\n<\/p>\n
After having her second daughter, high school math teacher Christle Stezskal<\/strong> had a choice to make\u2014keep working for little pay<\/strong> and give up the time she had with her <\/strong>young children<\/strong>, or find another way to help provide for them. Her husband had just finished the personal finance classic, Rich Dad Poor Dad<\/em><\/a>, and knew rentals were the right move\u2014but Christle\u00a0was only working with a teacher\u2019s salary.<\/p>\n She couldn\u2019t buy $400,000 houses<\/strong>, let alone $300,000 or $200,000 houses. But $50K \u2013 $100K rental properties\u2014that she could do<\/strong>. The duo set off, finding an out-of-state investing <\/strong>market where the numbers would work. They purchased their first deal, and then\u2026lockdowns<\/strong>, and a tenant moving out<\/strong>\u2014terrible timing.<\/p>\n That wouldn\u2019t stop Christle.<\/p>\n Now, just six years later<\/strong>, she has a real estate portfolio of 19 cash-flowing rentals<\/strong>. She\u2019s gotten creative, buying off-market properties<\/strong><\/a>, sending direct mail<\/strong><\/a>, and even bidding at courthouse auctions<\/strong> to get rentals at the right price. Because of her hustle, she\u2019s quit her job<\/strong>, now gets to spend time with her girls, and provides her family the financial future they\u2019ve always dreamed of\u2014and she didn\u2019t need deep pockets to do it.<\/p>\n Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Dave: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Dave: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: Christle: Henry: 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
After having her second daughter, high school math teacher, Christle Stezskal had a choice to make. She could keep working for Little Pay and give up the time she had with her young children, or she could find another way to help provide. Her answer, rental properties. But not $400,000 homes. She couldn\u2019t afford that, but what she could afford were small rentals. We\u2019re talking 800 square feet that cost less than $100,000. That\u2019s something she could do. She bought her first rentals out of state right when the lockdowns began, and she had a tenant moving out. Not a great start, but she didn\u2019t give up. By rental number three, she quit her job and went all in. Now, Christle has 19 rental units using all her cashflow to keep investing while her husband\u2019s W2 is paying their bills. That\u2019s a dream team combination. She\u2019s able to spend time with the two girls and provide the best experience to her tenants across her portfolio, and she should know because she self-manages these units.
Christle is still buying properties for around $100,000 and they\u2019re still cash flowing. She shares the exact market she\u2019s buying in, the renovations she\u2019s doing to get her higher rents, and how she juggles it all while raising two kids. These small properties can make you financially free too. So let\u2019s learn how.
What\u2019s going on everybody? I am Henry Washington. I am here with an investor story from Christle Stezskal out of Illinois. She is building a portfolio to help her achieve financial freedom, so let\u2019s jump in and learn how. Christle, welcome to the show.<\/p>\n
Thank you. Happy to be here.<\/p>\n
Why don\u2019t you start off by telling us a little bit about your background and how you first jumped into all this crazy real estate stuff.<\/p>\n
So I was a high school math teacher. I taught for seven years. I really enjoyed it, but in that time, my husband and I started a family and we had two daughters, Lily and Cora. And after having Cora, it didn\u2019t make sense for me to continue teaching. The pay was not offsetting daycare costs, that kind of thing. So we started looking for other options for me. My degree\u2019s in math, so I went back and got my master\u2019s and then made the shift into IT. Did that for a couple of years. But at the same time I made that shift, Alex, my husband, was doing a book club and they read Rich Dad Poor Dad. Gotcha. And it\u2019s classic. So he came home and he was like, \u201cHey, we should really look into real estate investing.\u201d He\u2019s like, \u201cI started listening to a couple podcasts. We should listen to more and we should read some stuff.\u201d So we did.
