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REW 88 Dina Buchanan | Climate Resilient Markets

Syndication Series #6: Investing In Climate-Resilient Markets With Dina Buchanan

REW 88 Dina Buchanan | Climate Resilient Markets

 

There are more reasons to invest in climate-resilient markets than just the climate piece. Here to tell you all about them is Dina Buchanan. Dina is the Director of Investor Relations and Business Development at PCRP Group. In this episode, she joins Moneeka Sawyer to share the value in investing in climate-resilient markets not only for the environment but also for your wallet. Dina highlights the strategies to incorporate energy efficiency in your multifamily investments to create value and do good for the community. Stay tuned!

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Syndication Series #6: Investing In Climate-Resilient Markets With Dina Buchanan

Real Estate Investing For Women

Welcome to the Syndication Series, where you’re going to learn all about what syndication is and how you can utilize it to build cashflow and grow your wealth. It’s an exciting strategy and I’m looking forward to sharing all of our guests with you. Let’s get to the show.

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I am so excited to welcome to the show Dina Buchanan. She is the Director of Investor Relations at PCRP Group, a firm that provides direct access to tax advantage and passive income commercial real estate opportunities. Dina has been investing in residential and commercial properties in the United States and internationally for years and has been responsible for overseeing approximately $200 million of assets under management. Dina, how are you? Welcome to the show.

It’s so great to be here. Thanks for having me.

I’m so looking forward to this conversation. It’s something we’ve never talked about on this show. I’m super excited. Dina, why don’t you give us first a high-level version of your story? How did you get into real estate?

I’m probably like a lot of other people out there. My husband and I wanted to start a family. We had these high-level corporate jobs. We went to school, got our education like we were told to do. We realized we didn’t own our time. We wanted to have more time. We love to travel. We want to start a family. We searched out opportunities for businesses and it all kept coming back to real estate. I don’t know why. Everything we looked at, from franchises to even in real estate, we were like, “This is what we’re resonating with.” We took a class and we got some education. Everyone should do it.

It’s a great idea. It’s like we went, “Poof.” Originally, we were thinking it’ll be me that stays home with the kids and my husband would keep his job but he ended up leaving his job first. I went on maternity leave with our first child and never went back. That was awesome. We did fourteen residential transactions in our first year. That was enough to replace his income.

We started to get involved with passive and did our first apartment community three years later. That’s when it started making like, “This is intoxicating. This is getting good with passive income.” That led to a series of other deals in syndication opportunities. I’m so excited to always talk about real estate and get everyone excited and knowledgeable about it because it’s changed our family’s financial DNA rather than having to go work for money, having money work for us.

Your first fourteen deals in the first year, what were they?

They were residential single-family homes. It was interesting, I thought that you had to start with residential. It’s what everybody did. We’re like, “We got to do it.” We did that first apartment building. I was like, “I wish we did fourteen of those in the first year.” Not that we were doing poorly, we did well. It was such a game-changer when you look at cashflow diversification over 27 units, which was our first one versus 27 single-family homes. When you look at the cash-on-cash return per door, it’s not that much of a difference. It’s a lot less to get in than 27 single-family homes if that makes sense.

Did you flip those homes? Did you buy and hold? What were you doing with those fourteen homes?

The power of syndication allows an investor to have their money duplicate itself faster and not have to do any of the work.

We did a strategy called flip, flip, hold. Our coach was very helpful in helping us reallocate those funds into passive income properties because he said it’s great to have all this capital at some point. He said something to me that was interesting. I didn’t get it then but I do now. You always want your money working and working harder for you.

Holding on to a whole bunch of capital, which probably would have been more of what we thought we were supposed to do back then would have been the thing. Having that opportunity to learn how we can take this money and buy three more properties, spread it out, leverage, use private money and use bank funding. Get a cashflow on these properties and then buy some more, flip those, move that money in and increase our passive income so that we could retire from a job.

You were actively involved in a couple of flips and then you would hold a couple of flips. Talk to me a little bit about climate-resilient markets, the thing that you talked about that nobody else has. Could you first describe what that is? Define it for us.

One of the things my business partner and I are very passionate about is reducing the carbon footprint in our world. People can agree or disagree that it’s necessary and it’s not what we’re here talking about. The big piece that is very interesting to everyone is how it impacts the bottom line for us as investors on all of our projects across the board. Regardless of where we are on the great debate of our generation, the numbers don’t lie when you do the math.

The opportunity in climate-resilient markets tends to be better because we don’t have issues with funding or refinancing. Insurance can play a part and things like that. If we’re going into a market and renovating that building and putting in some energy-efficient appliances or products and using those types of things, it can be great tax advantage for the project. A climate-resilient market would simply be one that doesn’t experience the extreme weather patterns that other markets may face, coastal markets, hurricanes, extreme heat, tornadoes or deep freezes.

They don’t experience those things?

Not to the same level. For example, I live in Florida. A lot of people associate Florida with hurricanes. It’s true. They happen. I live in Central Florida so there could be a hurricane East Coast or West Coast and maybe we’ll get rain and wind. I’m in the middle of Florida and Florida is not that wide so I could be at a beach on either side within an hour. Being 60 to 80 miles inland is a huge difference in what the damage will be or won’t be. It’s fascinating when you think about it. Same product, same state, it could be completely different.

What is the pricing like? You’re in Central Florida, I thought it would be a different product. It’s not a beach product. It’s a different product and location. It’s got to have different pricing, appreciation and demand. Does it have all of those things? What are you finding?

It’s interesting when we talk about Florida because it feels like the entire state is in demand. The beach, waterfront property, people love living on the beach. We had some Airbnb units on one of the beaches. They could be powerful generators of cash and good investments. However because I live in Central Florida, we live where there is a lot of international tourism. We’ve got Disney, Universal, Legoland and Sea World.

The short-term rental business in Central Florida has exploded because there is equally a demand because there are many people who want to come in. Hotels are booked up as well. It’s interesting people want to buy second homes here. A lot of them want to buy them and maybe live in them for four months out of the year and then rent the rest of the time. That used to be reserved for the beach properties but we’re seeing it inland too. It’s interesting.

REW 88 Dina Buchanan | Climate Resilient Markets

Climate Resilient Markets: A climate-resilient market would simply be one that doesn’t experience the extreme weather patterns that other markets may face.

 

You’re investing in Central Florida. Are there other areas that have similar types of demographics and demand?

Every market is different. The market is in demand. We’re doing multifamily properties. Those are always, in my opinion, and what I’ve experienced over the last couple of decades, always in demand. They keep getting more in demand as we see housing shrinking as far as availability. There is less. We will see that demand. We do have properties in San Antonio and Dallas. I’m talking apartment communities. We have seen a huge demand there.

Our occupancy in one of our properties in San Antonio, for example, hasn’t been below 97% in 1.5 years and it keeps getting higher. I see it in other markets as well. Whether you’ll see the same price point in other markets, that might be different as far as beachfront being inland. The dynamic with Florida’s a little different because of the tourism that we have in the center of the state. If you went to any of the beaches in Florida, you’d see the same.

In one of the questions you sent me, you said that climate-resilient markets tend to give you higher returns. Can you break that down for us a little bit?

Let’s break it down into pieces. Multifamily, we do multifamily mainly. Anytime we can have cash flowing door under the same roof, there is an opportunity there. Whether it’s a climate-resilient market or not, that’s number one. It’s the same principle as if we were going into a market that wasn’t climate-resilient and we’re going to go in and buy a Class B property. We’re going to buy that property below market value so it would be a property that was 10 to 20 years old that needed some upgrades. Where this gets powerful is the ability to do the upgrades because we already are going to pick a property that’s going to be in a high-demand market even though it’s an older property.

We’ve got the opportunity there like any other market to add value. Where the environmental and social governance piece comes in is we will put in our sponsors that we align with. If we do energy-efficient appliances, materials, paints and flooring that are more environmentally friendly, tenants love that because it reduces their overall monthly cost. Your demand and occupancy are going to be higher. We’re looking at the big picture and setting ourselves up for success that way.

How does it reduce their cost monthly? I’m a contractor. I run a construction company also. My experience is that if we do all the green types of things, it’s significantly more expensive to do the improvements that way.

The tax benefits for some operators that are doing that depending on how they set up can significantly offset the cost of those items. How it affects the tenants is their energy bills will be lower. The other thing to add to that is that you’re building your cost segregation where you can depreciate 39.5 years on a commercial and 27.5 years on a residential. If we’ve got a tenant that stays longer, overall, that’s going to reduce the expense for the owners of that building in that syndication as well.

In general, another area that makes sense is when we’re putting a multifamily building in an environment and we’ve got maybe some mass transportation, situations where it’s helpful for them, we can promote more green areas, we’re doing good for the community as well. It can help on a number of levels, not just dollars and cents wise. The bigger piece is getting these properties, especially how the investors will get out from a syndication standpoint. If we are in a climate-resilient market, we don’t risk having insurance issues and lenders don’t want to finance or refinance because there are some climate risks.

Ladies, we’re going to be talking about that deeper and EXTRA about some of the risks of being in a climate-resilient market avoids. Some of the big benefits of being in a climate-resistant area and also how to find those kinds of properties and those areas. That’s what we’re going to do our deep dive in EXTRA. Thank you for giving us a little bit of that and I’m excited to talk more about that. Could you talk to us more about ESG? What does that mean and how does it provide a benefit for investors?

People that are not factoring in climate risk into their evaluations could be setting themselves and their investors up in a syndication that could be very risky.

Environmental Social Governance is what ESG stands for. It’s something that we’re seeing larger companies pay attention to. People who are not factoring in climate risk into their evaluations could be setting themselves and their investors up in a very risky syndication. As things change and progress with the climate and it is happening, we have a huge problem with it. The worst the climate gets, the more risk effects of flooding. Anytime there is an insurance claim on a property due to weather, that’s going to affect that insurance business.

