\n<\/p>\n
Someone has to step up to the plate when a challenge presents itself<\/strong>, and today\u2019s guest always does. Tammy Skeath<\/strong> began her real estate journey in 2018, and despite being faced with several unique obstacles<\/strong>, she has found immense success. She currently has seventeen units and plans on expanding exponentially within the next few years<\/strong>.<\/p>\n Tammy was inspired to get started after watching her cousin continue to build wealth through real estate. Her first deal <\/strong><\/a>was a carbon copy of one of his deals<\/strong>. By doing this, she learned the ins and outs while having a step-by-step real estate guide<\/a> she could reference. Despite replicating his deal, she encountered various problems that made the process more difficult. The city she invested in has strict rules to protect endangered animals<\/strong>, and instead of investing elsewhere she decided to do more research on the issue. From her research she was able to find a unique solution and complete the project.<\/p>\n She did this again when she bought a gang house with twenty-seven code violations.<\/strong> Most people would say this type of property isn\u2019t worth the hassle, but it was for her. She was able to double her initial investment, and pull out $600,000<\/strong> from this one deal. Now real estate allows her to bring in a large amount of income, reach her goals faster and still have the time to spend with her kids.<\/strong><\/p>\n Ashley: Tammy: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Tony: Tammy: Tony: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Ashley: Tony: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Tony: Tammy: Tony: Ashley: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Tammy: Tony: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tony: Ashley: Tony: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Ashley: Tony: Tammy: Tony: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Tony: Tammy: Ashley: Tammy: Tony: Tammy: Tony: Tammy: Stephanie: Tammy: Tony: Tammy: Tony: Ashley: Tony: Ashley: Tammy: Ashley: Tony: Ashley: Tony: Ashley: Tammy: Ashley: Tammy: Ashley: Tammy: Ashley: \u00a0<\/p>\n \u00a0<\/p>\n<\/div>\n
This is Real Estate Rookie episode 177.<\/p>\n
I always get three quotes for everything. And the reason I do that is one to see what the better price and the person I get the best vibe with, but also to learn. And I get information that helps educate me for my decision.<\/p>\n
My name is Ashley Kehr, and I am here with my co-host, Tony Robinson.<\/p>\n
Welcome to the Real Estate Rookie podcast. If this is your first time joining us, we are the podcast who\u2019s focused on those investors who are at the beginning of their journey, and we\u2019re here to give you the inspiration, the information that you need to keep going to kind of blow up your career as a real estate investor. Ashley Kehr, what\u2019s new? What\u2019s going on?<\/p>\n
Just, I\u2019ve been this whole episode. I\u2019ve been doing my knee extension, so I\u2019ll always sit here, kill two birds with one stone.<\/p>\n
There you go.<\/p>\n
Yeah, still a recording from my couch, but I actually finally closed on a property that is going to have my office in it and also a nice little recording studio.<\/p>\n
Awesome. Well done.<\/p>\n
I have to actually, you\u2019ll have to remind me when we\u2019re done recording this, I have to ask our producer, Eric, what exactly do I need to actually fill down\u2026<\/p>\n
In your studio.<\/p>\n
\u2026 a studio?<\/p>\n
Yeah.<\/p>\n
Then I can look more professional like Tony, instead of sitting here on my couch in a Biggie Smalls t-shirt with my leg on ice.<\/p>\n
But it wouldn\u2019t be Ashley, if you weren\u2019t in the Biggie Smalls t-shirt, right? You got to have some cool t-shirt on, but no, congrats, Ashley, on closing that property. I know that\u2019s one you guys\u2019 working on for a while.<\/p>\n
Yeah.<\/p>\n
So happy to see you across the finish line.<\/p>\n
Thank you. Thank you. What about you? What\u2019s been with you?<\/p>\n
Yeah, we actually have a property under contract out by you so we\u2019ll find out\u2026<\/p>\n
[crosstalk 00:01:47] get an under contract that you signed?<\/p>\n
Yeah.<\/p>\n
Yeah.<\/p>\n
It\u2019s under contract now. Yeah. We\u2019re flying out there, not this weekend, but next weekend. We\u2019re going to be out there for\u2026<\/p>\n
Okay, well, I\u2019m going to come.<\/p>\n
\u2026 two and a half days. You got to come, come check it out.<\/p>\n
Yeah, definitely.<\/p>\n
Most definitely.<\/p>\n
And so, it\u2019s less than two hours from me.<\/p>\n
It\u2019s second hour and a half, right?<\/p>\n
Yeah.<\/p>\n
Yeah. Yeah.<\/p>\n
Super close.<\/p>\n
Something like that. We\u2019re flying into, I don\u2019t know, I think Rochester\u2026<\/p>\n
Okay. Yeah.<\/p>\n
\u2026 then we\u2019re driving in. Excited to see it. Actually, it\u2019s run right now as a bed and breakfast so it\u2019s like a seven bedroom. I think it\u2019s like 5,000 square feet. It\u2019s a massive property. We\u2019re still debating on whether or not we\u2019re going to continue to run it as like a bed and breakfast of who people can rent out the rooms or just rent it out as like some massive property that big parties can book and maybe do weddings or something like that. There\u2019s a lot of opportunity so we\u2019re excited for that.<\/p>\n
Yeah. Cool. We\u2019ll have to do a Rookie Reply episode on it once you get more into the dealer\u2026<\/p>\n
Once we get that up and running.<\/p>\n
\u2026 maybe when you close on it. Yeah. That\u2019ll be cool to talk about.<\/p>\n
Yeah, most definitely, it\u2019ll be cool.<\/p>\n
A unique property.<\/p>\n
Yeah.<\/p>\n
Today, we have Tammy Skit on and she is an investor out of California, but actually bought her first property in Florida. She talks about how she used another investor\u2019s blueprint to build out her first property and how she has grown and scaled to 17 properties now. Also, if you\u2019re interested in 1031 exchanges, she does a great job of modeling how she\u2019s been able to use that tax advantage to really build her portfolio.<\/p>\n
Yeah, Tammy. So Tammy\u2019s got like her crazy story, right? She talks about gang houses, buying houses with no sub-meters. There\u2019s a long story about a burrowing owl. If you haven\u2019t heard of about a burrowing owl, you\u2019re going to learn about that today. But I think at the heart of Tammy\u2019s story is just this lesson of not shying away from problems that other investors are afraid of and she\u2019s really used that to her advantage. The other thing that really stood out to me during her story, just her thoughts on goal setting and we kind of talked a little bit throughout the episode of how that\u2019s played a big role for her as well. Ashley, just one question for you, right? We\u2019re like three months or now four months into the year. Like, I don\u2019t know, 10 years from now, what does Ashley Kehr? Where do you want to be? Because I shared mine on the podcast, but you didn\u2019t share your story. What\u2019s Ashley\u2019s 10 year goal?<\/p>\n
