From the Screen to Short-Term Rentals and How “Stargirl” Started Investing

Ashley:
This is Real Estate Rookie, Episode 197.

Brec:
If I lived in a high rise in the nicest part of Atlanta spending I think it was $4,400 a month on rent, and still continued to rent out my place and get that positive cash flow, and how it happened to work out is I would have more money at the end of the day. If I was living the bougie life and still renting at my property. So just this one rental property has given me the freedom to live and not worrying about furnishing something while I’m working a full-time job, and just the freedom its given me has been so liberating and empowering.

Ashley:
My name is Ashley Kehr, and I am here with my Co-Host Tony Robinson.

Tony:
And welcome to the Real Estate Rookie podcast where every week, twice a week, we bring you the inspiration, information and education you need to kickstart your real estate investing journey. And I am so happy to be back sitting in front of the microphone with my wonderful Co-Host Ashley, what is going on in your neck of the woods Ash? How are things these days?

Ashley:
Well, I have to say major FOMO after watching yours and Sarah’s Instagram stories at the short-term rental conference in Nashville. How was it? It looked like a great time and that you got to meet and network with a ton of people.

Tony:
It was so cool. We weren’t speaking at that conference. We just wanted to go as attendees. There’s a lot of real estate conferences, but there’s not very many short-term rental conferences. So really cool getting to meet people that we had connected with online and meeting them in person, and it was actually also CMA Fest this week in Nashville.

Tony:
So there was just probably even more live music everywhere than there usually is. So overall, it was just really cool, love connecting with people. And just as a really big thank you, there were so many people that came up to me during that conference that shared that they were inspired by my story and they took action. Actually, I had three separate people that came up to me and said, “Tony, after hearing your story, I started buying short-term rentals and I’ve quit my job.” I had three separate people who told me that. So hearing those stories guys, you have no idea how much gratitude I have towards all of you. So I really do appreciate it.

Ashley:
I know. Doesn’t that just, it gives you that warm and fuzzy feeling that us totally talking nonstop is hopefully actually helping people.

Tony:
Right, right, right, but it was great. I love conferences. I know we’ve talked about the power of networking and stuff like that, but guys, if you haven’t gone to your first short-term rental conference, make sure you go. Obviously BPCON coming up in San Diego. If you guys haven’t gotten your tickets yet, make sure you do that, but that is one of the biggest, the best, real estate conferences out there so we would love to see all your smiling faces there for sure.

Ashley:
Yeah, I think one thing BP does is they do a great job of bringing in the speakers and the content, but also the parties, and it’s not just the parties, but that’s a great way to relax, let loose and connect and meet with people. I think they do a great job of doing that too. So it makes it a lot easier especially if you’re going to a conference alone, you don’t really know anyone. They make it really easy so that you can meet some people and become lifelong real estate friends.

Tony:
Yeah, some of the best conversations at these conferences happen after hours at the bar and you’re chatting with people when everyone’s kind of loosened up a little bit. So yeah, I met a lot of great people. So we hope to see you guys in San Diego at the bars after the conference history.

Ashley:
Yeah. I had a life changing conversation in a pizza restaurant or a pizza parlor on Bourbon Street in New Orleans at 2:00 a.m. at the last BP Conference. So yeah, I definitely agree with that. So on today’s episode, we have Brec Bassinger who is a superhero. Guys, we are so pumped to have our first superhero on the show. She is from CW’s Stargirl and a new real estate ambassador. She purchased her first short-term rental a year ago, and she comes on the show to tell us how she did it, breaks down the numbers and tells you guys, I think gives great advice as to how important running the numbers.

Tony:
Yeah, Brec and I connected on Instagram and we just formed a relationship that way, and I wanted to bring her on because I think, and she shares a lot of her story and how she got started. And I think people hear the word actress or actor, and they immediately think multi-millionaire rolling in the dough. And she shares how she was essentially house hacking a small room in Atlanta when she got started, and that’s what kick-started everything for her.

Tony:
So just lots of good information, and I think one of the things she talks about that hopefully you guys get some value from is how with her irregular income of being an actor she was able to still get qualified for a loan. I know a lot of rookies in our audience don’t have typical W-2 job. So that loan approval process is something she might struggle with. So make sure you guys pay attention for that part of the episode because I think there’s some golden nuggets in there for sure.

Ashley:
Yeah, I really enjoy too that she’s still house hacking too. So she talks about that a little bit too is not only before she even started investing, but she’s still house hacking too in her primary residence. Brec, welcome to the Real Estate Rookie podcast. Thank you so much for joining us today. Can you tell us a little bit about yourself and how you got started in real estate?

Brec:
Hi, I’m Brec. Thank you Ashley for the introduction. Most people know me as an actress. I grew up doing a Nickelodeon show for a few years called Bella and the Bulldogs. Super fun. Now, most recently I play Stargirl on DC’s Stargirl so I get to be a superhero. In real estate, that’s my other passion. I love acting so much, I feel like it really stimulates me creatively, but growing up, I was a mathlete, I was a numbers girl.

Brec:
I was what would be considered a nerd in school, and for me, real estate simulates that side of me. So it’s been really fun to start getting into that. And I feel like stimulating both sides of my brain. How I got into it is during the pandemic, my boyfriend and I, we went on a little trip to Big Bear in California, and it was like an off month. It wasn’t ski season, it wasn’t necessarily summer lake season and we show up and it’s a cute little tiny A-frame home, probably no more than 400 square feet, and we’re sitting there that evening and I start thinking about how much I’m paying for it.

