{"id":7425,"date":"2023-05-11T19:35:58","date_gmt":"2023-05-11T19:35:58","guid":{"rendered":"https:\/\/imsfund.com\/?p=7425"},"modified":"2023-05-11T19:35:58","modified_gmt":"2023-05-11T19:35:58","slug":"making-200k-year-in-3-years-w-this-high-cash-flow-strategy","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/05\/11\/making-200k-year-in-3-years-w-this-high-cash-flow-strategy\/","title":{"rendered":"Making $200K\/Year in 3 Years w\/ This High-Cash Flow Strategy"},"content":{"rendered":"


\n<\/p>\n

For real estate investors, passive income<\/strong><\/a> is almost always the goal.<\/strong> You may be making good money at your job, but the long days, longer nights, lack of sleep, and limited time off is probably leaving you feeling fatigued. This is exactly how Brittany Swait<\/strong> felt after a severe diagnosis put her life in danger.<\/strong> She was working harder than ever, but the time with her family was slowly slipping away<\/strong>. That was until she started investing.<\/p>\n

Brittany was able to build a fifty-nine-unit rental property portfolio in just three years<\/strong>. These properties bring in a staggering $200,000 per year passive paycheck<\/strong>, allowing Brittany to focus on her family, not take tasks from a boss. But this portfolio wasn\u2019t easy to build, even though it happened quickly. Brittany had to learn the BRRRR method<\/strong><\/a>, take considerable risks (like draining her retirement accounts), and put herself in an entirely new position.<\/p>\n

Now, just a few years later, Brittany is building her rental property portfolio at a fast pace, but she loves every minute of it. In this episode, she\u2019ll walk through the exact strategy she uses to make such high cash flow<\/strong>, her five tips for remodeling and renovating<\/strong> that will save you TONS of time<\/strong>, and how she\u2019s been able to pull her cash out of the deals she\u2019s doing. If you want to scale your real estate portfolio<\/strong><\/a>, Brittany is the person to listen to.<\/p>\n

\n

David:
This is the BiggerPockets Podcast show 764.<\/p>\n

Brittany:
Just three years ago, I was working 60 hours a week for somebody else, and now I have a portfolio of over 5.5 million dollars.<\/p>\n

David:
What\u2019s going on, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with my co-pilot and partner in crime, Rob Abasolo. Rob, how you doing today?<\/p>\n

Rob:
Good. Hey, you forgot to say that we\u2019re the biggest, the baddest, the best real estate podcast show on the internet.<\/p>\n

David:
I did not forget to say that. I just let you say it because I remember what it was like when I hosted this with Brandon and he never let me talk.<\/p>\n

Rob:
Genius.<\/p>\n

David:
I\u2019m not going to do the same thing. So welcome to saying the alliteration to start the show, we are the biggest, the best, and the baddest real estate podcast in the world. On that tone, today\u2019s interview was with Brittany Swait, who has accumulated 59 units over three years with a foundation in property management using techniques that we talk about on this podcast. It was an awesome show. Rob, what were some of your favorite parts?<\/p>\n

Rob:
Very cool story. Full-time mom, full-time property manager, full-time building a real estate empire. I think for a lot of the newbies out there, they\u2019re going to love today\u2019s episode because, personally, I think she totally demystifies rehab costs. I think when you\u2019re getting into rehabs in the BRRRR, where you\u2019re like, \u201cMan, I don\u2019t know how much things are going to cost. It\u2019s scary. How should I do this?\u201d She just has a way of dispelling that and I think making it feel feasible to the everyday person. What about you?<\/p>\n

David:
Yeah. She did a wonderful job of giving very practical information mixed with the goal setting element. So this is when you\u2019re going to want to listen to twice. It\u2019s an amazing story. Please share it with anyone you know. Before I throw to Rob in the quick tip, I just want to say, listen closely for the word shmedium, and when you hear it, I want you to go to the comments and tell us what you think about our business idea.<\/p>\n

Rob:
That\u2019s a good one. I\u2019ve already put a deposit on a Lamborghini because I know how big of a business this is going to be.<\/p>\n

David:
Yeah. So let\u2019s bring us in today\u2019s quick tip. What do you got for us, Rob?<\/p>\n

Rob:
Buy nice and not thrice. Comes after twice. If you want to know what this means, you\u2019re going to have to listen to the episode because we get into the philosophy of buying quality things.<\/p>\n

David:
Absolutely, and that\u2019s all we\u2019re going to say. Listen more to understand why that can be beneficial in your business. Very powerful stuff though. All right. Let\u2019s bring in Brittany.<\/p>\n

David:
Today\u2019s guest is Brittany Swait. Brittany has been investing for only three years. She currently owns 59 units as of this week. She added a few more since the time we first met her. She\u2019s investing in Omaha and Miramar Beach, Florida. She loves watching basketball much like me, especially when it gives her an excuse to travel to a game and get short-term rental ideas from wherever she stays. Brittany, welcome to the BiggerPockets Podcast.<\/p>\n

Brittany:
Thank you guys for having me.<\/p>\n

David:
Yes, it is our pleasure. So before we dig into how you\u2019ve accumulated such a impressive portfolio in a short period of time, was there a specific moment when your why got crystal clear for you? Can we start with that?<\/p>\n

Brittany:
Yeah, for sure. So 2019, I was having some health issues, went into the hospital, had a surgery, came home. I was diagnosed with cancer. So came home. My son was about five at the time, and he wanted to learn his bike, learn to ride his bike. So I was really in an emotional state of I didn\u2019t know what my future held, if I had a future, and I just felt really sad. So I said, \u201cI\u2019m going to give you 100% of my attention.\u201d So I shut off my computer and my phone, nothing at that time mattered except for watching my son ride his bike. So we did that. We sat out in the front yard for about six hours, and I realized that was the first time that I had ever in my adult life disconnected from work, really. I had my first daughter at 19, and so since then I\u2019d really been in survival mode instead of really living a life and thriving. So that was my, I guess, light bulb moment, really.<\/p>\n

David:
Well, that\u2019s pretty powerful. If you had to say what was stopping you from disconnecting, was it just everyday life stuff? Was it work? What was keeping that moment from happening before it did?<\/p>\n

Brittany:
I always wanted to be the best, and I was really good at work. So I think we as mothers have this mom guilt. No matter how good or bad of a mother we are, we never feel like we do enough, but with work, I always felt like I\u2019m successful. I can see it, I can see the numbers, I can see the promotions, I could see all that and I could feel it. So to me, it was just easiest to give my energy and attention to work because that\u2019s what made me feel good and feel successful.<\/p>\n

David:
Yeah, I can relate to that quite a bit.<\/p>\n

Rob:
What was work, by the way, just so we understand what your career was at that time?<\/p>\n

Brittany:
Yeah, so property management. At that time, I had been in it for about three years.<\/p>\n

David:
There\u2019s always something to do in property management. There\u2019s never a time where you\u2019re like, \u201cI just don\u2019t know what I could be doing right now.\u201d So I can see that that would become easily become addicted. Then you measure in the dopamine of checking boxes and knowing you\u2019re being productive, which all of us have. It\u2019s like it\u2019s very hard for those of us in this industry to have a day go by where we\u2019re like, \u201cWhat did I produce? What did I get done?\u201d If there\u2019s nothing there, then you just get this withdrawal feeling of you didn\u2019t get any dopamine. There\u2019s always something to do within the property management system. I can see that. Did you have a childhood or early years where you felt like you weren\u2019t good enough for certain things and then when you got a taste of being good at something, you\u2019re like, \u201cOh, I love this and I just want to keep pursuing it\u201d?<\/p>\n