We listened to, I feel like all the BiggerPockets episodes. It was all the time. We read all the books, all the audiobooks. And it quickly became like, let\u2019s do this. Let\u2019s put some effort in and see what we can make happen.<\/p>\n
We have a lot of similarities. My father and my stepmother were both high school teachers. My stepmother was a high school math teacher.<\/p>\n
Nice.<\/p>\n
I did IT for a while before I got into real estate. And I too read Rich Dead Poor Dad and my head exploded. So I get it. I get how this all pointed you in that direction. But reading the books and getting excited and translating that to actually doing something are very different things. So what\u2019s kind of the first deal you did? How did you stumble into that?<\/p>\n
In our area, in the northwest suburbs of Chicago, things are more expensive than what we were able to do at the time. We had a little bit of money that we were willing to earmark for real estate investing, kind of try it out, but we couldn\u2019t do that here. So we knew we had to find another market. So we landed on Kansas City, Missouri. We said, \u201cOkay, let\u2019s look for some boots on the ground.\u201d We started networking through BiggerPockets and we found a realtor, decided to take a trip out there, meet him, see what he does, look at some places. We did that. It was great. He was fantastic. Came back. And then from there, what he did is he would send us things. We\u2019d let him know if we\u2019re interested. He\u2019d go and he would walk it. He would do a video call with us and show us everything.
We ended up finding a place that we wanted to go under contract on. It was brought to us by a wholesaler, but then we had this realtor represent us in it. It still went through all the processes. We did an inspection because it was our first one, right? Yeah. We don\u2019t do those anymore, honestly. But our first one, we did the inspection. There were some things that had to be addressed. We had a couple things addressed. We bought it at a low price knowing that there was going to be more work to put into it, but it did have a tenant and it was going to cash flow for us.<\/p>\n
Okay. So you picked Kansas City. And one of the things I want to highlight about this story, sounds like you knew what you wanted in terms of financial return and you figured, \u201cI can\u2019t get that in my backyard, so let\u2019s start looking for places you settled on Kansas City.\u201d You networked on BiggerPockets and found an agent. BiggerPockets has an agent finder now. That is a great tool for people when you\u2019re looking to invest out of state, you can connect with an agent. And then after a couple video interviews, you said the one thing that people really never say when they\u2019re trying to pick a market. You got your butt on a plane and you went to the market or you got in the car and you went to the market. And not with intent to buy anything, but to get a feel for the market.
And that is such an important part of investing out of state because there are just things you need to see, touch and feel in order to understand and evaluate deals as they come into your inbox. It\u2019s not just that you want to go and buy something, but you want to go and figure out, okay, what are the neighborhoods that make sense? Where do I not want to buy? You ended up finding a deal. That deal came from a wholesaler, you said, but you had your agent represent you and you did an inspection. Everybody, if you\u2019ve never bought a property before, do inspections. Absolutely. I don\u2019t do them anymore either, but I am very experienced. If you\u2019re not experienced, you should try to get inspections whenever you can. So about this deal, talk to me a little bit. What was the purchase price of that property?<\/p>\n
So we bought it for 52,000.<\/p>\n
52,000. And how much work did it need?<\/p>\n
We negotiated for them to do radon mitigation. And then as soon as we closed, I had somebody do the roof for us, but that\u2019s all we did because we had that tenant in there. As soon as she left, we did a little bit of work. We ended up replacing the floor in the kitchen.<\/p>\n
So not a ton of work, which is good. So 50 some odd thousand is a ridiculously good price. And then to not have to do a ton of work and it be in decent livable condition enough to rent it out, that\u2019s a pretty solid deal. What was it renting for?<\/p>\n
If I recall correctly, when we bought it, it was at 800.<\/p>\n
Oh, wow. That\u2019s really good. Okay. And how did you fund this deal? Did you pay cash and refinance it? Did you just get a bank loan right away? Because some banks won\u2019t fund a loan that low.<\/p>\n
This one, we did delayed financing on it. So we purchased cash, but we don\u2019t have to wait to season it for a cash out refi. You can delay finance it and you can do 75% of ARV.<\/p>\n
Yep. Do you remember what it appraised for when you did that?<\/p>\n
I want to say like 75.<\/p>\n
Oh, nice. So<\/p>\n
You<\/p>\n
Were able to \u2026 Did you pull cash out or did you leave it all in there?<\/p>\n
We ended up leaving $13,000 in it, I want to say, and it cashflowed.<\/p>\n
Do you still own that one?<\/p>\n
We do. We still own it. Yep. Awesome.<\/p>\n
Okay. So first deal, sounds like it was a decent deal. You still own it. Cashflow, paid 52, did a light renovation, new roof, some infrastructure things. How did you transition from that into your next deal? Was it also an out- of-state deal?<\/p>\n
Yeah. So our second deal was also out of state. October 2019 was when we bought that first one. And then our second one, we actually bought at foreclosure auction February 2020.