That\u2019s because that\u2019s so hard for me to look 10 years from now. It\u2019s hard for me to even look two years from now. But\u2026<\/p>\n
Yeah.<\/p>\n
\u2026 honestly, my 10 year goal I think would be to\u2026 Let\u2019s see, how old will my kids be? Like 15, 16, and 18. I think my goal will be to work 15 to 20 minutes a day, maybe an hour, but still have so many things going on in the background, but I just don\u2019t need to be involved.<\/p>\n
Okay.<\/p>\n
I am that mom, that\u2019s driving our kids to football practice, to\u2026<\/p>\n
Yeah. Yeah. Yeah.<\/p>\n
\u2026 snowboarding, to all these different things, and then just being able to be spontaneous with them. I liked how Tammy says in this episode with goal setting is how you pick like even the silly little things that can motivate you to get things or to change things. That\u2019s like, I had this revelation when during COVID my kids went to private school and we had to drive the kids every day to school. My first thought was like, ugh, I have to drive on school every single morning. Then someone said, a friend had said to me, I get to drive my daughter to school every morning.<\/p>\n
Yeah.<\/p>\n
I get to spend that time with her, my whole mindset shift. That\u2019s kind of my 10 year goal is, and I think that will actually probably happen before that, because I think I\u2019m pretty, I get to do a lot of things now with my kids as far as driving them around, except for, as of right now in time, because I sold my car and don\u2019t have a new car yet and I have crutches, so I don\u2019t drive them anywhere at the moment, but yeah.<\/p>\n
But that\u2019s the goal?<\/p>\n
Yeah, that\u2019s just financial freedom, time freedom even more. I think that\u2019s one thing I\u2019m trying to balance right now is like how much money do I actually want to have and is it worth giving up more time to get that amount of money?<\/p>\n
Yeah, totally. I shared in the episode, but I share again now, my goal is to get to $1 billion worth of short term rentals over the next 10 years. But very much like you, I want to do that, but still maintain the time freedom and flexibility. I think our goal right now is to accomplish that by creating a fund that focuses on buying and acquiring short term rentals. When you have a fund structure, you\u2019re able to kind of put the team in place to\u2026<\/p>\n
Yep.<\/p>\n
\u2026 manage most of the day to day operations. That way, I can focus on podcasting and writing our books and all the things that I really enjoy doing and then kind of have a team in place behind me to manage most of the day to day. If you guys want to learn more about when that phone number comes, it\u2019s not here yet, but follow me on Instagram at Tonyjrobinson. If you want to see Ashley act spontaneous, you can follow her at Wealthfromrentals and see her crutching around the Western New York.<\/p>\n
You know what\u2019s funny, Tony is like, after my surgery, I didn\u2019t go on Instagram. I don\u2019t even think it was a week. I think it was like five days maybe. I didn\u2019t go on any social media. I can\u2019t even tell you how many people texted me. Are you okay? Like did something happen?<\/p>\n
Like where are you?<\/p>\n
I decided, it was last night actually. I decided to get back on and I started adding to my stories and someone message me and said, oh yeah, you\u2019re back at Instagram.<\/p>\n
You\u2019re alive.<\/p>\n
I was like, yeah, actually, I can\u2019t handle all the people texting me. Are you still alive? This is easier.<\/p>\n
Yeah.<\/p>\n
Okay. Well, before we bring Tammy onto the show, we have to say a very happy birthday to Tammy\u2019s mom, because today is her birthday, so happy birthday and I hope you are so proud\u2026<\/p>\n
Happy birthday.<\/p>\n
\u2026 and excited to hear your daughter on this episode. Let\u2019s bring Tammy onto the show. Tammy, welcome to the show. Thank you so much for joining us. Can you start off with telling everyone a little bit about yourself and how you got started in real estate?<\/p>\n
Sure. First of all, thank you guys for having me. I really feel very honored and privileged to be here because BP has done so much for my life and I really feel like it\u2019s changed the trajectory of my life and so thank you guys for everything you do. Yep, my name is Tammy Skit and I grew up in New Jersey, single mom. I grew up in the projects, very pretty poor, and I was given opportunity to go to college on a scholarship.
I ended up studying acting because there\u2019s a lot of money in that industry. Not for a struggling actor at least, but I started hobbling by doing films, commercials, voiceover. I ended up in LA, I was a working actor for about 10, 15 years, and then I had kids and my priorities changed and my husband and I were looking for something that I could do that would give me flexibility, and that\u2019s where real estate came in. I did my first deal and then I was hooked and now, we\u2019re on our way.<\/p>\n
Tammy, what made you decide that real estate is what you\u2019re doing next? Was there a book, a podcast, somebody in your life that kind of introduced you to real estate as an option?<\/p>\n
Yes. Growing up, my grandmother had one rental property and as a little kid, I would go with her to the different apartments. It was like an eight unit, I think, and she\u2019d knock on the door and people would give her money. And so, I thought that\u2019s pretty cool. Nobody does that for my mom. And so, I had that in the back of my mind, that was something people did. Then I had a cousin in Florida who was doing very well in his life and I knew that he was involved in real estate.
Actually, my first deal was something that he\u2026 It was a deal that I basically replicated. I knew he had done this deal, and I said, can you give me all the information on what you did? I did a step by step process. I just carbon copied what he did and that was my first deal. I don\u2019t know if that\u2019s the best way to start, but once I did that, then I became familiar with real estate more of it, and I started listening to podcasts. I came across BP and that led me to get more involved in real estate.<\/p>\n
You know, Tammy, it\u2019s funny that you say that you like copied this family member to get started in real estate investing because I did the same exact thing when I got started. A lot of you guys know, I started investing in the city of Shreveport, Louisiana, or as my co-host, Ashley, liked to call Treeport or Freeport. But what happened was my mom had retired from California. She moved to Shreveport. When she moved out there, she bought a house and she found a credit union that was willing to lend on the purchase and the rehab of that property. She came out of pocket $0 and she bought a house, it was super inexpensive. I think the house was like 35,000. She put another like 20,000 into the rehab and the house appraised for over a hundred grand when she was done.