Brittany:
I think just as a awkward teenager, I don\u2019t know if everybody feels that, but I did, I did also take the test that tells you about your personality, and my number one characteristic is competition. So after I found that out, it all made sense. You like to do what you\u2019re good at and you don\u2019t do what you\u2019re not good at. So really at that time I said, \u201cWell, that makes sense. I know that I\u2019m good at this so that\u2019s why I enjoy doing so much.\u201d<\/p>\n

Rob:
Okay. So you\u2019re a mom and you\u2019re sitting on the step there watching your kid ride his bike, learn how to do all that, and you\u2019re a property manager. I\u2019m sure there\u2019s a lot going on, but were you really loving being a property manager? Was that something that you always knew that you wanted to do or is that something that you just found yourself in organically? Was it an opportunity that just popped up randomly?<\/p>\n

Brittany:
Yeah, it was a really random opportunity. So before that, I was a stay-at-home mom for a couple years, but I was in management prior to that. So I had just filled in. My cousin worked at this property management company and he was going to be out of town, and so he said, \u201cCan you sit in on this meeting for me?\u201d and I did. Long story short, the owner ended up bringing me on in the leasing department, and then I, in probably six months, ended up taking over the entire company, so overseeing all of operations for leasing, bookkeeping, and maintenance, and our construction crews.<\/p>\n

Rob:
Wow, okay. So yeah, going back to when David was joking and saying, \u201cYeah, you\u2019re never really bored in this.\u201d Sounds like you probably weren\u2019t. So were you loving this? Now you obviously have a portfolio that we\u2019ll get into in a second, but is it the same grind property managing for someone else as yourself?<\/p>\n

Brittany:
I always had a weird pride of ownership even though it wasn\u2019t mine. I felt like I treated the company as it was, and so I loved it. I probably worked 60 to 80 hours a week for the first three years. It wasn\u2019t until that moment when everything happened with my health that I said, \u201cIf something were to happen to me, if I weren\u2019t to make it past this point, all I could say is that I spent the last three years of my life contributing to a company that is not even mine, number one, and number two, I have nothing after this.\u201d<\/p>\n

Rob:
Yeah. Do you feel like during that time, was it hard to stay positive? Are you a naturally positive person? I mean, you said you\u2019re competitive and you always want to be the best. So was that behind any of this? Tell us a little bit about the mindset as you started to think about some of these changes in your life.<\/p>\n

Brittany:
Yeah. So initially, I think anybody that\u2019s diagnosed really at the beginning, there\u2019s so many unknowns. So you lean on your doctors and you say, \u201cCan I make it through this?\u201d and they tell you the data. The data doesn\u2019t make sense to me. So I said, \u201cWell, I\u2019m not dying. I\u2019m going to make it through this.\u201d So I would go to treatment and the whole time in my head I would be saying, \u201cYou\u2019re fighting this. You\u2019re fighting this. You\u2019re going to make it through.\u201d Ironically, I went through treatment. They expected to me to have another surgery to remove the tumor, and the tumor was gone when they went in there.<\/p>\n

Rob:
Wow, that\u2019s amazing.<\/p>\n

Brittany:
So I said, \u201cI won.\u201d So my competition really came out at that point. I said, \u201cWell, I won beating cancer.\u201d<\/p>\n

Rob:
Yeah. That\u2019s amazing. Well, first of all, congratulations.<\/p>\n

Brittany:
Thank you.<\/p>\n

Rob:
I mean, we can say you\u2019re competitive, and it sounds to me, really, you\u2019re just a fighter, right? You take on things head on, and obviously, that comes into play as you started to get into the real estate world, you\u2019re like, \u201cAll right. I\u2019m managing for someone else. It\u2019s time for me to do my own thing and build my own legacy.\u201d So how did you and your husband evaluate the decision to leap into real estate and to actually drop the stability of your property management gig?<\/p>\n

Brittany:
I was overseeing the actual portfolio. So I would see all the numbers and I would always say, \u201cThis seems really inaccessible. It seems so far out. You have to have a lot of money to get into this,\u201d and we just didn\u2019t. So we said, \u201cHow can we?\u201d So we didn\u2019t know. We ended up reading Rich Dad Poor Dad, and that lit the fire under both of us. So we looked at where we did have money. We had bought our house a few years before this. So we went and saw how much equity we had in it. We looked at my husband\u2019s 401(k) and said, \u201cDo we have options that we can just drain this?\u201d Then my husband started a second job. He started a company so that we just had all this extra income that we could just throw towards investing.<\/p>\n

Rob:
Really cool. Really cool. So what was the first property that you got into from this? Obviously, I\u2019m sure you\u2019re evaluating a lot, you\u2019re researching a lot of options in front of you. Tell us about the first deal.<\/p>\n

Brittany:
Yeah. So my closing agent that my boss had worked with for a long time had closed a deal and she had contacted me and said, \u201cHey, I have this landlord. He\u2019s a doctor. He doesn\u2019t have time to landlord anymore. He just wants to get out of it. He\u2019s got a couple deals. Do you want me to send them over to you so you can look at them?\u201d I was like, \u201cYeah, they\u2019re probably going to be too expensive.\u201d So she sends them over and I see a $80,000 asking price. I said, \u201cOkay. 80,000? That seems attainable.\u201d So I ran the numbers and I ran the numbers again and again and again because I said, \u201cThis can\u2019t be right. He\u2019s asking 80,000, but the current value of it is about 150,000.\u201d<\/p>\n

Brittany:
So to me, it was a no-brainer, and I said, \u201cWe have to buy this property. There wasn\u2019t a if. There wasn\u2019t a maybe.\u201d I said, \u201cWhat do we have to do to get this?\u201d So we went and got a HELOC on our house. We drained my husband\u2019s 401(k), and then we took all the of our savings that we had and scrapped it together and had \u2026 I don\u2019t know how we came up with it all, honestly.<\/p>\n

Rob:
Pretty low stakes all around sounds like.<\/p>\n

Brittany:
Yeah. We just threw it all in.<\/p>\n

Rob:
You\u2019re jumping into the real estate pool at this point. Did you have a goal? Did you set a goal initially or were you just like, \u201cI\u2019m just going to buy a house and see where it goes\u201d? Did you know that you wanted to build an empire?<\/p>\n

Brittany:
So I just found our goals from 2019, and our goal was that we wanted to buy three rental properties in a year, and we wanted to own one million dollars in five years and five million dollars in real estate in 15 years. So that was our goal at the time.<\/p>\n

Rob:
Did that seem impossible at that moment where you\u2019re like, \u201cOoh, I don\u2019t know if we can hit it,\u201d or were you, I mean, obviously, we know you\u2019re a fighter here, so was that like, \u201cNo problem\u201d?<\/p>\n

Brittany:
Yeah. It seemed attainable. So I didn\u2019t want to create a goal that we wouldn\u2019t be able to achieve and then feel discouraged. So I felt like it was safe to set that three-property goal.<\/p>\n

Rob:
David is the master goal setter. We did a podcast not too long ago where we had to list out our goals. He\u2019s like, \u201cWhat are your goals?\u201d and I was like, \u201cI don\u2019t know. I think, I don\u2019t know, want this,\u201d and then I was like, \u201cWhat are your goals?\u201d and he had 15 written out.<\/p>\n

Brittany:
A scroll?<\/p>\n

Rob:
Yeah. I was just like, \u201cWhat?\u201d He\u2019s like, \u201cI\u2019ve got nothing prepared,\u201d and the scroll just goes out infinitely and really inspired me to start writing it down. I think it\u2019s good to have a small goal and a big goal the way that you did it. You had your one million dollar goal and your five million dollar goal. One of them is definitely obtainable. The other one obviously scarier, but as soon as you knock out that first goal, the next one seems pretty easy. So that\u2019s how I approach all these things. I\u2019m trying to goal set more and more.<\/p>\n