Brec:
And I was just like, “Wait, if I’m spending $500 a night for this little thing, holy crap. They’re making $15,000 a month.” And I just started doing the numbers. And I was like, “Oh wait, I’ve got to do this. I have to get into this.” So within 30 days of that trip, I had moved down to Atlanta to film the second season of Stargirl, made an offer on a condo, found, researched what ROI meant in all the little real estate terms, and within six months, I had my first short-term rental up and going.

Tony:
So can we pause on that because that’s like most people Brec I think don’t take action that fast. We’ve interviewed a lot of people on the show and even in my old podcast, your first real estate investment, I just focused on that first deal. So I know a lot about people’s first deals and most people on average take between 12 to 18 months to get that first deal. But you said 30 days later, you’re already submitting offers and you had that first deal within six months. That’s insane.

Tony:
And I’m appreciative of you sharing that because I want to get into your psyche a little bit. So most people have a little bit of fear or a lot of fear around getting started. Were you fearful? And if you were, how did you get past that?

Brec:
At the time, I didn’t know what to be scared of. So I called it like naive bliss. I just looked at the numbers and was like, “This makes a lot of sense. I want to do this.” And also, I feel like I’m so fortunate in my job that I get to travel a lot for work. So I get to study all these different markets and I have always been into real estate.

Brec:
So every place I go, I check the Zillow all the time, really studying the market. So going into Atlanta back for season two. I did feel confident with that market. So I did have that kind of education and history behind me, but as for buying a property, I knew absolutely nothing. And I just threw myself in and it’s been interesting because now, I’m wrapped from season three of Stargirl so I have time.

Brec:
So I’m really wanting to expand, but now, I do struggle with that fear because I know how many people are in it and what a competitive market it is and things that can go wrong. But I am trying to get back to that naive bliss of just throwing myself into it because it was successful. So why wouldn’t it be successful again?

Tony:
Brec, can we talk a little bit about how you educated yourself? Because I think that’s an important component of this. What kind of steps did you take to make yourself feel confident enough to go out and start submitting offers and eventually closing that first deal?

Brec:
So once again, numbers girl. For me, it’s all about the numbers. So I looked up online what the formula would be, of how do I make a positive cash flow and what the goal percent should be. And that’s just what I did. I got AirDNA, didn’t even know what it was, but just tried to figure out how I could get occupancy rates and daily rates and obviously, stumbled across AirDNA, and I just started plugging numbers in and saw what I needed to pay, and then I was so lucky.

Brec:
I literally just Googled short-term property management Atlanta, called the first lady. Absolutely wonderful woman. Still worked to her to this day. I tell everyone about her. She’s so fantastic. But once again, it wasn’t like, I didn’t know anything. So to me, of course she’s going to be great, and I’m so lucky that she has been great. So I do think a lot of it was just right place, right time. But then also education-wise, just really running the numbers because I trust that aspect of it the most. And so just practicing that until I felt confident with it. So then when I went to Atlanta, I was able to plug in those numbers and figure out if it was going to be a good deal.

Ashley:
So Brec, you said this was your second season that you were in Atlanta that you purchased this property?

Brec:
Yes.

Ashley:
Okay. So what did you do the first season? Did you rent a property there?

Brec:
So I was 19 at the time moving to Atlanta a place I had never been. I hadn’t been on a show in a couple years, also, a really cool thing about real estate. It’s like a consistent income, consistent passive income, we’re acting. It’s like, “Great. I made money this year.” Two years later, haven’t made any money the past two years. So going into first season, I didn’t have the finances to buy or really, the finances to live in a city like that.

Brec:
There’s a lot of corporate housing in Atlanta, furnished which looking back now is a great place to be for something I’m wanting to get into. But at the time, it was really freaking expensive. It’s anywhere from 5,000 to $7,000 a month, and I just couldn’t afford that. So first season, I lived in a not great part of Atlanta with one of my castmates. She was my roommate.

Brec:
A tiny little two-bedroom apartment. I think we were both paying $700 a month. We furnished it ourselves. So while we were working our full-time jobs, we were still focused on furnishing a place we were going to be in for literally six months. Fortunately, with season two, I had some more finances built up from that first season. So that’s when I was able to buy that rental property.

Ashley:
So you purchased this property to live in for season two, and then after that, it became the short term rental. Do you think it was an advantage that you got to live in it for a little bit first and be like, “Okay, you know what? This would be great to add.” Or, “These are the things that I need for the property.”

Brec:
Yeah, absolutely, because at that point it was very livable. The kitchen was I love cooking, so it was ready for a chef to come in and cook whatever he wanted. I plan on doing that again. So say if Stargirl God willing gets picked up for a fourth season, I fully plan on doing that exact same thing, using that six months to furnish it and then renting it out.

Tony:
So Brec, I’m glad you shared your experience about getting started because I think there’s this misconception about people who are in the entertainment industry or who are in sports that as soon as they get started, there’s just this big windfall of cash, and they’re rolling in the dough and flying private jets.