When she did that and she told me that, the light bulb goes off in my mind, I\u2019m like, hmm, I wonder if I can do this, not for a primary, but as I like as an investment property. That\u2019s how I got started as well as my mom did it first and I just kind of followed her into that market. I think the lesson for the rookies is that if you have someone that\u2019s in your network, that\u2019s already kind of one step ahead of you, that\u2019s like the perfect person to go talk to you to say, \u201cHey, can you give me the playbook on what you did so I can copy the success that you\u2019ve had?\u201d<\/p>\n
Totally. It doesn\u2019t have to be the deal that I copied didn\u2019t have the same results that he had, obviously, because he had the experience and the connections but it was good enough to get me started and to create that momentum so that I could do it a second and third time.<\/p>\n
Why did you decide on doing a deal that was exactly like his? Was it because you knew he had success with it or you had a limited mindset, that was the only way to get into real estate? We want to talk about how you decided to do it his way and what his way was, I guess, too?<\/p>\n
Right. It was a combination. He was one of the wealthier people in my family, because there weren\u2019t a lot of wealthy people in my family. I thought, well, whatever he\u2019s doing seems to be working step one. Then the second thing is I had no other ideas really on what to do within real estate until I started getting educated through podcasts. And so, because he had done anything, he showed me the numbers and what he had made off of it. I said, well, maybe I could do the exact same thing, work with the exact same people, buying the exact same neighborhood and do everything exactly the same and have the same results. Again, it wasn\u2019t the same exact results, but it got me started and it was a base hit.<\/p>\n
Before we keep rolling, Tammy, I just want to give the listeners a quick overview of kind of where your portfolio is today. Just what year was it when you started and then what does the portfolio look like today?<\/p>\n
Sure. I got started in 2018 and I started with a spec home build. I bought a lot, I build an entire house and then I sold it. I would not recommend that be your first deal. It was really stressful and I did it 3000 miles away. I did it in Florida. But again I was doing exactly what my cousin did and so, he did it in that town so I was going to do it in that town. Then, and now we have 17 units across Florida and California and yeah, that\u2019s where we\u2019re at today.<\/p>\n
Okay.<\/p>\n
Tammy, congratulations on that. First of all, that\u2019s awesome to have gotten up to 17 units, especially doing out-of-state investing too. What was your why? What was the reason and that you wanted to find like another career path and not just stay at home mom? What were some of those reasons and what was your goal, your end goal?<\/p>\n
Yes. Early on, my husband and I, after we had kids, I was doing part-time jobs and trying to have income just to help the family and all also, have time with the kids and we sat down and we talked about some goals and one of our goals was, one of our first goals was, if we can find, if we can supplement our income with some real estate so that we can at least pay off our mortgage every month, which is our biggest expense here in California, then I can stay home more. And so, our first goal was just that, was to get enough money from real estate to pay off our mortgage and that happened in about a year and a half. That was a five year goal, but that happened in about a year and a half.
Then we had to set new goals and I think that\u2019s what\u2019s important about goals is you just have to start somewhere and you just have to define a goal, even if it\u2019s not a big goal but a goal, and then you work towards it. Most of the time, it surprises you how quick you can get to that goal and then you pivot and you create new goals. But one of the first steps was we sat down and we put a goal together so that I could be around the kids more. And so, my why was time freedom to be with the kids and be at baseball games and all the things that working moms want to do.<\/p>\n
How important is it for somebody to sit down with their significant other and make these goals together instead of doing them on your own?<\/p>\n
It\u2019s really important. We try to connect at least monthly and go for a walk on the beach and talk about where we\u2019re at with our goals, talk about what challenges we\u2019re having. Yearly, early in the year, we sit down and we look at the goals we made the previous year, and we talk about challenges and successes and one, it helps our relationship. And two, it definitely helps our business.<\/p>\n
What other advice or tips would you have for our listeners who maybe need to get more involved in goal setting and figuring out what their why is? What are some things they can do to\u2026 Because even for me, it\u2019s hard to look okay, five years from now, what do I want in five years? It\u2019s a lot easier for me to look short term than it is long term.<\/p>\n
Yeah.<\/p>\n
What\u2019s some advice you can give to somebody for goal setting? I mean, you achieved your five year goal in a year and a half. I mean, that\u2019s pretty incredible. What\u2019s some action items people can do to kind of achieve the same?<\/p>\n
I think some of it is play, like just imagination, just getting silly with it and being like, well, like I never want to travel coach again, or I never want to clean my toilet again or things that just make you feel good and then it can grow from there. It can be like, well, what do we need to do to make that happen? And what steps can we take? I struggle with five year and 10 year ideas too sometimes.
But what helps me get out of that is I just get kind of silly and fun with it. And then when I get to that place, then I can actually make. Once I know what the silly thing is or maybe it might not be silly, but the thing that seems maybe not necessary, then I can make it more concrete and be like, well, this is what I can do to get there. It\u2019s just part of like imagination, talking, sitting down saying what motivates you? What excites you? What thing makes you want to get up in the morning? And then you can work from there towards what concrete goal that is.<\/p>\n
Tammy, there\u2019s a few things you mentioned that I think are really important. First, you said that you just need to decide on something, right? Like just kind of putting that goal in place, starts a lot of momentum. Even if you have to pivot later, that\u2019s fine. But just getting that goal, I think identified is what\u2019s super important. Ashley and I have talked about this before, but I was struggling with that a lot in my business about a year ago where it\u2019s like, man, I wasn\u2019t sure kind of where we were going or what the growth plan looks like and I was just kind like spinning my wheels. Then one day I just decided like, okay, it doesn\u2019t really matter what the goal is, as long as I\u2019m happy about it and it excites me, let\u2019s just make that the goal and let\u2019s move towards it.
I don\u2019t even know if I\u2019ve shared this with you yet, Ashley, but we just had our annual planning meeting for Alpha Geek Capital. And the goal now is to get to $1 billion in short-term rental assets over the next 10 years, right? It\u2019s going to take us a while to get there, but that\u2019s the goal that we set, right? That was like a big goal that got us all excited. Now, there\u2019s like a lot of energy from us as a team, all kind of moving and rolling in that direction. I think the power of setting the goal is that it energizes you and it motivates you to take a lot of massive action.<\/p>\n
Absolutely. And action is really where it\u2019s at. You\u2019ll hear that said over and over again from all your guests, but even if it\u2019s small action, everyday action will get you to that goal. I think I heard on the podcast at 1.1 guest said, you\u2019ll either win or you\u2019ll learn. And so, even when it\u2019s not a win and you fail, you\u2019ll learn something from that process, and like they say, you learn more from that failure than maybe you do from your wins. And so, action, and I would say that early on, like one of the reasons why I chose my cousin and why I just replicated his deal was because I knew the steps that he took and so it was easy to be like, well, he did this first, so I\u2019m going to do that.
Then he did this so I\u2019m going to work on that. And so, I had kind of a playbook on what he did and I didn\u2019t know any better than to go, than to think, wow, you\u2019re investing a lot of capital, 3,000 miles away. You\u2019re not going to see what\u2019s happening. You\u2019re in a profit share agreement. You were doing all these complicated things that I didn\u2019t have the experience for at the time, but I didn\u2019t know any better. And because I had a playbook, I was like, well, this is the next step. I have to figure out how to do that next step. But I have somebody who did it so I can just call him and ask.<\/p>\n
Tammy, you mentioned how you learned some lessons. Would you be willing to share what some of those lessons were with us?<\/p>\n
Yeah, absolutely. My first deal, I definitely learned a lot of lessons, because like I said, I was building a spec home in Southwest Florida and I was in California and I had to go from buying a lot to getting the contract with the contractor to building the house, to then selling the house, to then using a 1031 exchange to buy the next property. It went through so many steps and I learned so much about real estate in one transaction because of the full circle process that it was. But some of the lessons I learned, oh God, I learned so many lessons. But one of the early ones I learned was when you\u2019re\u2026 I was buying, I had to buy a lot. And when you\u2019re buying a lot of land in Southwest Florida, there\u2019s lots of endangered animals there for those who don\u2019t know. There\u2019s burrowing owls, there\u2019s tortoises, there\u2019s different animals that the state is protecting.
