s a little paradox in that for me only because it’s my understanding and my core premise at this point in my mid-50s. I grew up in a very poor family. I did not have access to resources and no one had ever been to college. It was that whole idea of education and freedom. It wasn’t something that we had access to and didn’t know that access. My parents did their best to ingrain in me. I can do attitude and willingness to work hard. I’ve always been a good student. I’ve got a lot of gifts and a lot of things that have come through that helped me again when I couldn’t see myself.

The most successful people that I knew and that I’ve had the blessing of knowing throughout my journey at this point are people who were always generous of heart, generous of spirit. It wasn’t someday when they got wealthy that they gave. It was getting through the stretching through the expansion. There’s something in that for us. I believe that giving causes growth. It’s an interesting paradigm when women come to one of our programs and they want education on how to build a business. I asked them to make a donation in exchange for your education. There’s often a little hesitancy if that’s a new paradigm for them. They haven’t done it before. I say, “If you can afford to invest in yourself here, you can afford to give there.” What it does is it starts them being expanded. This is either they can, then they start being a whole different level of leader.

We’re saying the same thing. I feel that women often over give. In their homes, they say yes too often. That’s more of what I was referring to about, we do need to keep ourselves filled up emotionally, internally, and mentally so that we can then stand in our power in the world. What’s also funny is that you will never expand until you understand that being of service is the most important thing. When you are able to start to understand that, then you expand in every way. You expand emotionally in your capacity to give, your compassion, wisdom, personality and also wealth.

My husband learned something from me very early on. We were broke as newlyweds. I remember one day, we were talking about the budget and I said, “I still have to donate to the temple.” He says, “We pass on it this year.” I said, “No. We’re going to double it this year,” which frustrated him. For me, when I start to close down, to cringe, feel that I can’t do it, is when I open up even more because then that releases all of that. Now, money, energy and creativity start to flow.

It sounds like it’s your story. It sounds like it’s your truth.

If we've been blessed to have an opportunity to do well for ourselves, who else can we help so that they can do the same? Share on X

Do you find that’s also true for other people?

It depends on where they are. There’s some truth in Maslow’s hierarchy of needs. When somebody is in survival mode, I’m always in awe, when I meet people who live on less than $3 a day, who find a way to give. There’s a place where a lot of times there’s a spiritual component that kicks in. Most people that I meet in the developed world are still running the myth of not enough, but they’re still trying to be more, do more, have more. Yet, if they can’t overcome that, then my conversation is not the right conversation for them. If they’re stuck in that, then all we can do is love and try to support them as much as we can with where they are.

What do you mean by a limitless woman?

Monica Nyiraguhabwa, who you’re familiar with, is also a donor for Girl Up Uganda through Kimberly Writing Women In Business Giving Circle. When I met this woman who’s in her mid-30s, I started to learn more about her story. She’s incredibly humble. You don’t know that until you start getting in there and digging in. She grew up in the suburbs of Kampala. She had her first pair of shoes at age thirteen. People may or may not know this, but in most places in the world, education is not free. She had to come up with school fees.

Her parents had to decide, “Do we send our son or daughter to school?” They decided to send their son because chances are, he would stay in the village versus her getting married and moving away from the village. She was resourceful. She started selling vegetables. She found a way to make her school fees. She started this at about age seven. It was mind-boggling to me. She went on the Government of Uganda partnered with the University of London and created a scholarship fund for five students in the entire country. There were 5,000 applicants. She was one of the five students who got the scholarship, went to England, stayed on for a Master’s degree in Public Policy, and then came back to Uganda to the slums. I mean no electricity, no water, no roads, no transportation, and decided to dedicate her life to lifting up other young women.

They wouldn’t have to be in a family where a family had to choose. That to me is a limitless woman. Everything that was presented to her was what we would consider I believe a limitation and she chose not to see it that way. She chose to stay deep in her faith to keep taking the next step that she could. She’s an Obama scholar, spoken to United Nations, on the Today Show. She’s right there in Uganda, in the trenches, making a difference for hundreds of thousands of girls. A lot of times when we face adversity in our lives, things that could be in way, perspective is important. For me, there’s nothing at this point in my life that makes me more excited than supporting a woman like that who’s out to change the world.

That was an amazing story. Thank you for sharing it.

She’s a limitless woman. That to me is the epitome of a woman who overcomes amazing adversity. An ordinary girl with extraordinary faith and perseverance. She chose not to just make it about herself. She has nine adopted daughters. She’s 36 or 38. She’s my relevant hero. I have many of them. It’s this work of how do we, as women, lift each other up? How do we as women continue to shift the idea that there’s any competition? There’s no competition. There’s a tremendous amount of abundance in the world. There’s a tremendous amount of resources.

If we’ve been blessed to have an opportunity to do well for ourselves, meaning that we’ve reached sufficiency. We’ve been able to take care of ourselves, our families. Who else can we help so that they can do the same? My family of origin could not help me past a certain point because they didn’t have any reference. They didn’t have any perspective. There were other people who saw me from the outside who said, “You can do this. There are other possibilities. Somebody has to open up and shine a light on what’s possible.” I feel like I’ve been very blessed. All the way plus up to this point, and as long as God lets me stay here. It’s good to be here.

REWE 10 | Creating Notes

Creating Notes: The epitome of a woman who overcomes amazing adversity is in being an ordinary girl with extraordinary faith and perseverance and choosing not to just make it about herself.

 

Laura, how can people reach you if they want to get in touch with you and find out more?

The easiest way to get connected with me is through the web. If you go to Free Gift Friday, you can opt in for a copy of my first book, Stop the Spinning: Move from Surviving to Thriving,where I tell my own limitless woman story, where I came from and where life has taken me. It’s a little bit of that journey and the power of the formula. The tools and the resources that I and the most successful women I know used to keep themselves on track financially, with the time, their operations, and community. You can always contact me through the website, LimitlessWomen.com. There’s a Contact Us form that comes right to me.

Ladies, I would go there and get that book. That sounds amazing. I know I’ll be doing that. Laura, are you ready for three rapid-fire questions?

Yes.

Give us one super tip on getting started in real estate investing.

One of the fastest ways that you can grow your real estate business is to get comfortable with using other people’s money. When you think like an investor, you look at how the profit on a property is made when you buy it, not when you sell it and you get clear about your numbers, metrics which all are part of the education. You can bring in business partners because everyone will run out of their own money at some point. If you want to keep growing, you want to keep expanding your business. Learn early on how to make it a win for other investors. A lot of people don’t necessarily have the time or inclination to get an education. If you’re one of those women who’s motivated by giving the education, understanding how to do this, and you partner with someone who’s an investor, who wants to get a good return on their investment, but they don’t want to have to do all the work, that’s probably the best super tip that moved us the fastest.

What would you say is a strategy to be successful as a real estate investor?

You have to get clear about what your revenue-generating activities are. If you’re not writing offers on houses, connecting with investors, and bringing in joint venture partners, not advertising your properties and finding leases, you’ve got to get clear to where are the actions that drive your revenue, not shopping. Shopping as fun as that is, that’s not always the best thing to be spending your time on. Get clear about your paradigms. Get your education in place, and then get into the actions that going to bring in revenue to your company.

What is one daily practice that you would say contributes to your success?

One of the fastest ways to really grow your real estate business is to get comfortable using other people's money. Share on X

I’m a very faith-based person. A lot of conversations with God throughout the day and I never say never. Almost every day, I don’t get out of bed without a deep gratitude practice. I have an incredible amount of blessings. I’ve overcome an incredible amount of adversity by American standards. At the same time, I know that we get more of what we focus on. I’m constantly in prayer and gratitude for all the good things that are happening. I’m open-minded and allowing myself to be led to what the next step is.

I love how you talk about that. You’ve had a lot of adversity according to American standards. Let’s keep it in perspective.

As a child, I was sexually molested. I experienced a tremendous amount of abuse and domestic violence relationship in my late teens. This is the piece, not that those things weren’t hard. They were very hard and I always had a roof over my head and I had fresh water. Now, the perspective I have after working locally in charity projects humbles me. It tells me what people are capable of creating and achieving with little in the way of resources. I’m inspired to see how many of them I can continue to support.

Laura, I loved this conversation. Thank you for what you’ve offered to my ladies.

It’s my pleasure. Thank you for having me.

Ladies, thank you for joining Laura and me for this amazing limitless conversation. I look forward to seeing you next time. You know how much I appreciate you. Always remember, goals without action are just dreams. Get out there, take action, and create the life that your heart deeply desires. I’ll see you soon.

