\n<\/p>\n
\u201cCancer.\u201d One word would change this mom\u2019s life forever, requiring her to drop her career<\/strong> and become a full-time caregiver<\/strong>. But little did she know that real estate investing<\/strong><\/a> would bring her more time, flexibility, and freedom<\/strong> than she had at any W2 job<\/strong>. Today, she owns several<\/em> rentals, including one that brings in over $6,000 in monthly <\/strong>cash flow<\/strong><\/a>!<\/p>\n Welcome back to the Real Estate Rookie<\/em> podcast<\/strong>! Jane Ng<\/strong> and her husband had been climbing the corporate ladder<\/strong> when a family medical crisis<\/strong> turned their lives upside down. Following her daughter\u2019s leukemia diagnosis, battle, and long recovery, Jane knew her next job would need to accommodate their new normal. Real estate has provided that and more<\/em>, allowing her to spend more time with her children<\/strong>, work without being chained to a desk, and bring in more than enough money to help support her family<\/strong>.<\/p>\n After dabbling in wholesaling<\/strong><\/a>, long-term rentals<\/strong>, and other investing strategies<\/strong><\/a>, Jane has since pivoted to short-term rentals<\/strong><\/a>, leveraging her hospitality background<\/strong> to craft memorable getaway experiences. Stick around and she\u2019ll show YOU how to copy her success, whether you\u2019re a stay-at-home mom or a nine-to-fiver!<\/p>\n Ashley: Tony: Ashley: Tony: Jane: Ashley: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Ashley: Jane: Ashley: Jane: Ashley: Jane: Tony: Jane: Tony: Jane: Ashley: Jane: Ashley: Jane: Ashley: Jane: Ashley: Jane: Tony: Jane: Tony: Jane: Ashley: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Tony: Jane: Ashley: Tony: Jane: Ashley: Jane: Ashley: Jane: Tony: Jane: Ashley: Jane: Ashley: Jane: Tony: Jane: Tony: Jane: Ashley: Tony: Jane: Ashley: Jane: Ashley: Tony: Jane: Tony: Ashley: Jane: Ashley: Jane: Ashley: Jane: Ashley: Jane: Ashley: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n
Our guest today was at navigating life as a full-time caregiver to her daughter battling leukemia. But when a Zillow listing popped up during a medical trip to New Orleans, she found a $60,000 house and a whole new future.<\/p>\n
And today\u2019s guest, Jane Ing, went from an accidental $8,000 wholesale to building luxury short-term rentals and now cash flows over six grand per month. And she did it all while raising not one, not two, but three kids and never stepping foot inside of her.<\/p>\n
This is The Real Estate Rookie Podcast. I\u2019m Ashley Kehr.<\/p>\n
And I\u2019m Tony J. Robinson. And with that, let\u2019s give a big warm welcome to Jane. Jane, thank you so much for joining us on The Rookie Podcast today.<\/p>\n
Thank you for having me.<\/p>\n
Jane, your real estate story really starts out with something heartbreaking. Your daughter was diagnosed with leukemia. Can you take us through that moment of when you got that news and how did that news shift everything for your family and for you personally?<\/p>\n
Yeah, it\u2019s a moment that as a parent you could never prepare for. Especially as a mother, it was the first time in my life I felt completely helpless. And I knew that in that moment there\u2019s nothing I can do to change our reality and there\u2019s no amount of money or education or knowledge or connections that we had that would change what we just heard. She has leukemia. It is what it is. And yeah, honestly, I\u2019ve never felt so helpless in my life.<\/p>\n
Jane, first, thank you for sharing that with us because I\u2019m sure it was a difficult time. I\u2019m sure it just kind of makes you reassess everything when you get that kind of news. I guess before that diagnosis, what did life kind of look like for you and what changes did you have to make afterwards as you guys navigated this new reality?<\/p>\n
So my husband and I were both working, pretty demanding W2 jobs. At that time, we just had two kids. So Ashley, my daughter who was diagnosed, she was three and a half. My younger daughter was two. Our son wasn\u2019t born at that time. And because my husband and I were so busy, our girls were in daycare from 7:00 AM to 6:00 PM. And in hindsight, I can\u2019t imagine them now that they\u2019re all much older. I can\u2019t imagine them being out of the house for 11 hours a day, but that was our reality. We were both so busy, both climbing the corporate ladder. And to be honest, we both enjoyed our W2 jobs. And I know most people get into real estate because they want to leave their W2, but we really enjoyed what we were doing. So I have a background in hospitality and in business.
And so after grad school, I worked for different hotels. One of them was Caesar\u2019s Entertainment where I learned \u2026 It was actually really fun because we learned everything about the hotel side, the gaming side, restaurants, spas, golf. You learn everything and it\u2019s super, super exciting. And I worked for smaller boutique hotels, but right before my daughter was diagnosed, I was actually working for Uber and my team was in charge of launching Uber Eats in different cities. And so we were working with the general managers of each different city and figuring out which restaurants we wanted to target and how the operations of all of that work. So it was really fun, so dynamic, but I had to give it up all in a matter of seconds.<\/p>\n
So Jane, as you\u2019re climbing the corporate ladder, and obviously it seems like you and your husband are both doing well, and this news comes in and kind of shifts everything for you. Obviously the first priority is just focusing on your daughter\u2019s health. And I guess give us an update, Jane, how are things today before we even talk about the real estate further?<\/p>\n
Yeah. So it\u2019s been 10 years since the diagnosis, and thankfully she is alive. She\u2019s doing relatively well, but she suffered a lot of complications during treatment. And this is one of those things where all the doctors we had, they\u2019re like, \u201cOh, this stuff, it\u2019s not even in the medical books, the stuff that she\u2019s going through.\u201d And when your child\u2019s diagnosed, they give you different sheets of paper that say, \u201cHere are some of the potential side effects of the chemo that she\u2019s getting.\u201d Most likely she might have fevers and rashes and they have \u2026 So they categorize it by most likely, likely, and here is a less than 1% chance she\u2019s going to have these symptoms. She had symptoms that were not on the paper. And a lot of what \u2026 So without going into all the details of her story, she had leukemia, but she had a very specific type that was resistant to chemo.