That’s a little bit more of our deeper dive but to give a bigger picture of why we’ve chosen this, we see larger companies paying attention to this and we know if they’re paying attention to it, there’s something there. There’s got to be a reason why they’re looking at underwriting and, “What’s going on?” The other reason is we as business owners and investors, not only does it help us do a better job for our investors but it’s also doing better for the environment and the planet.

Multifamily housing does reduce the carbon footprint. It’s socially responsible as well. Having a diverse team like our business is a woman-owned business. We’ve got a lot of diversity on our team as male to female. Having a diverse group that understands the dynamics of affordable housing and what we want to provide for the people that are going to be living there and how that’s all governed and plays out. Our motto is, doing good while doing well.

I love that because being socially conscious is such an important thing to my heart.

Mine too. That’s why we connect.

Dina, many people have come on my show and talked quickly about what an accredited investor is. Most of the time they don’t define what that is. I’m so delighted that you can finally define that for my ladies. I want to talk about that a little bit deeper. We’re talking about syndications. They have investments for accredited and non-accredited investors. The SEC has certain rules for the operator based on what investor they will take. The SEC understand that this is not the syndicators doing this.

The SEC decides if you’re going to take accredited or non-accredited investors, what you need to do and provide. For instance, if you’re saying that you’re an accredited investor, you need to show tax returns or assets. You need to be willing to show that information, not because the syndicator is being nosy. If they don’t have that paperwork, they can get shut down and sent to jail by the SEC. It’s a big deal.

We’ll take a letter from their CPA confirming it. There is also a tool that we have in our portal that does help them provide the proof of accreditation and we’ll look at that for them.

We invested in another syndication and they wanted us to use that portal. There was a cost involved. It’s a small little cost, ladies but my husband was like, “I don’t want to do that.” There are lots of different ways that we can do. You can provide this. This is one of those pieces that hits people. They get a little blindsided by, “Why am I having to send this information?” I’m so glad that we had this conversation. We had this series about syndication and I’ve gotten questions like, “The syndicators are asking for my personal information.”

The syndicators are not asking for their personal use. They’re asking for it because it’s required of them from the SEC. Don’t be offended because they don’t want to go to jail and help you make money. They would rather you going to end up with any legal problems. It’s a requirement by the SEC. I’m glad that we had that conversation. Let’s again define what accredited is.

REW 88 Dina Buchanan | Climate Resilient Markets

Climate Resilient Markets: Multifamily properties keep getting more and more in demand as we see housing shrinking as far as availability.

 

An accredited investor is someone who has $1 million of income-producing assets minus their personal residence and/or $200,000 a year income with two years tax returns as proof if they’re single and $300,000 if they’re married, again, tax returns that are proof or Series 7 license as well.

I didn’t know about that. That’s interesting. There has to be the expectation of continued income. It can’t be that I’ve got two last tax returns that show this income and I retired this year, which is great if you retired this year. It has to show the expectation of future income. Those are some of the things. Ladies, don’t get offended when someone starts asking you about your situation. They’re not being nosy.

It’s the way we can all do business and continue to do business for sure. One of the things that my husband and I discovered is we had money and we said, “What do we want to do with this money?” One of the things we’ve learned, and this is a cool way to look at it is the rule of 72. The rule of 72 is a barometer of what we use to figure out how long it will take that capital we have to double based on the current interest rate it’s making or the projected interest rate in the investment we’re looking at. A good way to look at this is if you take a traditional 401(k) and somebody had $100,000 in that 401(k) and it was earning 6% a year.

How long would it take for that $100,000 to double? We would divide 6% by 72 and that would be 12 years. Depending on the time in your life you’re looking at that. We’re talking about age. If I was sitting on the side of 35 or 40, all of a sudden it looks different than it did at 20. Retirement looks a lot different. If the money isn’t working fast enough, that means the person, individual, myself or any of you, we have to continue to work. We’re looking to get the money to duplicate itself quicker. The big reason for that is we want our buying power and the money is inflation. We could have a longer conversation with this but the rate of inflation and it keeps going up.

It’s not about prices necessarily going up. Even though it seems like it is, it’s the value of money going down. It’s losing buying power and it’s everybody’s money. There are smart people and very smart people who want to duplicate their money as fast as they can to keep their buying power in check so they can continue and live the lifestyle they want or better their lifestyle if they want. Whatever they want to do if they want to travel more. When we’re looking at an investment of syndication, for example, one of the opportunities that PCRP is considering has an internal rate of return projected of 18% or 20%.

If you divide that by six, now you’re looking at like 3.5 years for that money to double. Significantly different. That means the investor that invested in an opportunity like that can keep their buying power and increase it, which is the real goal to increase the buying power. They can either retire sooner or retire in a lifestyle by design, whatever they choose. This is the power of syndication because it allows investors to duplicate their money faster and not have to do any of the work.

When you invest in syndication, you get the cashflow, benefit of the appreciation and depreciation on your tax returns every year that you’re invested and you are doing no of the legwork. None of it. Someone else is doing all the legwork. You get your K-1. That’s what you get a year. You get to write all that stuff off. I’ve been an investor for a couple of years. At the end of the year, I’ve been making 10% interest on my money invested every year like clockwork. I get my K-1, we’ve got our depreciation. I pay no taxes on that 10%. We will pay at the end when you sell then you have all of that other stuff that has to be wrapped up.

When we’re doing the 10% each year or whatever that particular syndicator will give you sometimes it’s 7% or 10%. There’s different risks, ladies. I know I’m quoting 10%, they’re high-risk projects. If you want to go with safer projects, you’re going to be getting paid probably closer to 7% or 8% usually. I hope that I’m not making too many quotes for you. That’s the way that it works. A syndicator will give you a quote.

IRR is the Internal Rate of Return. What’s interesting about that is you don’t know what that is until the project closes.

Define that. What does that mean?

Multi-family housing reduces the carbon footprint, so it’s socially responsible as well.

Internal rate of return, that’s how the project is projected to perform. It’s a projection and it should be right in line with that. When you add in the tax, depreciation, cost segregation, all of those things that can get written in there, the Internal rate of return should be very close to, if not above, what’s projected for sponsors and syndicators that understand this process.

What I love about the projects that we look at is we have a line with sponsors that can produce that return. We have the climate-resilient piece, which is a little extra layer of protection. They’re not as necessarily high risk as maybe somebody else’s project could be if it’s not one of those markets. It offers a little bit extra security there too and a better rate so we love that.

I know that people have thrown away around that term IRR and it’s not something that we’re used to hearing. What it does is it takes the interest rate that you’re earning each year on your money. Sometimes they’ll refinance a project and then they’ll give you a portion of the cash out piece. That’s included in the IRR. When they sell the amount that you get paid, all of that is also so that’s your profit, that’s all added in. That’s what your IRR is. It’s all of those pieces together. The other thing that you mentioned that I want to highlight for ladies is on this show we talked a lot about retiring early and blissful. We want to help people to have a blissful retirement.

The journey to get there should also be blissful. I’m all about bliss, all through your entire life. For me, I’m on that edge where I’m looking at retiring. There is a lot of stuff going on in my mind that a lot of people don’t think about. Since you brought it up, I’d like to mention, we do have inflation. Whether it’s talked about or not, the prices of goods seem to keep going up. It’s not that prices are going up, although sometimes they are but the buying power is what’s going down. Our money does not have the same value than it had 20 or 10 years ago. I call this a grocery store inflation.

You go to the grocery store and see how much you could buy now with $20 as opposed to what you could buy 10 years with $20. I know this is a little off, ladies. I’m not accurate in all of the things that I’m saying. I’m giving you a high level of how to look at this. When you’re thinking about retirement, a lot of people say, “If I have $2 million and I’m getting 10% that will give me $200,000 a year, that’s what I’m living on right now. That will be able to maintain my lifestyle.” If you don’t continue to grow that $2 million, you’re not going to be able to keep up with inflation and the loss of value of the dollar.

When you’re calculating that retirement number, you need to calculate that you’re going to continue to save 10% a year. Ten percent goes to you. You always pay yourself first before you pay anybody else. Even when you’re calculating that number, let’s say now it’s $200,000 a day, make sure that you can calculate that you’re going to save at least, maybe even more, $20,000 a year and it’s going to go up. Would you say that’s true or would you give me even more numbers or would you say even more?

I would say more. It’s not about what you’re saving, it’s about what your money’s making. If you take that 10%, that could be good. The problem with saving it is we still have this depreciation going on of the dollar. We did a big number of stimulus package and that money is important to everybody to realize that it’s not money that was set aside for these things, it’s money that was printed. They continued printing where they’re at a place where they’re going to continue to print, that’s a whole other subject but the reality is they’re still printing.

The more they print, the same amount of money it would take to retire. If your retirement date was in ten years from now, I believe what you’re saying is, would this be enough? If it’s saved, my answer is no. The money is not going to go as far. However, if it’s invested and it starts to duplicate itself, it could be. It’s probably going to be individual, depending on what type of lifestyle that you’re planning for. Is it the same? Is it better? Does it not need to be as much as you’re making right now. Everything, cost-wise, it’s going to take more dollars to do the same things tomorrow as it does today.

Thank you for that clarity. I always say save because for me, it’s synonymous and I realize that it’s not for others. For me, save means invest. It’s synonymous for me. Ladies, when you hear me say that, save 10%. What I’m saying is invest 10%. I’m always like that. I understand that I misspeak because it’s not precise. You do want to be investing and continuing to have your money grow. There’s a couple of reasons why I love what Dina was saying. The first reason is the value of the money goes down. We have to have that increase to make up for inflation. The whole thing of inflation is a completely different story.