And so, if you happen to have land where an animal at some point was there build a nest, even if they\u2019re gone, even if it\u2019s flooded, if there was an animal there that had his home on your property at some point, they put a stake in the ground, a white stake, like a cross, saying this area is protected. I was looking for lots in this neighborhood that my cousin had invested in, [inaudible 00:20:49]. It was one of the better neighborhoods in this town. It\u2019s near water and it\u2019s just a really nice neighborhood. I noticed this one lot that was about 20% less expensive than every other lot in the neighborhood and I didn\u2019t understand why, but it was in a great neighborhood, on a great area. I drove by it. I went to Florida and I drove by it and there was that white stake.
And so, I asked my cousin, he\u2019s like, \u201cOh, you got to stay away from the lot with white states, because it means there\u2019s a burrowing owl.\u201d And he told me this nightmare story about a tortoise that moved onto his property and he had to pay $15,000 to get such association to come and rehome this tortoise. Then when they came to rehome it, the tortoise was gone. And so, then they couldn\u2019t move it, so then they couldn\u2019t take off the class. It was just a whole process. I said, okay, so I did a little more research and I found out the details of what having a burrowing owl on your property means. And I\u2019m sorry, I\u2019m talking out burrowing owl so much, but I\u2019m almost getting to the end of my story.<\/p>\n
No, this is interesting because this is something\u2026<\/p>\n
Yeah.<\/p>\n
\u2026 that\u2019s unique into somebody\u2019s market.<\/p>\n
Yeah.<\/p>\n
That you may not think about, especially if you\u2019re out of state investing. Yeah, so please continue.<\/p>\n
Right. I did some research and I found out that burrowing owl\u2019s mate for about four to six months a year and I found out what that time was, because during that time, there\u2019s a certain amount of feet you can build away from them. And so, I figured out that it was far enough on the edge of the property, that if we build at a certain time, which was the time we were looking at to build, we wouldn\u2019t interrupt or disturb the burrowing owl nest. There was no burrowing owl there, but again, at some point in history, there was a brewing owl there.
We were able to build our entire house and not disturb the burrowing owl and get this lot for 20% cheaper because nobody wanted to touch it. We really won when we bought. We really\u2026 Our due deal came from our buy and how well we were able to purchase it. Because like I said, the deal didn\u2019t end up working out the way my cousins did that, where he made more on his initial investment. However, we were still able to win because of the deal that we made by buying this lot with a burrowing owl nest.<\/p>\n
Tammy, that is a great example of becoming good at something that everyone else is scared of. It\u2019s like foundation issues. How many investors like, oh foundation issues, no. Then somebody coming in like, I\u2019m going to learn how to fix the foundation and I\u2019m going to become the expert in that. You just became the expert in burrowing owls and you save 20% on a lot. But just by taking the time to actually learn what it meant, having that cross on your property and how to work around it, because a lot of time it\u2019s just problem solving.<\/p>\n
Absolutely.<\/p>\n
That you have an issue in front of you, you have an obstacle, and solving that problem, so thank you for sharing that story with us.<\/p>\n
Yeah.<\/p>\n
I am glad you went into talking about burrowing owls.<\/p>\n
No, I was going to say that\u2019s happened with several deals of ours where people were staying away from a property for X, Y, and Z and we were able to figure out how to make that deal work. Because most of our deals have come from the MLS, and so if we didn\u2019t get creative, they wouldn\u2019t have worked out.<\/p>\n
I think the lesson there too for all of our rookie listeners is that there is a price point where almost every deal makes sense. For you, with this burrowing owl issue, it was a 20% discount that you needed for that deal to make sense. If there\u2019s a foundation issue like you were talking about, Ashley, maybe it\u2019s a 30% discount, but there\u2019s some number where almost every deal will make sense.
I think as a new investor, it\u2019s not necessarily what are they asking that you should be so concerned with, but it\u2019s like, what is the number that my underwriting, that my analysis says this deal makes sense at and starts your negotiations from there. But yeah, I love the creativity, Tammy, I love the problem solving. Now, I want to deep dive this whole spec build process. I know obviously you scaled to 17 units. I don\u2019t think all of those are spec build so we\u2019ll kind of talk about how you scaled in a bit, but before we do, just first define what you mean when you say spec build home and then just kind of walk us through the process that you kind of went through to take this deal from zero to 100.<\/p>\n
I should mention, I started off with funds from a sale of our primary residents. We bought our primary residents in 2011. It had appreciated quite a bit by the time we were selling it in 2015 and we had this chunk of money. And so, we were like, this is the perfect time for you to get involved in real estate because you have this money. Again, I had a cousin and so, we first started by shopping for the lot. Then my cousin had this profit share agreement with this contractor where he would build the house for cost and then he would take part in the profit once we sold it. Again, there was some learning lessons in working with this contractor. One of the learning lessons that I learned, that I happened to\u2026 One of the lessons that I learned was that if something feels fishy at the very start, take a moment and maybe reconsider.
One of the things he\u2019d put in his contract was that his wife had to sell the property, which I thought was strange because I didn\u2019t know why he was so adamant. Because I had asked if we could just have a third party sell it, but he was adamant that it had to be his wife. Later, I found out that she was new to the area, she had no contacts, she was very much starting out her career. And so, it probably hurt us in the sale part, but a lesson learned.