Tony:
We had Terry Harris, he was on episode 153 and he was a professional basketball player. And I think anytime people hear professional athlete, there’s this idea of what kind of lifestyle they’re living. And he was very open and candid and said that he was only making $35,000 a year as a professional athlete in the minor leagues for the NBA. And so I just want our listeners to understand that just because we have professional athletes or people that are in the entertainment industry, it doesn’t mean that their financial position is all that much more different than a lot of you that are listening today.

Tony:
So I appreciate you sharing that Brec because I think it helps set the table for the listeners. So Brec, obviously you started off in season one sharing your space and doing all this stuff. How was it progressed? What was that progression like for you?

Brec:
I think I mentioned, but something I really love about real estate investing is that passive income. And because of that third season was, it’s just so funny looking at the three years how much I’ve grown and gotten to grow. And I do give a lot of it to that second season decision of getting that rental property because after I moved away second season and started renting it out, it was really successful. I was getting positive cash flow every month.

Brec:
And to me, how I came back home to Texas and I bought a house here and basically what I was making off that property was covering my mortgage here at home. So I was like, “I’m getting this house for free.” That’s just how my brain works. But then going back to third season, everyone’s like, “Oh, you’re going to let, you’re going to live in the property you bought.” And that was my original plan was like, “Well, I might as well live there while I’m there and then rent it out while I’m not.”

Brec:
Then I sat down and I ran the numbers and I ran how much I would have in my bank account, the end if I paid the mortgage each month and just lived there versus if I lived in a high rise in the nicest part of Atlanta spending I think it was $4,400 a month on rent and still continued to rent out my place and get that positive cash flow. And how it happened to work out is I would have more money at the end of the day if I was living the bougie life and still renting out my property. So just this one rental property has given me the freedom to live and not worrying about furnishing something while I’m working a full-time job. And just the freedom its given me has been so like liberating and empowering.

Ashley:
Brec, you have mentioned this several times throughout the episode and we’re not even that far in, but run the numbers, and I think that is-

Brec:
I’m so annoying about it.

Ashley:
No, I think that is so powerful because Tony and I often get asked, and I’m sure you’re going to get the ask this now too is someone will come to you with two different scenarios and maybe somebody listening is like, “Should I do this or should I do this?” And the answer is to run the numbers just like you did. You looked at the numbers and ran them for each scenario and figured out, “Okay, at the end of the day, I’m going to have more money doing this scenario.” And that’s such a great way to make a decision when it comes to investing and what your investing strategies should be. So keep saying that. We need it to really hit home with everybody.

Brec:
Run the numbers.

Tony:
Yeah. Ash, let me ask something on top of that. I literally just came back from a short term rental conference last night and there was a guy in the crowd and he stood up and he asked a question to all the speakers and he was like, “Hey guys, I’m new, but I found this amazing property. I’ve ran the numbers. My returns are going to be super solid.” And he was like, “But I’m not sure if I should move forward with it.”

Tony:
And everyone on stage was like, “Well, why not?” They were like, “If the numbers work, why wouldn’t you move forward with it?” And he was like, “I don’t know.” He was like, “I just don’t know if there’s things that I don’t know.” And he was just slacking himself out. But for me, and it sounds like for both of you as well, it’s like I try and remove all the motion out of my decision making when it comes to running my real estate business because I think emotion is what gets us caught up in making bad decisions, but if you can sit back and look at the numbers because the numbers don’t lie, the numbers do not lie.

Tony:
I think if the numbers make sense and that’s your sign to move forward and Ash, I know you and your spreadsheets, you like to get down and make everything happen, right? So I’m just glad that we’re talking about the number’s perspective for our rookie listeners.

Ashley:
Yeah Brec, I want to ask you, so you had said you were a mathlete, you’re been into math and you’re knowledgeable about it, but what about somebody who isn’t? Maybe there’s somebody out there listening right now that is not good with math. What would be your advice to them as to how they can get better at running the numbers or maybe different tools or resources that you’ve used to get better at analyzing?

Brec:
Well, for me, like I said, when I got started, I knew absolutely nothing even when I had made an offer on the property, still I was just, very little, but I feel like there’s books out there that explain what those numbers are that we’re talking about and how to use them and how to work with them. So just educating yourself by reading, listening to podcasts like these, and then also there’s online calculators. So I’ve definitely used those to speed things up, and if you do that enough, I feel I can watch it, look at it happen, then maybe you can learn to do it yourself, but save time, use the calculator.

Tony:
Yeah. So speaking of calculators, we obviously have to plug the BP calc. So if you guys don’t know, BiggerPockets, you can use it free up to five times. It’s a property analysis calculator. I use that as I started my career as a real estate investor. Ashley’s used it in her real estate investing career. And to me as a newbie, it’s one of the best tools you can use. So you guys get five free uses of that. So go over to biggerpockets.com, there’s a whole calculator section, you guys can check it out there.

Brec:
I didn’t even know that. And look, see?

Tony:
There you go. There you go. And some people like to build it themselves. I’ve met other people that build out their own calculators and do it that way, but if you’re not that analytical person, or you don’t have that skill set, there are so many tools out there that can help you. Brec, I wanted talk a little bit about how you’re you’re financing these deals, because obviously you don’t have like traditional W-2 income. And I think some of the people in our audience have that same situation. So what was the process like for you in order to actually get qualified for a loan to purchase that first property?