The other thing is, understand that you don’t have a lot of free time when you’re working. When you’re retired, you might want to travel more to see your grandkids and eat out more. You’re tired of cooking. You might want to get someone to clean the house. There are a lot of expenses that we don’t have as working people that we will possibly have when we’re retired. I’ve seen this with all three sets of our parents that they spend a lot more now that they’re retired than they did because travel is expensive. They’re still paying their mortgage and all these other things. Understand that that increase not only should account for inflation but you want to know that your lifestyle can go up.

REW 88 Dina Buchanan | Climate Resilient Markets

Climate Resilient Markets: There are smart people and there are very smart people. Very smart people want to duplicate their money as fast as they can to keep their buying power in check so they can continue to live the lifestyle they want or better their lifestyle.

 

You’ve worked all these years that you can live the lifestyle that you want in retirement and that you’re not restricted by, “I only calculated as much. It was not the right calculation.” As we talk about syndication as a possibility for helping you retire, keep it in mind that it is also after retirement as a strategy to continue to grow your income, portfolio and assets so that you don’t get stuck with this ceiling of what you can afford after you retire. I feel like syndication projects are a big part of my plan as I’m looking at retiring. I wanted to interject that.

Looking at 2020 with COVID, I’ve taught many real estate investing classes and one of the things I was talking to my class about once was everybody was in the same storm but not everybody was in the same vessel in that storm. If you think about it from that perspective, if your worst problem during that time when you were sequestered, which was our family, we’re bored, that’s a good problem. There are people that were not in that same boat. They were in a situation where they couldn’t leave to go make money. They didn’t have any passive income but ours looked a lot different from maybe somebody else’s because we did have passive income.

I’m certainly not saying that to impress anybody but to impress upon you with passive investing and syndications. Those types of opportunities that we can have allow us to have that freedom. Who could have predicted a pandemic? There are going to be things that happen in life that none of us can predict. 2008 wasn’t exactly predicted per se. During those times, not just retirement but important to say, even now, starting to build that passive income, think about how much less you have to trade time for money. It’s almost like an insurance policy of cashflow because it’s going to come in. You don’t have to do anything for it.

I always say, if cash is king, cashflow is queen and the queen is always right.

I used to say cash isn’t king, cashflow is king. That’s so funny but I like queen better.

I can’t believe that this conversation was so good. Ladies, the conversation is going to continue and we’re going to go into EXTRA and we’re going to be talking more about the questions to ask when you’re looking for a climate-resilient project? How to evaluate those projects? How to find those projects? What are the trends and how to find those trends? We’re going to be talking all about that in EXTRA. Before we move into our three rapid-fire questions, Dina, could you tell us how people can reach you? I know you’ve got some gifts for us.

For anyone who wants to learn more about syndication, passive investing, climate resilient markets, how we pick them and why we picked them, go to our website, PCRPGroup.com. Sign up and you can download our free eBook. We are going to have an educational webinar series that I’m going to be leading with my business partner.

We’re going to do shorter snippets of 20 to 30 minutes because we know everybody’s busy and we want to get the facts out. When you’re spending your valuable, precious time learning, you want it to be quick and to the point so that you can get the good information in and go apply it. That’s the goal. Anyone that’s on this episode, please go ahead and sign up. It’s complimentary for you and learn.

Where do they go for the website?

PCRPGroup.com. If you want to reach out to me, it’s [email protected]. You can email me and set up a time to schedule a phone call about your investment goals and passive investing. I’m happy to help out any way I can.

It’s not about what you’re saving, it’s about what your money’s making. The problem with just saving it is we still have this depreciation going on of the dollar.

Dina, are you ready for our three Rapid-fire questions?

I’m ready.

Give us one super tip on how to get started in real estate investing.

The first thing I would do is educate myself. It could be a book or a course. I’m a big fan of classes, seminars, 1, 2 hours, 3 days even. There is a lot of opportunity and knowledge that gets dropped in an environment of people of like-mind. I’m a big proponent of educating yourself. You got to know what you’re going to get into.

What is a strategy on being successful as a real estate investor?

It sounds so simple but it’s have a system. If you’re looking at properties, have a system or checklist. A checklist is a great, simple but very powerful tool to make sure you dot your Is and cross your Ts and have somebody that’s already doing the business maybe look at that checklist. Maybe they’ll add some items that you didn’t have on there. It’s not a how-to renovate a house or a building but it gives you key things that get forgotten or could be harmful in a deal but it also gives you key things to remember to do.

I believe that systems are the key to bliss, simply because they allow you to unload all those things in your brain. Honestly, I have invested in syndications but I might do one a year. Each year when I go back to evaluate syndication, there is a whole process. I don’t want to have to reinvent the wheel every single year. That’s stressful. There is a way that we deal with that. I take notes and then I can go back and look at my notes and read my notes, “Those are the things that I thought about. This is what was important. This is what I’ve learned I add to my notes.”

Each year, it’s a little bit easier. Doctor Sam talked to us about a tool on how to evaluate syndication projects. We could add that in there. We get new tools. We learn more stuff. We find out what’s more important to us, what worked and didn’t work. Creating those systems helps us to feel less stressed and more capable.

SYSTEMS. Save Your Self Time Energy Money Stress.

I’m going to use that one, Dina. Thank you. Tell us one daily practice that you do that contributes to your success.

It’s going to take more dollars to do the same things tomorrow as it does today.

Every morning when I wake up, I’m a big proponent of gratitude. I have a quick moment of gratitude for everything that I have and I’m about to create. In my day, after I have that little meditation moment or a mindful moment, I pick out one thing that I want to focus on for that day and feel what it feels like when I’ve accomplished it. I take that energy and use it and ride that momentum so that at any point in the day if things happen, I got to pick up the kids, this practice was canceled.

This throws off this timing, go back to that mindfulness and click into that feeling because we all have these things no matter who we are. This is life. Anything that can take away from our bliss, we want to remove that because it takes us off track. It takes us down a tangent that we don’t want to be on. I’m very focused on mindfulness every day about what we want to accomplish and what it feels like. I can tap into that feeling and shift it and go about my day. That’s something I do every day.

This show has been amazing. We’ve talked about so much good stuff. Thank you, Dina. Ladies, thank you for joining Dina and I for this portion of the show.

It’s my honor to be with all of you.

We have more, ladies. We’re going to be talking about finding and evaluating climate-resilient properties and one of the big benefits of that. We’re going to do a deeper dive on that. If you’re in EXTRA, if you’re subscribed already, please stay tuned. It’s coming next. If you’re not subscribed but would like to be, go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free so check it out.

If you’re leaving Dina and me now, thank you so much for joining us for this great conversation. I loved having you here with us and I look forward to seeing you next time. We will see you then. Until then, remember, goals without action are just dreams. Get out there. Take action and create the life your heart deeply desires.

 

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About Dina Buchanan

PCRP Group Director of Investor Relations and Business Development

 

 

 

 

 

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Investing In Self-Storage To Generate Passive Income With Stacy Rowles-Rossetti – Real Estate For Women

 

Nothing smells of passive income better than investing in self-storage units. This isn’t your everyday job where you’ll wake up at 6:00 in the morning and manage your facilities. This can be done remotely, anywhere in the world. Get into self-storage with your host, Moneeka Sawyer and her guest Stacy Rowles-Rossetti. Stacy is the founder of StorageNerds and REI USA. She teaches people to invest in self-storage so that they can earn passive income. Her mission is affordable financial literacy. Join in the conversation so that you can start investing in self-storage. Do you want more time for yourself or your family? Listen in and learn how to change your lifestyle with self-storage.

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Watch the episode here

Listen to the podcast here

Investing In Self-Storage To Generate Passive Income With Stacy Rowles-Rossetti – Real Estate For Women

Real Estate Investing For Women

I am so excited to welcome to the show, Stacy Rossetti. She invested in self-storage, teaches people to invest in self-storage and owns StorageNerds and REI USA. Her mission is affordable financial literacy. Stacy, welcome to the show.

Thank you so much for letting me come on. I’m honored.

We’re so excited to have you. We’ve had nobody come on and talk about self-storage so far. I know that this is a hot topic and my ladies are going to love this. Thank you so much.

Anybody that wants to hear about self-storage is a friend of mine. That’s why I call myself a storage nerd.

Stacy, tell us your story. How did you get into self-storage and why?

I’ve been investing in real estate since 2010. When I first got started investing in real estate, I was wholesaling and rehabbing, if anybody knows what that is. What happened is in 2015, I got pregnant. What had happened for the first five years, all I wanted to do was rehabs. I was one of those crazy people that did like fifteen rehabs at a time. I was really crazy. I was like running around like a crazy person, stressed out. I got pregnant and then, of course, as a woman and as a mother-to-be, I started thinking to myself, “How am I going to take care of fifteen rehabs at the same time, take care of this little tiny baby? There’s no way at all.”

I was already working 100 hours a week. I basically told my husband I was like, “That’s it. We’re done with rehabbing.” He was like, “Okay. What are we doing?” I said, “I don’t know. We’re doing something that has to do with passive income.” I wanted to focus on passive income and up to that very point, I had not focused on passive income at all.

Essentially, I was always about like, “Let’s just get this rehab done and get to the next rehab.” When I got pregnant, I talked to my realtor and I have a realtor that I’ve had for years, the same one. I was like, “Can you get out there and start looking for passive income for me?” He was like, “What do you want to look for?” I was like, “I don’t know, whatever.”

Self-storage is a lifestyle investment. Click To Tweet

We looked at portfolios of houses. I was like, “Maybe we could roll this money over into a portfolio of 10 or 20 houses.” We looked at multifamily. This is back in the day. Remember when nobody multifamily wanted to buy multifamily? Everybody was focusing on rehabbing and that’s it. All the multifamily deals that I looked at, they needed huge rehabs. At that point, I was like, “I’m done with rehabbing. I can’t do it, because there’s no way because I have to take care of this baby.”