Important Links:

About Laura Gisborne

REWE 10 | Creating Notes

Hey! I’m Laura

An entrepreneur, philanthropist, writer, wine maven…

And fierce advocate for helping brilliant, passionate women like you mobilize their richest gifts into a business they adore that transforms lives and the world around them.

Working with me, you escape working harder and harder just to feel “good enough.” You shed the frustration of not being where you thought you’d be by now.

And instead, start living your greatest purpose. Far faster and with far greater ease, clarity and power to do good than you ever imagined possible.

Now, just in case you’re thinking “Sure, Laura, easy for you to say. You’ve already got the luxury of freedom and time. You’ve already got a string of successful businesses under your belt.”

Love the show? Subscribe, rate, review, and share!
Join the Real Estate Investing for Women Community today:

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On YouTube go to Real Estate Investing for Women

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[Customer Convo] Choosing Bliss, A New Giving Thanks Practice, And Real Estate With Chaitra Rai – Real Estate Women

REW 34 | Choosing Bliss

 

As host of the Real Estate Investing for Women podcast, we rarely hear what Moneeka Sawyer has to say about her experiences in real estate. In this episode, she sits on the hot seat as her customer, Chaitra Rai, asks some of the most curious questions that let us take a peek into her life, most especially with her real estate journey. Moneeka talks about her book, Choose Bliss, laying down what her typical workday looks like and how she inserts meditation and gratitude into her everyday life. She then goes to real estate and tells us some of her ways of finding a good investment deal, giving a loan, and applying for your second investment property.

Listen to the podcast here

 

[Customer Convo] Choosing Bliss, A New Giving Thanks Practice, And Real Estate With Chaitra Rai – Real Estate Women

Real Estate Investing For Women

Chai, welcome to the show. How are you?

I am doing wonderful. It’s great to hear your beautiful voice again. How are you doing?

I’m doing great. I’m sorry, it’s taking long for us to finally get this together, but I am excited about this conversation. You’ve got good questions. Thanks for being patient with me.

It’s all worth it. It’s all for the greater good.

Some of the questions that you sent me, you had some stuff about my book, Choose Bliss and you also had some real estate questions. Shall we start with Choose Bliss? Does that sound good?

That sounds great. After reading your book, I have a lot of questions that I wanted to talk to you about. One of the biggest questions I had after reading your book, you seem somebody who has varied interests in addition to your business ventures. I was wondering if you could share with us how your typical workday looks like and how many hours you spend on different things like your business ventures, blog, writing and podcasts. Do you have time for hobbies after that?

The first thing that I want to say about that is we each design our lives based on what makes us feel the best. How I would define a blissful life is that we get to do the things that make us feel most fulfilled. There are a lot of people that are out there talking about having a balanced life. A balanced life is a farce because there is a lot of stuff in a balanced life that doesn’t make our hearts sing. I designed my life. The way that I designed my life is more about doing the things that make my heart sing, spending more time doing that and less time doing the things that don’t make my heart sing.

I do have a typical day, but it depends on what my main focus is. I’ll give you an example. I have a property that’s being turned over, which means we’re in transition. I had a tenant leave and I’m putting a new tenant in. When I talk on my show about, “I only spend 5 to 10 hours a month,” what that means is most months, I spend zero hours and then if I have a transition, I might spend closer to 20 to 40 hours on that transition. It takes a lot of time to do a transition and do it right.

I only might do a transition every two years. I don’t do that often. I don’t spend a lot of time on real estate. In the morning, I wake up and I have a morning routine. That morning routine includes my shower, meditation, a little bit of journaling, a walk with my dog and my husband, coffee at the coffee shop and a walk back home. I sit at my desk and I look at a library of things that make me feel good, whether it’s a YouTube video, clothes or it’s a sweet letter that someone sent me like good reviews on my books or on the podcast.

I have an arsenal of feel-good material that I start the day with. I might take three minutes for that unless I’m watching a longer video, but that’s what I do with the first thing that I sit down at my desk. After that is when I start dealing with email. That’s how my day starts. After that, there are other things that happen. I do my email and then it’s what’s the focus of the day. Now, the focus of the day is I’m calling references for employers and for past landlords. I’m doing credit checks. I have to go to the property every single day because there’s something going on. It’s either I’m meeting a contractor, I’m putting up a new sign, or I meeting a possible tenant.

We each design our lives based on what makes us feel the best. Share on X

I’m spending a lot of times specifically on the real estate piece. However, I do think that I’m going to have a renter. It’s taken me about a week and then I will go back to my regular schedule. Once a week, I record shows and then the rest of the week, I might have a couple of hours set aside for writing. I do a lot of reading and a lot of background stuff that has to go on with running a business. I’ve got to keep my website and products going. Sometimes I’m dealing with technology all the time. It’s our best friend. It can also be a time thing for a lot of things. There are all of those things. I usually start work at about 10:30 or 11:00. My husband is at home because of COVID, so he and I take about 1.5-hour lunch.

That’s called work-day balance. Having a balance includes that.

I have a good solid amount of time that I work in the afternoon. It’s starting about 1:30 until 6:00. I take a break in the middle of the afternoon to do a twenty-minute meditation. There’s also something interesting now that David is home, we’ll often go for a twenty-minute walk in the middle of the day. He goes back to work and I do the meditation. I get a 40-minute break in the middle of that afternoon.

That’s super productive for the brain as well to break it up in chunks like that.

I get some good focus time, but I also get some nice breaks so I can rejuvenate. One of the things you asked me before the show is to talk a little bit about dance.

That’s the exciting part, your love for dance.

It’s such a big piece of my life and there’s an unfortunate truth. In the book, I talked about a one-car accident, but I’m recovering from another one. Most people don’t know, which is fortunate. I’m doing fine, but it was a highway pile-up about several years ago. My right arm has not been working very well since then. In the first two years after the accident, my legs were not badly damaged, but I was in a lot of pain. For whatever reason, my legs, arm and back got jammed in the accident. I’ve been in physical therapy, acupuncture and all of that stuff. I had surgery on my shoulder. There’s been a lot that’s going on. What that has meant is that I can’t dance every day.

If you read the book, you know that from my perspective, and we’ve heard this from many experts, exercise is a big factor in keeping happy. Our bodies need to move. I was a dancer. I didn’t even have to think about exercise and that was even better. Now, I’m not able to dance and I’m not moving. I have been able to move. I’m starting to be able to move my arm so I can start to dance again. Even before I would try to move and my arm would get torqued because it’s sympathetic movements in your whole body when you’re dancing.

That was painful, but in order to make sure that I am getting the exercise that my body is used to getting, I do four twenty-minute walks a day. I do one in the morning with my husband, one in the afternoon and one after dinner. That’s three and then somewhere in between. For instance, in the morning, we might do twenty minutes before coffee and twenty minutes after. It ends up being a full hour or we’re out with a dog and having some coffee. It’s 3 or 4 twenty-minute walks a day.

REW 34 | Choosing Bliss

Choose Bliss: The Power and Practice of Joy and Contentment

You found an alternative to getting your dance practice. You’re doing more walks now.

That’s one thing that I want to emphasize to people is we get so busy in our lives that we forget that our bodies were built to move. If we don’t move, the body cramps up, so we physically don’t feel well. If we physically don’t feel well, it impacts us emotionally. The other thing is that exercise releases all these endorphins in your body that are natural mood enhancers. This makes you feel better in general. Exercise is such a big piece of creating a blissful life. It’s the piece that people tend to overlook the most because it feels like a time sink, but it’s such an important part of staying blissful. Does that make sense?

I totally agree with you. It’s this principle of contraction versus expansion. I feel like when you go out and have your walks, you’re expanding your mind and your consciousness. As opposed to staying inside the house and your body is not getting any movement, and you’re contracting in some sense. You get the blood flowing too when you’re out and about.

Get some air and your creativity flows a little bit more because you’re not so focused on one thing. You open and expand, and more can come in. It’s having peripheral vision rather than tunnel vision. You can take in so much more.

When you’re out in nature too, you get all these creative ideas and thoughts, which would not have come if you had been stuck in the house.

Did you have any other questions about the book?

In your book, you have mentioned your gratitude habit and I thought that was fascinating. You mentioned that as you wake up first thing in the morning, you write out three things that you’re grateful for. I’m wondering if you could expand a little bit about that. Do you do a gratitude habit in the morning? Is it something you practice throughout the day? Do you write more than three things that you’re grateful for? Anything you could tell us about that would be helpful.