Brec:
It was really, really stressful because of my unique finances and how the money comes in. It was really hard for me to get the loan. Now I do traditional financing my first property because I lived in it. Some, it was a second home mortgage, but then moving forward, there’ll all be investment loans. It was just a good learning experience for me because in my head, if I showed them that I could pay for the property in cash, that I would get it.

Brec:
And my lender literally told me, she’s like, “You could pay for this property five times over again in cash. But if you don’t show a steady income, we will not give you a loan.” And that was such an eye-opening experience like, “Oh, okay.” So for me, I’ve just been after that experience these past two years, I’ve been very mindful of how to better lay out my money for it to look prettier for a lender and look more steady even though to be realistic, my income’s no more steady than it was, and then also having this one rental property and showing that on my history, I’m hoping will help me in the future as well.

Tony:
Yeah. Ash, I just want to ask your perspective, how do you balance because obviously, one of the big benefits of investing in real estate are the tax advantages. And you’re able to reduce your taxable income, but you can swing the pendulum maybe too far where if you’re showing this really small silver of income, it gets difficult to qualify for the loan. So Ash, I’m just curious, you’ve purchased a lot of properties. What has your strategy been for trying to balance those two things?

Ashley:
Well, I think my situation’s a little different than Brec because I worked at W-2 as I built my rental portfolio. So I had that W-2 for a long time to support a steady income and then build my rental portfolio, but I haven’t had … I still have a W-2 where I pay get paid $22 a week just to do a couple odds and end. So that is no difference at all to my income. So I technically still have a W-2.

Tony:
That’s $22. We could go real far, right?

Brec:
That’s it.

Tony:
Yeah.

Ashley:
So, but this will be my first, this will be about two years now because it was February 2020 when I stopped my W-2. So it’s been about two years now where I have my full tax returns, but I honestly haven’t gone gotten residential, traditional, conventional mortgage in that timeframe at all. I do more commercial where they’re more interested in the property itself and what the numbers look like and that I’m an experienced investor and that I have a history of being an investor than they are more concerned about seeing an actual W-2 income. So if you are someone who’s in Brec’s position, or even mine, you go to the commercial side of lending and it’ll be easier to get financing than if you’re going to the residential side.

Tony:
Yeah, and I’m so glad you brought that up because obviously, a lot of folks that are listening, they have this goal of leaving their day job. But to your point Ash, there is tremendous value especially if you have a healthy W-2 income to hold onto that for a while. So Kell Delaney, he was a guest on the podcast and I was actually just hanging out with him at the short-term rental conference over the weekend.

Tony:
And he’s up to like, I don’t know, six or seven short term rentals. I’m sure making pretty healthy cash and I asked him like, “Why are you still at your job?” And he was like, “Honestly, it’s because we’ve been able to bank roll so many of these loans because of his day job.” So he was like, “I just want to max that out when I get to that point, then I’ll leave.” So if you’re in a position or you’re in a job that you can tolerate maybe for a little bit longer, using that steady income is going to really, really help unlock some future lending options for you.

Tony:
Just one other thing that you mentioned Ashley that I also want to highlight is that there are other lending options outside of the traditional like, “Hey, how much money do you make?What’s your debt to income ratio?” For us in the short term rental space, you’re starting to see more of these DSCR loans or debt service coverage ratio loans where they’re saying, “I’m not looking at Tony as a lender. I don’t care about Tony’s debt to income. I don’t care about what his tax returns say. What I’m looking at is how much income would this short term rental produce and what is the required debt coverage on that property?” And if the property’s projected to do more income, then what the debt service is, then banks are willing to lend out on that. So guys, there’s so, so many other options in the marketplace for lending.

Brec:
I do have a question for you Tony.

Tony:
Yeah.

Brec:
With that, will they take in consideration short term rental rates or will they only do that long term monthly income? Because I’ve run into that before.

Tony:
Some lenders will do both. Yeah, so just to clarify Brec’s question. So when lenders are looking at projecting the income on a property, some lenders will only look at what that property will rent for as a long term rental. So if you had a tenant in there for 12 months who signed a lease, other lenders will look at your projected short-term rental income.

Tony:
So there are some lenders that specialize in short-term rentals that will do their own analysis to say, “Hey, here’s what we think this property will do as a short-term rental.” Now, here’s a little hack and I actually just learned this from my friend TJ Tijani. So if you guys don’t know TJ, he’s a short-term rental operator based out of Houston. But TJ said what he does is he will sign … He has two entities. So he has one entity that purchases the property and holds the mortgage, and then he has his short-term rental property management company which signs the lease to his entity that owns the property.

Tony:
So entity B is leasing from entity A and he just signs a long term lease between those two entities. And now, he can go to a bank and show like, “Hey, I’ve got a long term lease in place, help me refinance this debt.” So there are so many different ways to do that.

Brec:
That is so smart. Yeah.

Tony:
So smart, right? Blew my mind when I heard that the other day. So there are lots of options here.

Brec:
It seems simple, but it’s like, “Why didn’t I think of that? That’s amazing.”

Tony:
Yeah.

Ashley:
Okay. So Brec, you purchased that first property and then you went and purchased your primary now in Texas. Do you have that rented out when you are in Atlanta or are you just keeping that strictly your primary?

Brec:
Well, I am gone for quite a bit of time. So my brother actually lives with me and he pays rent. I was like, “I don’t care who you are. I’ll take your money.”

Ashley:
So you’re house hacking too, you didn’t even tell us that.