What happened is my realtor was like, “What about storage?” I said, “What about storage?” He said, “There’s a facility at 15, 20 minutes from your house. Would you be interested in that?” I was like, “Yeah, possibly.” As I drove up to this facility, I already knew I was going to buy it. The reason why is when I drove up to this facility on the left side, it’s like an industrial area.

It was very run down. For me, anything run down doesn’t scare me because I’m a rehabber. I drove up to this facility and on the left side near where the keypad was to get into the gate, there was a huge pile of tires that had been sitting there for years and years. I had already known. I was like, “This is going to be a good one.”

Anything that’s ugly and scary looks like money to me. That’s what happened. I called my realtor and I was like, “Let’s meet the owner. I want to figure out what’s going on with this thing.” It had been sitting on the market for five years and nobody wanted to buy it. We can get into why, if you want to do that.

I knew when I drove up to that thing that it was just so dumpy and ugly looking, but I could tell that it was going to be a good deal if I could get that at the right price. I instantly fell in love with storage and been focused on storage ever since. That’s basically my story is that I got pregnant and then all I cared about was figuring out how to make passive income so I could stay home with my daughter. That was it.

I got two questions for you. First of all, why was it sitting on there for five years?

This is back in the day when property used to sit on the market for five years and nobody would buy it. 2015 was still coming in the upswing. You would have a property that was sitting on there forever. One of the main reasons why, so the name of the storage facility was Big John’s Storage. I told my realtor, I was like, “I want to meet Big John.” He was like, “All right, let’s go meet Big John.” I went over there. I already knew it was going to be a good deal, so guess what I did? I invited my lender. I invited my husband and then my realtor and then me. We all went over and met Big John. John was his name.

John was a little tiny old man, like 88 years old. I was like, “Why are you called Big John?” He’s like, “Back in the day, I used to be called Big John.” He was ready to retire. His wife wanted to move to Florida and been complaining about it for years, but nobody would buy this facility. He had to sell it first so that he could take that money and go to Florida.

We started walking around the facility and as we were walking around, essentially the way this facility looks, it’s a long skinny facility made out of metal, like a metal storage facility. It had 64 10×10 units. It was on three acres of land. It was a huge piece of property. What he did is parking around it. Remember that there wasn’t an industrial area. He was parking like big rigs and like tow trucks and stuff like this, but he had no rhyme or reason to how he was parking. He was just like, “Go find a parking spot, wherever you can find one.” Parking was all over the place. The place was super dumpy. The tires that you saw in the front of the building also were everywhere else.

REW 70 | Self-Storage Investing

Self-Storage Investing: Once you figure out how to automate and systematize your property, it truly becomes passive income. Then you will be able to manage it from anywhere in the world.

 

In fact, in the end, there were thousands of tires that we found once we bought the place. We walked to around and what my husband and I did is we tried to figure out how much money we could make on that thing. What we did is we talked to John and he gave us the story that he built it in 1980. For the first twenty years, it was awesome, and then the last ten years or so, he didn’t want anything to do with it. He ran it into the ground. This is very typical. This is what we call a mismanaged facility, so it’s very typical, and I only buy mismanaged facilities. The reason why is because I’m a rehabber at heart and I want to buy ugly properties and fix them up.

We walked around and we both counted. We figured out that we could probably have about 60 parking spaces in that area, and then we would have the 64 10×10 units. We asked John, I said, “How much money are you making?” He said, “I’m probably making around maybe $2,200, $2,300 a month.” If you calculate up 64, 10×10 units at like, let’s say $70 a month, and then another 60 units of parking at $70 a month, you come up to almost $8,000, $9,000, $10,000 a month. He was only making $2,000, $2,300 or whatever he said. Anytime they ever tell you a number, it’s always the wrong number.

I was like, “John, why are you only making $2,000 a month when you could be making like $10,000 a month?” He’s like, “I’m just tired of this thing.” He’s like, “It’s paid off. I’m making $2,000, whatever.” We basically got into, I said, “I want to buy this place.” I said, “I’m not buying it for $500,000.” He had it listed for $500,000.

If it was full 100%. It could have been worth $500,000 plus if he was actually having customers paying and stuff because the thing with commercial real estate, it’s all income-based. Essentially, if you say, “It makes $5,000 a month,” it’s valued at this much money. He was making $2,000, so he was making like $2,400 or whatever. He made $25,000 a year. It’s only valued at like $200,000, $250,000. That’s it.

That’s when I told him, I was like, “Nobody’s going to buy thing, John, because first of all, it’s a dump. Second of all, you’re not making enough money to value it at $500,000. It’s valued at $200,000,” so my offer is $200,000. He was like, “No. I’m never going to sell it at $200,000.” I said, “Okay. Just think about it. Actually, my lender is right here. He’s going to lend the money to me.” I said, “Rick, is it okay? Do you want to buy this?” He said, “Yeah, let’s buy this.” I said, “I offer $200,000.” He was like, “No. I’m not doing it.” “That’s okay. Just think about it. Let me know.” The next day he called back and he said he would do $250,000.

We picked that thing up for $250,000 and it took us a good couple of years to figure out what we’re doing with that. It was our very first facility, but we fell in love with storage. It’s really given us the life that we want now. We’re buying our 10th facility right now. That thing is making almost $100,000 a year. We got an offer of $950,000 on that facility.

How long have you owned it?

Five years in July 2021. Isn’t that crazy? That’s why I love mismanaged facilities and it took us a good year and a half to figure out what we are doing to get into how to automate and systematize everything. We bought four this year already, and we’re on track to buy ten for the year. Once you figure it out automated and systematize it, it’s like doing wholesale deals or rehab deals. You get into making it truly passive income. When you can make it truly passive income, then you should be able to manage it from anywhere in the world and that’s what we are focused on now.

Anything that looks ugly and scary can be made into money. Click To Tweet

How much time do you spend to manage those properties?

We’re buying our 10th one now. We’re completely vertically integrated. We have 1,000 doors, essentially. We have my husband who manages the facilities and then we have our office manager, who’s the operations manager and does all the phone calls and things like this. We have like a boots-on-the-ground person to go around and overlock people and clean up the trash and all that stuff.

That’s it. There are three people to manage all that, and the two of them, the office manager and the boots on the ground person, can really do most of the work. Eighty percent of the work is done by both of them. My husband does the high-level stuff. He does the QuickBooks and the numbers and that stuff is what he does.

That’s the one thing I love about self-storage as well too. Everything that you hear about self-storage, it doesn’t take a lot of time. It doesn’t take a lot of effort. It really truly is like that, unless you become a mismanaged facility. All of the facilities that I’ve bought, essentially, the owners get up every day and go to their office and sit in their office and run their facilities.

For me, that’s a waste of time and money. I was like, “Why not automate that?” We’re completely electronic, completely virtual. Essentially, they just go online, book themselves, get their code, go in and do their thing. In fact, we haven’t even met any tenants in years. The first one that we bought, the very first one from Big John, that one, we were out trying to figure out what to do and meeting tenants and try to figure out how to automate and systematize everything.

By the second one, we were like, “We’re not going out to meet anybody. We’ve got to figure out how to make this electronic.” When COVID happened, we were already virtual electronic contact list. We didn’t have any issues at all. All the ones that get up every day and go and have the tenant sign a contract and stuff like this, those are the ones that were hurting. We didn’t have any issues at all.

Do you have any issues with people stopping paying and abandoning their unit or any of that stuff and what do you do?

The way it works is like, just think of the 80/20 rule. Eighty percent are going to pay on time, 20% are not going to pay on time. You put in rules. If you don’t pay by this day, you get a charge. If you don’t pay by this day, you get overlock. If you don’t pay by this day, you go to the auction process. You implement all these rules.

Most of the time, by the time the auction process comes up, we have very few. In fact, we haven’t even had any auctions because everybody’s paying, but there are those people that they get to the auction and then you’re like, “Come on, you better pay now. Otherwise, we’re going to do it.” There is that, and our office manager handles all of that.

How did you find your office manager and your boots on the ground person?

Just on Craigslist.

All of your units are in one location. You’ve got one boots on the ground person that manages all your units.

We’re only in Georgia, but we’re all over. We’re Southern Georgia. We’re all over Southern Georgia, but maybe within 30 minutes to 1 hour from each other, so he rides around and manages all of that is what he does.

Define mismanaged facility. Why don’t you define that and the definition between the two, mismanaged and income-producing?

Those are the two most popular types of facilities. Mismanaged is exactly what I said. They’re like 50% full or less. The owners are maybe only taking cash. They don’t have their books. Big John, when I asked him for his books, he opened up his drawer and pulled out his ledger. I have a student right now that’s buying a facility that has almost 300 units in it. Just imagine this, that’s 300 units and the owner does not own a computer.

REW 70 | Self-Storage Investing

Self-Storage Investing: Self-storage doesn’t take a lot of time. It doesn’t take a lot of effort either unless it becomes a mismanaged facility. Those are 50% full or less.

 

You find this all the time. Those are considered mismanaged facilities. The thing with mismanaged facilities is that you cannot go to a bank and get a loan for that. In the commercial real estate world, you have to prove income. If you can’t prove income, then the bank’s not going to give you a loan. That’s why you have income-producing properties. Those are really easy to fund and banks love storage facilities because you have very few defaults ever.

An income-producing property, then you could go to a bank and get a loan and you put 20% down and you can just go buy a property. Whereas a mismanaged property, they don’t have proof of income. They don’t have a P&L. They don’t have balance sheets, tax returns, rent rolls or anything like this. You have to find money from some place. Either you have to pay cash for it. You have to partner with somebody, you have to get a private lender to lend you the money, or you can get them to owner finance it to you.