So not only did she have to go through three times the amount of chemo, most leukemia patients would go through, but that wasn\u2019t enough. They said chemo wouldn\u2019t kill the cancer, so she needed a bone marrow transplant. And thankfully that put her in remission. And I was actually her donor because we couldn\u2019t find a perfect match. And so UCSF, the hospital we were at, they were doing clinical trials that allowed a parent to be a donor because by definition, you are like half mom and half dad. So my husband and I were both like a 50% match and it put her in remission, but she was left without an immune system for maybe six months. And during that time, she caught a virus and most of us are able to, you have a little cold or runny nose, her body just couldn\u2019t fight it. And that virus went straight to her brain and it just started causing all these issues.
And we didn\u2019t know because there\u2019s no way of knowing that there\u2019s any brain damage other than, \u201cOh, this kid is acting a little weird.\u201d So she was sleeping 20 hours a day and it just didn\u2019t feel right. And so after all these tests, we did an MRI and they saw tumors, bleeding, so much pressure. The amount of pressure her brain had at that time was already past the threshold of what a person could handle. And so they immediately put her in the PICU for safety. And I think my husband, this happened so quickly. We didn\u2019t realize what this meant. We\u2019re like, \u201cWhy are you putting her in the PICU?\u201d And they said, \u201cWell, we fear for her safety.\u201d We\u2019re like, \u201cWell, what do you mean? She\u2019s barely moving. She\u2019s not going to \u2026 \u201d I thought they meant she\u2019s going to fall off her bed or something like that type of safety.
\u201cNo, we\u2019re not sure how many days she has left.
\u201cAnd it was a shock. We didn\u2019t know that\u2019s how bad it got and got there very, very quickly. So we had a couple options. We had one option to keep her comfortable with just a steady drip of morphine and just kind of wait till the last day comes, or we could try a little bit of radiation to her brain and spine to see if that\u2019s going to kill the virus and at least stop everything from getting worse. And of course, that\u2019s the path that we chose. And they\u2019re like, \u201d This is not guaranteed at all. We\u2019re really just kind of trying whatever we can think of, but it worked. \u201cAnd so that was kind of when her recovery started, but the brain damage was so severe that even though they say kids\u2019 brains are plastic and you can relearn a lot of these things, basically the way they explained it to us was all the freeways in her brain where information passes, the freeways are broken.
And so information just can\u2019t pass from one cell to another cell. It\u2019s hard to pass. And so today she has basically every disability you can think of, like physical, intellectual, social, developmental, everything. She goes to a special needs school, which is amazing. They take very, very good care of her. But my husband and I had to come to the realization that she\u2019ll never be an independent adult. And so we will always have to care for her in some form. And so that\u2019s just something that we had to realize and accept. And she\u2019s 13 now, so we\u2019ll just figure out what happens, what happens next for her.<\/p>\n
Parents. And I\u2019m getting choked up listening to your story because I can only imagine the emotions you guys felt as you went through that. But I mean, just kudos to you guys for saying positive through all of that. I think the question that I have for you is, and this isn\u2019t even necessarily about real estate investing, but so often we find ourselves at moments in our life where it can feel maybe a little hopeless or it\u2019s just like, \u201d Why me? \u201cAnd we can kind of fall into that trap of feeding into those negative thoughts. How did you guys push past that? And this is just a life lesson for everyone that\u2019s listening because maybe not to the extent that you guys did, but we all have challenges that we end up facing in life. And I think how we respond in those moments is so indicative of what life looks like on the other side.
How did the two of you just together have that dialogue to say, okay, here\u2019s how we\u2019re going to move past this?<\/p>\n
Yeah, it\u2019s a really good question because we\u2019ve certainly met a lot of parents in similar situations along the way and everyone handles it a little bit differently. And we\u2019ve kind of seen how if it\u2019s kind of not the glasses half full thought, it could be very, very detrimental. So my husband and I, we\u2019re both Christian and for us, our faith was pivotal. And without it, I don\u2019t know where we would be today. And so as much as the situation sucked, we truly believe there\u2019s a reason and that\u2019s outside of our control, obviously, but also beyond our comprehension. I don\u2019t know why.
That was basically, I think, trusting that and knowing that, okay, this is the child that God gave us and no matter what happens to us, it\u2019s our job to be the best parents we can be for her. And if we are sad and angry and upset and depressed and going through all these negative emotions, we cannot show up for her the way she needs us because even the days where she couldn\u2019t speak in the hospital, she can very much sense our presence and she can read the room very well. If we\u2019re all having very serious conversations, her face changes a little bit. But if we\u2019re playing music and singing and dancing, and even though she can\u2019t participate, her face looks a little bit different. There\u2019s a little bit of joy in her face. And so we knew that she was so, so young, we knew that we had to show up for her in a way that she needed.
