Making $4,000/Month Cash Flow with 10 Rental Properties (In Just 4 Years)

Ashley:
Our guest today started out living in a small apartment, separated, baroque, and convinced that real estate was only for people like her landlord. But one listing changed everything, a single family home that was secretly a duplex and that surprise became her first house hack.

Tony:
Today’s guest, Alana Lipman, went from saving every dollar she made bartending, even flipping a camper to fund a down payment to building a portfolio of short-term rentals, long-term rentals, midterm rentals, a flip, and a mixed use building that cashflow like crazy.

Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s give a big, warm welcome to Alana. Alana, thanks for joining us today.

Ashley:
Yeah, thank you so much for having me. Alana, your story really starts out with a moment a lot of rookies can probably relate to, sitting in an apartment, feeling stuck and suddenly realizing your landlord might be onto something. So can you take us back to where you had that light bulb moment?

Allana:
Yeah, absolutely. So I just remember sitting in my apartment. I was separated at this time from my now ex- husband, but we were separated for a year and a half, almost two years at this point. And I had moved to a new town, was renting for, so almost two years at this point, and my whole life up until then, and I was like 28 at the time, had been renting. And I literally do remember the moment, Ashley, I was sitting in my apartment and I was writing out my rent check to Mark, who’s my landlord at the time, and I lived in a fourplex. And I just literally had that light bulb moment of, Mark has one mortgage and he’s getting four rents for probably all at least 850. And I was like, “Oh my gosh. Yeah, like you said, maybe he’s onto something.” And so I can actually pinpoint that exact moment that I had that thought that maybe I could do that too.

Ashley:
Before that realization kind of turned into any kind of action, describe for us what your life looked like for you during that time.

Allana:
Yeah. So that was close to the end of my separation. I ended up moving back to the town I had been from. Partially me and my ex- husband were going to try to make it work, but I also wanted to adopt my little through Big Brother, Big Sister. So I’m in Minnesota, Big Brother, Big Sister. It is a national organization, but there’s a really big presence of it where I’m from. And we had been matched at that time since she was seven. At this point, she was like 15. And so I was trying to get custody of her as she’s in a really rough situation. And I thought, well, I can’t be living in this small apartment separated from my husband that just won’t look great to a judge. It doesn’t look like stability for her. And so I decided to start looking at houses.
And at that point, my little … She had known my husband for like eight years or whatever at that point. So she loved him. She knew him. And so I found this house that looked really beautiful on the MLS and went to look at it. And yeah, it changed my life. It changed the whole trajectory of my life.

Tony:
What a strong motivating factor, Alana, to have someone in your life that you want to take care of. I’ve shared on the podcast before that I had my son when I was 16 years old. And I think just like that motivation of wanting to provide a better life for your kids effectively can be a strong motivating factor. So the combination of being annoyed, writing this rent check, wanting to adopt your little through the big sisters program, that gives you the motivation to jump in and get started. So you said you just jump on the MLS and start looking. Did you know what you were looking for? Did you have a sense of like a buy box or were you just kind of like open it up and just like window shop and see what was there?

Allana:
In my head when I had my light bulb moment, I thought, man, someday it’d be really nice to have like a fourplex or a duplex or something. But then at this point, my whole motivation was just to find a nice house that was big enough for me, my husband and my little. And so yeah, when I showed up, it was a duplex. They had listed it as a single family. And my wheels, I remember standing in that driveway and I’m like, “This is it. I am not letting this house go. ” And that was in 2021 when the market was a little more competitive. So I was like a little bit worried like, “I need this house. It’s everything I want and more.”

Tony:
Can we just talk about that agent for a second? Because to be in 2021 and to misrepresent a duplex as a single family home, that had to be one of … And I don’t want to disparage anybody, but that’s got to be one of the biggest fumbles from an agent that I’ve heard of in quite some time. Everything was selling like hotcakes in 2021, so it’s crazy that they would let that slip.