Mismanaged facilities are a little bit harder to fund than income-producing properties. The question that you should be asking yourself is, if you want to get them to self-storage, it’s like, “Where can I come up with the money? Can I come up with a couple of $100,000 or not?” If I can’t come up with myself, if I have to borrow the money to get it, then I should be focusing on income-producing properties.

If somebody, or if I have a couple of $100,000, you could go and find a mismanaged property. What I love about mismanage is that you can double or triple that value within the first two years that you own that thing. That property that we have that we’re selling it now, we got an offer for $950,000. We’ve been full in the first 18 months to 2 years. It only takes a little while to get those up and running.

You did say that with Big John, your lender said that he would lend against it, but basically, he chose the value based on what the income was. Is that true?

Yes.

If you pay cash for it, can you refinance it once you’ve gotten it up to snuff?

Absolutely. That’s exactly what you want to do. Once you get it to where it’s 100% or 90% plus full, then you could just go refinance it out and just get a bank loan on it.

For the bank loans, these are commercial loans, so they’re based completely on the value of the property. They don’t worry too much about personal income. All of your personal information that you would normally give for a single-family home. They do pull credit. Is that true?

They do look at credit, but it’s asset-based lending. That’s why I love commercial real estate. It’s really asset-based lending. That’s what you tell your sellers when you talk to them, it’s like, “You think it’s worth $500,000,” but the truth is, is that there’s no bank that’s going to fund this for $500,000, if you can only prove that you’ve made $2,000.

That’s how you get the sellers to say, “You’re right. I need to either prove that it’s worth $500,000 or I’m going to have to drop the price.” A lot of sellers don’t understand that concept because it’s like on the residential side. They’re like, “It’s worth $350,000,” but it’s really only worth $250,000. You have to be able to prove it and that’s what I love about commercial lending.

Through COVID, we’ve seen that there’s a big outflux from the cities. More people are moving a little bit more to the burbs. Not a little bit more, but quite a lot. I’ve always thought of self-storage as being really good in the city space where there’s not a lot of space. People are in condos or apartments, and so they need this self-storage because they don’t have a garage or they don’t have their own little storage in their backyard. Now, as people are moving out more into the burbs or have done that, have you noticed any changes in how your self-storage units are doing?

Every storage facility that we own is either in a secondary or tertiary market. There are three different markets, primary, secondary and tertiary. Primary would be in the city. Those cap rates of those facilities are super low, and then you have tertiary markets where it’s a mid-range cap rate. Those are burbs. Then you have tertiary, which is like country.

Storage is based off of migratory patterns and everybody is moving out. Especially huge, big storage facilities, companies like U-Haul and Public Storage, they’re looking at the migration of people and trying to figure out where are the trends. Where is everybody moving to? What cities are they moving to? What plays a key role in learning to invest in self-storage is number one, the population of cities.

Is it declining or is it growing? Is there a growth market or declining? You want to pay attention to that. If it’s declining, then it may not be a good area. Also, what you want to look at is you want to look at total square footage of a radius of maybe 3 to 5 miles, depending on if it’s a primary, secondary or tertiary market.

In life, everything follows the 80-20 rule. Click To Tweet

If you wanted to go and buy a facility in a tertiary market, out in a city that has 15,000 people or 10,000 people, essentially, what you would do is like, “Within this five-mile radius, how many storage facilities are there?” You would take the total square footage of that and you would divide it by the population of that area as well too, and your number should be between 6 and 8 or something like this.

If the number is 6 and 8, then it’s a thumbs up, but if it’s on the outskirts of that, and it’s probably not a good deal. When you’re looking at investing in self-storage, you want to look at the population of a town, population of the area, total storage square footage, competitors, and look at the market and see if it’s a good deal or not.

We pretty much own most of our facilities in tertiary markets. Some of them are in secondary but most are tertiary. We’re 100% full in every single one. We bought one in January that was a mismanaged property in a small town in Georgia. It was like 50,000. It’s not super big, like 50,000 people. That one, he said it was full, but it was really just full of people’s crap and nobody was paying.

That one, we’re still trying to lease-up, but other than that, all the other ones that we have, they’re all 100% full. I have one that’s in a town of 300 people. It has 60 units and it’s 100% full. The need for storage is so great right now that even if you wanted to build, which is another way to get into self-storage investing, I highly recommend it. The material prices are a little bit higher, but that’s not going to last forever. We’re thinking about building as well too. We’re definitely going to be building.

Obviously, it’s within your space. Can people do this virtually?

What I tell all my students is, “If you are going to get into self-storage investing, you need to be making this truly passive income.” There’s no reason for you to be getting up every day and going and managing your facility. That would be considered a job, not an investment, so you want to make it passive income and you want to build passive wealth, and self-storage investing is exactly the way you can do that.

We travel 6 to 8 months out of the year and we’ll be traveling the entire year. We just bought an RV and we’re going to be traveling. We’re gearing up to be able to do that and try to figure out how we can do that. I want to prove to my students that you should be able to manage your facilities from anywhere in the world.

During COVID, when everybody was freaking out and staying home and hiding, essentially, what we did is just hit the road. We went to almost every state. We visited every state. We did sixteen national parks in sixteen weeks. We went to Florida and hung out there for a month. We went up to Maine and hung out there for two months.

You can manage and all of our facilities are in Georgia. We weren’t even in Georgia for eight months out of the year. We weren’t even there. I tell my students, too, it’s like, “It’s probably better for you to buy something that’s further away because then what it does is it makes you automate and systematize that business.” Whereas if we have one facility that’s probably twenty minutes from our house, my husband’s like getting up every day and just going out there and hanging out and doing whatever. All the other ones that we have are way in South Georgia, 4 to 6 hours away. He can’t do anything with those, so he has to let our boots on the ground person manage those. He has to let the operations manager manage those. Whereas the one that we have right around the corner, he always getting up and going over there because it’s just a habit.

Buy stuff that’s a long way away and learn how to automate and systematize it because that truly is passive income when you can do that. I think the best-kept secret in the real estate investing world is self-storage. I honestly really don’t understand why more people don’t invest in self-storage. It’s a lifestyle investment. You can truly make your life the way that you want to with self-storage investing.

I invested in a syndication for a self-storage where they were building a 500-unit facility in Pennsylvania. I invested but I haven’t done it myself. I wanted to get into it. I’ve also done a syndication into a mobile home park. I’m investing into some of these things I’m hearing so much about, but I just don’t know enough about them to look at it as a possible primary investment where I focus my time on it. Ladies, in EXTRA, we’re going to be talking about how to buy your first storage facility in the next 90 days. If you want to do that, at least get more information.

Definitely, we’re going to be talking about that in EXTRA. The other thing is I wanted to say that Stacy, I don’t normally do this, but I’m so delighted by Stacy’s knowledge that we’re talking about this topic, which many of you ladies have asked about. Also, I’m a little bit surprised. Stacy has a self-storage course.

When I’m out there looking at coursework for real estate, it’s huge. $997 is nothing in my book and it sounds like you can do this truly passive. This isn’t something I’ve tried, but you can do this truly passive lifestyle. I feel good about saying you really take a deep look at that because I’m watching Stacy. She’s walking the talk. In other words, when we first got online and we were in the green room and we were talking, she’s like, “I’m on the road,” but she’s got this great backdrop. She’s got this big great backdrop. She’s got this lighting. She’s got her mic, she’s got this whole set up.

Most people who are traveling when they come on the show, they’re crackly. Their backdrop looks terrible, but she’s got the whole setup. This means she’s actually on the road and she’s setting herself up to travel for a year, running this business. If that’s true, then it is really passive income and she’s proving it. To me, that says quite a lot on so many levels. I’d encourage you to connect with her. Her course is $997, but she does also have some freebies for us. Why don’t you talk to us a little bit about that?

REW 70 | Self-Storage Investing

Self-Storage Investing: When you’re looking at investing in self-storage, you want to look at the population of the town. You need to look at every detail to really understand the market and see if it’s a good deal or not.

 

If you’re interested, we’ll give you a link to go and get what’s called Stacy’s Six Step System to Storage. It’s a template. It’s like an eBook. It will take you step by step on the way that I teach, and which is I teach in departments. If you think of your self-storage investing world, and it’s like you have six different departments.

That is your office admin, setting up your office. Doing your marketing, getting your acquisition stuff done, getting the financing, managing the facilities and then possibly liquidating them. I go through each of those departments in the Six-Step System. It’ll take you step by step and it’s a process. You can get that for free with the link that we give you.

We’re still figuring out that. If you don’t know where to go, go to BlissfulInvestor.com/stacy. The reason it’s really important is I know a lot of you connect with my guests and then you just go directly through their link, which is fine. What happens is then I don’t know that you were interested in that topic or that person.

If you use the links that I post, then I know you’re interested in this topic, you want to hear more. You’re interested in that person, so maybe I bring her on more or we do some partnership, which then gets you better deals, but it’s great for tracking to figure out what you ladies want. You know I’m all about serving you.

I’ve talked to so many of you like, “I signed up with that person,” and I was like, “Did you use my link?” They’re like, “I’m so sorry.” It’s about taking care of you ladies. Whenever you go to any of my guests, go take a look at the blog post on BlissfulInvestor.com. If you sign up for their program or you get a free gift, use the link that I put in there so that we’ve got some tracking. It’s not like I’m going to come back to you with any, I know some people are like, “I don’t want to be tracked.”

This is simply marketing numbers so that I understand what it is you’re wanting from me. I’m not just covering topics that you’re not interested in. Sorry for that big thing, but I’ve been hearing a lot of ladies lately where they’re like, “I didn’t use your link,” but then I just don’t know what you’re wanting. Please go to BlissfulInvestor.com/Stacy. Look up Stacy’s blog with the title where we’re talking about self-storage and use that link so we can track it. Did you have anything else you wanted to add, Stacy, before we move into our three rapid-fire questions?