I’ve created a whole new practice that nobody knows about yet. I’ll let the secret out for you. I even don’t get up. My alarm goes off and I push the snooze. It’s during that snooze period that I do the gratitudes in my mind. The way that I do it is I feel into the emotion. Any gratitude practice is good, but there is a right way to do a gratitude practice. That is to get into the emotions of feeling gratitude. I find this in my own life. I was in a car accident years ago and woke up every single morning in pain. When you do a gratitude practice and when you’re feeling pain or you’re feeling bad, it feels uncomfortable to be feeling that level of gratitude and joy. I don’t know if you’ve ever had this experience.

You’re lying to yourself in some sense until you believe it.

When you start to believe that you’re afraid, it will run away. That’s been my experience. There are a lot of times that I’m like, “I don’t want to get too happy because it’s not feeling real and comfortable.” The first thing to realize is that our most natural way of being is to be in bliss. Let me explain to my readers why I’m saying this. When we were born, we were born as these little bundles of bliss. We’re filled with joy, excitement, awe and wonder. We’re newly alive and we want to learn. There’s no fear and we’re going to try everything. That’s who we’re born as and somehow through life, we learn about fear, shame and we’re bad. We learn all of these things and it chips away at that bliss that is deep at our core.

A blissful life is when we get to do the things that make us feel most fulfilled. Share on X

That bliss is that light that’s talked about inside our core. It shines bright as always.

Gratitude is the quickest access we have to that little light of bliss deep down inside of us that wants to shine through our entire bodies.

It’s a gateway that do that special vision in us.

It’s okay that as you move into gratitude, sometimes you’ll get flushed with this feeling of joy and it’s uncomfortable because we’re not used to it. The more that you do it, the more natural it becomes and the more willing you are to go there. What’s even more delightful is that you start to stay there longer. Your body gets in the habit of being able to sustain that level of emotion on that vibration. Everything that happens inside of our bodies, whether it’s endorphins from exercise or being on a diet, whatever it is that we’re doing, our body needs to adjust to accommodate the level of bliss that we’re capable of.

The more that we practice, the more our capacity expands and the more comfortable we are with that. That also means that when we fall or things go bad, we’re more quickly able to move back into that place of bliss rather than staying in those distracted emotional states like depression, sadness, anger. Even ecstasy can be a huge distraction because it doesn’t support what you want in your life. It’s a good feeling, which is great. I’m not saying I don’t feel that. I’m saying that we want to live in this place that it’s expansive and supportive of our sustainable joy.

It’s like you’re attuning your body to the frequency that is emitted by that inner vibration. Your body needs to get acclimatized to that.

I do it first thing in the morning and that gets me started. I have an alarm on my phone. When it goes off on my screen, on my phone, it says, “I am so grateful for.” During the day, 2 or 3 times, I might be reminded to do a little bit of gratitude. The other thing that happens is I get in these moments when I’m working and I want to throw my computer across the room. At that moment is when I take some deep breaths and I say a couple of gratitudes because that calms me down. It clears my mind as a fog that happens in us when we get frustrated so that I can then think more expansively. If that doesn’t work, that’s when I go for my walk.

Gratitude can also help put you back in a rational place, so you can be more creative and more productive. That’s all the stuff that was covered in the book and what I’ve been doing for many years. Now, there’s a new piece and this is a piece that I do in the evening. I started to do a new I love you practice. At night, I write a little love letter to myself and what the love letter says is, “Dear Moneeka, I feel so lucky to be you and to be able to live my life through you,” and then I put gratitudes about myself and my life.

I might say something like, “I am grateful for your spirit and your willingness to share your point of view with the world. I know sometimes that’s hard for you and I appreciate that you do that,” or “I so appreciate your commitment to getting the word out there that bliss is a priority. I know that people sometimes look at you like you’re a crazy person, but thank you so much for being tenacious and committed.” I’ll say things like that. At the end of it, I’ll say, “Thank you for being you. I love you so much,” and then I sign it, Moneeka. You have no idea how good that feels.

After you write a love letter like that to yourself, and you go to sleep, you wake up in the morning wide open. It’s almost like an emptiness. There’s a space where it’s completely open that you can fill it with the good stuff. Most people, when they wake up in the morning, the first thing they think of is, “It’s another day, I want to sleep a little longer, or I’m late.” There are all these other things. Those are all negative things. Instead, if you do a gratitude practice, you’re filling yourself up with good things. The other thing that’s important to make sure that you’re not distracted from the gratitude piece is to be careful about what you’re waking up to.

REW 34 | Choosing Bliss

Choosing Bliss: Gratitude is the quickest access we have to that little light of bliss deep down inside of us that wants to shine through our entire bodies.

 

You want to wake up to a sound that’s pleasant to you and that does not feed your subconscious mind negative information. For instance, do not wake up to an uncontrolled music or news station. Don’t listen to the news. The second that you wake up, don’t wake up to that because most of that is negative stuff. You don’t want to put that negative energy in you when you first wake up. The other thing you don’t want to do is have advertising because advertising is designed to make you feel like you are not enough of a person, because of that, you need this product to be a better person. You don’t ever want that to be fed into your mind when you’re first waking up.

You don’t want sad songs. If you can control it, you don’t want things that are going to make you feel bad, hurt, or have bad memories. This sounds controlling, but you do want those first moments that you wake up, that you open to the world, that’s going to set up your entire day. You’ll make it a lot easier for yourself if you wake up to something beautiful, some beautiful tinkling, soft nature sounds, and birds chirping or crickets chirping is something I know one of my clients likes to listen to. My husband wakes up to Mexican music. He speaks Spanish, I don’t speak Spanish, but I love the way mariachi sound. It’s wonderful to hear that in the morning. Controlling what you wake up to is also going to help to support that gratitude practice.

It’s like you’re controlling your mentality on some level so that you can put your best foot forward as you start your day. Another thing I loved about what you share with us is your love letter the previous night because they say what you sleep with at night is what goes forward. It’s important to have positive things, not only when you get up, but when you sleep as well. That’s why I love your new practice that is incorporated into your routine. Thank you for sharing it.

One of the things that I love talking about more than anything else is how people can live a blissful life, and I feel that we can keep talking, but I think we should move on to the real estate piece.

You’re taking your first loan, venture into your first real estate investment and you go to the bank and because of the period we’re in, there are certain downturns in some areas, banks are asking for a higher down payment. Once you do buy your first property and you go ahead with the process, how do you know that this is a good deal? How do you find a good investment deal when you’re doing this for the first time?

There are a lot of different pieces to that. First is finding the right property, the right loan and what happens next after that? It’s a three-step question I heard. We’re going to talk about the economy later. There’s no such thing as a perfect property, but there is a perfect property for you personally. I teach this in my coursework. The short version of this is that you want to look at your resources and your tolerances before you pick a property. My bank is offering a loan at 3.25% interest with a down payment of 30%, is this good?

Every bank is going to be offering different things. Most of the banks are requiring a down payment between 25% and 35%. Yours is right there in the middle. A rate of 3.25% is fantastic. It’s fluctuating about an eighth of a point. You might be able to go down to eighth, but you also might end up at 3.75%. I got quoted at 3.875%. For our readers, understand that we’re talking during COVID. I want to give you an overview of what I look at when I’m looking for a loan.

What is the market bearing right now? The market is asking for between 25% to 35% down. A rate of 3.25 % is right in the middle of what I’m seeing. You’re going to find out more about that by calling a broker and getting an idea because a broker has access to many different products. He will have access to a product that’s only 5% down, but he’ll tell you the rate is higher and you’re going to have to put five points down, which is 5% down in fees. Brokers are going to be able to tell you the range of what rates are looking at and what down payments are looking like. That’s the first thing.

The other thing is going to be, can you put that 30% down? If you can’t put it in your area, how much do you have to put down? What is that 30% of? If you have $30,000, 30% means that you can only buy $100,000 price. That’s going to also determine if this is the right time for you to buy or not and what to buy. The next thing that I always look for is the perfect property for you is the property that is in a neighborhood where you’re going to find tenants that you like doing business with and it’s a property that you enjoy maintaining.

Let me give you an example of what that looks like. I have a property that is vacant. When I bought that property, it is walking distance to Starbucks and the Sprouts and to a bunch of cute walking area. The property is only a three-bedroom, one bath. It’s fairly small. The tenants that I was looking for at that time, and I predetermined this, was a small or a new family, husband, wife and 1 or 2 kids with no pets. You’ve got your customer avatar. My tenant is my customer.