David:
It\u2019s funny you mentioned that because I just got back from Scottsdale two days ago at our house, Rob, doing a goal setting retreat. Apparently, you inspired this because you were like, \u201cDavid is so good at setting goals.\u201d I was like, \u201cI didn\u2019t know it was that good.\u201d I need to share the gospel of goal setting with more people. So we had everybody out there and we went through goals and we incorporated them into business in other parts of our life.<\/p>\n

David:
What came out of that event was this revelation to pretty much everyone there that goal setting is not as simple as write down what you want to accomplish. You have to incorporate it into, \u201cHow do I want my life to look and what kind of a person do I want to become?\u201d because the best goals will require more of you than the person that you are right now. They force you to grow personally in order to be able to achieve things.<\/p>\n

David:
Now, Brittany, I\u2019m sure that that was a part of your journey. You started off working for someone else\u2019s company, doing a great job, getting a lot of accolades. It was probably personally fulfilling, but it was taking away from the time with your kids. Cancer hits, and obviously, that\u2019s going to shake everything up. Now you\u2019re asking different questions, \u201cWhat do I want my life to look like? Who do I want to be?\u201d which is funny because that\u2019s what comes right before we set new goals. So did you incorporate that into your goal setting? Was that more of a subconscious thing as you sat down and decided what you wanted your life to look like?<\/p>\n

Brittany:
Yeah, I think. So I had read a book and I can\u2019t remember what it was, but it basically says you imagine your life or you take what you want your life to look like and then you work backwards from there. So I said, \u201cWhat do we want our lives to look like?\u201d At that time, I said I want to buy an RV and be able to just travel wherever I want. It has since changed. I do not want an RV, and I do not want to take long road trips across the country, but seeing we want to move to Florida in a few years, and I said, \u201cHow do we do that?\u201d and we just worked backwards from that point.<\/p>\n

David:
I\u2019ve always wondered if people \u2026 It\u2019s very hard to come up with goals if we\u2019re being honest. When you sit down, when I joined GoBundance, that was the thing that they made us do. They\u2019re like, \u201cWhat are your goals?\u201d It was like I don\u2019t think like that. I don\u2019t think about what are my goals. I just think about how do I get through tomorrow. I didn\u2019t know what my goals were, and you don\u2019t realize how hard it is until you actually have to come up with them.<\/p>\n

David:
Then I\u2019ve noticed everyone has the same goals. They always involve the word freedom. There\u2019s always an RV travel across the country, which is funny because I never as a kid was thinking, \u201cAll I want is to have an RV and to go to Omaha, Nebraska,\u201d but yet that pops up. There\u2019s always a beach somewhere like, \u201cI want to be on a beach contemplating life,\u201d which that\u2019s like a vacation, right?<\/p>\n

David:
I think it\u2019s so hard to come up with goals that we just think about a vacation we would take and we\u2019re like, \u201cThat\u2019s what I want my whole life to be. I want my life to be a vacation,\u201d and until you actually get real detailed about what you\u2019re looking for, your reticular activating system, your subconscious does not know what you want your life to look like. It\u2019s incredibly hard. So I applaud you coming on here and saying that you took on that challenge because that\u2019s what you got to get figured out first, and then the real estate, the way you build up, will adapt to what you want those goals to be, but none of us are thinking about goals. We\u2019re just thinking about the next unit, the next unit. Make the list, check the box, move on, get the dopamine hit, very similar to how you were living your life before.<\/p>\n

David:
So you got that first deal, and I understand that you used the BRRRR method to stack from there. Walk us through the number of units and the cash flow that you added on every year using that strategy.<\/p>\n

Brittany:
Yeah. So in our first year, we brought on two properties and we cash flowed just $3,700 a year. Year two, we had 10 and we\u2019re cash flowing $53,000 a year.<\/p>\n

Rob:
Whoa. That\u2019s a big difference. Okay. It\u2019s $50,000 difference. Okay. Just making sure.<\/p>\n

Brittany:
Yeah, which we actually pivoted our strategy a little bit with that, but in our third year, this year, we\u2019re at 59 properties and we\u2019re cash flowing $200,000 after all of our expenses.<\/p>\n

David:
Okay, and that was after year one. Now, was it all just BRRRR? Is that how you got there?<\/p>\n

Brittany:
Yes, all of those were the BRRRR method. We did have one fourplex that we were long-term renting all four units, and I got weirdly scared after it didn\u2019t rent after two days, and so I said, \u201cLet\u2019s furnish this thing and see if we can rent it another way,\u201d and so we did, and that\u2019s the big jump in our cash flow is because we have two midterm rentals in that fourplex now.<\/p>\n

David:
Okay. So that was another unexpected blessing where it\u2019s funny that you freaked out after two days. That\u2019s solely a property manager, \u201cI did such a good job. It should be booked right now.\u201d<\/p>\n

Brittany:
\u201cNobody wants this.\u201d<\/p>\n

David:
Yeah, \u201cI\u2019ve done something wrong. Change right now. Oh, wait,\u201d which is the property managers I get are eight weeks later, \u201cWhere are we at with that? Oh, yeah. No one\u2019s rented it. I forgot about it.\u201d I would much rather have you working for me. So what was the paradigm shift when you went to, \u201cOh, I can furnish them and I can rent them out faster and for more money\u201d? How much did that impact your strategy moving forward?<\/p>\n

Brittany:
So I would say it\u2019s huge. So now we look at, \u201cIs this good for a long-term rental?\u201d So everything that we buy, we want it to also work long-term. The midterm market is becoming really saturated where we\u2019re at so I want that to fall back on as a plan B, but really anything near the hospitals, we found rent long-term or medium-term.<\/p>\n

David:
Yeah. Basically, here\u2019s what I\u2019m hearing is you went from analyzing a property based on where a long-term tenant would want to live, which is fairly simple. I mean, that strategy is very easy. It\u2019s why beginners start there, especially small multi-family because you take the house and then you look for what it would rent for, and you run your numbers. With medium-term, with short-term rentals, you don\u2019t start with a property, you start with a location, then you look for the property in the location, then you try to determine what it would rent for. So it\u2019s like a third dimension that gets added into this. I noticed that the more complicated the process becomes, usually the more lucrative it is, the more simple that it is, the easier it is to get into, but the harder it is to make money. Is that a similar pattern that you notice when you switched strategies?<\/p>\n

Brittany:
I did, yeah. So I\u2019d say your long-term rentals, they\u2019re just easy. I mean, you can analyze them in just seconds, really. You type everything into your calculator, but you go to the medium-term and you say \u2026 Number one, it\u2019s not just your purchase price. You\u2019re looking at furnishing it, and that was a big mistake that we made at the beginning. I thought, \u201cGive me two grand. I can furnish this thing,\u201d and then I was $5,000 in the hole and 75% done. So making sure that you take everything into account when you are buying the property and not just your purchase price and your rehab.<\/p>\n

David:
Rob can spend two grand on the throw pillows that go on the $9,000 couch.<\/p>\n

Rob:
That\u2019s a little hyperbolic, but I have been known to walk out of world market having spent a thousand dollars on throw pillows and fake plants.<\/p>\n

David:
Oh, yeah, quickly.<\/p>\n

Rob:
It\u2019s actually pretty spot on.<\/p>\n

Brittany:
Yeah, it\u2019s so quick, but that\u2019s my favorite part of it is the design part. So we can go in and we rehab our long-term rentals, so it\u2019s all the same finishes, paint color, light fixtures, tile, and then we go into these, and that\u2019s when I really get to have some fun. My husband\u2019s always saying, \u201cThat light fixture\u2019s expensive,\u201d and I\u2019m like, \u201cWell, remember the rent though is going to be triple, so it\u2019ll make up for it.\u201d<\/p>\n