Wow. It was pretty cool. So that was Kansas City as well. We were working with this guy. His whole business was, \u201cI\u2019m going to find people who want to purchase at auction. I\u2019m going to identify auction properties. I will send out a list to all of my buyers. If anyone\u2019s interested, I will go look at the house morning of auction. I will see if I can get pictures. I will see if I can identify any structural concerns, whatever. I will send that information to you. You tell me your max bid. I will go to auction. I will bid for you. If we win it, I will put the money down. You wire me the money. I will renovate for you. \u201d And for most of his buyers, he was also an agent and he would then sell it as a flip for them. For us, we told him, \u201cWe want to keep it, so you renovate it, but then we\u2019re going to go ahead and take over and we\u2019ll lease it up.\u201d<\/p>\n
Huh. Did you find this person through BiggerPockets? I<\/p>\n
Don\u2019t remember if we found him on BiggerPockets or not. Okay. But I don\u2019t know how we found him either.<\/p>\n
Okay. Okay. Random stranger seems like a<\/p>\n
Decent<\/p>\n
Business model. All right.<\/p>\n
Yeah, right. No, so he was another person that we went out and we met and we actually, with him, we said, \u201cHey, we\u2019re very curious how this process works. Can we ride along with you one day?\u201d
And he
Was like, \u201cYeah, meet me at seven o\u2019clock at the McDonald\u2019s and we will go together. You can follow me to a couple properties. I\u2019ll show you which ones I\u2019m looking at.\u201d And then we went to an auction with him and it was really cool. Well,<\/p>\n
That\u2019s cool. I think that\u2019s another great piece of advice for people. If you are at all interested in buying auction properties, just go to a couple of auctions. Oh, for sure. See how it works. You\u2019re going to learn so much, but also auctions are a great place to meet people who have money and might be willing to be a private lender for you. So if you continue to go and start to build a brand for yourself or start to build a reputation for yourself, I mean, in most auctions, you got to pay cash for properties, if not right away, then within like 10 to 15 days. So
These are great people who have cash on hand who like investing in real estate, who could be lender contacts, but they also have all the other contacts you need to invest in real estate. Auctions are just a great place to hang out if you want to build your network, because those are doers at the auction. They\u2019re not playing games if they\u2019re bidding on auction properties. So you vetted this person by going and seeing how they were doing what they were doing. You looked at some of the properties that they were bidding on. So that gave you a level of comfort, I assume. Yeah. And then he would go to the auctions and bid for you. Did it take a while before you wanted \u2026 Because auctions aren\u2019t easy to win. People bid those properties<\/p>\n
Up.<\/p>\n
Yeah.<\/p>\n
It took a while. We probably worked with him for probably two, three months, honestly. We were looking at properties every night. Every night after the kids went to bed, we were looking at the properties and flagging anything we\u2019re interested in. What\u2019s tricky is you can\u2019t actually make your final bid. You can\u2019t set that number until you know the condition of the property, which you don\u2019t know until morning of, if at all. There were so many times he\u2019s like, \u201cI can\u2019t really see much. Don\u2019t know what\u2019s going to happen.\u201d And that\u2019s actually how this property was. He went to it and he\u2019s like, \u201cIt\u2019s tiny. It\u2019s 850 square feet.\u201d He\u2019s like, \u201cIt looks like it started maybe getting some work because there was new siding on, but it wasn\u2019t fully completed.\u201d So he\u2019s like, \u201cThis is a little bit of a wild card.\u201d So we\u2019re like, \u201cOkay, well, what could it possibly cost to renovate this thing?\u201d It\u2019s 800 square feet.