And also for our other daughter at that time, she was two. She has no clue what\u2019s going on. And Tony, I know your girls are really young, so I don\u2019t know exactly how old they are. Maybe they\u2019re roughly the same age, but so you can imagine, right? They\u2019re so young, they cannot comprehend what\u2019s happening. And so we knew for their sake, both of them, the one that\u2019s sick and the one that\u2019s not sick, we just have to show up for them in the best way that we can.<\/p>\n
Incredible, I think, resilience and just mindset from you and your husband. And I\u2019m literally kind of holding back tears here as I hear you talk through this because it is really a moving story and just \u2026 I hope people can listen and find solace in their own challenges that if you approach it with the right mindset, it doesn\u2019t necessarily take away from how difficult the situation is, but it does, I think, allow you to move through it with the mindset of like, we can figure out a way to get through this. So I appreciate you sharing that story with us. Now, as you went through this journey, at some point, the corporate ladder wasn\u2019t as important to climb and you made the transition into real estate. How did that even come about as you guys were going down this path of caring for your daughter?<\/p>\n
Yeah. So I realized as she was going through treatment and in this season of her life and also my life, my desires and my corporate dreams were just not important whatsoever. So that all went on the back burner. And to be honest, all I had the emotional capacity for was my family. I just didn\u2019t have time to think about myself or anything else. It was just my daughter, my sick daughter, my healthy daughter, and my husband.That\u2019s all I had the capacity for. And I was okay with that. I accept, this is not going to be the rest of my life. This is a season of my life where they really need me and I will be the mother, the wife, whatever in this situation for this season. And as she started getting better, we were no longer in this hyper scary situation where it was life or death.
We knew she was going to survive and we were going to bring her home, and now we\u2019re just figuring out different therapies and treatments for her. In the back of my mind, I kind of thought, well, I would like to do something. I knew that I could never go back to the same type of corporate job because I would have to commute or I would have a boss. And because of all of her complications, she sees so many different doctors that I just can\u2019t ask for permission every time to take her to those appointments. And I also like, those appointments have to come first over anything else. I can\u2019t reschedule because I have to work.<\/p>\n
And you\u2019re not always given an option as to when your appointment can be either for a lot of those. Yeah.<\/p>\n
Yes, exactly. And so I knew I had to be my own boss and have some kind of a job where I dictated all the terms. I could work how much or as little as I want to. And my daughter and I were in New Orleans for a two-month medical treatment. And this is one of those things where obviously in hindsight, had she not gotten sick, we would not have been in New Orleans and none of this would\u2019ve happened, but it all happened. So we were there for two months. The treatment made her super tired. And so during the day I would drive around, she\u2019d take a nap in the car. I would just pull over wherever I was. I happened to pull over in a decent neighborhood right in front of a foresale sign. I looked it up on Zillow because I had nothing else to do.
And it was a decent three bed, two bathhouse for $200,000. And coming from the Bay Area, to be honest, I just didn\u2019t know that those price points existed. And I know people living in most other parts of America are like, no, it\u2019s pretty common. $200,000 is actually not that cheap. But for the Bay Area, I mean right now, even a fixer-upper is probably a million dollars. And so it was the first time I thought, oh, hey, we could afford real estate. We could afford an investment property in the Bay Area, we just couldn\u2019t. And so I went down this rabbit hole of learning as much information as I possibly could, and it was all through BiggerPockets. I mean, this was back in 2020. So podcasts, I don\u2019t think the rookie podcast existed at that time, but the main podcasts, books, blogs, I just absorbed myself in as much information as possible.
And that\u2019s kind of how our journey started, but I didn\u2019t plan to get into real estate. It was just kind of an accident.<\/p>\n
So was that the property you ended up buying or was that just the one that led you to-<\/p>\n
No, no, because after I started doing my research, I realized, wait, $200,000 is expensive. This is actually not a good deal.<\/p>\n
So Jane, you ended up taking on a rental in a new market, but what happens when this new market has some bad weather, bad tenants and burnout all before your first short-term rental? We\u2019ll dive into it right after this break. Okay, so we\u2019re back from our short break. Thank you guys so much for taking the time to check out our show sponsors. So Jane, what did you do next after seeing that listing? What made it feel like it was time to pursue your first deal?<\/p>\n
So I just became obsessed and I was on Zillow all the time. And since I knew I was physically in New Orleans for the next two months, I wanted the opportunity to actually see some of these homes if I could. So my first deal was an unexpected wholesale deal. I saw a property on Zillow for $120,000 and everything I learned from BiggerPockets told me if it has been often on the market multiple times or if it\u2019s been sitting on the market for a really long time, then you can negotiate. Then the seller\u2019s desperate. So I didn\u2019t know anything about construction or renovating or anything, and I offered 60,000 and they accepted. And I was blown away, my realtor was blown away. But what happened next was I tried to get a loan because I was going to borrow it. It was going to be a pretty big construction project and I was trying to get a loan and none of the local lenders would lend to me for two reasons.
One, I was out of state and they just went through Katrina. And so they were a little bit traumatized and burned by what happened with Katrina. And so they were very, very cautious working with new out- of-state investors. So I was a new out- of-state investor and I had no track record. So those two went against me pretty, pretty hard and I couldn\u2019t get a loan. So I talked to my realtor and I was in a position where I either had to move forward or get out of contract, but I knew it was such a good deal. I just couldn\u2019t let it go. So my realtor and I found another investor who was interested for $68,000. So we did a same day double close, which I didn\u2019t even know existed until that moment, where I bought it from the seller for 60 and the investor bought it from me for 68, and then a few days later I got a check in the mail for a little under $8,000.<\/p>\n
That is amazing that your very first deal was an 8K accidental wholesale transaction. And honestly, shout out to your agent for helping you find a buyer on the backend because there are a lot of agents who are like, they kind of looked down on wholesaling almost. So the fact that he or she was open to that and educated you on how to actually do that, I think was great. Let me ask Jan, and this is more of a technical question. Was it one closing where you just got an assignment fee or did you actually have to somehow fund that initial 60K purchase and then literally an hour later fund the second transaction for 68K because in the first scenario, you literally don\u2019t need any cash because you\u2019re just like a line item on the closing statement. But in that second scenario, you\u2019ve actually got to have the 60K to close in that first deal to then turn around and resell it for 68.