We get so busy in our lives that we forget that our bodies were built to move. Share on X

They’re starting their life. They’re involved with their work, helping the kids with homework and family time. They don’t have time for all the maintenance of a house and all the gardening. They’re looking for something that’s a little bit lower maintenance. A condo might be a good idea. They’re making about this much money. These are the tenants that I want to work with. The other thing is where does that tenant want to live?

If they’ve got young children, they’re going to want a safer neighborhood. Ideally, for me, I wanted a safer neighborhood and here is why. Every evening, I’m going over to the property after my workday to do something, not every evening, but frequently. If I’m going over there in the evening when it’s dark, I need to feel safe as a woman. Men are going to have different considerations. They want to feel safe too, but it’s going to feel different to them what’s appropriate and what’s not. I need to feel safe in the neighborhood, in the home and with my tenants. That’s another thing that I consider.

When you’re looking at the perfect first investment property, you want to take all of that into consideration and you want to look for the property that is perfect for you. Does that mean you might have to wait to get the right property? It does, but you don’t want to wait for the perfect property. The first property that I bought was a smaller property, a three-bedroom and two baths. Now, much of what I own is executive homes.

The ideal property was an A-class neighborhood and executive home. That was perfect for me, but I couldn’t do that at first. In the beginning, I had to do something that was a perfect fit for the first investment. That means I needed to feel safe, I needed to be able to deal with the kinds of tenants that I wanted to do business with and how much money I have to put down. You might have to wait to get in because you may not have the money to buy into that neighborhood. Make sure that the second you can buy into a neighborhood that fits your parameters, that you do that because sooner is always better than later.

Those are great points about the safety aspect. I wouldn’t have thought of that.

Most people don’t, but for women, it’s a big deal especially if you are managing. My husband is not managing my properties. He helps me out every once in a while when I’m desperate, but that happens rarely. The other thing you asked about is the loan piece. You get your first loan, your first property, and now you’re like, “How do I get the next one?” It depends on what area of the country you’re in. Fannie and Freddie, which are the government-backed loans, in most areas, they will allow you to go up to ten conforming loans without rates going up. That’s pretty easy. Conforming is different in different parts of the country. In some place it’s 149, in California it’s 510. In California, our parameter is five loans. After five loans, we can still get the next five loans, but the rate will be about one percentage point higher. The rates on the first loans are all at 3.25%. The next one would be at 4.25% or 4.75%. It’s going to go up a point to a point and a half after the fifth loan. That’s when you go to loan number six. That’s in California.

If you’re talking to a mortgage broker, they’d be able to give you their parameters. When you’re talking to a mortgage broker, find one who is well-versed in investment properties. You want to find out, do they have investors? How many investment loans do they do per year? Is that their main business or they’ve got 1 or 2 clients that they do or they might do 1 or 2 a year. They’re not going to know enough. You want somebody who can answer all these questions like, “How many loans can I do? What are the different investment property products? How is my primary residence loan going to be affected by those other products and vice versa? How many points can and how much more down payment?”

You want them to know all of that stuff. Some of those loans will have restrictions based on the CC&Rs, which is all the HOA rules for condominiums, townhouses and PUDs. If you have a mortgage broker who understands investing, they’ll know the right questions to ask, and they’ll also know how to guide you as far as what kinds of properties to look for. My loan officer asked me for all of the information that then he’ll say to me, “Moneeka, what’s going on out there? What would you expect those to be?”

Let’s say my HOA dues are $650, that’s going to take down the price of my house that I can buy by about $100,000. That’s calculated into the debt-to-income ratio. I have to pay that additional amount. If it’s only $200, it’s going to be a different thing. He knows to ask me that so that we don’t have an ugly surprise when we send it to the underwriter and they’re like, “There are these HOA dues that we did not calculate into the debt-to-income ratio. You don’t qualify for as much.” That’s one example.

When you talk about your loan officer, do you normally take loans from the bank or private investment companies are an option as well?

REW 34 | Choosing Bliss

Choosing Bliss: Advertising is designed to make you feel like you are not enough of a person; because of that, you need this product to be a better person.

 

You can do either one. I’ve done everything through the bank right now because it’s super easy. It’s streamlined, but I have a lot of different options as far as private money and other investment options too. I just haven’t taken advantage of them. That was all of that. Did you have any other questions on that stuff? I know I covered quite a lot there.

You answered all of those three. We covered finding the perfect property, getting that loan and the third one was applying for your second investment property. You told us about the conforming loans. That was very useful. The loan officer would be able to give us that information too.

If you’ve got a loan officer that is used to dealing with investors, then they’ll be able to give you all that information.

Thank you. That was super helpful, especially in the location, how important it is when you’re selecting your first property. Real estate investing is known as hassle-free, once you have the perfect property and things are going well. How do the ups and downs of the economy change that? Would it change in case the economy has some major changes?

The economy is a big question that people want to hear a lot about. I’ve done several shows on this. Here’s the thing that I always say about predicting the economy and predicting real estate’s movement. Someone out there is going to be right on their predictions, but we don’t know who that person is going to be. I talk about my experience of many years in real estate of what that looks like. I’ll talk to you a little bit about what my experience has been and what I have gleaned from that. It was either ‘87 or ‘89, my dad was paying for my college education through real estate and then the tax laws changed. Prop 13 came in California and they removed some of the tax benefits of being an investor.

The real estate property values plummeted. There were a lot of us that were in school at the time whose parents were paying through real estate. There was a lot of stress about money during that time. Things recovered and then the market started to march up. It was going up. It was doing phenomenally well because people adjusted and property values all recovered. In 2001, it was when we had our next crash. When I graduated from college and got married, my husband and I bought our first home with 5% down. Our property was going up. We took an equity line on that first property and we bought our second property, the beautiful home that we bought. We bought that in January of 2001. Right after that, the whole market crashed again.

We went along. We stayed in that property. I took another equity line. I bought a few more properties. In 2008, I bought my dream home. It was a million-dollar condominium on the top floor. In 2009, the market completely crashed again. My timing was not good. I wish my timing was better. I do think that it is wise if you can time the market. I’ve never been able to do it with any level of success, even so, we started our real estate investing journey with about $10,000. By twenty years later, I would have been able to retire, in spite of the fact that the market crashed twice during my journey in real estate.

The California market is volatile. We count completely on the appreciation. You’ll see that the properties are volatile. What we see mostly is properties in the very low-end and high-end tend to crash most often. In 2001, if it was below $200,000 and above $700,000, you would see a lot of volatility. If it was between that $200,000 and $700,000, it stayed fairly stable. It might have lost 5% or 10%. In 2008, it was a completely different thing because the crash was caused by a real estate-specific problem, which was the loan industry.

We saw all houses dropped fast. That particular phenomenon will hopefully never happen again. That was something that was real estate-specific. There was a problem with the banking system and we fixed that in many ways. That kind of crash is not likely to happen. Are we at the top of our economy? We’re pretty close. Real estate is going gangbusters here in California or Northern California in the Bay area. However, I don’t know how it’s doing in the rest of the country. I don’t think it’s going gangbusters the same way. One of the things that I’ve been giving advice to people and I have been given advice also is to look at markets like what you talked about where in Central Texas, for instance, the pricing stays stable even in 2008. When you are looking at that, what’s also going to be true is have the market values appreciated significantly since 2008?

They have, especially in areas like San Antonio and Houston. They’ve appreciated. There’s a lot of demand.

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If you can find a magic area like that, where it’s fairly stable, but then you’ve also seen a lot of appreciation, you’re going to have a good chance of not being heavily affected by the economy. Most areas that are not going to be affected by the economy as much are going to be places that are more cashflow places. What will happen is you’ll get a property that is going to cashflow right out of the gate, which you can never find in California. If the economy takes a turn, that cashflow will stay stagnant or will continue because people still need to rent homes. People are not flooding into those areas so the property is not going to necessarily go up high, but it’s also not going to go down very low. It’s going to stay fairly stable.

When you’re looking at an economy, you want to look more for those safer markets where you’re going to get some cashflow and that cashflow then offsets any loss that you could make or you could endure. Those markets are also likely to recover after if they take a 10% drop. If you’re investing in a place like California or an appreciation-focused market, you’re going to see a lot more volatility. What’s important then is to have the wherewithal. What I mean by that is liquidity. You want to have some cash, the emotional wherewithal and the mental mindset to hold on for the long-term. You want to make sure that if things go wrong, you have time to recover so that you can become right again. You need about a ten-year cycle to recover from a hard hit.