And we set our price, but those mornings were so tense. And my husband and I were both working. So I can remember sitting at our desks being like, \u201cOkay, we have 10 minutes, figures out quick, chat back and forth and then send him the info.\u201d And we finally won that one. He told us, he\u2019s like, \u201cYou\u2019ll get one.\u201d He\u2019s like, \u201cIt takes time, but we\u2019ll get it. \u201d And so this day, I remember I was sitting in a meeting, a one-on-one meeting with my manager
And I get a text message that says, \u201cYou won. I need the LLC name now.\u201d I was like, \u201cOh my God.\u201d I\u2019m like, \u201cWhat do I do? \u201d So I told my manager, I\u2019m like, \u201cI\u2019m so sorry, but I just got a text message and I need five minutes.\u201d I went hustled and did whatever I needed to do, but it was like, whoa, just wild. It was very cool.<\/p>\n
Okay. How much did you win the auction for?<\/p>\n
Yeah, so that house we bought for $21,000.<\/p>\n
21,800 square foot house.<\/p>\n
Okay.<\/p>\n
Was it a complete gut job? What\u2019s the catch here?<\/p>\n
So it was, but not for us. The people who owned it before, it must have been an investor that ran out of money. I don\u2019t know how you do on an 800, but I mean, stuff happens, but they had gone and they had completely gutted it and started drywall, flooring. So it was set up perfectly for us to just go in and finish it.
So
We did finish the renovation completely. They had started some tile floor in one of the rooms, but it was ugly and we\u2019re like, \u201cJust rip it up and let\u2019s just do LVP through the whole thing.\u201d So standard, we do the same finishes on all of our stuff to keep it easy. So dark wood LVP, white cabinets, black knobs, all white bathroom, just went in and did that. We did have to add AC. We had to redo the electrical because somebody had gone and pulled out all the wiring, but I think the renovation ended up being all in 40,000 maybe.<\/p>\n
Oh, wow.<\/p>\n
It\u2019s<\/p>\n
Not bad at all.<\/p>\n
No, no. With all new AC, HVAC.<\/p>\n
So you\u2019re all in 60, 65 grand. What\u2019s that thing rent for? Well, what did it rent for then versus what\u2019s it rent for now?<\/p>\n
When it rented at first, I think it was like 800.<\/p>\n
That\u2019s<\/p>\n
Such a<\/p>\n
Deal.<\/p>\n
I know. Well, and we bought it cash. We funded the renovation ourself and then it appraised right away for 88. Oh, wow. So we pulled almost everything out of it. We\u2019ve got $13,000 in that one too. Oh my<\/p>\n
Goodness, man.<\/p>\n
Most of our money back, cash flows and it\u2019s up to 925<\/p>\n
Now. Oh my goodness. What a deal. Yeah. That\u2019s awesome. It\u2019s got to be scary to walk into a partnership like that though when you\u2019re doing a deal like this. I know you said you vetted him by going and kind of seeing what he was doing.
Do
You have any other tips or advice you would give to people who are considering a partnership or a similar model for making sure that who they\u2019re working with, they can trust? Is there any conversations you had upfront before you did anything?<\/p>\n
Yeah, so we also asked him for references. So I talked to three other investors that he\u2019d worked with. And then the other thing that was nice is they, he had a team that he worked with. His team was very communicative. They used iCloud to record videos and send them to us. We had weekly updates on how the renovations were going. You got to just be in communication as long as that\u2019s happening and you get videos. Pictures are one thing because picture can be taken anywhere. But if you see a video, it starts with your front door and you\u2019re walking into the house, there\u2019s a little bit more there to it.<\/p>\n
Awesome. I definitely want to dive into seeing how you continued scaling, but first we got to take a quick break.<\/p>\n
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All right. We are back on the BiggerPockets podcast with investor Christle Stezskal, and we are talking about how she built her real estate business. She did her first deal in Kansas City, Missouri. And I would say that was a solid double in terms of profitability. And then did a second deal in a semi-partnership. I\u2019d call that one a double, maybe going on a triple.That\u2019s a pretty good deal.<\/p>\n
Yeah, that\u2019s a great one. Proud of that one.<\/p>\n
All right. So how did you determine what was going to be next? Did you continue this business model with this person? Did you continue in Kansas City? Where does the story pivot from here?<\/p>\n
Yeah. So to be honest, I think we would\u2019ve continued with that process, but COVID happened and foreclosures were done. Yeah, they dried<\/p>\n
Up. They<\/p>\n
Dried up.<\/p>\n
Yep.<\/p>\n