I know we covered it all, but you did talk a little bit about lending and I wanted to just reiterate that as well too. You really want to get into self-storage. The truth of the matter is, is that if you’re super busy and you got other things that you’re working on, there’s nothing wrong with lending out just like you did.

The truth of the matter is, is you’re making money and you’re not doing anything right now just by lending that out. I always tell my students like, “Even if you can’t get in there, you don’t think that you can own a facility and manage it, because it’s just too much time of work.” Land. Get into a syndication or get into a fund or find somebody and partner, and you’d be the lender, and then that way you can still do it as well too.

It is a good way to test the waters and different asset classes to see what it is that you like, how does it work out? Someone else has the knowledge and is taking all the risks. Thank you for that. I have three rapid-fire questions for you. Are you ready?

I’m ready.

Stacy, give us one super tip on getting started investing in real estate.

Getting started in investing in real estate, I would say honestly, is like, “Just don’t be afraid to just take action and focus on marketing.” People do not market enough, especially in real estate, to find deals. If you’re not finding any deals, guess what? It’s because you’re not marketing enough. Take action by marketing and having a whole bunch of strategies for marketing.

What is one strategy for being successful as a real estate investor?

It’s the same thing. Take action. A lot of people don’t. You have to keep moving forward because guess what? In the real estate investing world, everything is 11th hour. It’s so annoying. I wish I had a deal that closed and it was just like easy peasy, lemon squeezy, but it’s not. We’re closing on a storage facility now that we are supposed to close. There are title issues and it’s so frustrating. You’ve got to keep moving forward because it’s just how it is in this industry.

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

I’m a walker, so I’m exercising. My personal success is that I’m a busy person. I need a lot of energy because of all the stuff I do. I do the 12-3-30. It’s like when you get on a treadmill. It’s a twelve incline of twelve and like a pace of three miles per hour for 30 minutes. I do that 5 or 6 days a week, at least, and it gets me pumped up. I feel so much better mentally after I do my walk. Sometimes when I’m having a hard day, I’ll take a walk and it’s only 30 minutes of walking. I’m sweating to death. If anybody’s interested, check out the 12-3-30. It’s a great exercise.

This has been amazing, Stacy. You have me so intrigued. Thank you for everything you shared on this portion of the show.

I appreciate it. Thank you so much for me to hang out with you.

We had fun and I am so excited about the EXTRA, where we’re going to talk about how to get your first facility in 90 days. Ladies, if you are subscribed to EXTRA, please stay tuned. If you’re not, this may be the time to get subscribed. Go to RealEstateInvestingForWomenExtra.com, and you get the first seven days for free. You can get this one for free.

Take a look at the membership, and if you love it, that’s great, and if you don’t, you’ve just got some great content. Go to RealEstateInvestingForWomenExtra.com. For those of you that are leaving Stacy and I now, thank you so much for joining us for this portion of the show. I look forward to seeing you next time, and 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 next time.

 

Important Links

 

About Stacy Rowles-Rossetti

As a real estate investing expert and coach, I have built my name on the results I have created – for myself and for my students.

Investing in real estate has changed my life, opening doors for me and my family and affording me an outlet for all my creative and entrepreneurial energy. Through scaling up a renovation company in Atlanta with hundreds of transactions to learning to invest passively through creative financing deals and storage facilities, I have not only overcome many trials and tribulations, but systematized and organized my days so that I can run several successful businesses.

Day after day, I work hard at what I do, striving to stay ahead of the curve by building on my knowledge and making shrewd decisions. This did not happen overnight, of course. My early days in real estate were slow, exhausting and hard, but little by little, I earned a sense of what worked and what I needed to do to achieve consistent results. Because I taught myself all this learning through experience and mentors, the process was gradual and required the utmost diligence on my part.

Today, I own and operate REI USA and StorageNerds. REI USA is an online education and networking platform that is exactly the tool that I would have wanted when I was getting my start, something that aspiring and established investors can turn to, a means to cutting your learning curve dramatically.

 

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Creating Passive Income Through Turnkey Real Estate With Leah Collich 

Passive Income Through Turnkey  

 

Real estate has been proven to be one of the best long-term investments and best ways to increase passive income to live your dream life. Moneeka Sawyer interviews real estate investor and investment counselor Leah Collich to ask about her journey of becoming a real estate investor and eventually being Real Wealth Network‘s investment counselor. She explains how turnkey property investment works and how she and her husband ended up doing it. So if you want to venture into this type of real estate investing, listen to the conversation and be more familiar with it.

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Listen to the podcast here

 

Creating Passive Income Through Turnkey Real Estate With Leah Collich

Real Estate Investing For Women

I am excited to welcome to the show Leah Collich. She is a native Texan and is a spouse of an active-duty Army officer. The army has afforded them the opportunity to see the world and live in Asia, Europe, South America and all across the United States. Their life abroad led them to realize a passion for travel and adventure. They quickly discovered that real estate investing was one of the best ways to boost their passive income so they could continue this lifestyle after the military. Her professional background is in communications and after working as a government consultant for many years, she now works full-time in real estate, passively managing her portfolio of rentals and as an Investment Counselor for Real Wealth Network with Kathy Fettke. Every week, she speaks with dozens of investors about how they can make their real estate investment goals a reality through the purchase of turnkey investments. Leah, welcome to the show.

Moneeka, thanks so much for having me. I’m excited to be here.

I’m excited too. We’ve loved hearing from Kathy in the past. I wanted to introduce my ladies to the team. Ladies, Leah is one of the counselors for Real Wealth Network, which many of you have already checked out. Some of you have already talked to Leah and because of the synergy with the two companies, Leah’s now our designated blissful coach. I wanted to introduce you ladies to her and we’ll talk a little bit more about that later but in the meantime, Leah, could you tell us about your real estate story?

I’m pleased with this collaboration and being able to connect with you and your readers. I think a lot of understanding my background and where I come from feeds into the mission of real wealth. I’d love to share that with you. I’m a regular person. I know filling in some of the information and preparation for this show, we call it expert session. I found myself going, “I get that a lot even on calls. When I talk to investors, people assume that I’m some expert or that I know everything there is to know about real estate.” I always tell them, “I’m a regular person. The only difference between me and you is time and action at this point.” My story starts off as a lot of beginner investors.

I happened into real estate on accident. In 2010 during the middle of the last housing recession, I had just gotten married. My husband was starting his career in the military. We were stationed in a small tiny town in Southern Alabama. We were smart enough to do some basic math when we were house hunting. We found this brand new construction townhome and we looked at the numbers and said, “We can rent this townhome for $950 a month or we can buy it for $750 a month.” My dad had had a rental property growing up. There was nobody in my corner telling me like, “Don’t do that. Bad idea.” The math made sense. We bought this brand new construction townhome knowing we would be there short-term, knowing that we would keep it after we left, turned it into a rental and it would make us some money.

That’s what we did. This was in 2010 when there was a home buyer credit. You got a check, we got a $15,000 or $10,000 home buyers credit to buy this cashflowing investment. Fast forward, maybe seven years or so, we were subscribing to the traditional way of preparing for retirement. We were doing everything right. We were saving, not maxing out credit cards, opening up 401(k) accounts, IRAs and maxing them out every year, trying to be as diligent as possible to be sure that we were prepared for retirement. It was when my husband got close to his halfway point in his military career that we were like, “In another 10 to 12 years, we could maybe retire, you’d get a pension.” We looked at these retirement accounts and we went, “We can’t touch that money until we’re 59.5. That doesn’t help us retire early.”

We started looking for opportunities in our life of, “Where can we create income that we can live on?” That rental had been cashflowing all along and rented nonstop. We got inspired to replicate that but be a little bit more intentional with it with the purchases ongoing. We flipped a house that we lived in, freed up a bunch of cash as we moved to Europe and said, “We’re going to get this cash reinvested and we’re going to focus on cashflowing markets.” We had a comfort level with that first market that we bought in. We went back to that same market. We bought a foreclosure from Europe, we’re overseeing a renovation. We’re on the phone with general contractors late at night. We’re trying to hustle and get this great deal going.

It was a lot of work but it was a success story. We were so pleased with ourselves but we did at the end in our reflection on how it went go, “What could we have done better in that scenario?” One, it wasn’t super passive. We were both working full-time. It was a lot to take on as an investment strategy. Two, we didn’t improve the value of that home enough to justify a cash-out refinance. We were a little bit under leveraged in this property. We started seeing that if we want to scale that extra cash that’s stuck in that asset, if we did that over and over again, we’re limiting our ability to scale and expand.

Sometimes, the only difference between a successful person and those who are not is time and action. Click To Tweet

We thought, “Wouldn’t it be great if we could find a company or someone who could do the rehab for us, we could come in with the capital, put our money to work passively, have maximum leverage and move on to the next one.” That’s how we found Real Wealth Network. Living from Europe, we’re looking for opportunities to connect in new markets with opportunities that we could put that income to work passively. We scaled quickly in that year. Now we’re diversified in about five different markets and that’s how I got to this idea of passive income but turnkey because it allows me to continue to pursue passion, interest and use my time in those ways instead of on the asset itself.

I have ads running for you, this is the true blissful path. That’s the way that I’ve done things too is I always want things to be like little time and energy commitment. For me, I’m more of an appreciation person. I’m moving from an appreciation market to more of cashflowing markets and that happens. We evolve in life to what it is that we’re needing as did you, you went through an evolution. Ladies, that’s one of the things to keep in mind is whatever strategy you are trying or doing. I don’t like to say try because real estate is not a try-thing. You got to commit and give it some time. Whatever you’re doing in this stage of your life could be different than what you’re doing in the next stage of your life. You’re not married to this strategy but you could get married if you fall in love. I’m trying to use definitively one of those places where we can fall in love because the benefits are great.