David:
I make fun of Rob for this all the time. I bust his quaff about it, but the reality is I\u2019m jealous because I am handicapped when it comes to design. Okay. I\u2019m like a dog. They\u2019re colorblind, right? I just don\u2019t know. Until I\u2019ve seen it put together and I can tell what it looks like, it is very, very, very difficult for me to figure out any kind of design element. So part of this is probably passive aggressiveness on my behalf, and I\u2019m jealous.<\/p>\n

Brittany:
Leave his throw pillows alone.<\/p>\n

Rob:
You leave them out of it.<\/p>\n

David:
I can understand the big picture of real estate very well, but when it zooms in, I\u2019m like, \u201cEnhance, enhance,\u201d and there\u2019s no enhancing. My software doesn\u2019t work that well. I can\u2019t actually see where I\u2019m getting at.<\/p>\n

Rob:
It\u2019s because you need a keyboard that\u2019s really loud and then you say enhance and that\u2019s how it\u2019s like, \u201cEnhance.\u201d<\/p>\n

David:
Oh. See, it\u2019s your background in marketing that will help you solve a lot of these problems.<\/p>\n

Rob:
That\u2019s right.<\/p>\n

David:
We all did benefit from your design expertise in the Scottsdale house, so I appreciate that. People give me credit for it. They\u2019re like, \u201cOh, my God, David, you designed it so beautiful,\u201d and I\u2019m like, \u201cYeah, I did. Just don\u2019t ever ask me to do that in front of you where I would be exposed.\u201d<\/p>\n

Brittany:
Always take the credit.<\/p>\n

David:
Yeah. So I love \u2026 Brittany, one of the things that Brandon and I used to say was, \u201cFollow your fire,\u201d okay? It\u2019s like the passion you have because real estate is not a thing, it is a accumulation of a lot of things. As we\u2019ve mentioned, real estate is an entire economic driver. There\u2019s so many jobs within real estate. There\u2019s so many strategies to put into it. You got to find the part of it that you enjoy doing. It sounds like for you, the design element combined with the bargain hunting, combined with your property management, understanding of where to look and what to do, really, you went from just working in property management knowing the fundamentals to scaling incredibly fast. Do you attribute some of that to the fire that you found in that space?<\/p>\n

Brittany:
Oh, for sure. That\u2019s probably the number one motivator. So a lot of times I\u2019ll say, \u201cHey, let\u2019s just stop buying and let\u2019s just live off our cash flow and see what that looks like,\u201d and then we\u2019ll finish one rehab and I\u2019ll say, \u201cOh, I found another deal,\u201d because now I want to design another one. So I feel like it does have that addictive-<\/p>\n

Rob:
Oh, yeah, no doubt.<\/p>\n

David:
It needs to because we spend so much time and energy doing it. If Rob did not have that idea for design and flare and he could see things from the perspective of the person looking at Airbnb or VRBO where he\u2019s like, \u201cOoh, that would stand out,\u201d he wouldn\u2019t be able to do it well. If you didn\u2019t have your background in it, Brittany, you wouldn\u2019t be able to pick the right houses, which is setting me up to my next question here now that we\u2019ve gotten into why the fire\u2019s important. How are you finding these deals? I think the people who don\u2019t understand the fundamentals of the asset class you\u2019re trying to get into, they just grab random houses off of Zillow and they run it and they say, \u201cOh, it didn\u2019t work. Let me just keep trying.\u201d It\u2019s like the throw spaghetti at the wall method hoping that one of them sticks versus when you really understand what you\u2019re trying to accomplish, you have a specific place you\u2019re going to find deals, a specific location, a specific type of asset. You don\u2019t waste all that energy and time. So what is your system like for identifying a potential problem and then how it\u2019s analyzed?<\/p>\n

Brittany:
Yeah. So my two best deals have actually been found on Facebook.<\/p>\n

Rob:
Oh, it\u2019s unconventional.<\/p>\n

Brittany:
Yeah. We saw one of them posted and I saw the address. I did a quick Google search and I said, \u201cOh, this is three minutes from the hospital.\u201d Ran my numbers. We ended up getting that one. Then our second one, my realtor had posted basically, \u201cHey, I\u2019m looking for a small multi-family. Does anybody have anything?\u201d This owner reached out and said, \u201cI don\u2019t have it on the market, but I\u2019d be open to looking at selling it.\u201d So we worked out our deal that way. So Facebook has been my best friend for deals.<\/p>\n

David:
So when it comes to Facebook marketplace, are you starting with the location? What are you doing when \u2026 How are you using Facebook? How do you know which properties you want to be targeting there?<\/p>\n

Brittany:
So I don\u2019t necessarily go to Facebook and look for properties, but a lot of times people will post them in the Facebook real estate groups. They\u2019ll throw their deal out there and you\u2019ll have a hundred people say, \u201cSend me more information.\u201d If I see the address and I know that it\u2019s in an area that I\u2019m interested in, then I\u2019ll run it, but that\u2019s really how things are coming up for me. I\u2019m not looking for them.<\/p>\n

David:
So you are starting with location.<\/p>\n

Brittany:
Yeah, always location, yup.<\/p>\n

David:
So for someone who wants to use your Facebook marketplace marketing strategy, how do they determine what a good location would be for a medium-term rental or a short-term rental?<\/p>\n

Brittany:
So I love anything within 10 minutes from the hospital. We used to do short-term rentals, but then I said I\u2019m sick of having to have my phone on in the middle of the night just in case. So that\u2019s why we moved to the medium-term rentals. So yeah, 10 minutes within the hospital and it has to have at least one bedroom. That\u2019s really my minimum criteria.<\/p>\n

David:
Do you notice any additional benefit as putting your property manager hat on to having two bedrooms or three bedrooms over one bedroom, specifically in the medium-term rental space?<\/p>\n

Brittany:
I would say two bedrooms, for sure, because there\u2019s a lot of people that travel together. I\u2019ve only had one group of three that\u2019s traveled together. Everybody\u2019s usually in pairs or solo. So I do like those two bedrooms, especially, but if you look at the price that you get for rents for a medium-term one bedroom versus long-term, it\u2019s triple of what you get. So I love the one bedrooms also.<\/p>\n

Rob:
Yeah. Well, for reference, this is usually the \u2026 It\u2019s a spectrum, obviously, but just like David said, the amount of work that you put into something is going to be correlated to the return. So for using long-term rentals as the baseline, that will be the smallest return. Then it\u2019s medium-term rentals and then it\u2019s short-term rentals. The way I like to analyze it is medium-term rentals typically are going to bring two to three times what you would make on a long-term rental, and then short-term rentals are three to four times what you\u2019re going to make on a long-term rental in terms of gross revenue. So when you can find a medium-term rental that is three times what you\u2019re going to bring on a long-term rental, you hit the jackpot because you\u2019re actually not making that much less than if you were doing it as a short-term rental and you end up working a lot less too.<\/p>\n

Brittany:
I\u2019ve noticed that there\u2019s way less wear and tear. Medium-term you look at, if you compare it to long-term and the short-term, I mean it\u2019s perfect. They come home, they sleep, they eat, they go to work, whoever is renting it. So you don\u2019t have the same wear and tear that you do with the long-term or the short-term.<\/p>\n

David:
Yes. I heard an argument about this online one time where someone was saying, \u201cI don\u2019t like short-term rentals because you have all these people coming in and out of your house increasing wear and tear.\u201d I thought, \u201cNo, I bet you it\u2019s the opposite,\u201d because when it\u2019s your house, you just beat the crap out of it, but when you\u2019re staying in it for a couple days, you don\u2019t really have time to get comfortable enough to destroy it like you do your own thing, right? So I would bet you that there\u2019s less wear and tear and you catch the deferred maintenance much quicker before it becomes deferred because as Rob knows, you get that complaint every time there\u2019s a tiny little problem, whereas your tenant will let their shower slowly flood the entire bathroom for three years and you won\u2019t hear about it until your subfloor is completely rotted out.<\/p>\n