And so, what we did was we constructed the house and that took us about six months and then we put it on the market and we thought it\u2019d sell right away and it didn\u2019t. It took a little bit longer because of some of the issues, but we were able to sell it. In the end, we made about 10% return on investment. Again, I probably wouldn\u2019t have put that much capital into one deal and put all my eggs in one basket like that. But it\u2019s what I had at my disposal and it\u2019s got me started.<\/p>\n
Can I ask a follow-up question, Tammy? I just want to make sure I\u2019m understanding the relationship between you and this builder. You went out, you paid for the land in cash, is that correct?<\/p>\n
Yes, I paid for the land in cash.<\/p>\n
Okay. You brought the land and then the contractor brought, he covered all the construction costs or were you actually paying him to build it out, but just at whatever it cost him?<\/p>\n
Exactly.<\/p>\n
Okay.<\/p>\n
I paid for everything. That\u2019s why I said\u2026<\/p>\n
Gotcha.<\/p>\n
\u2026 I don\u2019t know, it would be smart to do this, otherwise, but again and you know different. And so, I paid for the lot and I paid for all the construction. He didn\u2019t take it up but it was just cost.<\/p>\n
Gotcha.<\/p>\n
It was just what he was paying his subs and for the materials.<\/p>\n
Gotcha. Okay.<\/p>\n
Then when we came to sell it was a 60, 40 break. I made 60%, he made 40%.<\/p>\n
Gotcha.<\/p>\n
Plus the commission that his wife made.<\/p>\n
Interesting. Okay. All right. I\u2019m sure there was some big, so you already named one, right? If things feel fishy at the beginning, that maybe that\u2019s a red sign, what are some of the other lessons that you learned kind of going through this new build out phase that we can share with the listeners?<\/p>\n
Again, the burrowing owl part was the part of the lot. And then the building, again, I didn\u2019t know much about construction. And so, I really used this time to get educated so I\u2019d ask him a ton of questions. I mean, he was probably sick of hearing me, but he would say, well, this is going to cost this. And if we do it this way, it\u2019s going to cost this and I\u2019d be like, and then I\u2019d have him break down in me, why that costs that much and why this happens and why we need this, or can we do this? And he would, I got a full education on what building a house was. That came for free for me because, well, not for free. I obviously invested in the deal, but it was a perk.
And so, I would say when you\u2019re working with contractors, use that time as an education time, ask questions, get the information you need to grow. One of the things I do is I always get three quotes for everything and I learn that from BP. The reason I do that is one to see what the better price and the person I get the best vibe with, but also to learn, because I ask questions at every quote and I ask why they\u2019re doing that and is this possible? I get information that helps educate me for my decision.<\/p>\n
I think that\u2019s super valuable is taking on a partner and kind of leveraging not only them as a partner, as to whatever they\u2019re bringing to the table, but those other unique skill sets they have. Yes, like the part of the partnership was he was going to be basically the project manager and oversee the construction and handle the build. But also you leveraged him by getting a knowledge and information so that you can learn too. I did that too for my liquor store building. I took on a partner, I gave him some equity and he did a lot of the rehab and remodel, but I also worked alongside him to learn a lot of the things that went into doing a full gut rehab.<\/p>\n
Yeah.<\/p>\n
Tammy, are there any other properties that you had that kind of had like a lesson in them too? Maybe some issues that came up that people should watch out for, too?<\/p>\n
Yeah, gosh, I feel like, so one of the things I do is after each property, I take some time and I write the lessons because you\u2019ll forget them, right? And so, I write down this happened, didn\u2019t feel good, this is what I\u2019ve learned, this is what I\u2019ll do next time. And just writing it down, we\u2019ll help cement it. Because when you hit these bumps in the road, they hurt, they\u2019re like, ugh, is it me? Why did that happen? Like, am I not supposed to be doing this? If you can take that lesson or take that hardship and write it down and think about what you would do different next time, then it\u2019s actually not a waste. It\u2019s actually something that you can use to make you a better investor.
Yeah, I\u2019ve had plenty of when we bought a fourplex after a couple of properties after the spec home and I work with\u2026 I had to work. It was pretty much full gut remodel and I had to work with lots of contractors. One of the things that I learned is that contractors are people too, and I think as a woman, you walk into a job site and it can be a little bit intimidating. It\u2019s like walking into a mechanic. You\u2019re like, well, what are they going to try to sell me? Or how are they going to try to change order me or whatever it is. I\u2019ve gotten much better and I\u2019ve learned how to have a relationship with my contractors.
One of the things I do is I speak Spanish fluently. And so, I speak Spanish to them. If I know that\u2019s their primary language, I try to relate to them. I let them know that I\u2019m on a budget and that things need to work out a certain way. I just talk to them like person to person and I get to know them and I get to know their\u2026 I know everybody\u2019s name on the job site and I try to build relationships so that\u2026 So up to now, I haven\u2019t gotten cheated by any contractors and I feel like I\u2019ve been able to build good relationships with them, but I still get three quotes, no matter what.<\/p>\n
Yeah. Tammy, I want to talk a little bit more about that. Before we do, I just want to go back to the end of the spec home build. We know that it was a six month job. You made a 10% cash on cash return, but you mentioned that you 1031 those funds into something else. First for the investors that aren\u2019t familiar with what the 1031 is, can you define that for us? Then let us know where you took those funds, and last piece, you also typically have to hold the property for closer to a year to be able to 1031 so I\u2019m curious how you\u2019re able to kind of navigate that piece as well.<\/p>\n
A 1031 is a tax term for basically doing a like in kind exchange. You are selling a property and you are reinvesting the profit from that property into another property or land. It can be any kind of real estate investment, as long as its real estate. You do have to keep it for longer in a year, but we had this for 18 months and also we were able to show that we had the intention of potentially renting it and so we didn\u2019t have any issues. At that point, we spoke to the 1031 that qualified intermediary, and they told us that would be fine.
And so, we sold it. We used the profit from that, which was a considerable amount of money because a lot of it was cash that we had to invest. We purchased two duplexes side by side because our long term goal was to really have long term buy and hold properties after we\u2019d been educated, because during those 18 months, I started listening to BP and figuring out what to do. And I learned so much that I was like, oh, I shouldn\u2019t have done that as my first deal, but here I am, and now I know what to do.<\/p>\n
Awesome. Well, I love that you were able to kind of take that 1031 and use it to keep growing the portfolio. Yeah, just as a quick side note, like there are situations, or I guess, exceptions to that 12 month rule. Like we sold one of our properties about nine months after we bought it and we were still able to 1031 because we were able to show them proof that our intentions were to hold it as a rental, but the market had adjusted and we were kind of capitalizing on that opportunity.
The 1031 is definitely a way that a lot of people grow wealth fast when it comes to real estate, so thank you for kind of letting us know how that story ended. I want to go back to the contractor piece because you mentioned that you\u2019re good at building relationships, but how are you finding contractors, right?<\/p>\n
Yeah.<\/p>\n
Because I think that\u2019s always a struggle for new investors. It\u2019s honestly, still a struggle for us. We just had to end a relationship with the contractor two weeks ago. How are you finding good people in today\u2019s uber competitive market?<\/p>\n
Yeah, I will say, it can be a challenge, but I meet\u2026 Even if you have one person that does their job well, it could be a realtor, it could be a property manager, it could be a lender. Your one rockstar in your life that you feel like, oh, he\u2019s the person that knows things. He\u2019s the person who gets things done, then I use that person to get contacts. Sometimes what I\u2019ll do is even if I don\u2019t really know that person that well, but I know they worked on a job, I\u2019ll find out who that person is and I\u2019ll start calling people.