Brec:
No, I know. Yes. I actually did use that term the other day. And I was like, “I hope I use that correctly.” I don’t even know, but yes, I’m house hacking my own home with my brother. Woo-hoo, but it’s actually been, it’s worked out so great. Yeah.

Ashley:
So is there one of these properties that you wanted to go into the numbers with us and break it down?

Brec:
Yeah, absolutely. I’d love that.

Ashley:
So we know it’s in Atlanta.

Brec:
Yes.

Ashley:
In Atlanta. What was the purchase price?

Brec:
273,000.

Ashley:
Okay. And how did you pay for it?

Brec:
Conventional second home mortgage loan.

Ashley:
Okay. And you’re doing it as a short term rental. On average. What is your daily rate would you say?

Brec:
Obviously, it depends on the month. I’d say if average would be around $175.

Ashley:
And then how did you find the deal? Was it on MLS or a different source?

Brec:
I did go through a traditional real estate agent, but actually, it was through my property manager who already managed a property in this condo. So when she saw one was available, she sent it to me. So I give so many props to her because it’s extremely hard to find a condo that will allow short term renting.

Ashley:
Okay, that’s really cool. I didn’t realize when you had told us you Googled and found your property manager, that you did that during your initial research before you even purchased a property. So yeah, you want to start there is to talking with her and how you actually got her to send you the deal. We talk about networking and getting people on your team, but you hadn’t even worked with her yet, and here she is sending you the insider information on this property for sale.

Brec:
Yeah, looking at it from her perspective, I feel like that’s very smart of her because she has this potential new client. Why not send them a very lucrative looking property so you can manage it? So to me, it makes sense.

Tony:
Brec, can you tell me was that initial conversation like when you contacted that property manager? Because I’m sure they get all kinds of people reaching out to them. What did you say to build that relationship?

Brec:
So I called her and at that point, I didn’t know what you paid a property manager to manage your short-term rental. I really didn’t know much, but she was just so open and honest. And one of the first things she said, she’s like, it’s one woman. And right now, I think she’s managing 37 properties. And she was like, “I can send you any one of my current clients, and you can hear it from them.” Basically how amazing she was.

Brec:
And then I started asking the questions. At this point, I hadn’t checked AirDNA. I didn’t know what it was, and so I asked her, “Well, what’s your average occupancy rate among your properties?” And she was like, “80%.” And I’m like, “Oh.” And then I plugged in the numbers. I was like, “Oh, wait. That’s really good.” And then she’s like, “My average ratings are 4.9 star.” I’m like, “Wait, I think that’s also really good.” And she’s like, “And 90% of my properties are super host.”

Brec:
I’m like, “Wait, that’s also really good.” So she actually was one of my main sources of education I feel like and really explaining to me the tips of it. And once again, my naive bliss, maybe she just believed it because I went in with such confidence like, “Yep. I have 30 days to find a property. I have 50 days to close because I’m moving down here in 45 days. So let’s go.” And I just said it was such confidence I guess she believed me.

Tony:
I only asked that question because I know a lot of rookie investors, they have this imposter syndrome. I get people that ask this question like, “How do I get an agent to take me seriously? Or how do I get a wholesaler to take me seriously or property manager to take me seriously?” And on the flip side, I’ve also met agents and property managers who say that. Yeah, they’re always trying to filter out the people that are tire kickers versus those that are serious potential customers. So yeah, I do think it was maybe your level of detail in your line of questioning and maybe the confidence that you had when you reached out to her that communicated how serious you were?

Brec:
Yeah, in all careers, I’ve always had this attitude of not like I want to do it, I’m going to do it. Even when I was an actress or even when I was young … Even when I was an actress, when I was young, probably five years old, people would come up to me and they would ask, “Oh, what do you want to be when you’re older?” Kid you not, my answer would be, “I don’t want to be anything. I’m going to be an actor.”

Brec:
Obviously, I was a very sassy child. And I think just going into that, or going into this, I had that attitude as well. I was like, “Well, why not me? I’m going to do it. This sounds like a good opportunity. Sure. Yes.” And looking back, I think that was extremely helpful. And it’s something I feel like knowledge sometimes can create fear, at least from my experience. So it’s good for me to say these things out loud and remind myself and rationalize my fears to get back to that point because I think that’s a good attitude to have.

Ashley:
So did you have this same attitude when you found your lender for the deal? The confidence going in is, “I’m buying a house, give me the money.” And how did you find your lender?

Brec:
It was someone my dad had used for years. And so I was like, “Great. Family recommendation.” My parents just bought a home and sold their home and this person was not involved because they were not great, but not everyone can be great like my property management. I can’t always get that lucky. It was so extremely hard. I feel like every single day I would … Well, first of all, they wouldn’t call me back.

Brec:
But at this point, I really did. I was moving down there two days before I was supposed to close. And so it’s not like I could not go through with this and then try to find a new property. My time restraints were very slim. And so I would just tell her, she’s like, “Well, I don’t think it’s going to work. At 2020, you’ve made no money this year.” And I was like, “Well, figure it out. What do you need from me? Do I need to get a letter of intent from my employer?”

Brec:
Just tell me what you need and I will get it to you. I worked with someone who was also really great, but I still, that is the one thing I feel like I haven’t found is a good lender who almost understands my finances because I get they’re very, very unique, but I do need to find that. That’s something I still am in search for.