Rob:
That\u2019s right.<\/p>\n

David:
So although that is a pain in the butt that you\u2019re getting all this correspondence, it will lead \u2026 It\u2019s like you go to the doctor every four days.<\/p>\n

Rob:
That\u2019s true.<\/p>\n

David:
Your health\u2019s not going to get that far out of out of hand if you\u2019re constantly getting those checkups, even though it\u2019s a pain in the butt to go.<\/p>\n

Rob:
Yeah, I\u2019m thinking through it. I mean, medium-term rentals have actually been harsher on my properties in short-term rentals, but it\u2019s because I didn\u2019t have a good system in place. So whenever someone would book for three, four, five, six months, I\u2019d be like, \u201cAll right, great. Set it and forget it,\u201d right? They\u2019re going to be in and medium-term rental tenants typically don\u2019t bother me, but the thing is, just like you said, they live there, they use it. They may not be clean, they may not be organized, they might be messy. So whenever they would check out at month six, my cleaners would basically call me crying being like, \u201cOh, my gosh, it is nasty in here.\u201d<\/p>\n

Rob:
So ever since then, we\u2019ve instituted a new policy where for every month that the cleaner stays at my property, we will charge a cleaning fee for every single month, and we add that to their total bill. That way, we can get our cleaner in there, some eyes on the property, they can let us know if anything looks weird, and that way, whenever the cleaner comes on month six or whenever the people check out, it\u2019s not really a deep clean as much as just a regular turn that you would normally have on the short-term rental platforms.<\/p>\n

David:
Yeah, that\u2019s another thing to consider with these. Is there a name for short-term rentals and medium-term rentals combined?<\/p>\n

Brittany:
Shmedium?<\/p>\n

Rob:
The hybrid, shmedium.<\/p>\n

Brittany:
Shmedium term.<\/p>\n

Rob:
Sure, it\u2019s a shmedium.<\/p>\n

Brittany:
Shmedium.<\/p>\n

Rob:
Yes, shmedium-term rentals. I like it.<\/p>\n

David:
The shmedium industry, that\u2019s exactly right. In traditional real estate investing where you have a long-term rental, it\u2019s funny because we never \u2026 Long-term rental wasn\u2019t even a thing. It was just a rental, right?<\/p>\n

Rob:
Rental, yeah.<\/p>\n

David:
The problems would come from a plumbing issue or a roof leak or a door hinge, it was always something with a property itself. So it was not usually as expensive, and if you did have to dump a lot of money into fixing a problem, it increased the value of the property in some way. So there\u2019s an issue with the plumbing, and so you have to go rip stuff out and fix it, but then you put in better cabinets when you rebuild it or something.<\/p>\n

David:
With the shmedium rental industry, you\u2019re replacing a couch that you just spent $3,000 on six months ago. Let\u2019s say you spent 50 grand to furnish something. That is not the same as spending $50,000 on the property to remodel a kitchen, to remodel a bathroom. That actually increases the value of the asset.<\/p>\n

David:
So that is a thing that\u2019s good to highlight to people because when they\u2019re first getting started, I think they just think, \u201cOh, I\u2019m dumping this much money into getting it going.\u201d They don\u2019t realize that much of that money you\u2019re going to have to dump it again depending on what you spent it in, spent it on. My last question before we move on because I really want to hear more about the BRRRR strategy and how you\u2019re doing it is how concerned are you about oversaturation in the medium-term rental space because it is the bell of the ball these days in real estate investing.<\/p>\n

Brittany:
Yeah, I don\u2019t love it. So not exciting because I don\u2019t like the competition out there, but all of our properties that we have would work long-term for long-term rentals. So I mean, it would be less cash flow, but that\u2019s always our plan B. We do provide an amazing product and we have multiple properties. So if something doesn\u2019t work out dates wise or something for somebody, we do have other properties that we can put them in. So that has worked out really nice.<\/p>\n

Rob:
I have followup question on this, speaking of creating your own competition. Can you give us any tips for how you\u2019re actually getting some of these medium-term rental tenants? I think that\u2019s probably the question that our audience screams at the speakers every time we talk about it. They\u2019re like, \u201cHow do you find the tenants?\u201d Are you just getting them on Airbnb? Are you reaching out to hospitals, Furnished Finders? What\u2019s your tactic?<\/p>\n

Brittany:
Yeah. We do everything on Furnished Finders, Furnished Finders and word of mouth. So we\u2019ve had a couple referrals from current nurses that have referred the next round of people, and we found them that way, but Furnished Finders has been our biggest go-to. It\u2019s not always people that you get leads from. I have tons of people call me or text me that they found our listing there. One time we got somebody from Airbnb and they booked through Airbnb for 30-day stay, but we don\u2019t do much on the Airbnb platform anymore, just the Furnished Finders.<\/p>\n

Rob:
That\u2019s interesting. I exclusively, for the most part, I would say almost every single, I think every single medium-term rental tenant I\u2019ve had has come from Airbnb. I\u2019ve never actually had any luck on Furnished Finder, but admittedly, I\u2019m not a Furnished Finder nerd. I don\u2019t know the platform. I haven\u2019t gone in and optimized it and all that stuff. So yeah, I\u2019m more of a Airbnb guy for finding all my things, but I have heard really great things about Furnished Finder, and I\u2019d like to put more on there this year. So maybe I\u2019ll hit you up for some tips.<\/p>\n

Brittany:
Well, it might also be the area. I know it\u2019s popular here, but if you talk about other states, it might not be as much.<\/p>\n

David:
I was thinking the three of us need to create a new platform called shmedium.com, where we advertise short-term and medium-term rental properties.<\/p>\n

Brittany:
I actually sent the paperwork to my lawyer as you guys were talking, so I got it trademarked and we\u2019re good.<\/p>\n

Rob:
I actually bought the domain.<\/p>\n

Brittany:
Oh, you bought it already? I forgot to hit submit when I \u2026 Yeah, I was on there. Dang it.<\/p>\n

Rob:
Yeah. Actually, it was schmedi.um. That\u2019s the only thing that\u2019s available.<\/p>\n

Brittany:
.org.<\/p>\n

David:
All right. So Brittany, getting back into your journey here, by the way, thank you for the advice you gave us specifically on this industry. I think for someone who\u2019s worked in property management as long as you have and is managing your own rentals, that\u2019s valuable, valuable insight that most people won\u2019t learn until they\u2019ve made a whole lot of mistakes trying to figure that out. You came into real estate with a leg up from your competition from the previous experience you had as a property manager. What are some tips that you would give to new investors that are trying to price out a rehab? This is a question we get a lot, \u201cHow do I determine how much a rehab\u2019s going to cost?\u201d<\/p>\n

Brittany:
So I go into properties looking at the major things first. So I look at roof, HVAC, foundation, concrete, my big stuff, plumbing, electrical. If I check too many boxes and the numbers won\u2019t work, then I say, \u201cI\u2019m done looking at this one.\u201d So I\u2019ve got the numbers pretty good. We\u2019ve been working with the same crews for seven years now. So I can look at a house and say, \u201c$5,000 roof, $5,000 driveway, $6,000 foundation.\u201d Whatever it is, I add those up real quick while I\u2019m already past my budget. So there\u2019s no sense in looking at this anymore.<\/p>\n

David:
That\u2019s smart. So basically you\u2019re saying you got to eat all your vegetables before you get to the dessert. So if the vegetables are going to make you full, then don\u2019t even start because you want to have some room left. So looking at the roof, the HVAC, the concrete, nobody gets excited about that part. So if that\u2019s taken up the whole rehab budget, just stop right there, this isn\u2019t the right deal for you.<\/p>\n