I\u2019ll reach out to\u2026 As long as I get three quotes, then I know I\u2019m going to get a more well rounded idea on what the scope of the work is and what the price is. And so, I talk to people that rockstars who know rockstars, and then I find jobs that I liked, and I find out who worked on that job and I\u2019ll contact them. Then lastly, if I need a third person, I can\u2019t find them, I\u2019ll go to Yelp. I\u2019ll go to Google. I\u2019ll I\u2019ll start asking people that I know to get another contact,<\/p>\n
Tammy, what did you end up buying with that 1031 exchange? You bought the two duplexes with that?<\/p>\n
Yes.<\/p>\n
And did you have to do rehabs on that? Are you doing rehabs on all of your properties and with\u2026<\/p>\n
I am.<\/p>\n
\u2026 all of these rehabs going on, what are you using to manage these rehabs? Do you have any software? Is it Google sheets? What is it that\u2019s working for you to kind of keep track of all these projects you have going on?<\/p>\n
Well, I should mention that my husband\u2019s love language is Excel. And so, he builds beautiful, beautiful spreadsheets for me and I use all of those spreadsheets for all of our properties, but yes, your initial question was, am I using\u2026 What was your initial question? Sorry.<\/p>\n
Just like if you\u2019re using any\u2026<\/p>\n
I said, I am\u2026<\/p>\n
\u2026 software for any of the properties that you\u2019re doing rehabs on? Yeah.<\/p>\n
Yeah, and I am doing rehabs on all, so I mostly buy value, add properties. And so yes, I am doing rehab on all the properties that I buy. I did purchase after, with the 1031 funds, I purchased two duplexes that were side by side. The reason why these were a good deal is because they were identical duplexes and they would not get insured and maybe they probably wouldn\u2019t qualify for traditional financing because their roof was in need of repair, and in Florida, your insurance is a big deal. And so, they weren\u2019t getting touched by anybody who needed conventional financing. I had this chunk of money from the 1031. I was able to use, gather some more money from just our reserves and put all of our funds into purchasing these two duplexes cash.
My plan was to then put the roofs on, remodel them and then refinance them a few months later, which is what we did. We bought these two at a real discount because it was all cash and I was buying two, instead of one. They had them both marketed separately, but I was able to\u2026 I found out that he was selling both and I said, I\u2019ll buy both for you, if you give me a discount and I buy it all cash. And so, that\u2019s how we made that deal. Then, we did, we refinanced it a few months later, pulled out the cash and then went and used that. It was that original seed money that just kept growing snowballing into something bigger deal by deal by deal. I wasn\u2019t using the birth strategy, but it\u2019s still that idea of having your money grow and through each project.<\/p>\n
I love that. That kind of gives a little insight as to how you\u2019ve been able to grow and scale is putting that value add into each property so that you can pull your money back out and go on to the next deal.<\/p>\n
Yeah.<\/p>\n
Have you done anything else besides the new construction and buying the rentals, the buying holds, have you dabbled in any other strategy?<\/p>\n
We just recently closed on our first short term rental about a week and a half ago.<\/p>\n
Congratulations.<\/p>\n
Yeah, and that was a surprise. I hadn\u2019t expected to buy a short term rental, but again it was in a 1031 exchange and I had a week left and I couldn\u2019t find anything in Florida. And I met a realtor at a meetup who was doing short term rentals in the Desert and she kind of showed me her numbers. And I was like, I\u2019m not going to get into a whole new area of real estate a week before I have to identify this property.
But then it was just like eating at my brain, so I spent two days just doing all the research and reading all the stories and watching all the YouTube videos, like from all like Tony Rob, all the guys and like just absorbing, absorbing. And then I was like, okay, I think I can do this. And so, then we put like five or six offers in a week and landed one, two days before we had identify.<\/p>\n
That\u2019s another thing too, with the 1031 exchange is that you have these timelines where you have to identify a property you have to, and then close on the property within a certain timeframe, or else you lose the advantages of the 1031 exchange.<\/p>\n
Yep. It\u2019s stressful. But it\u2019s also, if you have a hard time with action, it actually makes you take action, because you have a ticking clock saying you got to act.<\/p>\n
Yeah, and that timeline goes fast. When we had our 1031 in process, like I think we let like, I don\u2019t know, three weeks go by before we even started looking and we looked up like, oh my God, almost a whole month has gone by. We were scrambling like crazy to try and try and make it work. But yeah, but so cool. With the short term rental piece, I love that you guys are dabbling in so many different pieces of real estate, you start off with the spec build. Now, you\u2019re doing the value add strategy, now you\u2019ve got the short term rental. I\u2019m just trying to think of like the timeline here. You do this first spec build, then you go out, you buy the duplex. Can you just kind of like walk us through the timeline of how you get from those duplexes to now 17 units?<\/p>\n
Yeah. Last year was a big year for us. After we bought the duplexes that was in 2019, yeah, 2019, and then 2020, we had one property and that was a big project that was a fourplex in Long Beach, California. And that was a complete, that was the one that was a complete gut of the whole building and had to be all redone. Then 2020, we were able to scoop up two deals and that was a three unit in Florida and a five unit in Florida. The five unit was really interesting because that was a property that also was on the market for a while and nobody had picked it up and I looked at it. I looked at it several times and I was like, what, why is this property not getting bought?