So which of those two was it?<\/p>\n
It was the first scenario, so I didn\u2019t have to bring anything to the closing table.<\/p>\n
That is fantastic. Man, what a great first deal. So I think a lot of people maybe would\u2019ve stopped there. They\u2019re like, \u201cEh, I jumped in, couldn\u2019t figure this out, \u201d but you didn\u2019t. So what happens after this 8K wholesale<\/p>\n
Deal? So I was even more fired up to get a property because this was not planned and I just made $8,000 from something I didn\u2019t really plan on doing. And so I was like, \u201cHey, there\u2019s a lot of things I can just figure out as I do it. \u201d I have BiggerPockets has given me enough background and education and knowledge, maybe like 80% and the 20% I just have to learn from doing it as I do it and different roadblocks happen, I just need to figure it out. So now I knew what wholesaling was because I just did it. So that same realtor introduced me to a local wholesaler whom I never met, but she sent me a deal for $50,000 in a little suburb outside of New Orleans and that was because it was wholesale had to be all cash, but it could have been fixed up, but it didn\u2019t have to be.
So we chose not to. We did a cash out refi because I think it was worth like 75,000. So we got all of our money back. I had a tenant in for 800. Six months later, she stopped paying rent, so I had to evict her. And at that point, we did the renovation.<\/p>\n
And how much did you have to spend on the renovation?<\/p>\n
I think 35. So we were all in about 85. And after the renovation, I rented it for $1,100 and a year and a half later we sold it for 110. Wow. That\u2019s a pretty good one. And you were cash<\/p>\n
Flowing, I<\/p>\n
Assume? Yes, we were cash flowing. Yes. And we also bought the two homes right next to it from the same wholesaler, and it was roughly the same numbers. Yeah. So our first handful of deals did pretty well.<\/p>\n
Were you self-managing those properties or did you hire a property manager in the area?<\/p>\n
I had a property manager because I didn\u2019t know about the self-managing thing. I just didn\u2019t know that was even possible. In hindsight, I would\u2019ve probably self-managed, but the property manager, their office was maybe three minutes from the house. And so it was just so convenient to hire them and they were great.<\/p>\n
Yeah. That\u2019s interesting that you say that, that you didn\u2019t know that was an option. And I think sometimes we forget about those things because I didn\u2019t know when I bought my first property that you could get a loan. I thought you either had to pay cash or borrow money from a friend or someone. I did not think that you could go to the bank and get a loan unless you were living in the property. So Tony, maybe we need to do an episode on some of these things that you may not know. And that\u2019s a great point of you may not know that you can actually self-manage and there\u2019s rental property management software out there that helps you do a lot of it. So now with these rentals, did you sell just one of them or did you end up selling all three of them and why did you decide to sell?<\/p>\n
I did sell all three of them. So I owned them for about a year and a half. And in that year and a half, we went through two hurricanes and that was two hurricanes too many. And the second hurricane, I don\u2019t remember what it was called, but it literally went through my street. And thankfully it missed our homes by like 20 feet, but it was too scary. And so I just wasn\u2019t interested because I knew these weren\u2019t going to be the last hurricanes, right? It\u2019s Louisiana. Hurricanes are going to happen. So we decided to sell them. We did 1031s into two different assets. So we invested in long-term rentals in Little Rock, Arkansas. So we still have three homes there. And then we also decided to buy our first short-term rental in California.<\/p>\n
Janet, I just want to ask a few follow-up questions. First, can you define for folks that don\u2019t know what a 1031 exchange is and why it\u2019s beneficial for real estate investors?<\/p>\n
Yeah. So a 1031 exchange is basically when you sell an investment property and you have a capital gain. Instead of paying taxes on the capital gain, you would basically roll it over into a like- kind property and there\u2019s some nuances there that you have to follow, but that allows you to defer the capital gains taxes from that first property until you kind of sell the second property. But the goal is to continue 1031ing until, I guess. Swap to and drop. Swap, swap to be dropped.<\/p>\n
So you guys were able to unlock some of that equity that you\u2019ve built up through these renovations and the burrs to then go buy some other properties. And then it sounds like the other part of the reason that you guys sold was maybe more the emotional component, like you mentioned the hurricanes. Was there anything else aside from the weather that was kind of like gnawing at you from holding that portfolio? Was it really just the risk of are these properties going to stand the next hurricane?<\/p>\n
Yeah, I think hurricanes was probably 80, 90% of it. The other 10 or 20% was maybe the neighborhood. So I initially thought it was maybe B minus class. It was more C class. And I knew with my first tenant who stopped paying in six months and she was doing things in the house she wasn\u2019t supposed to be doing. And I just didn\u2019t want to deal with those tenants. There\u2019s certain risks that come with that and I wasn\u2019t interested in that.<\/p>\n
So now you\u2019ve pivoted to short-term rentals and you said you bought one in California. Walk us through this deal. How did you find it? How much was it?<\/p>\n
Yeah, so it\u2019s interesting because if I were to buy short-term rental today, I would not follow the same process, but this was 2021 and all the podcasts I was listening to, everyone talked about STRs. I think no one even called it STRs back then. It was just Airbnbs, right? Everyone was buying an Airbnb. It was cash flowing so much. And the more podcasts I listened to about it, I realized, oh, this is like running a hotel. And no one was talking about it that way, but because I have a background in hospitality and in business, for me, I was like, oh, I\u2019d just be a general manager of this one room hotel, even though it\u2019s like four bedrooms or five bedrooms. I\u2019m like, \u201cThis is my one room hotel.\u201d And the way we decided on this market and we found this place, we\u2019re in the Bay Area, my brother and his wife were in LA and for my kids\u2019 spring break in April, we wanted to meet in the middle.