I find that it does embolden you when you experienced mastery that might be too strong of a term even but when you’ve experienced success in one avenue, I feel like it can embolden you to take risks in new areas and try out some different strategies. It doesn’t have to be an exclusive strategy. We’re always looking for deals elsewhere. I certainly have an appetite for flipping and doing some of that more active approach but it’s been such a journey for me and something that I’m grateful now to get to share and encourage other people on how they can do the same and how this is a viable strategy for creating retirement, creating freedom, or even diversifying. It doesn’t have even to be that grand of a plan. It can be a simple diversification measure as well.

Do you feel like you’ve replaced your income? Could you go have that lifestyle with what’s coming in with cashflow?

We’re getting close to having choices.

I love that you say that. It’s not retirement, it’s having choices.

We started realizing our whole career we’ve spent away from family and we’ve had a wonderful adventure. It’s been so rich but at the end of this career, we were inspired. Our why was the ability to have the choice to go where we want to go. We don’t have to go and follow a job in a specific city. We can choose to go back with family or abroad but having those options, to me is worth so much and you discover that you enjoy it. These ideas that you had of paying down loans, it evolves and suddenly, you’re moving in a different direction. We’re continuing to have a lot of fun with it. Retirement keeps getting kicked further down the road by choice.

I know what you mean because we could retire too. David loves what he’s doing and I love what I’m doing. Why would you retire when you love what you’re doing? Ladies, read me talk about retirement all the time and it’s not the right word. I love your choice of where it’s better, where we have a choice. We can now make decisions based on what we want to be doing with our time, life, energy and money as opposed to what we need to be doing to pay the bills. I love the way that you put that.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: When you’ve experienced success in one avenue, it can embolden you to take risks in new areas and try out different strategies.

 

Finding people like Kathy has been instrumental to that for me. That’s what Real Wealth is passionate about is about. It’s not chasing this idea of that society puts on us of what is successful but what is real wealth to you? It is freedom, a choice and being able to live life on your own terms. That resonated with us so much and little did I know that one day I would join the Real Wealth team and get to share in that mission of spreading that dream with others.

Why did you choose to do that?

My background is in communications. I did a lot of adult curriculum development. That instructional and teaching background is my speed and then the opportunity to marry that with this personal passion that we developed of investments, I find it super exciting. What we do at Real Wealth is providing a lot of emphasis on education and teaching people the fundamentals because the fact of the matter is the reason more aren’t investing in real estate is there’s a significant learning curve and it’s intimidating. In our minds, we’re thinking of these mega moguls that have invested in real estate.

We think that’s where we have to be and that we self eliminate. We choose to pursue other options that are maybe easier. In Real Wealth, we break that barrier of like, “Ask questions. Let’s be curious and learn together. We don’t have to be an expert about it.” The second part of that is offering a tactical means by which you can take action and turnkey offers you the ability to connect with people in markets that are experts there in that market boots on the ground who understand the market dynamics and who can help you find a product there and that long-term buy and hold investment.

How does this work for people once they’re in the system, they joined and everything, what happens?

We aggregate a lot of data on what makes a good market for real estate investors. We’re looking for job growth, population growth, strong diversified economies but yet we want them to be affordable markets where we can come in as levered buyers and have good solid cashflow. We want landlord-friendly laws. We let all of this data point us to those markets. We’re interested in about fifteen different markets and that’s not an all-inclusive list. There can be great things about many different markets but once we found those fifteen markets, we go out and look for a team there locally that specializes in finding those deals and in rehabbing those properties or in some cases, building new construction homes. In addition to that, they have professional property management again so that you get connected to that deal.

If that were it, that would be too easy because it’s overwhelming. Fifteen markets is a lot to choose from. It still doesn’t make it tangible. That’s where an investment counselor helps. We’re experienced in these markets, myself and there are three others. We know these markets, these teams and general investing strategy. We get on the phone with an investor who’s ready to pursue that. Through a conversation, we talk, what is their search criteria? What are your goals? What is it that you’re looking to do? That can guide us to a market that’s maybe the best fit for an investor. I’m sure you’ve heard before some people want to drill it down and go, “What’s the best market?”

The answer to that is always, “It depends. What are you looking for? How much capital are we working with? Are you looking to create maximum cashflow or the greatest return over a longer period of time?” What is the priority? Through a conversation, we help you refine what it is that you’re looking for and refine what your buy box is. What can help you get to those goals that you have sooner? We can make those referrals and connections to these companies and those markets that can help you identify the property.

Turnkey allows investors to continue to pursue passion and interest. Click To Tweet

You introduce to a company in the market. Are you hands-off after that or what happens?

What makes us different is that we maintain a relationship with our investors. It truly is a network. The strength of the network is in our investors. It’s providing that full circle or full feedback loop if for a lot of people, this is their first time going through a transaction like this. We, Real Wealth Network, remain involved and offering you that strategic guidance. We’ve put together some great checklists that help you with due diligence and how things you should be looking for when you’re screening property and getting home inspections, appraisals and offering you some of those good tips to guide you along the process. We love getting feedback from our investors on how it’s going.

We touch base and maintain that relationship beyond acquisition but into the management phase where the proof is in the sauce, that long-term hold of the property. How’s it doing? Did it do what we hoped it would? At the end of the day, you can’t make guarantees about how someone’s experience can be? How past performance can’t guarantee that, but it can be a good indicator to be able to point to 100 or 300 sales in a specific market and the track record of the property management team that has managed those homes for this period of time. That can give a lot of people the confidence that they need beyond taking a shot in the dark, in a market that they’re unfamiliar with where they don’t know anybody. It’s a lot of the benefit that you get when you’re a part of Real Wealth.

What happens if something does go wrong with the management company? This has been my biggest fear of going outside of the California market. I’ve kept all of my assets close within 50 miles so I can get there. If you’re out of state then you can’t do that. What happens if there’s something that goes wrong for instance with a management company or the house or something like that?

Think of it as a risk. That is a risk tolerance that is beyond some people, that idea of not being able to go there. Due diligence is extremely important and not just taking what we say and going with it regardless. We always say, “Trust what we say,” but verify it. Make sure that this is something you’re comfortable with. I tell everybody, we have a property manager here that is proven that we have some leverage with because we’ve worked with for many years but at the end of the day, you need to make sure that they meet your criteria because even within something like property management, there’s a personal preference. You can talk to five different people about the same property manager and you’ll get five different takes on some of the nuances of how they do business and whether they love them or whether they’re okay.

The important part and what we put a lot of emphasis on is you own this process. I do interview a couple of property managers who have a backup plan. When I’ve had situations like that personally, where something has not gone well and a property management experience wasn’t the best, it’s something that you can focus a little bit of energy into. I was quickly able to identify another property manager that could meet my expectations a little bit better. We at Real Wealth are here to help guide you through that process and lead you through that process of evaluating. Sometimes, it’s hard to know what is a typical experience or what is something that is a normal risk of owning real estate. Let’s not throw the baby out with the bathwater yet and dump your property manager. This might be a problematic tenant and you need to ally with the property management company and get beside them in the real issue.

Do you give references for property management companies? How do people find who to interview?

We provide the reference for the specific property manager there in that market. That’s the reference that we offer but then you can go online and find other property managers on your own. We do encourage you to do that to make sure that they’re who you want to work with.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: Make decisions based on what we want to be doing with our life, energy, and money, as opposed to what we need to be doing to pay the bills.

 

Do you offer the opportunity to talk with other network members that have used that property manager as a reference? How might that work?

COVID has put a little bit of a damper on our normal processes for that. We had live events every month before March 2020. That was an opportunity for investors to all get in the same room, share their experiences, talk about the pros and cons of different areas and that was hugely beneficial when we did that so regularly. Now that we’ve gone virtual, that looks a little bit different. We do though have the ability to connect you with some people there locally in the market who have bought there over a period of time and who can give you some insight into their experiences with property management.

That would be my big thing is to get the references and get some validation around that decision. Tell us a little bit about, how you fit into my Blissful community? I’m excited about this collaboration. Let’s talk about how it happened and what my ladies can expect?

Kathy and you share a lot of synergies in your approach to this. You’ve got a similar abundant mindset that Kathy and Rich Fettke both have. This was an opportunity for us to provide a woman to woman connection in real estate where we can help your investors who are curious about the turnkey model, curious about a more passive approach to real estate investing so we can have that warm handover. We’ve set up a website for our blissful friends who are interested in turnkey where you create a profile on Real Wealth Network and then you’ll automatically be linked to me as your investment counselor. Once you’re logged in and created that account, you’ll have access to all of the free educational resources. You can start educating and you can look at all the market data that we’ve aggregated. You’ll have the ability to look at the teams that we work with. You’ve got access to me as your investment counselor to help you navigate the process, streamline it and hopefully get you going.

Nothing happens until we take action. We can think about it all day long.

I had a blissful investor come and we had a great strategy session. She was contemplating lots of different investment strategies, some more active some more passive but recognizing that there was a place in her investment strategy for a passive approach. We got her connected with the team that works in the market that she was most interested in. It’s that power of networking. It’s working for her already.

It has been interesting because my ladies email me and I love that. Several of them had connected with Real Wealth and a couple got to talk with you and a couple of the guys. Ladies, every single person on their team is unbelievable. I know that all of your coaches are awesome but I did feel that like, “We’re a ladies’ group and we want to talk to a lady.” It was cute when you called me and said, “Would you like your ladies to talk to Leah?” I was bouncing around excited about that. As women stay in the community, we think a little bit differently than men do and our priorities feel a little bit different. It is nice to talk to another woman about this stuff. I’m honored that you’re going to be working with my ladies.