So unfortunately for that gentleman we worked with, his business kind of shut down for a little while. At the same time though, we were reflecting and honestly people are like, \u201cWhy did you start out of state? You\u2019re crazy.\u201d It was great because it forced us to figure out how to do it with other people and systems. But at the same time, it is kind of nice to have things a little bit closer.<\/p>\n
There\u2019s a price for convenience though.<\/p>\n
Absolutely. I<\/p>\n
Just think that out- of-state investors have a leg up because you have to build your business to run pretty much without you. That way when you want out, it\u2019s a whole lot easier than where people like me, I don\u2019t have to do that. I\u2019m here, but I end up spending time doing things I absolutely should not be doing out of pure convenience.<\/p>\n
So<\/p>\n
Is there a benefit to investing in your backyard? Yeah, I love investing in my backyard, but you have to force yourself to build in processes even though you can do the things yourself. And when you\u2019re type A like you, that can be sometimes hard to do.<\/p>\n
Yeah. So we decided let\u2019s try to stay a little bit closer to home. So again, through networking, we found a realtor in Rock County, Wisconsin. So that\u2019s just over the Illinois border, just north of Rockford, Illinois. For us, it\u2019s about an hour. And we started working with him in Beloit specifically, and we started building a portfolio there. We got our first property in fall of 2020, single family, purchased it for 57,000, two bedroom.<\/p>\n
Was this on market?<\/p>\n
Yeah, it was on market. He brought it to us. I feel like he knew it was coming to market, so pocket listing. But yeah, it was just MLS. It was an investor that had it. He had a couple of buildings and he was trying to 1031 into some other stuff.<\/p>\n
And<\/p>\n
So we told him, \u201cYeah, we\u2019re flexible to your timeline. So go ahead and get your other stuff figured out so you can 1031 it all together and we\u2019ll just close when you\u2019re ready.\u201d<\/p>\n
Did this one need work? Was it already rented out? What\u2019s the store?<\/p>\n
No, it was totally renovated. It was not \u2026<\/p>\n
For 50 what?<\/p>\n
Yeah, 57. Yeah, it\u2019s tiny. It\u2019s tiny. It\u2019s like 600 square feet.<\/p>\n
Okay.<\/p>\n
And renovated rental grade<\/p>\n
In Wisconsin.<\/p>\n
Yeah, I mean, but still. Still. I mean, LVP floors, white kitchen appliances.<\/p>\n
What was the rent that tenant was paying?<\/p>\n
It was not rented at the time. We rented it, I want to say our first rent was 725 on it.<\/p>\n
Oh, that\u2019s solid.<\/p>\n
Yeah. That\u2019s<\/p>\n
Solid. Awesome.<\/p>\n
It was<\/p>\n
Good.<\/p>\n
Okay.<\/p>\n
Did you pay cash and refi this one or how did you purchase it?<\/p>\n
We just financed it straight up on that one.<\/p>\n
So you did a conventional mortgage 25% down, 30 year fixed?<\/p>\n
Yep.<\/p>\n
So you found this amazing deal. You have now said, \u201cAll right, investing closer to home seems like a better fit now that we have some experience, plus we feel like the market\u2019s affordable, things are growing in the right direction.\u201d At what point in all these deals were you able to leave your job? How did you make that decision?<\/p>\n
Yeah, so it was kind of happening right around this time. It\u2019s like one, two, three, we\u2019ve gotten, they\u2019re working. This is a thing. I had only been in IT a couple of years. I wasn\u2019t super into it. I wasn\u2019t super invested in that role and it just made sense for us. It was going to give me the flexibility to stay home with my kids and spend more time with them. And so we just decided to go for it.<\/p>\n
And when you say you went full-time, you mean just you, your husband continued working at W-2?<\/p>\n
Yep. Yep. So my husband\u2019s still working his W-2. He\u2019s an engineer. I\u2019m very thankful that we found real estate and that we were both comfortable enough for me to leave. We didn\u2019t necessarily need my income. His is the household income that supports us. We don\u2019t use our real estate income at this point. Just put it right back in.<\/p>\n
That\u2019s a lesson people learn I think once you start doing a few deals because yeah, the allure is buy properties, get cashflow, cashflow equals income, income replaces, job, then I do full-time real estate. But several things happen when you do that. A, you become less bankable. Banks love a W2. Even if your real estate business makes so much more than your W2, they will still love a W2. So you limit yourself from a bankability perspective when you leave your job too soon. Also, there\u2019s something to be said about real estate being more enjoyable when you don\u2019t have to feed your kids with the money your deals produce. But once it becomes, \u201cI\u2019ve got to pay my mortgage and feed my kids with my real estate business,\u201d it can hurt you because you start looking at deals with different goggles on, right? Absolutely. And so knowing that no one\u2019s going to starve and our bills are going to be paid regardless of if I do this real estate deal or not, A, makes it more fun.