What you’re saying is location matters very much, especially if we’re seeing some uncertainties in the economy. Keep in mind that if you’re in an area that has substantial cashflow, that’s probably a better area to invest in.

I still want to buy property in California. This is the market that I love. I need to have a ten-year timeframe on that. I need to make sure that I don’t need to make money on that property right away. I want to make sure that I’m covering my mortgage and my expenses. If the market turns and I lose a significant amount on the property, if I’m upside down, then I can continue to pay that mortgage either through rents or by selling something that I have liquid. For instance, stocks or there might be other things that we have that are liquid, that we can then put into our real estate to sustain ourselves. I’ve been known to do that. When things go bad, I make sure that I can cover myself.

That’s great planning.

I tell people don’t put all of your money into real estate. It’s very solid. It’s the most secure investment on the planet, but there are times when it cycles also. It’s good to make sure that you’ve got some cash and some different things so that if you need liquidity, you’ve got that. The other thing I always say is always have an equity line taken out on your primary residence. You can’t get them on rental properties. That can also serve as an emergency fund if you need to pay mortgages or stuff on your rental properties. Don’t use it for things like vacations, buying a car and consumer debt. Use it to make sure that you’re sustaining your investment business so that you don’t end up losing properties if things turn and you need a little bit of help during that time.

I can’t believe how much information has value that I’ve been able to get out of your show and your readers too. You explained everything so beautifully and easy to understand. We could have asked for a better mentor than you.

Did you have any other questions before we close?

This is coming back to your book, your new habit, the beautiful letters to yourself. I wanted to know if you were planning to come up with a book on affirmation.

I’m not. Many people asked me that. There are many out there that are good. I’m a co-author of a book called Experts & Influencers: Women’s Empowerment Edition. It came out and we are doing their little quote cards. Each of us ladies that were in the book wrote six quotes and you can get a card deck with all of these quotes. If anybody is interested in a card deck, please email me and I can send that to you. It’s $20 per card deck, but you get 52 cards in any case. However many that you get, you get all of these quotes by powerful women that help you to empower yourself and live your best life.

REW 34 | Choosing Bliss

Experts & Influencers: Women’s Empowerment Edition

That sounds like an amazing deal. I wouldn’t want to miss that.

You can go to BlissfulInvestor.com. You’ll see my email address there. Let me know if you want some cards. This is a good conversation. Thank you so much for asking your questions. This can benefit my entire readers and all the ladies out there. Thank you for being willing to do that.

Thank you for being a great mentor to all of us ladies who tune in to your show regularly. I’ve got so much value from it. I’m coming from your knowledge in real estate investing to feeling like I’m learning so much and I’m ready to move ahead. Thank you for everything that you do.

It’s my pleasure. It’s comments like that that lets me know people are reading, and I love that. Thank you. It makes it all worthwhile.

I look forward to catching up with you soon. Thank you for this opportunity to ask you questions. I love your book and I’ve been recommending it to all in Sundry.

Ladies who are reading, I love doing this show and having the conversations that I get to have with these amazing experts. The reality is that I am doing this to be in service of you. If you have any questions, email me and maybe you can be on real estate investing for women as one of the guests. We can have another conversation like I had with Chai. It can help all the other readers too. There’s never a dumb question. All the questions that you’ve had, all the other people have had before you. Feel free, and other people have after you. Many readers have the same questions. Please let me know if you have any questions, and we can record a call and help all the ladies out there.

When I read your book, every chapter touched something in me and the chapter that you mentioned about giving also touched a deep chord in me. You found a school in India that you donate and you help run. It’s been a dream of mine to do something like that to provide education and school. You found a school that makes your heart happy and you’re donating. How did you find your calling to serve this particular organization or this particular school? How did you know that this was the right fit?

There’s no real right answer. I want to mention how my husband found his, because he didn’t have a heart calling. One of the things he does is he goes online when he’s looking at an organization that feels like it resonates with something that he wants to donate towards. One of the things that he looks up is how much of the funds go to administration and charitable services. He’s always looking for organizations where most of the money goes to services rather than to the administration. That’s a tip-off the top of my head that he has always done.

I went to India when I was sixteen. I was a foreign exchange student. I was out and about and I was meeting people. One of the things that struck me was how the women in India were being treated as opposed to what I was used to in the United States. I would hear these horror stories about Sufi, about these arranged marriages of these girls that were very young and how girls didn’t get any education. There was all this stuff that horrified me. At a young age, I decided that I was not going to be like that. I was going to be the captain of my own life. Nobody was going to determine who I married, how and when. I was going to get an education. I determined those things for myself, but I also realized I had the freedom to do that in the US and that in India, women didn’t always have those options.

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I became committed early on to the education of women in India. One of the things that I was convinced of was that the more educated a woman is, the more likely she is to be able to make choices that are more supportive of her than if her life is completely run by her father and by people that were “more educated than her.” The other thing that I realized is that women can fight for their rights, but if we are constantly fighting against men who do not believe the same things, we can never win. It’s important that the education of men also supports the equality of women. Women need to know what is possible for them. Men need to understand and believe that women are equal to them.

I started donating to schools in India at the age of sixteen. I would do $5 a month. I started to donate to different schools in India that supported the education of women and the upbringing of women as equals. In the United States, we used to go to a temple. When I moved to California in 1976 or ‘77, my parents plugged into a Hindu temple that was up in Oakland. That particular Swami, we became close to. It was in 1987, he started this school in India. When we started talking about what the philosophy of the school was, I knew I had to get behind it.

That’s why I started donating quite a lot of money to help to support the school and those sorts of things. Because of that, I was able to impact also some of the direction of the school, the way that the approach was for the education of both girls and boys for the uplifting of women in India. I’m close to the Swami. I’ve gone to India and I did a little movie in the school. I’m involved. The thing that I loved most about it was that I knew the people that were running the organization and I knew what the accounts were.

They didn’t have a huge amount of administration. Most of the money was going towards the school or in the United States. It depends on where you donate. You can donate to the school or you can donate to the temple here in the United States for the upkeep of the building and the temple here. You can designate those funds. I see and I watch every single year more buildings go up. They get more computers, they’ve got more students, and there’s a new farm. It’s becoming a little bit more sustainable. They had to build a bunch of wells because their water levels went way down because their wells weren’t producing.

This is a thing that happens in many of the villages in India. We know that that’s another problem. I’ve been watching the whole thing and where the money goes, and that’s why I feel so committed to it because I know that it’s going to essential services. That’s how I made that choice. It happened as a process throughout my whole life. For David, he will find something that he wants to donate to and he’ll find an organization where most of the money goes to the essential services.

It sounded like it almost happened in a natural way for you. It unfolded naturally.

It did. It’s in my book. It’s one of my pillars of Bliss. It has defined so much of who I am because when you’re looking at the world for a way that you can help and that you can make it better when you’re making an impact, there’s something that happens inside of you. You’re not as a mercy of the world. You’re able to create impact and affect change. It feels empowering. It feels good on so many levels and it’s also helping the world. It’s that thing that we’re giving back. When you feel grateful for everything that you have, if you’re truly grateful, you want others to experience having some of the benefits that you have. Having the opportunity to do that makes you feel even more grateful. It also fills you up with this feeling of empowerment and feeling like you’re doing good things in the world. It’s always been integrated.

You’re making a difference.

In the book, one of the things that I talk about is making an impact is not about giving money to a school in India or Africa, or helping with a water system somewhere. It’s also holding a door for somebody. It’s giving somebody a smile if they seem to be having a bad day. It’s being kind. All of that is creating an impact in the world. It creates a ripple effect of kindness and bliss everywhere you go. That in itself is making an impact. It doesn’t have to be something big. It doesn’t have to be something monetary. It can be who you are being in the world when you’re out there with people.

It’s being aware of our behavior when we’re out there with people.

Practicing kindness and giving back in that way.

Thank you. I have a lot to write in my journal from our conversation.

Thank you for asking that question. That’s not anything I’ve talked about on this show. I’m sure the ladies will get a lot out of that. Ladies, thank you for taking this extra step towards your future, bliss, and financial freedom. Always remember, you do have control over your success. I’ll see you soon.