Allana:
Yeah. Yeah. So my realtor on my end was my former brother-in-law. And so he called right in front of me, he called the selling agent that he knew pretty well. And he’s like, “Come on, this is a duplex and you know it. ” And yeah, they had marketed as a single family with a mother-in-law suite, but it had separate entrances, like it was a duplex. I believe they just did that because single families are worth more. The average person doesn’t want to live in a duplex. They don’t want to and they don’t think they can really invest in real estate like that. So I’m thinking that was why, but it did work in our favor to be like, “Come on, this is a duplex.” So yeah, it worked out really well for me incidentally.

Ashley:
I think that’s really market dependent too, especially at that time, whether a small multifamily would be better or a single family. And I think it depends really on the neighborhood too. If it is primarily homeowners in a neighborhood, then yeah, I could definitely see why they would list it as a single family with the in- law suite compared to if it’s more investors in a neighborhood that it’s more beneficial to actually list it as a duplex in that area. So I kind of see what they’re trying to pull there for sure. So after you walked this property, I’m assuming you’re thinking, “I’m going to house hack that. ” And what did you end up doing to that other side of the property? Did you list it as a long-term rental, short-term rental?

Allana:
Yeah. So I did a short-term rental and part of the reason for that was since I had separated, it all just kind of worked out. Since I had separated, I had went and bought all my own stuff, like my own bed, my own couch, my own dishes. I had everything already that you would need for an Airbnb and I had nothing to do with it besides put it in Airbnb or sell it all since me and my husband were back together. And so yeah, I put it all in the other unit. So I didn’t have to invest barely any money that way to furnish it. And so yeah, put it on Airbnb and it just filled up right away. Whether it filled up with traveling nurses just on Airbnb people for the weekend or whatever, at that point I didn’t have a minimum stay or anything because I just wanted it to fill up and it was never an issue.
And to this day, I’ve owned that property for now a little over four years and I’ve never paid my own mortgage on it. So it was a win for sure.

Tony:
Yeah. It’s like the perfect house act, right? It’s like everything coming in covers all of your expenses. I guess let me ask Alana, how did you fund that deal? What type of debt did you use? Just give us a quick snapshot of what it actually cost to acquire that first duplex.

Allana:
Yeah. So I got the 5% conventional loan. It was my first time buying a home. So that was really great. And I wanted to lessen the cash I had to bring to the table during that time because I mean, a big reason I wanted to get into real estate is to have more cash flow to make more money. And so yeah, I did the 5% down. I offered a little bit more than asking price actually. And so then I asked the sellers to pay the closing costs. So it kind of even out just to lessen the amount of cash I would have to bring at closing day. And yeah, so we can talk exact numbers. I think it was listed at 217. And so I offered like 223 and asked them to pay all the closing costs. So it really evened out.

Tony:
And we’ve talked about that strategy before, but for the Ricky’s that are listening who might not be following, if you buy a property for, just for round numbers sake, let’s say you buy a property for $190,000, but it appraises for $200,000. If you actually adjust the purchase price up to $200,000, the seller can then give you that additional $10,000 back as a credit towards your closing cost. So again, for round numbers sake, if the purchase price is $190,000, and let’s say you’re doing a 20% down payment, well, 20% of 190 is $36,000, if I’m doing that math correctly, 20% of 200,000 is $40,000. So it’s more, but you’re getting a $10,000 discount because you’re giving you that credit, so you’re actually only paying $30,000 down. So I know that’s a lot of numbers and maybe you’re following, maybe you’re not, but basically if you can actually increase the purchase price in some scenarios, you can have less cash out of pocket to acquire the deal, which is what Alana did here.
So it sounds like it went incredibly well for you. On the short-term rental side, I’m curious before we move on to your next deal, had you ever managed a short-term rental before? What gave you the confidence to say like, “Man, I can manage this property as well?”

Allana:
No, I never had before. However, my best friend, and to this day, she still runs a shared space Airbnb, but I just knew there was a need in the community for it because she was always full in a shared space. And so I thought, how much more full will I be giving them their own entrance, their own bathroom, their own everything? And so I had the confidence that there was a need for it in our community, but I had never managed anything like that before.

Ashley:
So you got really creative with your down payment. And what was your career at this time that you were doing during this time? And was it easy to actually get funding on the property?