And it was 2021. So people are still a little bit weary of travel after COVID. And so we didn\u2019t want to get on a plane anywhere. We wanted to drive. And so we were looking at places that\u2019s kind of in the middle. So three and a half hour drive for both of us is Central California. It\u2019s near Paso Robles, San Luis Obispo, Pismo Beach, that area. And I was looking for Airbnbs and they were all really ugly, not just the design and the home, but the photos were really bad. It\u2019s almost like they purposely closed the curtains before taking pictures. The listing description was bad. The price was like $200 every night, 365 days of the weekend. So just by looking at what was available, I knew most operators were not treating it like a business. Most operators were not doing this professionally. And so if I were to enter this market, I would do better than almost anybody else.
Not because I have so much experience because I had none, but I would just take it more seriously. You can tell these people were not taking it seriously. Things have changed a lot since then, but this was back in 2021. And so the next thing I did was try to understand the licensing requirements in all the cities in that county. And I picked, I think, two cities where licensing was relatively easy, easy to get or the STR permit. And I reached AirDNA, I don\u2019t even know if it exists. Actually, I think it did exist, but I found a realtor by reaching out to other hosts on Airbnb. So I reached out to three people just to be like, \u201cHey, I\u2019m interested in buying in this market.\u201d And you guys know because you guys have Airbnbs as well. When you get this inquiry, it looks like someone\u2019s booking your place, right?
So you get really excited, but then they\u2019re asking a question that\u2019s like, \u201cHey, I want to be your competition. Can you help me out? \u201d Although I asked it in a really nice way. And so of the three people I messaged, two never wrote back to me. And then the third person happened to be a realtor. And so she was like, \u201cHey, yeah, I\u2019ll help you. \u201d And so she just told me her name. She said, \u201cGoogle my name.\u201d So I did and I got her phone number and I talked to her and within a week we were under contract.<\/p>\n
Wow. That\u2019s incredibly fast. So Jane, let me ask a couple questions here because I think a lot of folks \u2026 Now granted, you already had some experience in the long-term rental space, but a lot of folks I think are hesitant to pull the trigger and get second analysis paralysis. How did you move so quickly? What allowed you within seven days to be under contract on your first short-term rental?<\/p>\n
So a couple things. I felt like we were not the only ones with this mindset of, \u201cHey, I want to see friends and family, but I don\u2019t want to get on an airplane and I don\u2019t want to stay in a hotel. I want to drive there.\u201d And so where are some popular driving destinations from the Bay Area and from Southern California where people can meet? And Central California was just so easy. There\u2019s beaches nearby, there\u2019s so many things to do. I also know it gets super hot there and this property had a really large pool. And so even though the house itself was kind of ugly and we had to do some renovations, the pool and it also has a really big in- ground hot tub and you normally don\u2019t see inground hot tubs, you see the aboveground hot tubs, but this in- ground hot tub can very comfortably have 12 people in there.
It\u2019s like a mini pool. And so So those two things, if I were to put in myself would cost hundreds of thousands of dollars and it was already there. And so that was the biggest thing, but this wasn\u2019t a market where other Airbnb investors were looking because it\u2019s a city that most people haven\u2019t heard of. And to be honest, it didn\u2019t look very nice. I bought it from two people who had lived there for 40 years. So it kind of looks like they had been living there for 40 years. There were three different colors of carpet. So yeah, I felt like the pool and just the demand at that time of people really wanting a drive market would make it successful.<\/p>\n
And what city did you say it was in, Jane?<\/p>\n
This is Atascadero.<\/p>\n
A Tascadero, but you said it\u2019s near San Louis Obispo.<\/p>\n
Yeah. So it\u2019s right in between Slow and Paso Roblos. It\u2019s like 20 minutes from each.<\/p>\n
Got it. So I just looked at that city on Airbnb while you were talking here. I know St. Louis Obispo, but I\u2019ve never heard of Atascadero. And even still to this day, a lot of the \u2026 And I\u2019m looking for larger properties and a lot of them still kind of suck. So maybe there\u2019s an opportunity there for a lot of people that are looking for kind of a coastal town to go buy near San Luis Obispo. So the property itself, what was the purchase price on it?<\/p>\n
The purchase price was 722,000.<\/p>\n
722. That\u2019s a big swing for your first one. Yeah, from 50. Yeah. And what kind of debt did you use on that one? Did you use a second down or second home loan, 10% down, or what was the debt?<\/p>\n
Yeah, we did a 10% second home loan.<\/p>\n
In 2021, I mean, rates were starting to creep up, so what was your rate at that point?<\/p>\n
3%.<\/p>\n
Okay. So you got a sweetheart deal. All right, there you go. So that one worked out well. So now you\u2019ve got this background, Jane, in hospitality. You worked for boutique hotels, some of the biggest hotel chains literally probably on the planet with Caesars. How did that shape how you approached this short-term rental versus someone who maybe didn\u2019t have that experience?<\/p>\n
Yeah. So I thought of what I learned in grad school. So at Cornell, the hotel program they have, there\u2019s a hotel there. It\u2019s called the Statler Hotel, and it\u2019s mostly for undergrad students to do all the grunt work. They do housekeeping, they do operations, they do everything. As a grad student, we weren\u2019t able to do that, but I was able to talk to a lot of the undergrad students who did that and kind of pick their brains on like, \u201cHey, why did you sign up to do this? And what did you learn?\u201d And things like that. And I realized you have to do all the work of a hotel to be a really good general manager. Well, you don\u2019t have to, but that experience is super, super helpful and important in understanding what your team eventually does. And so when we bought this property, I had the mindset of, okay, I\u2019m the general manager of this hotel and hotels have housekeeping, they have operations, revenue management, sales and marketing.