 

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How To Earn Real Wealth From Turnkey Rentals With Kathy Fettke

REW 33 | Real Turnkey Standards

 

You can go to 10 states and get 10 different ideas of what a turnkey rental means. Seeing a need to create a benchmark for the industry, Kathy Fettke created the Real Turnkey Standards, a checklist that sets the tone for what turnkey means. If you didn’t know Kathy yet, she is an active real estate investor, licensed real estate agent, former mortgage broker and host of the Real Estate Wealth Show and Real Estate News for Investors podcasts. Join in as she talks to Moneeka Sawyer about the opportunities you can take in building passive income with turnkey rentals. She also shares her predictions on real estate investing opportunities for the rest of 2020 and beyond. Want to hear her step-by-step process of turnkey investing? Tune in to Real Estate Investing For Women – Extra as well and join Moneeka and Kathy there!

Listen to the podcast here

 

How To Earn Real Wealth From Turnkey Rentals With Kathy Fettke

Real Estate Investing For Women

I am so excited to welcome back to the show, Kathy Fettke. For those of you who don’t remember Kathy, let me tell you a little bit about her. Kathy is the Co-CEO of Real Wealth Network. The bestselling author of Retire Rich with Rentals and host of the Real Estate Wealth Show and Real Estate News for Investors podcasts. She is an active real estate investor, licensed real estate agent, and former mortgage broker specializing in helping people build multimillion-dollar real estate portfolios that generate passive monthly cashflow for life. With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS, MarketWatch, and The Wall Street Journal. She was also named among the top 100 Most Intriguing Entrepreneurs by Goldman Sachs two years in a row.

Kathy, welcome back.

Thank you so much for having me.

Kathy, you’ve talked a little bit more about market research and what the market is going to be doing. I want to focus on your turnkey business. Could you tell us a little bit about how you got started with that?

It was back in 2004 when I was a mortgage broker and I learned about the business through mortgage brokering and many of the clients that I worked with were buying properties all over the country. I started to investigate that and find out why. It was simply because there was this word ‘cashflow’ that a lot of Californians don’t understand or don’t know what that is. It’s impossible. It’s cashflow but it’s of the negative variety. That’s what people understood. If you buy a property in California, you might breakeven or negative cashflow but it will appreciate so much that it offsets and makes it worth it.

The down payment alone is difficult for people to come up with to buy very expensive California property. I learned long ago that if I wanted this thing called cashflow, which is more of a sure thing than appreciation that it wasn’t going to be in California, therefore we’d have to get good at figuring out how to buy rental properties where I can’t drive by them, fix them myself if needed, or manage it myself in any way. That journey started in 2005. I also had Robert Kiyosaki on the Real Wealth Show which is my podcast and I was doing it way back then.

In 2004, real estate prices had doubled if not tripled in some areas. Kiyosaki came on the show in 2005 and he said, “I made all this money. I’m going to sell now while everybody else is buying because they think these prices are going to continue to go up.” What a lot of people don’t realize is that when values go up, that’s the time to cash in, take that money, and buy cashflow. That’s what I learned from him. I jumped on an airplane, went to Dallas because he said that’s where he’s buying, and he gave lots of good reasons. The job growth, population growth, affordability there, and infrastructure growth. I came back with five properties that cashflowed with what would have been a down payment on properties in California. That’s what started it.

I talked about that on the Real Wealth Show and people said, “I want to do the same thing. How do I do it?” I said, “Here’s the real estate agent I used. Here’s the property manager I used. Here’s the lender that I used, which at the time was me. Here’s the whole team. Here’s this turnkey process for you.” That was before the turnkey property was a thing but it’s packaged for you to make it easier, “These are the people I’ve worked with. I’ve had great success with them. Here you go.” That turned into a business where we still do that. We find teams that can acquire the properties or build them if they’re brand new, screen a tenant, and manage that tenant ongoing so that people from out-of-state can have it done for them by somebody local.

REW 33 | Real Turnkey Standards

Real Turnkey Standards: Investors love new homes because they come with warranties. They’re brand new. Tenants love them, especially during COVID.

 

You have different teams in different areas so you’re not managing them anymore. Do you invest with each of the different teams that you investigate or they’re managing properties for you? How does that work?

We invest in a lot of them. Rich and I get busy. I’m embarrassed to say that so many times we haven’t had the time to build our own portfolio the way that we want to. Sometimes we’ll get ten amazing properties in Florida. We do a webinar on it and they’re sold out. I look at Rich and go, “We didn’t get one.” We have properties in Florida, Ohio, Pennsylvania, and California too. California is not cashflow, although I do have one Airbnb and that has been cashflowing. If you’re going to own property in California and you want cashflow, that is one way to do it, but it is more time-intensive for sure.

That’s a little bit more like a job. I know that you’ve got your checklist and all of this stuff for turnkey properties but I want to talk a little bit about the new construction. I’ve been seeing going through my email that I’m getting all these webinars about new construction that you guys are working on. Could you talk a little bit about that and why that is so exciting?

When I started investing out-of-state, there was so much limited inventory at that time. In 2005, everyone was buying real estate as you may recall so it was difficult to buy anything. There were multiple offers and everybody is competing. In 2005, I met with builders and said, “Can you save 10% of your inventory for our network at Real Wealth? You don’t have to worry about that. It will be for rental.” That’s how we got into it. Investors love new homes because they come with warranties. They’re brand new. Tenants love them, especially in COVID. They’re clean, got yards, people are moving out of apartments, condos, big cities and realizing, “We’ve got to this space. We need it since we’re now teaching, working, cooking, and entertaining at home.” The home is now the central focus of our lives these days. People are wanting to either rent or particularly live in a new home. They love that in this environment.

The thing that’s amazing is the cashflow is not that different because prices have gone up so much and there’s so much limited inventory in general. I can talk about why that is and why we’re in a V recovery in real estate. It makes no sense. I was at my Pilates class and the Pilates instructor is like, “I don’t understand how people can be out of work, and yet the housing market is taking off.” There’s a good reason for that. It’s a lack of inventory. Because the builders have not been building over the years, existing home prices have gone up but we’ve been able to work with builders who are willing to take a smaller margin to be able to sell in both investors. You can almost get the same return from a new home than an existing one in this moment. That’s not always the case. It’s definitely not the case years ago.

It was better to get an existing home, buy it in foreclosure, fix it up, get amazing returns, but that’s difficult to do now because there are bidding wars on properties. Once again, we’re doing what we did years ago which is going to the builders and saying, “Will you please reserve a percentage of your inventory for us?” Sometimes builders are done with a project and they want to get out. It’s expensive for them to hold shop at the development and that last 10%, they don’t want to deal with. They’d rather pick up and move the staff to their next project. We come in and say, “We’ll help you out. We’ll pick it up.” We get to be in these beautiful residential neighborhoods and own the tiny percentage of rental properties there. It’s great for the investor and tenant.

What markets are you doing that in?

We’re working with builders in Florida. This has been projected before COVID that people are looking for a more affordable lifestyle. They would love to be near beaches and a place that feels like vacation. If you’re retiring, you want to retire in a nice place but affordable. Where are you going to do that? Shockingly, you can do that in Florida. If you don’t want to be anywhere near the hurricanes, then you go inland a little bit. Don’t buy anything on the water. You can visit the beach but don’t live on the beach because you have higher property taxes and you’re going to have to deal with boarding up your house every time there’s a hurricane. If you buy or own property inland, then you’re not in flood zones. It’s just a bad storm which you have everywhere.

REW 33 | Real Turnkey Standards

Real Turnkey Standards: Always get an inspection if you’re buying a property whether it’s turnkey or not, next door or not. Unless you are an inspector yourself, it’s worth it.

 

That area between Tampa and Orlando is the fastest-growing part of the country. It has been for the past few years. That has dramatically accelerated because of COVID as more people from New York City and bigger cities on the East Coast are finally making their dream come true of retiring in Florida because they can work from home. They’re maybe not retiring but they get to go there early. We’re seeing a mass exodus out of the high tax states of New Jersey and New York moving to a place where it’s more comfortable with this new normal. There are certain states that are more landlord-friendly and business-friendly. That’s a fact. Florida is one of those states. There’s no state income tax. They didn’t shut down during COVID. A little bit, but they opened up quickly.

People who are looking to get back to normal, they can do that more in Florida than New York, New Jersey, or California for that matter. Again, you’re seeing what was already in motion is a massive demographic shift to the Southeast and yet home prices are very affordable. These markets were off the radar, big builders were building in places like San Francisco and New York because they could make so much money on those high-end condos and Chicago and so forth. There’s still a lack of inventory with all this migration to Florida, Georgia, and Carolinas. Home prices are still within the $200,000 range. We think that the material cost is going up, we’re going to see prices go up over time.