B helps you make more solid investing decisions. I\u2019m saying all this because everybody wants to quit their job. And I think there are some people that absolutely should quit their job. Sure. If you can generate enough cashflow and you have a terrible job and it\u2019s limiting your life with your family, sure, you should try to figure out a way out. But if you at all like what you\u2019re doing, you make a decent income, keep that job as long as possible because it\u2019s just you can grow and scale faster. It will make your investing life easier. You will enjoy investing more. And then you can build up wealth faster. If you have a job versus not having a job, it will make real estate harder if you don\u2019t have a job. So just don\u2019t just do it because you can, do it because you have to or you need to.
I didn\u2019t quit my job until it literally cost me money to have a job. But other than that, I was going to keep working. All right. I\u2019m off my soapbox. Great. You were able to quit your job. Your husband still works. Can you give me a little bit of a breakdown? What does your portfolio look like now? Where are the properties? Did you sell anything that you\u2019ve bought? Where are you standing?<\/p>\n
Our thing is we find houses that are in need of renovation, significant or light, usually more significant. We renovate them, we cash out and we hold them. We are at a total of 19 doors right now.<\/p>\n
Wow, congrats.<\/p>\n
Thank you. We\u2019ve got 18 long terms and we just got our first Airbnb in summer 2024.<\/p>\n
In your backyard or did you go get one somewhere cool?<\/p>\n
So it\u2019s in Wisconsin, but it\u2019s just over the Illinois border.<\/p>\n
Okay. So it\u2019s somewhere cold, but not somewhere<\/p>\n
Cool. Well, yeah. I mean, cold during the winter. So yes. But that\u2019s where we\u2019re at. But we love it. It\u2019s a little lake house. It\u2019s on a very quiet little lake. It is the perfect little retreat and we are so obsessed.<\/p>\n
Do you guys use it?<\/p>\n
We use it when we can, but it\u2019s booked very often. We were supposed to go up there this week for spring break and it got booked and we were like, all right, let other people enjoy it. We\u2019ll hang here. But yeah, our long terms, 18 doors long term, we have a four unit, we have a two unit. Both of those are in Wisconsin. We did just start working into Illinois a little bit more into Machesney Park, which is just north of Rockford. I did a direct mail marketing.<\/p>\n
That was going to be my next question is how are you snagging these local deals?<\/p>\n
Yeah, so this is kind of crazy to be honest. After I left, I was like, \u201cLet\u2019s try all the things. Let\u2019s try banded signs. Let\u2019s try direct mail, networking in investor groups.\u201d Bandit signs, I got nothing off of. It was people calling me with \u2026 Dude, it was the most ridiculous numbers and-<\/p>\n
There was a time they worked. It doesn\u2019t work anymore.<\/p>\n
Yeah, I have the same experience as you. I hated it. The direct mail, the first set of postcards I sent out, I specifically remember I did 83 test cards and one of those was to myself. So 82 cards went out to these targeted properties that I found. I used PropStream for a list and I wanted to see what they looked like. That was really the motivation. Let me get this. Let me see how it works. Let me make sure my phone number works.<\/p>\n
All right.<\/p>\n
I got two different deals off of that from two different investors from those 82 cards. Whoa.<\/p>\n
I couldn\u2019t even believe it. That is unheard of. I was just about to fuss at you too because 80 cards is a waste of money. But if you\u2019re doing it as a test, that makes sense. That\u2019s actually a pretty smart thing to do. Send out a small batch, see what they look like. So your test case landed you two deals on 80 postcards?<\/p>\n
Yeah, it was ridiculous.<\/p>\n
Okay. I\u2019m going to make a caveat here and then<\/p>\n
I\u2019ll<\/p>\n
Ask That doesn\u2019t happen. Yes. People who are listening do not do that. You are throwing money down the drain. This is a very rare occasion where you\u2019ll get a deal from anything less than at least a thousand postcards. To send less than a hundred and get two deals is literally like a miracle. So congratulations. But I think here\u2019s what I think worked in your favor, just based on all my years of sending mail. Mail has a much higher return in smaller, less popular markets because people there are not used to getting direct mail. They\u2019re not used to hearing from real estate investors about buying their house. If you\u2019re going to send 80 postcards in Houston, Texas, you wouldn\u2019t have heard of Pete. But when you\u2019re sending it in much smaller markets, people are sometimes getting direct mail about buying their home for the very first time.