Ashley:
So how did you solve that problem? Obviously that’s amazing that you were persistent and you got the deal done. So how did that happen? What did you end up? Did you supply the solution or did they eventually come back to you with things that you could do?

Brec:
Oh, no. I called our show runner and I was like, “Can you send me a letter saying that I’m going to be working for the next year?” And he is like, “Okay.” And then I called my account. I’m like, “Can you send a letter that I’ve been making money consistently since I was 15?” And he was like, “Okay.” So I just kept getting stuff because I’m like, “No, this …” At this point, this was my only option. I was running out of time.

Brec:
So I was going to make it work even if at that point, even if I had to go to a family member and be like, “You go in on this with me. Let’s co-own it, and then I’ll pay you back.” I was so set on getting this property.

Ashley:
I think that’s a great lesson right there is that persistence and also being determined. You could have easily have just, “Wow. They said no to me.” “Oh, I guess I’m not getting the property.” And given up right there, but look at just giving that little bit of extra effort. And I think that being told no turns people down and then that fear of rejection again and again, and that can really stumble people from getting started in real estate investing because there are going to be these obstacles, there are going to be these roadblocks.

Ashley:
And as soon as you can get over one, each obstacle and each dilemma and each problem gets easier as you go on because you don’t care if people say no because just like Brec here, you’re going to be persistent, determined, and you’re going to find a way to make it work. So I think that’s a really important lesson for everyone to think about. If someone tells you no, especially when you are so close to the finish line of getting this deal done, ask them what can you do to make it work, or like Brec, just go out and find your own solution and get as much data and information and overwhelm them with that.

Tony:
Ash let me add on to that because this is just more of a mindset thing, not even necessarily related to real estate, but I read this quote, I don’t even know, it was a long time ago, but it said a smooth sea never made for a skillful sailor. And that always stuck with me because it’s like I think in life, we have the tendency of trying to avoid adversity and obviously, no one wants bad things to happen to them, but I think a healthy level of adversity in your life is a good thing.

Tony:
You have to go through these things that are difficult, things that you can’t find the solution to initially, or things that are challenging because it does build that muscle for you. And it always makes me go back to Nick Cooley’s episode. I can’t remember what episode he was, but if you guys look up Nick Cooley, he talks about his ice cream sandwich story. And Nick and I literally almost cried together on this podcast because we both shared these moments where we went through this extreme adversity, but we both felt like better men and better people because of those moments.

Tony:
So for all of you guys that are listening, all of you rookies that are listening, I think accept and anticipate some adversity as you go through this real estate investing journey, but also understand that it’s going to make you a better real estate investor, it’s going to make you a better person once you get through the other side. And there, now I’m off my soapbox now, so.

Brec:
I love it.

Tony:
Brec, back to-

Brec:
No, I love it. That saying is going to stick with me as well. That’s really beautiful.

Tony:
Yeah. Yeah, Nick Cooley was episode 109. So if you guys go back to that episode, you guys can hear his story. Brec, before we move off of this deal, you said that it was a second home loan. So can you maybe give some details? How was that different from a regular loan? What was the down payment? What was the interest rate?

Brec:
Yeah, I believe correct me if I’m wrong for a second home. It has to be minimum 10% down. I’m sure it could be lender to lender as well. I had to put 20% down because once again, they didn’t trust that I could do this. Also looking, I was 20 years old at the time and I’ve run into my age being a big thing. Even I’ve met with a few.

Brec:
I’ve gone into new builds and there will be the representer there and they just speak down to me. I’ll go with my mom and they immediately go and talk to my mom and not me and my mom, she knows it. It gets me riled up. She goes, “Oh no, no, she’s actually the one interested.” And they just turn around. Anyway, I don’t know. I got lost. I got lost on my soapbox of me being young and looking 15.

Tony:
No, I love that. I love that. But no, I get your point. It is most 10% down, second home or I’m sorry, most second home loans are 10% down, but yeah, it’s obviously going to vary from borrower to borrower and lender to lender in terms of what that person’s unique situation is. But you bought this you said during … What was the year you bought this in?

Brec:
Okay. It was the end of 2020.

Tony:
Okay. So interest rates were still pretty low. Do you remember what you-

Brec:
3.125. It’s what I got on both my home mortgages and now they’re going up. And I was like, “I thought this was the norm. I thought they were always 3%.” No.

Tony:
Yeah. And honestly, we picked up a lot of our portfolio during that time of really, really low interest rates as well. Our best interest rate on one of our short term rentals is 2.625%.

Brec:
Oh, shut up, that’s amazing. That’s stupid good.

Tony:
That’s like almost free money. So it’s like yeah, we were scooping them up last year. So Brec, I want to run out this deal. Are you able to share some numbers? You’ve had it a little while now, do you know what the property’s gross and approximately what that net looks like?

Brec:
Yes, I wrote it down so I would be prepared. So my down payment plus furniture all in was 60,000 almost exactly. So last year, I didn’t rent it out every month. So I took the average of what it rented out per month, and I made approximately 22,000 in positive cash flow. And then with the equity, I built it, it would’ve been about 45% return on my 60,000.

Tony:
You’re saying it real casually, but that’s pretty impressive especially given the fact that you didn’t even rent it out the entire year.

Brec:
No, I know.

Tony:
That’s amazing. And sorry, give us some context. You said it it’s in Atlanta, but are we in downtown Atlanta in the suburb somewhere?