So I was thinking of all the different aspects of running a hotel and this home is three and a half hours from my house. So I couldn\u2019t go for every check-in and neither I didn\u2019t want to go for every check-in. But I wanted to know, when I was getting quotes from cleaners, I wanted to know why they were quoting me a certain price. It\u2019s going to be three people and it\u2019s going to take three to four hours to clean. I\u2019m like, why? Why is it taking nine to 12 hours to clean a four bedroom house? That doesn\u2019t make sense to me. But what I wasn\u2019t incorporating was I have seven beds there and to do the laundry for seven beds and all the towels and the bath mats, and we have separate pool towels, that takes a lot of time. And oftentimes if we have a same day turnover, they need to take it offsite to do it.
And so one of the things I did early on is I did the laundry myself. So I was like, I want to know how long this really takes. And not only does it take a lot of time, it\u2019s exhausting and I don\u2019t do it very well. It takes so long to make the beds. I fold towels a certain way in my own house because no one cares whether or not it\u2019s pretty. It just needs to be folded. But I was trying to figure out how do I fold these towels in my Airbnb? So I had to YouTube it and then I had to pick the type of folding that I liked best and then I had to learn how to do it and how to set it up. And I was like, okay, now I know why I pay my cleaners a premium. I understand the job of a cleaner, but I wouldn\u2019t have understood that if I didn\u2019t do the work myself.
And so the first property was a lot of DIY, not necessarily to save money, but just so I understood what my team was doing and to make sure that I\u2019m also properly compensating them for their work.<\/p>\n
I also did the laundry when I first started my short-term rental and it was a Airbnb arbitrage and it was in an apartment complex. So they had laundry rooms. So we would go and take over one of the laundry rooms, fill up three washers, and then we\u2019d have to wait around to switch it over to the dryer. And yeah, it was awful. And making the beds, we had bunk beds doing the top bunk and \u2026 Oh God, yeah, it was awful. And we\u2019d always have to make sure we had quarters too, because they were coin operated too. And you forgot your quarters, you\u2019re back out to your car digging through the cup holder.<\/p>\n
I unfortunately have never done laundry to him my short-term rental. So shout out to my cleaner for holding it down that way. Jane, how fast did you get the property up and running? So I know it took you seven days to find it, another 30 days or so for closing. How long after closing did you actually get it up and running and welcome in that first guess?<\/p>\n
Yeah. So in hindsight, I did it pretty quickly. So we had to do a big renovation. We redid all the flooring, paint, redid the kitchen, redid some landscaping. And my contractor, he\u2019s incredible. Not only did he finish on budget, but also on time. I think he was off by a couple days. So we closed on May 10th and the property was done by early July.<\/p>\n
Let me ask you something about that real quick with the contract during the timeline and lining it up. So your contractor was able to start right when you closed. How did you get your contractor into the property to actually get you all the estimates and to understand, did you do that during your due diligence period? Did you ask to have permission for him to come through?<\/p>\n
Yeah. So during our one-month period where we were under contract, I think as soon as we were okay with the inspections, I asked the seller if I could just have a day at the house to interview contractors and just to figure out what I needed to do. And they were very gracious and allowed me, I don\u2019t know, 8:00 to 5:00 or something. And my realtor had to sit with me the entire time because I couldn\u2019t be there by myself. And we had maybe five contractors come through, gardeners come through. I interviewed pool guys. They did all that stuff in that day. And they gave me a scope of work and then I chose my guy from there. So he literally started the day after we closed.<\/p>\n
Think about how efficient that is. And all you did was ask and they said yes.<\/p>\n
Yes, absolutely.<\/p>\n
How did you find the potential contractors to interview? Was it just Yelp? Were you in Facebook groups? Was it your agent? How did you get those folks to even line up to come give you the potential scopes?<\/p>\n
Yeah, I used Yelp and Google and I\u2019ve learned that in some markets, more people use Yelp and in some markets, more people use Google and you don\u2019t really know until you start searching in both, but that\u2019s how we found every night. I did ask my agent for referrals, but those referrals ended up not panning out.<\/p>\n
So now that you\u2019ve got the renovation done, what were some of the things that you did during the setup process that maybe would stand out compared to other short-term rental hosts when setting up the property?<\/p>\n
Yeah. So I knew with Airbnbs, especially because now we\u2019re in summer, right? I knew time was money and even getting it ready one day sooner would probably make me an extra 500 or $1,000. So I was in a race for time to get this property ready as soon as possible. And we were actually, now that I think about it, 4th of July weekend, we were in New York visiting family and that\u2019s not something that we could have changed. And so I was gone for a week, which drove me crazy, but we were gone for that time. So towards the end of construction, I started having things sent to the house. The furniture we were going to do, the linens, all that stuff, I had it sent to the house because there were people there and they would just put it in the shed until I got there.
A few things that I did at \u2026 Now it\u2019s a little more common back than not so much. I like to label everything, and I know this doesn\u2019t seem like a big deal, but maybe a third of our five star reviews mentioned the labels. And this is also, because it\u2019s a process that I go through after a home is ready, I close the front door from the outside and I literally walk in, I close my eyes, I open it. I\u2019m like, okay, if I\u2019m a guest coming in here for the first time, where do I go? What do I look at first? Where\u2019s the light switch? And if I turn that light switch on, what does it actually turn on? And a lot of that stuff is pretty confusing. And sometimes you see a light switchboard where there\u2019s four or five light switches together and you just kind of turn all of them on.