They\u2019ve never seen anything like it. So people respond. They\u2019re not always positive responses, but people respond. Okay. So caveat out the way, congratulations. That\u2019s amazing. So you got two deals from this direct mail campaign where a direct to seller, assuming they were decent deals.<\/p>\n
Yeah. Yeah, no, they were great. And at this time I was working with a small local bank too.That\u2019s<\/p>\n
The formula. That\u2019s my<\/p>\n
Formula. It was great. They basically set us up with a line of credit and then we could do our renovations using that line of credit or using our own cash, and then they would finance it for us at the end. We still work with them. They\u2019re great. Such a good relationship.<\/p>\n
That\u2019s the play. That\u2019s the real estate investor, single family, small, multifamily playbook. If you can find a way to get direct to seller leads and you can get in with a local community bank or two that like those types of assets in those specific markets, they can get super creative with you about how they get to finance. You can really grow your real estate business if you nestle into that niche. That\u2019s super awesome. All right, this is great information and I want to dive into some more, but we\u2019re going to do that right after the break. All right. We\u2019re back with investor Christle Stezskal talking about growing her real estate portfolio. Let\u2019s jump back in. All right, so you sourcing some off market deals, but it sounds like your price points are still that sub $100,000 price point. You put some money into it if it needs it, and then you\u2019re renting it out for somewhere between, sounds like between 800 and 1,000 to 1,200 bucks.
Is that the typical deal structure that you buy and are you continuing to buy at that price point?<\/p>\n
Yeah. So generally speaking, yes, we\u2019re still in that same kind of price point. Obviously, COVID has changed things. It\u2019s much harder to find those property values. Everything has increased significantly. Additionally, though, rents have increased significantly. So we are still purchasing usually around a hundred at this point. And then renting, those initial properties are still 900, et cetera. But we do have the last property that we did, we purchased for 110. Our renovation was right around 40. It appraised at 187.<\/p>\n
Wow.<\/p>\n
And then with that small bank, we did a cash out refi. So we were able to pull everything out except for 11,000. They had us keep 11,000 in it. It\u2019s renting for 1,825. Wow.<\/p>\n
Yeah, that one\u2019s pretty<\/p>\n
Good. That\u2019s<\/p>\n
Really good. And when you\u2019re buying sub-100,000 properties, what are the ages of these homes? Are they really old homes?<\/p>\n
Absolutely. So they\u2019re definitely older. We started limiting ourselves. We don\u2019t purchase anything older than the 60s at this point.<\/p>\n
Oh, that\u2019s not<\/p>\n
That bad. It\u2019s not. No. We were purchasing older stuff and we do have \u2026 Our duplex was built in the 1880s, old building. We don\u2019t want those anymore. But yeah, they\u2019ve been worn down and a lot of them I\u2019m buying from investors. So it hasn\u2019t been owned occupied. It\u2019s been rented, tenanted, beat up. So we go in and this last one, we threw some new subfloor down in some of the rooms. We all new flooring, all paint, updated electrical in a couple places, a couple new windows, that kind of thing.<\/p>\n
People hear sub 100,000 and they just think these are the worst properties they\u2019ve ever seen in life. And that\u2019s not always the case. Every market is different. I still buy properties sub 100,000 sometimes, and they\u2019re perfectly fine houses. Do they need work? Yeah, absolutely. But they\u2019re not some home built in 1882. It\u2019s a very reasonable home. I\u2019m buying one that was built in 72 for $85,000. This can be done. It depends on your market. One last thing I wanted to cover with you is you\u2019d mentioned earlier in the podcast that you self-manage, but it sounds like a lot of your portfolio is about an hour drive away, maybe a little more, plus you\u2019ve got the stuff in Kansas City. Are you managing the entire portfolio and how does that impact or not impact your life?<\/p>\n
Yeah, so I manage everything. Any of the maintenance requests come through me. Anytime leases need to be renewed, it\u2019s me finding new tenants. I do that. Honestly, I feel like when a rain is, it pours. Oh, of course. I\u2019ll hear nothing, and then it\u2019s like everything.<\/p>\n
Everybody\u2019s HVACs out at the same time.<\/p>\n
Almost. Yeah. And it\u2019s on a Saturday and it\u2019s freezing.<\/p>\n
And the roof\u2019s leaking. Yeah.<\/p>\n
Right. Yeah. So yeah, I mean, there\u2019s been things that it\u2019s like, \u201cWow, I need to address this immediately.\u201d Not convenient. My husband and I were out of the country for a wedding and I got a text from one of my tenants that the refrigerator started on fire. They opened it up and it was smoking and stuff. I was like, \u201cWell, get it out the house \u2026 House.