Brec:
I’m in Atlanta proper. So there’s Midtown which is where you want to be. I’m right north of that, but I’m still actually considered a Midtown location. So it’s a wonderful location. I actually got so lucky. I feel like I bought in at the right time because mine’s a two bedroom. A one bedroom sold two months ago I want to say for 375,000.

Ashley:
Wow.

Brec:
Mind you, I bought a two bedroom just a year prior for 273,000. So I’m also there’s been this thing in my head where like, “Now, it’s probably worth north of $400,000.” So take that $120,000 worth of equity. Plus the $75,000 that I’ve made, that’s almost $200,000 that I’ve made off of $60,000 in two years. So in reality, I’m looking at a 300% return which because I’m like, “I got to keep doing this.”

Tony:
And there’s the tax benefits, right? We talked about that earlier, but now you’re also going to be able to use that to in a smart way like offset some of your other income as well. So that’s why we love real estate.

Brec:
It’s so great. It’s so fun. I love it.

Ashley:
So Brec, are your plans for the next deal? Are you going to buy again in Atlanta or are you going to look into a different market?

Brec:
So I’m living in Texas now and I use my travel, my work always as an excuse to study the market that I’m in whether it’s a three day vacation in Destin, I’m on Zillow, I’m on Airbnb. I’m studying what’s going on because I just think it’s really fun. So I have really been setting the market I’m currently living in which is like the Dallas-Fort Worth area. And right now, I’m narrowed down to two things and whatever better opportunity comes up first, that will be my next deal.

Brec:
So either a lake lakefront property in the Dallas-Fort Worth area, so more of a vacation destination type thing or back in Atlanta because I have my team set up there. That’s so wonderful, and there’s two very particular areas in Atlanta that I’m looking, but still sticking with the short term rentals.

Tony:
Can I ask one last question before we move off of this deal Brec. So I know you have the property manager in place right now. A, what drove your decision to hire that property manager versus trying to figure it out on your own and then B, as you continue to scale, is your plan still to use third party property management?

Brec:
So when I’m in Atlanta filming, I work on average a 14 and a half hour day, and that’s not fully working. I’ve worked 80 hour weeks before. So realistically, when I’m working, I don’t have the time and mental capacity to also be managing a property. Right now though, I’m on hiatus.

Brec:
So in the area that I’m in, I’ve done some research looking for that property manager because it is important for me to have them set in stone before making an offer on a place because it can all happen so quickly. And then you have this property, but you either don’t have a team to help you rent it out or you’re just not set up to do that. So I’ve done quite a bit of research, reached out to different companies.

Brec:
I reached out to five different property management companies in my area. One followed up, only one response and then didn’t respond after that. And I’m like, “These are not the type of people I want managing my property when it’s supposed to be a 24 hour service to those tenants.” So actually, there’s been a lot of conversation between me and two of my friends to start my own property management company. My dad and brother also both do real estate investing.

Brec:
So right there, I have some secured Airbnb properties. So I was like, “Okay, you already have about, you could have easily five properties in just a couple of months.” But once again, it’s a bit nerve wracking to do that. It’s something I know absolutely nothing about on how to do that, but so I’m currently working on learning how to do that because that is one of my next goals.

Ashley:
It’s exciting building something, isn’t it? That’s what I [inaudible 00:42:39].

Brec:
It is. I told my dad because he’s very … And he also knows, it’s very kind of him, but he knows how much my time is worth at this point. Just like how many things I have my fingers in and how successful a lot of it has been. And he told me he’s like, “Could this property management company make you a million dollars?” And I was like, “Absolutely.” He’s like, “Okay, fine. Do. I don’t care.” I’m like, “Great.”

Ashley:
Brec, we’ll have to have you back on in a year to talk about starting a short term rental property management company.

Brec:
Please. And I’m going to annoy you guys whenever I have questions or need help. This has been so fulfilling and exciting to me because at this point, I haven’t really had anyone to talk about this stuff too. It’s just in my head and I’ll talk to my boyfriend about it and half the time I’m going, “I’m sorry if I’m annoying you.” He’s like, “No, just keep talking. It’s fine.” So I’m totally going to take advantage of this new relationship and friendship. So thank you guys.

Ashley:
Yeah, good.

Tony:
Of course.

Ashley:
Okay. So we have a rookie exam Brec. So hopefully you still have all of your math knowledge because this is definitely a hard exam.

Brec:
Oh no.

Ashley:
Okay. So these are a couple questions that we ask every guest onto the show, and the first one is what is one actionable thing rookies should do after listening to this episode?

Brec:
Just because we’ve been talking about it so much, go do your best. Find a property online and run the numbers on it. If you have to look up a formula, if you have to go use a calculator, I don’t care. Just go run the numbers on it. Get a good little practice in, it’s fun.

Ashley:
That is a perfect answer.

Brec:
Does that work?

Ashley:
Yeah, we can’t hit home enough. Run the numbers. Practice, practice, practice.

Tony:
All right Brec, so question number two. What is one tool software app or system that you use in your business?

Brec:
AirDNA.

Tony:
I love that. For folks that aren’t familiar with AirDNA , can you explain what it is and how you use it?