Allana:
Yeah. So I work full-time. I still do for the American Heart Association. And then at that point, I had worked there for two years, so now I’m going on like six, six and a half, and then I also bartended. So when I had moved to this other town and separated and was kind of living that life, I needed more money. I didn’t have my ex- husband’s income or anything like that at the time. And so I started bartending as something to keep me busy, keep me down there, help me meet new people in a new town. And I just made a lot of money bartending. And so that was really, really helpful as well. So I had no problem securing the funding for my first house.

Ashley:
And I want to bring that up because I think one of the first steps to getting your first deal or your next deal is to figure out that funding piece. And so what did you do first, the chicken or the egg? Did you get the funding lined up? Did you get pre-approved and then go find the house to kind of know your budget? Or did you find the house first and how did you feel comfortable with a price range without getting a pre-approval for a loan?

Allana:
Sure. So I really didn’t know anything and that’s kind of how I do things. I really jump in both feet and then figure it out as I go, which is what I’ve been doing for the last four years. So I actually was on my way out of town for a work thing and I wasn’t the one driving. I’m looking at Zillow just because I had this idea like I want to adopt my sister or my little, I should be looking. And I loved this house where I was like, “I want to turn around right now and go home before it sells.” And so I went, contacted my brother-in-law at the time, set up a day to look at it, looked at it same day, went to a mortgage lender and just did everything as quickly as I could. So yeah, it’s very nostalgic thinking back on it.

Tony:
Now you only ended up staying there, Alana, I think six months before you got the itch and you ended up buying another house just a few doors down. What was the thought process behind that move?

Allana:
Well, yeah, that house, a few houses down came up for sale and my ex- husband, which we got divorced not too long after this, so I just kind of kept going with everything, but he didn’t really like living in a house hack. We have two dogs and he didn’t like feeling like if they were barking, that we were disturbing our tenants downstairs and stuff like that. And so when this one came up, he asked to look at it and I thought, “Well, we’ve saved so much money. We’ve never paid a mortgage or utilities on this house. We have the money for it, saved up.” And so we went and looked at it, and then I kind of went back to the same lender, got an idea on what a mortgage would be on that house and thought this will be paid for too with the other side of the duplex.
So the unit we had been living in, that paid the mortgage for our new house and then the Airbnb side of the duplex paid for that house. And I didn’t want to short-term that one. I wanted to find a long-term renter for just diversifying and mitigating the risk of having at least one house paid for through a 12-month lease instead of relying on Airbnb solely.

Ashley:
I mean, how great is that, to be able to move into another house and like, “Oh, I still don’t have a mortgage, but I get to live in my own house.” So what did the numbers look like in this property? And I think we have to go back to that duplex too and talk about the cash flow on this thing if you’re able to cover both mortgages with those rent payments.

Allana:
Yeah. So the next deal, the new house I bought or we bought was asking price was 169 or 169.9 and replayed the same thing with the closing cost strategy, offered 175. If they would cover closing costs, they agreed. And so yeah, within six months we were moving into this new house and the mortgage on that one was about 1,200, but we were able to rent out the half we had been living in for 1,700. So yeah, today that property is, both sides are long-term rented and it cash flows really well.

Ashley:
I feel like that’s another thing we need to get into is why did you decide to switch? Because I think a lot of people started Airbnbs around that time and some have pivoted out of that. We have to take a short break, but I want to talk about how you scrape together money for your first deals, but also what happens when you start stacking properties while working at two jobs and what happens when compassionate tenant decisions turn into big, expensive mistakes? We’ll get right into that after a word from today’s show sponsor. Okay. Before the break, Alana showed us how creative you can get when the capital is tight, but once she started scaling, she ran into a whole new set of challenges, juggling a full-time job, bartending, and growing a portfolio fast. So Alana, you work full-time, as you mentioned at the American Heart Association and you’re bartending.
How did you manage to also grow and scale and manage your acquisitions and operations for these properties?