Brittany:
Yup, done, and a lot of that stuff you can see from listing photos or whoever\u2019s sending me the deal, I\u2019ll say, \u201cHey, send me pictures from every side of the house exterior and then send me a quick video walking me through it. I want everything in the basement. Show me the foundation, furnace, hot water heater, your plumbing stack, the electrical panel,\u201d and I can really just say yay or nay at that point. If it looks good, then I\u2019ll go hands on and look at it myself a lot of times.<\/p>\n

David:
That is really good, and I think that advice is incredibly important in today\u2019s market because it\u2019s making a comeback. Years ago, back in my day, we actually cared about things like concretes and plumbing, and the market got so hot that that wasn\u2019t \u2026 It didn\u2019t matter, right? \u201cOh, it needs a new roof. Oh, it\u2019s only 15 grand. It\u2019s going to be worth 25 grand before the escrow\u2019s over.\u201d Who cares, right? Real estate really did change, and I can\u2019t even criticize people for doing it that way because you did make, depending on the market, right?<\/p>\n

David:
Where I am in California, you might make $250,000 over four years of owning the property where that $15,000 roof wasn\u2019t as significant, but with what we\u2019re seeing with the market slowing down, rates going up, values are not increasing at the level that they were, I really do think that buyers are becoming harder and harder to find in certain locations, which means sellers have to give concessions that they did not have to give for a long time. If you\u2019re selling a property that\u2019s in wonderful condition, you\u2019re probably going to get what you want, but if you got some warts in there, if you got some stuff that the makeup\u2019s been covering and the buyer goes swimming with you and the makeup comes off and they see what they\u2019re really working with, you can\u2019t sell a house that\u2019s got foundation issues anymore. If you\u2019ve got plumbing leaks, it is expensive. There is a lot more room to negotiate. So are you seeing the same thing as you\u2019re scaling to 59 units in three years that you have more negotiating power over these issues than you did before?<\/p>\n

Brittany:
Yeah, definitely. Even when the market was really hot, a lot of our stuff was off market. So we would be aggressive with our offers, but we always buy everything with no repairs, no inspection. My biggest thing is I just want somebody to walk it. So if it\u2019s an agent or my husband or whoever it is, I want somebody to have eyes on it that I trust that can say, \u201cThis is what I saw.\u201d They didn\u2019t skip over this corner when they were sending me a video for it, and we missed out on something, but we did. We were doing flips a couple years ago, and I would say the huge difference that I\u2019ve seen is roofs. Nobody was asking for a roof replacement. I mean, you could have a hole the size of a raccoon and they would look past it and pay you 50,000 over ask price, and now those things are absolutely being asked for now.<\/p>\n

David:
So we\u2019ve got assessing the major costs, which I added are the non-sexy things, but that\u2019s why you got to look at them because they\u2019ll be easily overlooked. Then I really like your advice of, \u201cWhat can I do? Where can I save money? Does this fall within my wheelhouse of repairs I could make?\u201d So if you\u2019re a plumber and the house has massive plumbing issues but nothing else, maybe you lean more towards that property because you have a competitive advantage, and then what do you have next?<\/p>\n

Brittany:
So when I look at the major stuff, I say, \u201cIs this going to last me at least three years?\u201d If not, then I\u2019m replacing it with my rehab. So all of our properties we rehab at the beginning before we rent them out. So we\u2019ve looked at what are our major things that give us problems. So galvanized plumbing is always clogging our drains, clogging the little screens in your faucet and they break when you try to make repairs. So that\u2019s one thing that we always do. If there\u2019s galvanized plumbing, we\u2019re always replacing it. Then drafty windows was another thing that we heard a lot of complaints from tenants. So that\u2019s a big thing that we look at.<\/p>\n

David:
So the tenants were complaining that the windows were too cold, that too much cold air was coming in?<\/p>\n

Brittany:
Yeah. A lot of our houses are over a hundred years old, so you\u2019ll have those old single pane windows that go up and down and they\u2019re held with weights on the side, and people hate them. They don\u2019t stay up. You got to put your remote there to hold it up. So we just replace them. It\u2019s not as expensive as most people think when you\u2019ve got your crew doing everything else while they\u2019re in there. So it\u2019s a no-brainer at this point.<\/p>\n

David:
That is another thing as a real estate broker selling houses for a long time. Windows being a problem was not even something that would be considered. Sellers just were not going to give you anything for that. You had me thinking. How much of this stuff that typically every 10 to 20 years a homeowner would be forced to replace things like windows and roofs and plumbing that because we\u2019ve had such a run in real estate, nobody was spending money to fix these things up is now all going to be starting to become a part of the process because the prices are not exploding as fast as they were? I think being extra diligent at looking at what might need to be replaced is going to become a bigger part of investing than it was in the past. Rob, what\u2019s your theory on this three-year timeframe? When do you think something should be replaced?<\/p>\n

Rob:
Well, the old Robuilt adage of buy nice, not thrice, and this really does apply to everything. I mean, obviously, I\u2019m coming at this for more of the furniture side of things, especially in medium-term rentals more than short-term rentals. When you buy something that\u2019s not going to last you, let\u2019s say even the three years that you\u2019re talking about, it\u2019s a really big inconvenience because a lot of times what people do is they\u2019ll buy the cheap thing, cheap thing will break, and now they have to hire somebody to come and get rid of the thing that broke and replace it and assemble it, and because people are cheap, they\u2019ll say, \u201cOh, you know what? The chances of it breaking in probably pretty low,\u201d and then they go and they buy the cheap thing again, it breaks. Got to get someone to go and toss it in the trash and replace it.<\/p>\n

Rob:
Then on the third time, they\u2019re like, \u201cI\u2019m tired of doing this. I\u2019m just going to buy the nice version of this,\u201d and that\u2019s whenever they\u2019re out of the problems and it\u2019s like, \u201cOh, if they had just done that to begin with, they actually would\u2019ve saved themselves so much headache and pain along the way.\u201d So I imagine that fixing up homes and renovating is probably pretty similar to that simply just because, yeah, you get what you pay for basically, right?<\/p>\n

Brittany:
Absolutely, and that\u2019s something that we \u2026 That\u2019s our guideline for all of our rehabs. It doesn\u2019t matter what area of town, how much we paid. Everything\u2019s getting rehabbed to a high quality. So you\u2019ve got granite and people say like, \u201cWell, you don\u2019t need to put granite in every house.\u201d Well, granite actually saves me money because I\u2019m not putting a countertop that somebody puts a hot pot and burns it. I\u2019m paying 200 bucks every time that I have to replace it. So spend a little bit more upfront and you get higher rents and happier tenants, and you have a nice product, so your appraisal comes back high-<\/p>\n

David:
Shows better in pictures.<\/p>\n

Brittany:
So we touch every surface of every house that we are in.<\/p>\n

Rob:
We just had someone on the show, oh, man, probably in the last couple weeks that said that they renovate their houses to basically be good enough for them to live in in case they ever lost everything and they needed to be able to live in there themselves.<\/p>\n

Brittany:
That was Rick.<\/p>\n

Rob:
Oh, it was Rick, yeah.<\/p>\n

Brittany:
Rick Marin.<\/p>\n

Rob:
Rick Marin, yeah. That should be coming out pretty soon if it\u2019s not out yet, but I thought that was really nice because when you think about it that way, you can spend a little bit more, and as notated in the BRRRR Bible written by David Greene, the actual material isn\u2019t necessarily what costs most of the money, it\u2019s usually the labor. So you can spend a couple hundred bucks to get something nicer and it\u2019s not really going to cost you all that much more in the grand scheme of the budget.<\/p>\n

Brittany:
Yeah, especially when you\u2019re doing it all at once before a tenant is in there and they\u2019re doing everything. So yeah, I agree with that.<\/p>\n