Do you guys buy the properties or do you reserve them for your investors?

No. We’re simply a broker. We are with eXp which allows us to be a national brokerage. We have agents all across the country, they find us properties, and we work with the builders. I have relationships with a lot of builders so they do reserve that inventory for us. Normally, they don’t like selling to investors and don’t want investor neighborhoods but they’re willing to have 10% to 20% of their neighborhoods be rental properties. They don’t want somebody coming in saying, “I want to buy a property and make it a rental.” They know that we have worked very closely with the property managers and we have high standards for screening tenants. We have one company that will be managing those. It’s very professional and high-end so they’re more willing to do it.

You have one management company that any investor that buys in, they get that management company. That’s all completely handled.

You’re not required to use that management company but we do have some influence. It’s not our company, it’s one that we found. We interviewed them. We have a list of twenty questions that we share with investors. You can download that from our website at Real Wealth, The Property Management Investor Questionnaire. We want to know how many properties are you managing. How long have you been in business? How many people and staff do you have per property? How many evictions do you have? If it’s too many, you’re not screening well. If it’s none, I don’t believe you. How long does it take to evict and what’s your process? These are things that we want to know.

We want to see that there are great reviews, there are happy tenants, and those tenants are being cared for. We have a deep vetting process for finding property management. Even beyond that, if we have a few hundred investors that are using that property management company to manage properties and one of those landlords has an issue that they’re dealing with and they’re not getting a response from the property manager. If I call from Real Wealth and say one of our members is having these issues and that property manager doesn’t take care of it, they don’t want us to pull everyone and find a new property management company.

We have a little bit more leverage. They want to keep us happy. They want to keep us bragging about how great they are. That’s the whole beauty of referral-based businesses like Yelp. Businesses and Yelp will go beyond what they might’ve done in the past because they want great reviews. That’s what these property managers want us to do. It’s to review them and tell our members that they’re great. They better be great because if they’re not, they’re not on the list anymore.

When values go up, that's the time to cash in, take that money, and buy cashflow. Share on X

One of the things you mentioned is that you’ve got a high standard for the property management companies. You also have a high standard for the properties that you get. You’ve got these construction properties that are all brand new. You’ve also got a checklist of everything that those properties have to have if you’re buying an older property, remodeled property, or something else for your clients too. Is that true?

We have a checklist. It’s called our real income property standards. There’s this thing called turnkey rental property businesses that popped up in Real Wealth. We were one of the first, as I said, to discover that and realize there are investors who want to buy out-of-state, but they don’t know how, don’t know who to trust. They want a referral from someone who has a track record. That didn’t exist back then so we created the systems to make that happen. This idea of turnkey popped up and anybody could say they had a turnkey business, but nobody defined what that meant. You might work with one turnkey provider in Ohio who’s mind-blowingly awesome and then that’s your idea of what turnkey means. You go to a team in Columbus and you’re so disappointed because they didn’t do the same thing.

That’s what we discovered when we were looking for these teams that could help us out. They all had different standards of what they consider turnkey. This one guy I went and looked at his properties and I said to him, “You got this from foreclosure. Foreclosures have a distinct look, feel, and smell.” Many times, they’ve been sitting for a long time. They can be vaguer if someone lived there. They need a lot of clean-up. I looked around this property and said, “What did you pay for this?” Turnkey was in his company name. That’s how I even found him. I said, “When are you going to do the renovation?” He goes, “What do you mean? We already did?”

I’m looking around and this looks like it came right from the bank. Things were broken, curtains hanging lopsided. It was awful. I said, “You can’t be serious that you’ve renovated. What did you do?” He said, “We put in new carpet,” something like that. I’m like, “This would definitely not meet our standards.” He goes, “That’s okay. I have a waiting list of people from out-of-state who will buy it.” I thought if they only knew, they have no idea what they’re buying. They saw turnkey but they have an idea of what that means. They never bothered to check, never got appraisals, inspections, or anything like that. That’s when we thought we need to define what turnkey means to us.

We called it Real Turnkey Standards and we have a certain amount of life left that we expect to see on roofs and on HPAC systems. All those big-ticket items that cost you so much money and blow all the cashflow that you ever earned on that property, it could be gone with one problem or one repair that you need on that big-ticket stuff. We want to make sure that there’s enough life left, at least the inspector says, “It looks like there are ten years left on the roof,” or so forth. Those turnkey standards are also on our website at Real Wealth.

We tell people, “If there’s anyone on our referral list that you want to work with, download those standards and give it to the inspector that you hire.” Always get an inspection if you’re buying a property whether it’s turnkey or not, next door or not. Unless you are an inspector yourself, it’s worth it. Get the inspection and give them the turnkey standards and say, “I want to make sure that they’ve renovated this to these standards.” If they haven’t, then that team doesn’t get to be on our referral list any longer or they need to fix it and bring it up to the level that we expect. Again, another reason to get an inspection is you can often get work done that you would have had to pay for later but the seller pays for it.

Do you help people to get that inspection like arrange all that and do all of those things?

We have a list of inspectors that we recommend. We’re legally allowed to give a list of three inspectors that have been recommended by our members but we don’t make the phone call.

REW 33 | Real Turnkey Standards

Real Turnkey Standards: Right now, there is a short window for new construction. In 2021, there will be a great opportunity in pre-foreclosures and foreclosures.

 

How about financing? With these turnkey properties, what I found is that a lot of times you can do it like any of the hats. You put some money down, get a loan, all of that stuff.

What is amazing and I try to tell as many people as I can who feel discouraged that they’ll never get into real estate because they live in California or they live in a high price market and they think, “How am I ever going to come up with $100,000, $200,000 down payment or qualify for that massive loan?” What they don’t realize is these loans are like a car payment. If you’re buying a $100,000 house, your mortgage is $80,000 and your payment is $400 a month. People are shocked that they can qualify. Sometimes with low paying entry-level jobs, they can still qualify for these investment properties. It’s almost cheaper than getting a car because it’s amortized for 30 years whereas a car is amortized for 4, 5 or 6, whatever they’re doing these days.

The payments are low. My daughter was two years out-of-college working an entry-level job and she was able to qualify and she saved her money. She did not buy a car, expensive fancy drinks at Starbucks. She saved her money, and she was able to do it on a low salary because again, almost anyone can qualify. They’re looking for high credit. You can get up to ten investor loans with Fannie or Freddie. They’re conventional with these unbelievably low rates in the 4% arena if you have good credit and then you need 20% down.

If it’s a $100,000 house, you’re talking $20,000 and $80,000 mortgage, and then that income that that property generates, you get to add to your income. At least 75% of it or whatever the bank says so you’ve increased your income and you can qualify for more on the next one. Save that cashflow as the down payment for the next and do it again. I tell people, “If you have $200,000 cash that you are able to save, maybe you’re saving it for a down payment, you could buy ten rental properties, get that financing, have a $500,000 portfolio.” That might be harder to qualify for in a high price market because you’re having to qualify for the whole payment without the income.

What kind of income could people expect if they do that scenario? They do 20% down, they’ve got an $80,000 mortgage, what kinds of cashflow would they be looking at?

In a market like Florida or in parts of Atlanta even Charlotte where they are red hot. You can’t even imagine the number of people moving there every single day. There are waitlists. There are bidding wars so prices have gone up. When prices go up, cashflow goes down because you’re paying more for the property and rents don’t go up quite as quickly. They are going up but not as quickly as the home prices are. We’re seeing about 6% to 8% return on those new homes. On existing homes, homes that had been in foreclosure, have been fixed up, or a little bit older, you can get a higher return on that.

When you consider that you’re putting a down payment, let’s say you’re putting $30,000 down on $150,000 property and that property goes up in value of 5%. You’re talking about an increase in value of the $150,000 property, but you only put $30,000 down. People don’t realize that it’s the cash-on-cash return that matters. The cash you put into it versus the cash you’re getting out of it. When you include the appreciation on that, it’s phenomenal. I don’t know any other investment that has returns like that. You can double your money very quickly because of the cashflow you’re getting along with the appreciation because you’re getting appreciation on the whole thing, even though you only put money down on a portion of it.

Do you feel, Kathy, with your construction projects and all of that stuff that there’s a window of opportunity that might slip away from us? Do you feel like this is something that we can count on into 2021 and beyond? What do you feel about that?