Allana:
Absolutely. So staying really close with that Airbnb, moving a few houses down, being that close was easy to keep managing it and doing tenant turnovers. I also lengthened the amount of time, like the minimum stay. And I also started marketing that Airbnb on FurnishFinder because at that time there was still a lot of traveling nurses, especially with COVID happening and everything like that. And so I was able to book more midterm rentals as well. And then, I mean, it really helps. The bank likes to see a W2, a full-time job that you’ve been at for at that time, four or five, now six years. They have a lot of confidence in lending for new properties and stuff like that. Just a very busy schedule though, working weekends and nights at the bar, making a lot of cash flow, but that cash flow, I was able to keep doing it because I was saving every dollar I made from bartending to put towards a down payment on a new house.
And so I had a bigger why. And if I didn’t have that big why, I think it would’ve been hard to keep up with everything. I think bartending would’ve had to go at some point. But yeah, at one point I was able to actually saved every single dollar I made for four months. I bought a little safe, would come home from my shifts at 1:00 AM, put it in the safe, didn’t ever count it really for a few months. And after four months, I had $10,000.

Ashley:
That sounds so exciting. How fun.

Allana:
It was really fun. Yeah. I’m like, that’s easy money. I mean, I was still using my bar paycheck and stuff, but yeah, every single dollar I made funded, actually bought a camper first with that. So I found a camper for sale for 5,000, went and checked it out. It was like a really nice camper, but very outdated. Flipped it in three days, like flooring, painted everything, made it like this luxurious camper in three days, took it on one trip to Colorado just because got to test it out, came back and I sold it for 10, five, and I only had $1,000 in material invested into it.

Ashley:
And three days time.

Allana:
Yep. And so then profited even more, and then that went on to a down payment of another house.

Tony:
Oh, and I love that you’re such a hustler with your different sources of income. And I also love the idea of having an actual safe. I’ve never thought about saving money in that way, but it’s just like, I guess it works if you get a lot of cash tips. You come there, you drop it in the safe, but it’s just such an easy way from a behavioral perspective to make sure you’re not touching the money that’s meant for something bigger. So I love that approach. Now, you’ve dabbled in a few different things already, right? You mentioned short term, you mentioned traditional long term, flipping a camper van, but what about the actual management process? Because I know that obviously you’re still dealing with people. I know that you’ve had some issues with eviction, which is maybe a very scary thing for a lot of new investors that are getting started.
So maybe walk us through, you’ve got into some trouble. What did that look like and what was maybe the lesson learned from that story?

Allana:
Yeah. Yeah. So I think it’s important to say today I have 15 doors of all amazing tenants. They’re all just so great, but that’s because I had a couple questionable tenants that really kind of took advantage of my empathetic, compassionate nature, my willingness to listen and kind of took advantage of that. So those two tenants … So one of the gals I also marketed, I didn’t really like talk about this part, but I had a passion for women in domestic abuse situations. Not that that’s anything I’ve ever been through. However, when I had separated from my ex- husband, I went to this apartment, I had nothing. I’m like, “Man, good thing I have a job and I can buy a bed and dishes and stuff like that. ” But I started thinking, “What about women that are stuck in a bad situation and they can’t leave or they feel they can’t leave because they don’t have their own stuff?” And so that’s keeping them in a bad situation.
And so since I already had a furnished place through word of mouth, I had some domestic abuse survivors come and stay and I would give them really reasonable rates and stuff like that. And I had one gal, and I think it’s important to say too, she was really, really scared of her fiance when she left him and came to stay at our place, but he passed away three weeks after she moved in. So it was no longer an issue that she was scared of her fiance and stuff like that. So it’s important to say that when I say that she was always paying her rent three to four weeks late.
And thankfully at this point, I had some other tenants that were still keeping up on the mortgage and stuff, but I need that rent money. And so then she worked with Transitional Housing, which is a program we have here that will help tenants in a bad situation. And she went through transitional housing two times to pay her rent, but they called me after the second time and they said, “Hey, just want to let you know as the landlord, we’re not going to help her again, just so you know, this isn’t going to be an option for her a third time.” And we had only signed a six month lease and we were coming up on that six months and it was approaching winter in Minnesota, which makes it a lot more difficult to evict a tenant. And so it was like September. And so I just told her, “I don’t want to continue our contract after this.
” And she had, man, I got paragraphs of text messages for like a month about how she was going to sue me for age discrimination and just all sorts of wild things. I mean, thankfully she had come to my door and apologizing about how she never pays rent on time and about how I probably want to evict her and that was all on my Ring camera at my house. So I mean, I had that, but never had to use it. She didn’t actually end up trying to sue or anything like that. Thankfully, her profession was a cleaning lady, so she didn’t leave my place like trash or anything like that. And then the second tenant, so he came to me, he wanted to long-term rent and it was perfect for him in the sense he was like 21 at the time, just wanted to leave his parents’ house, but he didn’t have any of his own stuff.
So he’s like, “Hey, I heard you have this furnished unit.” And he had no renting history or anything like that, but I really, to this day, I like this kid as a person, but rented from me and it went well for a while. And then the company he was working for shut down and I knew that was true. And so I just got stories for like months about excuses like why he was late or why he thought he couldn’t pay. And I kept kind of giving into that and being like, “Okay, I understand, but if this happens again, we’re going to have to go separate ways and stuff like that. ” Anyway, I finally was able to stick to it because I thought, “I’m running a business here.” It is the business of people, but it’s also like I’m running a business. And yeah, at the end of the day, long story short, he left me out $3,000, a broken window, and that place infested with fleas after I had done, I had done a lot for … I had even bought him, this is just bad on me, but I had even bought him a cheap car to get to work and back when his car was out.
And so yeah, total it was like 3,000.