It\u2019s a five unit, it\u2019s in a great area, and so it wasn\u2019t sub metered for water, so that was one thing. It needed some\u2026 It had some deferred maintenance, it had really low rents, but all that stuff could be worked with. I figured out how to submeter, I did the research on that, and I learned how to do it and it actually isn\u2019t that hard. I mean, it\u2019s costly. But if you put that in your deal and you figure out what the number is, then you offer what makes sense and that\u2019s what we did. That\u2019s how we put or just that one.<\/p>\n
You guys are on a tear. I just want to pick your brain really quickly. You were doing a lot of investing in Florida and then you picked up this property in Long Beach. For those that aren\u2019t familiar Long Beach is like another big city that\u2019s a little south of Los Angeles, so it\u2019s in California. A lot of people say that long term rental in California just don\u2019t make sense. What pulled you out of a state like Florida to invest in Long Beach?<\/p>\n
It was just the deal. We got approached and I was going to save this property for a deep dive, but it was a good deal.<\/p>\n
Yeah. Well, hold on. Yeah, let\u2019s do that then.<\/p>\n
Yeah.<\/p>\n
Let\u2019s do that. Okay. Okay.<\/p>\n
Yeah, let\u2019s do a deep dive on this one.<\/p>\n
Okay, awesome.<\/p>\n
I\u2019m going to hit you first, Tammy, just like some rapid fire questions to kind of set the table.<\/p>\n
Sure.<\/p>\n
Then we\u2019ll get into the story from there. So property type, we already know that you said it was a fourplex right?<\/p>\n
Fourplex, that\u2019s right.<\/p>\n
Okay. Awesome. And then city, we just said, Long Beach.<\/p>\n
In Long Beach, California.<\/p>\n
Yep. And then what was the purchase price?<\/p>\n
750,000.<\/p>\n
Okay, cool. Let\u2019s talk about how you found this deal first. Okay?<\/p>\n
Yeah.<\/p>\n
Or was it on the MLS? Was it a wholesaler, who was the lucky person that showed it to you?<\/p>\n
We had an agent bring it to us and tell us, this is an off market deal. This was a very interesting property because it was a gang house. There was a shooting in Long Beach and the people involved in the shooting were tracked down to this house and the police had come in and arrested three of the tenants in three of the units and had basically thrown the book at the landlord. There was like 27 code violations on the building. And so, it was going to be a lot of work and it was like pretty much all vacant. That\u2019s how much it cost. I mean, that\u2019s where the property was. Should I go on or did you want to ask me a question?<\/p>\n
Yeah, let me ask something there, right? This is your first property in California, right? How did you build this relationship with that agent, for them to bring you this off market property? Because you\u2019ve never worked with them before so why did they trust you as the potential investor that could close on this?<\/p>\n
Yep. When I was in that 1031, a year prior, I had looked on BP and looked for investment companies here locally. I had read, I had seen somebody write about this one realtor group and investment company in Long Beach. And so I had reached out to him when I was looking for a 1031 exchange property, and I needed one, I ended up buying it in Florida, but I kept that relationship going on. And so, he knew that we had some funds that we wanted to deploy and that we were interested in investing in California and so he reached out to me because it met our criteria.<\/p>\n
A couple things to point out there. A is that the power of networking goes a long way, right? You kept that relationship open even though you were actively looking for something at that moment. Then when something popped up, he knew your criteria, which is the second important thing that if you can communicate to these agents and brokers and wholesalers, what is you\u2019re looking for, when they have something that crosses their desk that meets that criteria, you\u2019re hopefully the person they think of. For you, Tammy, it seems like you\u2019re the investor that wants the property that nobody else wants, right? You\u2019re going to buy the property with no sub-meter, you\u2019re going to buy the property with the burrowing owl, you\u2019re going to buy the gang house.<\/p>\n
Yeah.<\/p>\n
If you go out there and you tell these agents and brokers that, hey, I\u2019m willing to take the properties that everyone else is passing on, that\u2019s an opportunity for you to kind of make a name for yourself.<\/p>\n
Exactly. And so, we bought it and it was March 2020, and we were in escrow and then COVID hit. And we seriously thought about getting out because it was like panic mode, nobody knew, everything stopped, people pulled out of escrow and we still had contingencies so we could get out of escrow and not move forward, but we kept going back to the numbers and that\u2019s the other thing, once you\u2019ve worked the numbers and you know it\u2019s a deal, you kind of have to stick to it and follow through. We came to a really crunchy moment where we were like, is this going to like\u2026 Should we just pull out? Like this is, I mean, we\u2019re spraying the bottom of our shoes with alcohol, and yet we\u2019re now we have to go knock on people\u2019s houses and say, hey, we\u2019re the new landlord.
We were like, we should probably just pull out, but we just kept looking at the numbers and saying, no, this makes sense, this is a good deal. Eventually, this thing will end and people will need housing. And so, we push through and we closed on the deal. Honestly, it being COVID was a gift for us because we had the pick of the litter when it came to contractors, everybody was out of work in April 2020, all the jobs had stopped. And so, we were able to get really the good prices. I asked for discounts on things that I hadn\u2019t done in a while. I was able to get\u2026 They finished in a little over 60 days, a full gut job on the building. I mean, we had a lot of blessings come from the fact that we were in such a precarious time.<\/p>\n
Sorry, really quick, I just want\u2026 You said they finished in 60 days?<\/p>\n
Yes.<\/p>\n
It\u2019s for a fourplex?<\/p>\n
How many units were they doing? Were they all four of them?<\/p>\n
Fourplex. Yeah. Yeah.<\/p>\n
Wow.<\/p>\n
We had one left, one tenant left. And so, we were able to cash for keys her, and then we went right to work. And so, we had the roof going, the windows that we were demoing and we did\u2026 Again, we had contractors willing to work because everybody was out of work and we did it in the little over 60 days.<\/p>\n
Tammy, can you explain real quick? What cash for keys is, please?<\/p>\n
That\u2019s when you are in a situation where you have a tenant and they still have a lease or you\u2019re in a state like California, where it\u2019s just not easy to get somebody out once they\u2019ve been there for a long amount of time, even if they don\u2019t have a lease. And so, you offer them cash for their keys and it\u2019s a number that suits their needs, and it\u2019s a number that is works with your numbers and is still going to be profitable for you. And so, that\u2019s what we did with the tenant. We offered her cash to be out. I think we gave her like three weeks and she was in a building that had 27 code violations. And so, there was mold throughout her unit and there was all sorts of just bad, bad seen.
But she\u2019d been there for 20 years and it\u2019s amazing how attached you get, even if the place you\u2019re living in is not up to par. And so again, it was a relationship, I went and talked to her several times and eventually, we would be able to get her out because of the code violations, but because of COVID that was being delayed. And so basically, I tried to explain to her, you\u2019re going to be able to use\u2026 We were giving her like seven times what she pays for rent. And so, she initially said, yes, then she said, no, and then she said yes again. And so, it took her a little bit of back and forth, but eventually she took the money and she moved to a much nicer area so that\u2019s good for her.<\/p>\n
Tammy, I want to talk through the numbers before we move on from this deal. I know the purchase price was 750. What was your capital needed to close in the deal? What was your down payment and your closing cost, do you recall?<\/p>\n
The total initial investment on that property was 292,000. It was a 25% down payment, and then the reno was about 105,000. We are actually in escrow right now for 1.224. In two years, we were able to double our initial investments. We bought it for 750, invested 292,000 and are selling it for 1.224 and we will pull out of that deal about $600,000.<\/p>\n
Wow.<\/p>\n
So what\u2019s the\u2026<\/p>\n
Congratulations.<\/p>\n
Yeah. That is\u2026<\/p>\n
Are you going to do another 1031 exchange with that then?<\/p>\n
Yes.<\/p>\n
Yeah.<\/p>\n
Yeah. So we will be in another 1031 here in about 30 days.<\/p>\n
What are you guys going to 1031 into with those funds?<\/p>\n
I\u2019m all ears. I don\u2019t know yet.<\/p>\n
Tony, you forgot\u2026<\/p>\n
Yeah.<\/p>\n
\u2026 you still didn\u2019t have that property in Louisiana.<\/p>\n
I could have sold your house in Louisiana. It would\u2019ve been a terrible return, but the money would\u2019ve went somewhere, but no, Tammy, that\u2019s\u2026<\/p>\n
Yeah. I don\u2019t know.<\/p>\n
That\u2019s amazing. You were all in for looks like somewhere around a million bucks, you\u2019re going to be able to sell for 1.225, pretty much, slam dunk deal. Really quickly, can you tell us what the rents were before and what you were able to push them up to in that time?<\/p>\n
Again, the three units were vacant and then one unit was $700 and now, the two bedrooms are going for 2,000 and the one bedrooms are at 1,500.<\/p>\n
Wow.<\/p>\n
Yeah.<\/p>\n
Wow.<\/p>\n
It\u2019s a great cash flowing asset. But one of the things that I didn\u2019t mention during this two year process is that we eventually leased up the whole building and then we ended up and one of the lessons learned is be really, really good on your leasing and really strict on your criteria. And we weren\u2019t, and we ended up having an eviction during COVID, which was extremely painful, but it was a big lesson learned. And so, now it\u2019s a great cash flowing asset, but I think after you go through experience like that, they talk about those landlords who get rid of properties that cause them pain.