It’s a topic that I know you’re passionate about but I feel financial literacy, engagement hasn’t been instilled in women like it has in men. Because of that, subconsciously, we’re more prone to take the back seat and to let somebody else lead that. I love and am inspired by women who recognize that that doesn’t have to be true and that there is a place for you to engage. If it’s easier to come to that place by engaging with another woman who’s already done it then let’s do that so that we can empower more people to do the same.

Nothing happens till we take action. Click To Tweet

Women are better suited to real estate. We love to nest, love our homes and love creating beautiful spaces. It’s intuitively and naturally one of our powerhouses is this ability to create a home and that’s what real estate is all about. Being able to do that, we can look at the numbers, creating space, to do your research but we get good gut feelings or inspirations about where to where to invest. It can be confusing. Once you look at the numbers, you then can use your intuitive sense, “Three different markets work. Where do we want to start?” Also, neighborhoods and all of that stuff. We are inherently better suited for this business. It seems sad that we’re not as involved as we could be and not benefiting from the amazing cashflow, appreciation and wealth that can be built through this industry.

There’s a lot of pressure too in this space to marry this idea of being a real estate investor and entrepreneur. I’ve had to tell people before and had to slow people down sometimes, I’m like, “You don’t have to make this a business. You don’t have to go and employ people.” I get some people who right out of the gate want to talk about entity formation and the tax structure for their entity formation. I’m like, “You don’t even have a house yet. Let’s slow down. Let’s learn some correlations of cashflow and appreciation. Let’s study some proformas and look at the basic math before we start blowing this up to be some gigantic entrepreneurial idea.” Real estate can be a diversification strategy. It can be passive. It can be a little side hustle hobby that you enjoy doing and it gives you that feeling of power or validation if that’s what you’re searching for. It can be that and it can be small. It doesn’t have to be huge.

It’s interesting because real estate was always my side hustle. I was in corporate, I ran my own businesses and real estate was that thing that I didn’t pay attention to. As a matter of fact, if I had paid attention to it, I can’t even imagine where I would be now. I pay no attention to it and suddenly, I’m worth millions of dollars. There were hard times. 2001 and 2008 was a hard time but through most of it, I haven’t had to think about it and I love that. It’s the side hustle without the hustle. Much of that is what turnkey is all about. It’s about the side creating the side hustle without the hustle.

The opposite of the hustle like people in the blissful business. I do agree with you, people get caught up in what everybody is out there talking about like the entity structuring, taxes and the, “You should be flipping as they do want to HGTV. You can make all of this money. You should have 1,000 doors.” No. You do what’s right for you. I only have 6 or 7 doors because I don’t like lots of doors. I’m in an appreciation market because that’s what I know for now and I’m making a transition cause I want to make a difference. That’s working in my life. You don’t have to do all of those things and all the gurus are telling you to do. You do what’s right for you.

It is prevalent in this space and I’ve always tried to resist against it and own my experience for it being my experience. We all have our scales of risk and reward of what’s right and wrong. It’s up to us to zero our scales and determine, “For me, where’s the risk and the reward here? Where’s that balance?” What we don’t want to do is allow somebody else who’s in a completely different phase, space balance our own scales. Being okay with your process looking a little bit different. If it’s not turnkey, that’s great. Do whatever it is. That’s probably the one thing that I would say is the rule you got to take action somewhere. I’ve heard you say this before, “Goals remain undefined. It’s a dream. It’s not ever going to happen. We’ve got to give ourselves some concrete tactical steps and create a timeline for ourselves so that we step into that.”

The other piece about this and I know that this is true with a lot of us women because we do feel intimidated. We haven’t necessarily had the network or educational support and all of this stuff. You want to know your stuff. You want to get educated. You want to make sure that you’re doing the right thing. You don’t want to look stupid. You don’t want to have lost money. This is what I say to that, everybody in business loses money. Don’t be afraid of it but it also isn’t something that you have to do either. You can make good decisions consistently. I’ve never lost money ever on a real estate project. That’s been many years.

Not everybody has that same track record and it’s okay. When I say that I haven’t lost money, that doesn’t mean that I haven’t had a lot of fear. In 2008, I lost 50% of the value of all my properties, I was underwater on every single one but I didn’t sell, so I didn’t lose money. Let’s all keep that in perspective. That’s what I’m trying to say is that keeping it all in perspective and understanding that you’re going to have to learn along the way. You can do as much research as you want. You can look at as many videos. You can talk to as many people. You can listen to as many podcasts but nothing happens with your wealth or your education until you start doing something because you’ll learn a lot being in there.

I see it all the time. The analysis paralysis. It’s putting a lot of pressure on yourself to know everything. I was talking about this with my husband. I’m like, “Everybody wants to step up to the plate and they want to first swing knock it out of the park.” That would be epic. That would be awesome. I’d rather be the person who is confident who understands it but I’m okay with a base hit. Like I’m going to load up those bases. The better I get at loading the bases, the more my confidence builds. At some point, I’m going to knock it out of the park. When I do, the bases are loaded. That takes the pressure off me to make sure that everything is nailed and that there wasn’t a single thing. Part of what I always try to do is reflect on a situation and look at it, even when I thought it went great, like, “Let’s look at it. What could we have done better next time?” That’s how we wound up in the turnkey space. Evaluating going, “That was good. Nice job,” but how could we refine this? The next time it’d be even better? That’s a sweet spot to stay in.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: There’s a lot of pressure in this space to marry this idea of being a real estate investor and being a real estate entrepreneur.

 

We are going to move towards the end of this show but before we do that, I want to talk a little bit about Extra because you’ve got some yummy, exciting stuff to offer my ladies. Tell us a little bit about what you’re going to cover in Extra?

The seven steps for new investors is what we’re going to cover. It’s going to be tactical, if I’m getting started, what are the next seven steps for me to do? Starting from let’s think about goal setting down to, “Let’s refine my buy box so that I can take informed action.” We’ll talk a little bit about what those next seven steps are.

I love that. I can’t wait. I love it when we get a breakdown like that, specific steps that we can take. I’m excited about that. Tell us where we can reach you.

We have set up a page on RealWealth.com for the Blissful Investor. You can go to RealWealth.com/Blissful. If you create a login there, we’ve already set it up on the backend so that you’re immediately linked to me as your investment counselor. You can click around once you’re on there. You’ll see It’s very easy to connect with me once you’re logged into your account. We can set up an initial strategy session and get you going.

I know lots of ladies are already in the network and enjoying the benefits. Go check it out and join. It’s free to join. Leah, are you ready for three rapid-fire questions?

I’m ready.

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

Aside from watching our Seven Steps for New Investors, I tell everybody financing is the gas in the tank. We can know where we want to go. We can know that it’s a great place but until we know that we have gas in our tank to take us there, we’re not going anywhere. I always tell beginners, “The first thing you should do is understand your borrowing potential and talk to a qualified lender who specializes in investment loans.”

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What would you say is one strategy for being successful in real estate investing?

We already talked about this a little bit but I think for me, it’s staying curious. This is something that Kathy Fettke does so well. Don’t be afraid to ask questions. I think that could be maybe the flaw of the other genders that there’s sometimes a pride that we have of not wanting to admit when we don’t know something when the reality is, it’s a very good question and there are lots of other people in the room who don’t know it either. Staying curious and not being intimidated to ask for additional information. I see this a lot in our space, people assume that if someone is trying to sell them something that they’re trying to deceive them or trick them into something. I say, “They are humans too and they’re a real estate investor, be curious about their experience, leverage their experience in that market, ask questions.” That has been instrumental to my success.

I was having a conversation with another investor and I ask a lot of questions. He’s doing something that I’ve never done and will never do. It’s a type of construction because I’m doing construction. I am constantly asking questions. At one point, I said to him, “I get that I ask a lot of questions. You can shut me down.” He’s like, “You can send me an email and see when it gets stopped.” It’s so much fun to be involved with someone who’s interested rather than someone that thinks I’m smart and they’re going to follow my instructions. “You’re going to go places because you care enough to figure it out.” I wanted to share that with ladies so that you know people love you asking questions and if it is too much, they’ll say, “I don’t have any answer. Talk to somebody else. That’s too many questions.” You get to there, that’s a good place because that means that you’ve dug deep. Questions are a good thing. They’re good for your business, self-esteem, success and relationships. Leah, tell us one daily practice that you would say contributes to your personal success.

It’s important to reinforce what you want to be replicated. This is true in many different aspects of life, relationships, finances, with children. Focus your energy on what went right and what you want to see happen again. The example that comes to my mind related to real estate is we have a friend who’s wanting to get into real estate for a long time and has talked about it for a very long time and got a property. It’s not going perfect but it’s typical real estate investment problems, the maintenance and phone call. That kind of stuff. He’s chosen to focus on the negatives of that and focus on, “It’s another call. It’s another problem.”

We always try to say, “Let’s make sure that we’re reinforcing all the good things that happened that month.” You got a tenant with no vacancy, you got top market rent for that property. You’re cashflowing well every month. It’s not ideal to have to go and fix this item but let’s reinforce all of the things that went right and that is going right because that’s what we want to replicate in our life. If we focus on all the negatives and on all the things that didn’t go excellent, those can sometimes be an inhibitor to our future progress.

This has been so good. Leah, thank you for all you’ve shared so far.

I’m happy to be here and looking forward to connecting with you ladies.

Ladies, stay tuned for Extra. We’re going to be talking about the seven steps for new investors. If you are already subscribed to Extra, you’re going to get that on whatever device you’re reading to this show. If you are not subscribed to Extra but would like to be go to RealEstateInvestingForWomenExtra.com. You get the first seven days for free, so you can check it out. If you love it, you stay. If you don’t, at least you got a lot of good content. For those of you that are leaving us now, thank you so much for joining Leah and I for this portion of the show. I appreciate you and I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you next time. Bye.

 

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