And so every light switch in the house is labeled. All the kitchen cabinets and drawers are labeled. And this is also because I\u2019ve had an experience where I went to a pretty large Airbnb and I was literally looking for a cup. I just wanted a cup of water. And I think I opened 12 cabinets before I found the cup. And this is not the host\u2019s fault at all, but after that 12th cabinet, I was a little bit annoyed. Why do I have to open 12 cabinets to find my cup? Again, nobody\u2019s fault. And I don\u2019t want my guest to just even feel annoyed for any reason if I can control that. So that\u2019s something I do at all of my properties that I think stands out and it\u2019s a little bit more guest focused. But going back to setting up this first property. So once the furniture got there, my husband and I spent various amounts of times getting it set up.
We listed it end of July. So we closed May 10th. We listed it end of July because I remember I had a full month of revenue in August and that first month we grossed $14,000. And<\/p>\n
What\u2019s your mortgage payment on this property?<\/p>\n
3,000. That\u2019s P-I-T-I. It includes taxes and insurance, $3,000.<\/p>\n
Yeah, those 3% interest rates. If we could go back to those days. So Jane, I mean, obviously you guys crushed it with this first one, and I know you continued to kind of scale up from there. And I know that your next deal did significantly more revenue than this first one. So I want to get into that deal after QuickWord from today\u2019s show sponsors. All right, we\u2019re back here with Jane. So Jane, you talked about the 14K you made in your first month with that first short-term rental, but the next one, even bigger. So tell us about this deal. You bought a luxury short-term rental for, I believe it was $1.1 million, right? So even a bigger step up in purchase price. What made you decide to go so big with this one?<\/p>\n
So with this property, it\u2019s located about an hour and a half east of San Francisco, maybe almost two hours, I think. And I was really looking for something that was different. So I feel like in some markets, Airbnbs are getting a little bit saturated. You can\u2019t kind of have the same cookie cutter four bedroom home with fancy designs. There has to be something that \u2026 You have to have something that most people don\u2019t have. And so this property had two things. One, it\u2019s big. It\u2019s 4,000 square feet and you can comfortably sleep 16. And not a lot of homes can \u2026 They don\u2019t have beds for 16 people. And it had four acres and only about half of that was being used, maybe less than half of that. And so we had space to put in a pickleball court, bocce ball, fire pit, barbecue, all that stuff.
But at that time, there were not a lot of properties, if any, around the Bay Area that had a private pickleball court. And this is when pickleball was going crazy a couple years ago. So those two \u2026 So the three things. One, proximity to where a lot of people live who have the capital to spend on a nice vacation, right? So within a one or two hour drive. Two, it could comfortably sleep a large number of people. And three, there\u2019s amenities that a lot of other Airbnbs don\u2019t have.<\/p>\n
Jim, we can touch on the amenities here in a moment, but I think just from a strategic business decision perspective, once you get above a million bucks, you can also start buying smaller boutique hotels. And given the experience that you already had in your W2 life of living and being a part of those boutique hotels, what made you decide to go for luxury single family versus maybe just buying a smaller boutique hotel somewhere else?<\/p>\n
I think because I\u2019m already familiar with short-term rentals, this was an easier way to try luxury Airbnb because I haven\u2019t tried it before. I think eventually I will buy some sort of a hotel. And even though I do have a background in it and experience, as you know, Tony, underwriting is still very different, right? The process of buying a hotel is very, very different. And so I wasn\u2019t ready for it at that moment.<\/p>\n
And I think that\u2019s what\u2019s made you successful, is that you\u2019re not getting shiny object syndrome because of what a lot of other investors are doing or seeing that, that you\u2019re sticking to what you know when you\u2019re building that solid foundation and sticking to your strategy, even though a hotel would be a shiny object and is something new to learn about and exciting is you\u2019re sticking to what you know and building that foundation before you actually make that pivot into doing a hotel. I mean, Tony, how many short-term rentals did you do before you built that solid foundation to pivot to doing a hotel a lot, right?<\/p>\n
Yeah, absolutely. And I think for us, because we were at that similar point where our hotel that we bought was a million bucks. And I was personally going back and forth between, okay, do we just buy a luxury single family short-term rental or do we go with the hotel and we opted for the hotel. But I do think that there\u2019s benefits to both. And just trying to weigh what makes the most sense, I think is what I was trying to get at from you. But going back to the amenities piece, because you touched on that, you added a lot, right? You said botchy ball, pickleball before is even cool. How did you decide which ones to add? And I think more important, how do you make sure that you don\u2019t over amenitize? I mean, you could add everything, but at a certain point, it doesn\u2019t necessarily add additional money to the return that you\u2019re getting.
So how did you make that determination of how much to add and which ones to add?<\/p>\n
That\u2019s a good question. And to be honest, I don\u2019t know if I have the best answer for that. I think the thought around pickleball is because everybody was talking about it. It was almost overwhelming. Too many people were talking about pickleballs, and one day my husband and I were like, \u201cOh my gosh, what if an Airbnb had a pickleball?\u201d The thought just popped up out of nowhere. And when we saw this house, there\u2019s a perfect rectangle for the pickleball court. And so it was just a matter of ROI, right? Is this actually \u2026 And obviously there isn\u2019t a precise way to figure out dollar for dollar. How much more am I going to make with the pickleball? All you know is that there were very close to San Francisco. There\u2019s a lot of people with money, a lot of people play pickleball. Would they pay a slight premium for a private pickleball court?