There is a good reason why despite people being out of work, the housing market is taking off – lack of inventory. Share on X

It’s a short window. Prices are going up because material costs are going up. Labor costs and permit costs are going up. Lumber costs went up 60% or something like that and there’s such limited supply. Builders have been raising prices. It’s very all unexpected and you’ve got lower interest rates that allow more people to get into the game so to speak. The payments are lower. When you’ve got bidding wars, more people are being able to afford these homes. Bidding wars do one thing, they drive prices up. I do believe it’s a short-lived window. With that said, probably in 2021, there will be a great opportunity in pre-foreclosures or foreclosures.

Sadly, some people aren’t able to recover from this situation and aren’t able to keep their homes. There will be an uptick in foreclosure but I want to emphasize that it’s not going to be anything like 2009 in my opinion. If you’re waiting for the market to get flooded with foreclosures like they were and get this crazy, amazing deal, I don’t necessarily see that coming. There will be more opportunity than there is now but it’s the opportunity we need to have more inventory so that people can buy something that there’s something on the market. I don’t think we’re going to see prices go down. It’s shocking because if you talked to me months ago, I would have not been too sure about that.

I’m not sure what I said months ago but it’s a lot of, “I don’t know what’s happening.” When we thought, “This is unprecedented. Millions of people are losing their jobs every week. They may not get them back. They might, they might not but we don’t know how long this thing is going to last. We don’t know if we’re getting a vaccine. We don’t know if anyone wants the vaccine. What is happening?” You’re not allowed to work but you’re also not getting a stimulus check. It was confusing. Of course, add the eviction moratorium, foreclosure moratorium, and all of these laws that never existed before and change the rules of the game midway.

You’re like, “This is not what I bet on. It was very shocking. At the same time, we called all fifteen property managers from different cities that we work with. We got them on a Zoom call and said, “What are we going to do? People are losing their jobs. They’re receiving eviction moratorium so they might not pay.” All of the property managers came together and said, “Let’s help the tenants out. This is not their fault that they’re losing their job. They didn’t do anything wrong. They got fired. They got laid off by nothing that they did. Let’s help them.”

These property managers got together and helped their tenants find the stimulus packages they need, apply for the PPP loans. They give them a whole list of job applications, jobs that were available, and gave them payment plans. They reached out to help. The landlords and investors within our network were like, “We want to help the tenants.” We ended up having a higher collection rate during that time of uncertainty than ever. That was again, another shocking thing. During this time, this is not the same recession we’ve seen in past recessions.

It is weird. It’s nothing we’ve ever seen. We know the last recession was caused by housing and bad loans. That is not the case this time. The loans of the last ten years have been good loans, solid loans, good borrowers with high credit scores, job history, and down payments. They built equity because the values have gone up. There’s nothing the same about it. They’re locked into low payments. It’s a very different deal than before. We also came into this with a limited inventory already, then you have more people saying, “I’m not even going to walk outside my house and let alone let someone in it.” No one was moving and no one was selling.

Nobody wanted to get kicked out of their home. The home move to this new level of incredible importance where everything happens and it had to be a wonderful place. People were willing to do whatever it takes to make that payment, to pay their rent so they didn’t get kicked out or they weren’t in a situation where they’d have to pay it all in three months like, “I don’t have to pay it now but I’ve got to pay it all in three months.” That would be difficult. People have not wanted to move and they’re having their extra funds or the stimulus money they got to go to paying their rent.

That’s so good to hear. What I love is the encouragement by the property managers and also by your team to your members to support the renters so that everybody can experience success together so people don’t get kicked out and the landlord still gets eventually paid. It’s a team effort. It takes a village. All of us have to be on the same team for this collaboration to happen for everybody to succeed. I love that.

REW 33 | Real Turnkey Standards

Retire Rich with Rentals: How to Enjoy Ongoing Cash Flow From Real Estate…So You Don’t Have to Work Forever

There’s so much talk about landlords versus tenants and this war between the two. We’ve got to work as a team, as you said, and care about these tenants who are hopefully taking care of the properties, our assets. We even would send birthday cards and gifts to our tenants.

Kathy, I knew that you’ve created a special link with some special stuff for my ladies and that is RealWealth.com/blissful. There will be all sorts of education. Why don’t you tell our ladies what they will find there?

On there, we have a list of fifteen different cities. It changes but under the Invest tab, you have to join. It’s free to join. Once you do it, it unlocks all this data on the demographic shifts that we’re seeing where the job growth is, which markets are going to recover the quickest from COVID and this situation, where are the areas that are most landlord-friendly, where if someone doesn’t pay, you do have the right to evict them. All of that information is under the Invest tab with a list of the different cities and all the data there, plus a list of the referral groups, the turnkey companies on there who we’ve been working with for years in many cases and have this rave reviews from our members.

That’s such a nice thing to know, “I’m going to work with this team that has 25 people who rave about them or 100 people,” or whatever it is. We also have a ton of information there on asset protection, tax benefits of owning real estate, how to get started, and financing tips. It’s all free in webinar form under our Resources tab. Under that tab, you’ll also find the list of lenders to work with. You want to work with a lender that understands investment property so we have a list of those people.

Again, one application and they can use that to get you qualified for up to ten loans with sometimes a little bit more paperwork needed but they’re great efficient lenders. I also have my podcasts, The Real Wealth Show and Real Estate News for Investors. That is a quick one that gives updates on real estate news. The Real Wealth Show interviews people who can share their success stories. Finally, my book Retire Rich with Rentals is on Amazon. On that, there’s a clear checklist of what you need to do to get started to build your passive income rental portfolio.

You have so many great resources. Thank you so much for that.

Thank you for letting me share it.

Everyone, check it out at RealWealth.com/blissful. Use that link so you can get any of the special content that’s on the site. Ladies, I am so excited about what we’re going to be covering in the next portion of this show in EXTRA. Kathy has shared all this amazing information so far. Thank you for that, Kathy. She’s going to talk about how to get started and turnkey with her, the step-by-step on how to do it. I know many of you ladies have been wanting to get into real estate. You have done so much research, but you don’t know the steps to take to get started.

Kathy is going to be sharing that with us in EXTRA. If you are subscribed to EXTRA, we’ve got more. If you are not subscribed to EXTRA but would like to be, go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free. You can download a ton of content, see if it’s for you, and then you can stay subscribed or not. This EXTRA is going to be action-oriented. This might be the exact time to try EXTRA. Thank you so much for joining Kathy and I. I so appreciate you. I look forward to seeing you again next time. Until then, remember, goals without action are dreams, so get out there, take action, and create the life your heart deeply desires. I’ll see you soon.

 

Important Links

 

About Kathy Fettke

REW 33 | Real Turnkey StandardsKathy Fettke helps people build and secure wealth through cash flowing real estate. She is a real estate developer, fund manager, and educator.

She is a regular guest expert on FOX News, CNN, CNBC, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal, and was named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row.

Kathy believes we become more successful by learning from those who have done what we hope to achieve. As host of “The Real Wealth Show,” a featured podcast on iTunes she interviews successful real estate investors to share their secrets. She also hosts the Real Estate News podcast, and is author of the bestseller, “Retire Rich with Rentals.”

Real Wealth Network offers free resources and cutting edge education for beginning and experienced real estate investors. The organization also searches the country for high job growth markets. In those metros, they find highly rated property providers who offer “turn-key rental properties” to investors. Turnkey means that the homes are already renovated, with qualified tenants and experienced property management in place.

Real Wealth Network offers free education on tax savings, asset protection, self-directed IRA’s, 1031 exchanges, note investing, multifamily and commercial property, land development, syndications, crowdfunding and more.

Kathy and her husband Rich are active real estate investors in single family homes, apartments, commercial property, land development and homebuilding.

 

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Simple steps to get started investing with Amy Bersamin – Real Estate Women

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Today I’d like to welcome to the show our guest Amy Bersamin!

About Amy Bersamin

Amy is passionate about helping people purchase real estate using money they never knew was available to them.  She was in her early 20’s when she first bought a house.  It was not until after learning how to use OPM to purchase real estate that she was able to buy rental properties.  Her vision is that young adults get the financial education and coaching so that they can be well on the path to earning passive income shortly after entering the job market. 

As the Managing Partner at Sweep Strategies, a financial education and coaching company that has changed the lives of over 3000 individuals and families across the US, Amy knows that having your own coach to help you with implementation is the key.  Sweep Strategies specializes in 1:1 coaching tailored to your unique situation.  Amy herself has coached clients so that they were able to purchase rental properties within months of joining their program.

In This Episode We Talked About

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