Brec:
Yeah. So you pay, once again, correct me if I’m wrong, I feel like you all are the professionals, but you pay $20 for X amount of properties in whatever location you want. And it shows you, you can click on each property that’s listed on Airbnb and it shows you the average occupancy and the average nightly rate. So you can use all of those to get an idea of what your property would do.

Ashley:
Okay. And the last question is where do you plan on being in five years?

Brec:
In five years? 28. I’m kidding.

Ashley:
We’ve never had that answer before actually, surprisingly.

Brec:
I’m quite a literal person. I’m going to manifest it. I’m going to say owning my own property management company and at least 10 short-term rentals in my portfolio.

Tony:
All right Brec. Well, you passed the exam so great job, but I want to take it to our next segment which is the rookie request line. So every episode we give our listeners a chance to ask questions. So for those of you that are listening, if you want your question featured on the show, give us a call at 888-5-rookie, and there’s a chance we might use your show or I’m sorry, there’s a chance we might use your question on the show. So Brec, are you ready for today’s question?

Brec:
Yes.

Zoe Gatlin:
My name is Zoe Gatlin. I’m just outside of Austin, Texas, and my fiance and I are trying to get into our first real estate deal. We have a good lump sum of money saved up, but we’re both self-employed so we don’t have the money to show for it. I recently got a W-2 job to proof of income, but I have no credit. I don’t have bad credit, I just never built my credit. My fiance does have credit. Is there any way we can use his credit and my income source to get into our first deal or what’s the best way to start building my credit? The quickest amount? Thanks guys. Love your podcast.

Brec:
Yeah, I feel like you spoke on this a little bit earlier Tony, but more that investment lender situation where they focus more on the numbers and less about you as an individual. To me, that seems like a good fit.

Tony:
Yeah, and even your experience Brec about just finding the lender and like maybe there’s some additional documentation you need to provide or there’s other ways to prove income even outside of the W-2. So yeah, like Brec said, we talked a little bit about that earlier, but hopefully that points you in the right direction. Anything to add onto that piece Ash?

Ashley:
No, I don’t think so. I think you guys covered it is finding ways to work with the lender. One thing that I have realized has helped build a good relationship with the lender. So they want to work with you is that when they do ask for things, be super, super timely in getting that information back to them because, or else, they’re just waiting around and the quicker and the more responsive you can be and keep those lines of communication open with your lender, they’re going to be way more appreciative when you can get things back to them in a timely manner than them sitting around and waiting for you for days or weeks or months, even to get information back from you. And so they don’t have to nag you for it to keep your file moving.

Tony:
And we talked about this in the past before too, but it’s like don’t always walk into a bank or to your lender and say, “Hey, I want a loan, this investment loan.” Walk into your lender’s office and say, “Hey, I’m looking to buy an investment property. Here’s how much cash I have. Here’s what my credit situation looks like. What is the best lending option for me?”

Tony:
And then put the onus on them to figure out how to get you the right loan for your specific situation, but I think all too often, we hear these different loan products and we get tied up in using the product and the product doesn’t matter. We’re not real estate investors because of the loan products. What’s most important is getting the deal done. So give them your situation and put the onus on the lender, on the bank, on whoever you’re working with to find the right solution for you.

Ashley:
And a lot of these smaller local banks too, they have a lot more flexibility than bigger banks because they actually have a board of directors that goes and approves every loan or every option that goes through that bank. And some of the loans they’ll keep in house or they’re not tied to federal and government loans like Fannie Mae and Freddie Mac. So definitely check your small local banks and ask them what options do you have for what I want to do.

Tony:
Last thing before we move on. I’ve shared the story before, but my very first, the first three deals that I did in Louisiana, they were all zero money out of pocket. The bank financed the purchase price and the rehab. And it was because I walked into them and said, “Hey, I’m looking at buying and rehabbing some properties in your area. What kind of loan product do you have?”

Tony:
And they were like, “Here you go. We’ll cover everything if you find a good enough deal.” And I wouldn’t have been able to find that if I was just going in and saying, “Hey, I want a 20% down loan to buy a property.” So always going with your intentions and let them guide the conversation.

Ashley:
Before we close out the show. I want to give a shout out to this week’s rookie rockstar. So this is Jay Mennel, closed on a cabin that he’s going to turn into a short term rental. This is his first short-term rental and fifth property overall. So congratulations Jay. And he says that he’s hoping to follow in the footsteps of Tony Robinson. So even more exciting, but congratulations.

Tony:
We’re a size 14 man. So those are some big footsteps [inaudible 00:50:09]. I’m kidding.

Ashley:
So if you want to be featured as our week’s rookie rockstar, please post in the Real Estate Rookie Facebook group what you have going on, what is your weekly win. Even maybe a lesson learned. We love to share those too because we think it’s always important to not only share the wins, but to share things that you may have learned across your investing journey or you can send a DM to me and Tony @wealthfromrentals or @tonyjrobinson. Well Brec, thank you so much for joining us. Can you let everyone know where they can reach out to you and find some more information about you?

Brec:
Yeah. Thank you. I am on Instagram @brecbassinger, my name and I’ll go ahead and link this, Stargirl season three coming up this Fall.

Ashley:
Well, thank you so much for joining us. We loved hearing about your first property, your short term rental, and also your house hack. Make sure you guys check out Stargirl too coming out with the third season. So thank you very much for joining us. I’m Ashley at Wealth from Rentals and he’s Tony at Tony J. Robinson, and we will be back on Saturday with a rookie reply.