I think everybody would have said yes. And this is a property we\u2019re planning on holding for a very long time. And so we were confident that the ROI was there. And we\u2019ve had people do pickleball tournaments. There\u2019s only one court and it\u2019s nothing fancy. It is an official size pickleball court, but it\u2019s really nothing fancy, but people, they\u2019re like, because there just isn\u2019t enough space in the Bay Area to have a pickleball court where it doesn\u2019t feel like it\u2019s cramped in somebody\u2019s backyard.<\/p>\n
Now with this property, did you get the same 3% interest rate or was this different? And how did the numbers turn out on this? What are you cash flowing?<\/p>\n
Yeah. So this was not only our most expensive purchase price, but it was by far the highest interest rate we\u2019ve ever had. So our interest rate is 7.75%. And so this is, for everyone listening, don\u2019t be worried about the interest rate because there\u2019s still opportunity. This property on average, we cash flow about $6,000 a month.<\/p>\n
We just recorded a rookie reply where that was one of the questions, should we wait until interest rates lower? And here\u2019s a perfect example of like, you can make a deal still work even with a high interest rate. Cash flowing $6,000 a month.<\/p>\n
Six grand a month, right? So we\u2019re talking about 72 grand a year in cashflow. What did you guys actually spend to acquire the property and what do you think you invested in total to actually get it set up, design, furniture, amenities and so on?<\/p>\n
Yeah. So this one, because it was a jumbo loan, I think we had to do 20%. I don\u2019t remember if it was 20 or 25% down payment. So this one we had to have a little bit more cash upfront. We did do some renovations. We added two bathrooms and did paint and just some light fixtures. The bigger renovation was adding the two bathrooms. And then we turned the garage into a game room. And so that was about $100,000, but we actually didn\u2019t have the cash, but we knew we had to do the renovation. And so we opened a few 0% APR credit cards and we put all the renovation on the credit cards. And so two of them was 0% interest for a whole year and one of them was 0% for nine months. But in that time period, we cash flowed enough where we can pay that off.
And so essentially it wasn\u2019t for free, but we didn\u2019t have to have the capital upfront. We let the cash flow from the property pay for those credit cards and the renovation.<\/p>\n
So you guys were all in for 200K, give or take on the down payment, maybe tack on like another, I don\u2019t know, just call it maybe 250, closing costs and whatever else maybe went into it, another 100K. So 350 all in. So we\u2019re still looking at, even with the 7.75% interest rate, about 20% cash on cash return. That is phenomenal, absolutely phenomenal with an interest rate of almost 8%. Thank<\/p>\n
You. Now, Jane, before we wrap up here, I just want to ask, how has real estate changed your life? How have you been able to be there for your daughter to make every appointment, to do everything you need to do with your family and everything and be present in your life and enjoy it, but also be able to fulfill that career almost. As you said, you had loved your job, but you did what a lot of mothers would want to do and be able to leave that job, leave their career whenever their child needed them. And you did that, but there had to be some part of you that missed that creative outlet, that missed that dream, that goal, that desire that you had all through your career to reach. So tell us how real estate was able to make that happen for you where you could still be there for your daughter and you could still live some part of the life that you wanted.<\/p>\n
I mean, it\u2019s really been a dream. And I don\u2019t just, I know a lot of people say that, but the flexibility that comes from managing short-term rentals, and I know it\u2019s not passive income, but as you guys know, you can have systems and automations in place where you can do everything from your phone. Well, if I\u2019m waiting for a doctor\u2019s appointment with my daughter or I\u2019m waiting in car line to pick up my kids or in between sports practices and I have to respond to something, I don\u2019t need to be in front of my computer. And the cash flow is more than what we could have imagined. I initially started it kind of as like a little side hustle hobby and it\u2019s really, it replaces most people\u2019s full-time income and so much more, right? It\u2019s become such a powerful cashflow tool and wealth building tool for our family.
And I think especially for moms, whether you work full-time, part-time, stay at home, and you want more time, right? Whether it\u2019s time with your family or maybe just time for yourself, right? Time to go to the gym during the day without being interrupted, time to meet a friend for coffee. Moms always are craving more time, right? This is such a perfect way to have more time and also support your family. And with short-term rentals, there\u2019s also co-hosting, there\u2019s so many different things you can do within short-term rentals that are super, super powerful and also just really fit the mom\u2019s schedule really well.<\/p>\n
When my kids switched to a different school, like during COVID, they went to the school because it was still in person and we switched them to that. And I remember saying to a friend, \u201cUgh, but I have to drive them to school every day.\u201d And that person said to me, \u201cThat\u2019s awesome. You get to drive your kids to school every day.\u201d Not everybody has that choice. Not everybody gets that time with their kids in the car. And I always think about that, how real estate has allowed me to be able to get to drive my kids to the millions of places they need to be. And that\u2019s just something I\u2019ve learned to appreciate over time is like, that\u2019s an opportunity. That\u2019s something I should be so grateful and thankful for that real estate has provided for me is the things I get to do with my kids as much as I\u2019d rather do other things, that is time that I won\u2019t get back.
So I think real estate really, as much as you said, everyone says it\u2019s a dream and it doesn\u2019t seem real, it really can do these powerful things for you with money and with time and just with your family in general too. Well, Jane, thank you so much for coming on to share your story, to tell us all about your real estate investing journey and congratulations on your success as an investor.<\/p>\n
Thank you so much.<\/p>\n
Where can people reach out to you and find out more information about your investing journey?<\/p>\n
So I\u2019m primarily on Instagram. You can find me @theinvestingmom and just send me a note. We can connect.<\/p>\n
Great handle to have.<\/p>\n
Oh, thank you.<\/p>\n
I\u2019m Ashley. He\u2019s Tony, and thanks so much for listening to this episode of Real Estate Rookie. If you like this episode and you like others, make sure you subscribe to our YouTube channel at Real EstateRookie. Thank you guys so much for listening. We\u2019ll see you next time.<\/p>\n