And I send them a new fridge. And the Lowe\u2019s delivery, they also take away the old appliance and done in 24 hours. So I mean, yeah, stuff\u2019s going to happen and it\u2019s not the most convenient time, but you just have to have, again, systems. I know that I can go to Lowe\u2019s and I can get appliances delivered to any property and the old one removed quickly. I know that I can call this HVAC company and they\u2019ll go to this set of properties and they\u2019ll be out there today. I have plumbers that I can reach out to in each of the markets in Kansas City specifically. So we also inspect our units. I recommend that to anybody who\u2019s starting out. And we\u2019ve all admit, we\u2019ve gotten a little bit lax with it. We started with quarterly inspections. Every single quarter we got- Do you do them<\/p>\n
Or do you send someone to do them?<\/p>\n
In Kansas City, I have somebody boots on the ground that he\u2019s my guy. He goes and he uses my form, so it\u2019s all consistent. And he schedules with the tenants. He has their numbers. He schedules, he goes out there, he takes pictures. The units here, I do them just so I can get in and see everything and say hi to my tenants. We have good relationships with our tenants. Our tenants stay with us for a really long time. We have very low turnover, but it\u2019s all about relationships. We pride ourselves on being mom and pop and caring about our properties and not being run by a property management company where you\u2019re just a number. But yeah, I mean, there\u2019s trade-offs. It is a lot of work and you do have to be available. The whole tenants, toilets, and termites, right? Everybody says that. It\u2019s not that bad usually.
There are times where it all hits, but it\u2019s really manageable.<\/p>\n
All right. Well, this has been amazing. You have a fantastic story. What advice would you say or give to someone who\u2019s listening to this, who\u2019s maybe a teacher or maybe working a job where they know they need to bring in some additional income, but they\u2019re very scared to jump in. What advice would you give to that person?<\/p>\n
Yeah, I mean, it can be scary. And the way that I combat scary things is by data gathering.
Get your hands on anything you possibly can. Listen to BiggerPockets Podcasts, talk to other investors, read the books and network and see what are other people doing? Are there opportunities in your area? Do you need to start looking out of state? And I mean, that\u2019s scary too, but it does force you to figure stuff out so you can be confident to make that decision. So you can do it. You\u2019re capable of doing it. You just have to set your mind to it and combat any fears by just gathering data. Now be careful not to get stuck in analysis paralysis. At some point you have to make a move, but there\u2019s definitely a fine line. You need to make sure that you\u2019re informed enough and confident enough in what you can do.<\/p>\n
I love that. Christle, you\u2019ve got an amazing story. Thank you so much for coming on the BiggerPockets Podcast and sharing it with everybody.<\/p>\n
Thank you.<\/p>\n
All right, everybody. If you learn something from Christle\u2019s story, then check out BiggerPockets Podcast, episode 1252. It was back on March 16th and it was with investor Joanna Caldera. Joanna\u2019s another scrappy investor who proved almost anyone can improve their financial picture, starting with just one property. Thank you everybody for watching this episode of the BiggerPockets Podcast. We\u2019ll see you next time.<\/p>\n<\/div>\n