Well, even though that property now is a cash cow, because I went through that painful eviction experience. Every time I bring up that property would just kind of give me like heartburn. And so, at the beginning of this year, I was like, let\u2019s just sell it. It\u2019s already reached our goal. Let\u2019s sell it, let it be somebody else\u2019s happy property. And because I just have too many memories left with that one, and it\u2019s going to be a great property for this new owner.<\/p>\n
Yeah. It\u2019s like a headache property. It caused you a headache once, and then you always think about it.<\/p>\n
You always think about it that way.<\/p>\n
Okay. Well, Tammy, thank you for sharing that deal with us and congratulations on it. That is awesome. And good luck with the 1031 exchange.<\/p>\n
Thank you.<\/p>\n
I want to take us to our rookie exam. This is where we have three questions and we are going to give you a quiz.<\/p>\n
Okay.<\/p>\n
Okay. [crosstalk 00:52:59]. The first one is one actionable thing rookie should do after listening to this episode?<\/p>\n
I would say, write down a goal. Even if it\u2019s just by the end of this year, I\u2019m going to have put in 20 offers. Or if it\u2019s by the end of this year, I\u2019m going to be under contract. Or by the end of this year, I\u2019m going to attend 20 meetups or write down a goal and then start taking action towards it. Just if you take action every day and I know people say this over and over, and I know it sounds cliche, but it really is at the core of being successful. If you take small, consistent action every day towards your goal, it\u2019s foolproof. You will get to your goals and probably sooner than you expect.<\/p>\n
Awesome. Question number two, Tammy, what is one tool software app or system that you use in your business?<\/p>\n
We use Apartments.com for all our properties in Florida. That\u2019s how we collect rent. That\u2019s how we write up our leases. And because I have a kind of a mom and pop type property manager in Florida, it really helps streamline that and create less work for me. We also use Stride for miles, and then we use Wave app for our bookkeeping, accounting stuff.<\/p>\n
For the last question, where do you plan on being in five years?<\/p>\n
We\u2019re hoping to end the year at 25 units. At this point, it seems a little aggressive, but like I said, you put it out there. If you don\u2019t reach it, you\u2019ll still win if you grew at all. But in five years, we\u2019d like to be at 50 units and hopefully sooner.<\/p>\n
I want to take us to our Rookie request line.<\/p>\n
Yeah.<\/p>\n
For all of you that are listening, if you want to get your question featured on the show, give us a call at 888-5-ROOKIE, leave a voicemail. We might use it on the show, but Tammy, are you ready for today\u2019s question?<\/p>\n
Yes.<\/p>\n
Hi, my name is Stephanie. I live in Massachusetts and my question is, would it be wise to pay down credit card debt before investing in my first property? Or should I go ahead and invest in a property and use the income from that to pay down debt? I am finding it hard to pay it down with the income I currently have. Thank you.<\/p>\n
I think given the\u2026 At a different time when interest rates aren\u2019t as high, I probably say invest, but you really have to look at your situation and see how high your interest rates are. If you\u2019re paying 25% interest every month, I would start working on getting those credit card bills down. However, you just have to do the numbers. You need to see how much this property, how much a potential property is going to bring you, and then compare that to how much you\u2019re paying monthly on credit card. And whatever is higher, that should be your priority.<\/p>\n
Yeah. I love that. I love that advice, Tammy. I think this is such a deeply personal question, Stephanie, and everyone kind of has a different approach to this. I have a friend who just paid off his mortgage, like that was a big goal for him. I don\u2019t know if I\u2019ll ever want to pay off my mortgage because the interest rates are so\u2026 We got a 3% interest rate in our primary house, right? It doesn\u2019t make sense to\u2026<\/p>\n
Right.<\/p>\n
\u2026 pay that off. I think this kind of goes into the same situation. If the debt is like crushing you, which I\u2019m not saying that it\u2019s crushing you, but you said you\u2019re having a hard time paying down the debt with your current income. I would think that maybe focusing on getting that debt down first might be better in your unique situation, but at the end of the day, Stephanie\u2019s going to be based on kind of what you feel is best financially.<\/p>\n
Okay. Well, before we end the show, I want to highlight this week\u2019s rookie rockstar. It is Shane Albert, his wife, and him just closed on seven new doors today, purchasing a portfolio of a triplex, three single family houses and a fur all of their own intertwined into one closing. Wow, that\u2019s awesome.<\/p>\n
Right.<\/p>\n
And brings them to nine doors total. We were fortunate enough to find a way to do this with only $500 out of pocket.<\/p>\n
Wow.<\/p>\n
Wow. That is so cool.<\/p>\n
Holy crap.<\/p>\n
Congratulation, Shane. I think we\u2019re going to have to get Shane on the show and talk more about that deal for sure.<\/p>\n
Yeah, I don\u2019t think I\u2019ve ever heard of anyone getting nine doors with only $500 out of pocket.<\/p>\n
Yeah.<\/p>\n
Yeah, that\u2019s crazy.<\/p>\n
Well, Tammy, thank you so much for joining us today. Can you let everyone know where they can maybe reach out to you or find some more information on you?<\/p>\n
Yes, I\u2019m on Instagram, even though, it\u2019s mostly pictures of my kids, but it\u2019s Tammy Skit on Instagram. You could also email me at [email\u00a0protected]<\/a>, and I\u2019m on BiggerPockets as well, and I\u2019d love to connect with people out there and network.<\/p>\n
Well, Tammy, thank you so much for providing so much value today to our listeners.<\/p>\n
Thank you.<\/p>\n
I\u2019m Ashley at Wealthfromrentals and he\u2019s Tony at Tonyjrobinson on Instagram. We will be back on Saturday with a Rookie Reply, so make sure you are sending Tony and I, your questions on Instagram or leaving them in the Real Estate Rookie Facebook group, or leaving us a voicemail at 1-888-5-ROOKIE, and we may just play your question on one of our Rookie Reply episodes. Thank you guys so much and we\u2019ll see you next time.<\/p>\n