David:
The quick tip to take from this is when you\u2019re evaluating or analyzing what you\u2019re going to buy, \u201cAm I going to buy the $200 one or the $500 one?\u201d it\u2019s not a $300 difference, it\u2019s $300 plus whatever money you\u2019re going to have to spend on labor to replace it, which is what we don\u2019t think about. If you\u2019re going to have to spend 150 bucks to $200 every time you send someone out to go fix the thing that you bought that was cheap, that\u2019s what makes it more expensive. So you\u2019re not just analyzing the cost of the item, you\u2019re analyzing the cost plus the labor.<\/p>\n

David:
Then I think granted in general is one of the wonder materials of real estate investing. Like you mentioned, it works at every single area. When you know a person that can install it, granite can be incredibly cost-efficient because the labor itself or, sorry, the material itself is not that expensive, which leads us to your last point here. You mentioned knowing a person that can fix certain things. So what advice do you have about knowing that when you\u2019re buying distressed properties, fixer uppers using the BRRRR method, knowing the right people that can do this work is incredibly valuable? What tips do you have for finding those people?<\/p>\n

Brittany:
So I like finding people who can do more than one thing because that\u2019s where we save the most money. So I am finding or we have crews that can come in and paint, refinish hardwood floors, tile, install cabinets. They can do everything as opposed to bringing in a drywaller, bringing in somebody to do the floors, bringing in somebody to do the windows. Just finding somebody who can do it all, that\u2019s where we save the most money and are able to meet our budgets.<\/p>\n

Rob:
Does that come into play when you\u2019re working with a contractor? Do you prefer to work with a contractor that has a particular trade? My contractor in Joshua Tree was also an electrician. So when it came time to building the house, he did all the electrical work, didn\u2019t sub it out, and that ended up usually being a cost savings to me in the grand scheme of things. Is that ever similar like that in your scope of work?<\/p>\n

Brittany:
Absolutely. Most of our guys are \u2026 Well, not most of them, but a few of them are plumbers also. So we get the plumbing done with the rest of the rehab. So that\u2019s really nice. So our biggest tradesmen that we\u2019re bringing in would be if we\u2019re replacing an electrical panel or a roof, which our guys actually can do roofs too. So I would say our electrical is our most expensive tradesmen that we\u2019re bringing from the outside.<\/p>\n

Rob:
Yeah, that makes sense. So just to recap here because I think we went through five. One was you assess major cost items first like your HVAC, concrete, roof because basically, if you\u2019re checking all those boxes off when you\u2019re doing a renovation, that means that you\u2019re not really going to have a ton of money for the design aspect and the last 10%, right? So you move on after that. It needs to last at least three years. So whatever you put into the property needs to be relatively high quality. DIY when you can. So if you got to step in and paint the house, you\u2019re willing to do that. Always replace the windows and find a crew who can fix more than one thing. Did I miss anything there?<\/p>\n

Brittany:
No, I think you got it.<\/p>\n

Rob:
\u2026 and seen. I did it.<\/p>\n

David:
All right. So that all is information that will make you a BRRRR superstar, which is still a pretty, at least as far as I\u2019ve seen, the most efficient way to scale a portfolio once you know what you\u2019re doing. Now, I will add the caveat. The things that make BRRRR successful for scaling quickly can also cause you to fail quickly. Scaling is not always positive. It just is amplifying how quickly something gets done. So if the plane is rising, it rises quicker, but if it\u2019s crashing, it\u2019s going to crash quicker too.<\/p>\n

David:
As a property manager, as a person with experience solving the problems of managing rehabs for your clients, you walked into this with a knowledge base that is going to protect you from making the mistakes that could cause people to crash. So that\u2019s one of the reasons I think that you were likely successful at BRRRR. How did you navigate the seasoning period that it\u2019s become more difficult to get your money out of the deals once the rehab\u2019s completed?<\/p>\n

Brittany:
Yeah. We actually work with a local credit union, and we do portfolio loans. So they don\u2019t make us wait that six months to a year seasoning period. They\u2019ll finance us 75% of the appraised value. So we\u2019ve been really lucky to do that. It\u2019s actually our third credit union that we\u2019ve worked with. The first one said that we grew too fast, so they wouldn\u2019t do any more business with us. So then we moved on and we found somebody who would, and that\u2019s how we\u2019ve been able to scale as quickly as we have.<\/p>\n

David:
So the credit union isn\u2019t making you wait 12 months before you pull the money out?<\/p>\n

Brittany:
Nope. We actually just finished one rehab in three weeks, and we have the appraisal Monday, and they\u2019re refinancing it. So it\u2019ll be five weeks total by the time we sign the papers.<\/p>\n

David:
If anyone\u2019s wondering why, it\u2019s because these guidelines for the 12-month seasoning periods come from conventional loans because the broker or the lender who gives you that loan is then going to go sell that on the market as a mortgage-backed security, so there\u2019s a guideline that the person buying the loan says it has to be 12 months before we will refi, but credit unions hold those loans on their own books most of the time. They don\u2019t sell them so they can create their own guidelines. They don\u2019t have to play by the Fannie Mae, Freddie Mac rules, which is why having a relationship with a local lender is so important or in Brittany\u2019s case, having a relationship with several because when you scale as quickly as you did, you can outgrow the shoe that you were wearing and you have to go get a bigger shoe or another set of them. So congrats on there.<\/p>\n

David:
For someone who hears this and they\u2019re like, \u201cYou know what? I relate to Brittany,\u201d which by the way, you\u2019re very relatable. I think a lot of people are going to feel that. Would you say that property management is a good place for people to start looking to if they want to get started in real estate investing?<\/p>\n

Brittany:
So I would say yes. So property management to me was almost \u2026 I feel like it was cheating because I could see what other people were doing and learn from their mistakes, other investors\u2019 mistakes and not have it affect my wallet. So it was nice to learn that. You also learn the ins and outs of the management so you decide, \u201cI absolutely could do this,\u201d or, \u201cThis is something I would never ever touch. So just let me be an investor. I\u2019ll pass it off to property management,\u201d or you look at it and say, \u201cI want to save some money and I don\u2019t mind dealing with tenant issues, maintenance issues, leasing issues. I can do this myself.\u201d So I would say the biggest part is learning from other investors even when they don\u2019t know they\u2019re teaching you.<\/p>\n

Rob:
Yeah, totally. So you\u2019re now at 59 units after closing on 30 this week, which is a relatively large deal, I\u2019d say.<\/p>\n

David:
Timely for this podcast recording.<\/p>\n

Rob:
It really is.<\/p>\n

Brittany:
I did it just for the podcast.<\/p>\n

Rob:
I think it\u2019s probably safe to say that draining your 401(k) was probably worth the risk. Seems like you did okay. Can you tell us what\u2019s your total portfolio net worth and what\u2019s your cash flow sitting at today, if you don\u2019t mind sharing?<\/p>\n

Brittany:
Yeah. So our total portfolio is worth 5.5 million.<\/p>\n

Rob:
Woo! You did it. That was your goal, right?<\/p>\n

Brittany:
We hit it. So we\u2019re 13 years ahead of our goal.<\/p>\n

Rob:
Oh, my gosh, that\u2019s amazing.<\/p>\n

Brittany:
Yeah, five and a half million and we cash flowed 200,000, and that\u2019s after mortgage, insurance, property taxes, maintenance, capex, all that good stuff.<\/p>\n

Rob:
So you\u2019re, let\u2019s see, that would be roughly 16, 17 grand?<\/p>\n

Brittany:
Yeah.<\/p>\n

Rob:
Not bad.<\/p>\n

David:
So from 232 a month in a 401(k) to 16 grand a month with all the equity that you\u2019re building, the loan you pay down, the properties going up and potential rent increases, that wasn\u2019t a terrible decision.<\/p>\n

Brittany:
No. It\u2019s one we will never, ever regret. Probably best decision of our lives.<\/p>\n

David:
Yeah, and you know what I see, Brittany, is you bet on yourself. You said, \u201cI understand property management. I understand real estate. I\u2019m doing this for someone else.\u201d You didn\u2019t get in the victim mentality of, \u201cWell, how come it\u2019s not fair that they\u2019re not helping me with something?\u201d You just said, \u201cI know how to do it. I\u2019m doing it for them. Let me go do it for myself now.\u201d In a sense, you were like a paid apprentice that learned the business, and then you started your own business.<\/p>\n

David:
I think this is a beautiful, beautiful, beautiful blueprint for other people that are doing well in the corporate world, they\u2019re doing well at their job, they want freedom. Rather than just saying, \u201cI\u2019m going to quit my job and I\u2019m going to start investing real estate full-time,\u201d you work in real estate, you learn the industry that way, and you make it like this little jump off point in the middle. It\u2019s not quit to W-2, pure real estate. It\u2019s moved from W-2 into a real estate related industry, learn the business like you did, Brittany, and then move into building your portfolio while you\u2019re still doing. It\u2019s a much smoother transition than just going from the spa and jumping into the swimming pool and trying to figure out if you can make it. Do you have any advice for other people who are maybe sitting in a cubicle right now listening to this wishing that they had your life or the steps you\u2019d recommend that they take?<\/p>\n

Brittany:
Yeah, I would say just do it. I also feel like people think that once you\u2019re successful, you have to quit everything that you were doing before. So during this time, I\u2019ve kept my job the whole time. My husband\u2019s worked the whole time. We don\u2019t live off the cash flow yet. We reinvest everything. So I would say my advice would be take what you\u2019re good at and do it for yourself because in my job, I was stuck at, \u201cHere\u2019s your salary. You\u2019ll get a raise every year. Here\u2019s your hours.\u201d You\u2019re stuck in this box, but when I do it for myself, there\u2019s so much opportunity for growth that it\u2019s surpassing my salary times a hundred.<\/p>\n

Rob:
That\u2019s cool.<\/p>\n

Brittany:
Everything that I learned in property management I would say is more than I ever learned in school. This is like my college degree. I regret going and actually paying for college when I could have dived into this first.<\/p>\n

Rob:
Sure, but it all led to this, right?<\/p>\n

Brittany:
Absolutely.<\/p>\n

Rob:
To this moment and to these successes. So with that, I\u2019m just curious. I mean, so much has happened and you\u2019ve crushed every goal and you\u2019re 13 years ahead of schedule with your five million dollar goal. You\u2019ve actually surpassed it. What has real estate allowed you to do? Is there anything specifically that now where you\u2019re at you\u2019re like, \u201cWow, I can do this thing now because I\u2019ve built something\u201d?<\/p>\n

Brittany:
Yeah. Our favorite thing is to just take trips with our kids. We want to give them experiences instead of just stuff. So not having to ask for time off or plotting your days off on your work calendar, just the freedom to get up and go. Last summer, we spent a month in Florida, and that was really our test of can our business run without us being there. So that was a test and we passed it. So I would say just the freedom. So my biggest goal but also the goal that I don\u2019t really talk about because it\u2019s not pretty is my goal is I don\u2019t want to have to set my alarm in the morning.<\/p>\n

Rob:
That\u2019s fuzz amazing. Are you kidding me? That\u2019s a beautiful goal.<\/p>\n

David:
I\u2019ll say there\u2019s not much more that will increase the quality of your life than waking up when you want to wake up.<\/p>\n

Brittany:
When you want to, yes.<\/p>\n

David:
When your body is ready to.<\/p>\n

Brittany:
Yeah, and I don\u2019t feel like people talk about it. I feel like when you talk about goals, you say, \u201cHow much money do I want to make?\u201d or, \u201cWhere do I want to go?\u201d or, What do I want to buy?\u201d but honestly, it\u2019s like, \u201cI just want to sleep,\u201d right?<\/p>\n

Rob:
That\u2019s not all bad.<\/p>\n

Brittany:
I want to wake up when the sun comes up. I don\u2019t want to hear my blaring alarm waking me up in the morning. It\u2019s just that freedom.<\/p>\n

David:
I don\u2019t want to feel nauseous when I hear that sound and the first thought is, \u201cWhen can I go back to sleep?\u201d<\/p>\n

Brittany:
Right, counting down the hours, \u201c15 more minutes. Give me some time.\u201d<\/p>\n

Rob:
That\u2019s perhaps the most beautifully honest and perfect answer, but honestly, I thank you, Brittany, because you came into this and it all started with you wanting to watch your kid learn how to ride his bike, and now you\u2019re spending vacations for a month while your business stays relatively passive, and now you\u2019ve got bigger goals. I\u2019m excited to see what your next goal is. I know it\u2019s the waking up thing, but whatever that goal in the portfolio is because based on what we heard, you\u2019re going to do it. There\u2019s just no question about it. So I hope that everyone listening here today can listen to this again and say, \u201cAll right, I can do it too.\u201d<\/p>\n

David:
Yeah, and nice callback to when we talked about how goal setting is difficult to do but it\u2019s so important because that\u2019s a much better goal than I want to travel the world in an RV. I want to wake up when I want to wake up, and you will design the life you want based on real estate to be able to accomplish that. Really, you deserve a lot of credit. I mean, you should be waking up every day feeling like success because you escape the 6:30 alarm clock. Please, nobody tell Jocko Willink that we just described that as-<\/p>\n

Rob:
Yeah, I was going to say.<\/p>\n

David:
He\u2019ll come after me and I\u2019m not ready for that level of smoke right now, but I do agree with you. I think that that\u2019s very healthy. This has been a fantastic interview, Brittany. I just want to congratulate you on the success you\u2019ve had, as well as the way that you went about doing it. I hope that we stay in touch. For people that want to learn more about your fantastic life and strategy, where can they find out more about you?<\/p>\n

Brittany:
Yeah. I\u2019m most active on Instagram. So it\u2019s Destined_To_Wealth.<\/p>\n

David:
Ooh, destined to wealth. That\u2019s wonderful. Rob, how about you? Where can people find out more about you?<\/p>\n

Rob:
Well, if you want to search for me and see that little blue check next to my name, I\u2019m just going to rub this in your face all day, David, because I know you want the blue check, but I\u2019m now verified on Instagram and now you\u2019ll know that you\u2019re talking to the real Robuilt and not a robot, not robotilt. So Robuilt, R-O-B-U-I-L-T. I\u2019ll never ask you for crypto or Forex and I\u2019ll never message you first. David, what about you?<\/p>\n

David:
If people want to find out more about me, they can follow me at davidgreene, with an E at the end, 24.com or DavidGreene24 on all social media, but just be super, super, super careful that you\u2019re making sure it\u2019s spelled correctly. The minute you follow me, you will get a bunch of fake people that will follow you with fake accounts. I don\u2019t know how they do that, what they\u2019re doing to see who followed me. I think there\u2019s a list of followers that maybe they can see, and as soon as someone follows me, they go, \u201cOh, follow me too.\u201d So look carefully at the screen name.<\/p>\n

Rob:
We can just blame AI for everything now.<\/p>\n

David:
That\u2019s what I\u2019m \u2026 I think we\u2019re all going to start doing like old people blame the TV for making people dumb, \u201cIt was the television.\u201d That\u2019s right. All right, Brittany, thank you very much for being here. We\u2019re going to have you back on again sometime soon because this was a fantastic story. Everybody, go check out Brittany\u2019s Instagram and send her a message if you want to learn how to be an awesome possum just like her. This is David Greene for Rob, tell me where you get them Hanes T-shirts, Abasolo, signing off.<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n<\/div>\n

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Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n


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