Tony:
You might be the nicest landlord that we’ve had on the podcast, but also there’s maybe a business interest for you to like, “Hey, I’m going to give you this car so you can get to work and pay me my rent.” So I like that approach as well, but-

Allana:
It was both. Yeah.

Tony:
It was both, right? After those experiences, because you said now you’ve got nothing but amazing tenants, what did you change in your process to go from that tenant pool to where you are today?

Allana:
Yeah, I absolutely have systems I don’t deviate from now. It’s so important. So I do background checks through, I personally use, and there’s a lot of good resources out there, apartments.com, they’ll require a background check if you ask them to. I call previous landlords. I don’t call the one they’re with now because in case that landlord is like, “Hey, yeah, get them out of my place.” And they’re like, “They’re amazing.” I just don’t call the current landlord. I call previous ones that have no incentive to lie to me or embellish. And then I look at their income and everything like that, credit score and stuff like that. And I just bought a new place where I had two not fit applicants apply and they also both tried to manipulate me into renting to them anyway. And I literally said back, I said, “I have systems I don’t deviate from.” And now I have, he’s moving in January 1st, but he’s going to be a great tenant, solid job.
I know people that actually personally know him just by chance that are like, “He’s great, really good, respectful, hardworking guy.” And if I would have given into one of those other two tenants that applied for my new place, it definitely wouldn’t have gone well. So I’m glad I stuck to my systems and didn’t let my empathy or compassion get the best of me because it was kind of tearing me apart when they were asking for a shot. But I’m glad that I … I chose myself, compassion for myself this time.

Ashley:
There’s a scam that actually tried to happen to me was with fake pay stubs during the screening process. So their credit score is decent and they submit their pay stub as proof of income, but I was just like, just something felt off to me. So I’m searching the address on the pay stub and it’s like a payroll company. And then I’m doing all this research as to the addresses match up. And then I asked for the contact person for the manager. And then I’m Googling who they say the manager is, the company name, the phone number to see if they all match up and like none of it did. But it was like a really good Photoshop job of an actual pay stub, but it ended up that it wasn’t like the phone number must have been a friend or something like that who was going to pretend to be the manager to verify their income.
But yeah, having those comments in place. Yeah. So I want to pivot a little bit besides just your residential tenants. You actually scaled into a mixed use building which had residential and commercial and one of the commercial units was a chiropractor’s office and then it had two apartments. So how did that deal happen and why did you decide to pivot into a mixed use building?

Allana:
Yeah. It’s probably my best deal to date. So I always just had interest in doing at least one of everything in my portfolio and gaining experience, if it made sense, if the money made sense. I was really interested in that. I had some reservations because like so many more people work from home now and stuff like that for going into a commercial space. But I had heard that this chiropractor, a longtime chiropractor in our town was retiring. And so I thought, wonder if I should go knock on his door and see if he would be interested in selling or what his plan is with this place at least. And so I went there and there was some stuff I didn’t know. It worked out really, really well. But so it’s 1,700 square feet of office space that he used. He used every room for his business, like x-ray room, physical therapy room, all different stuff.
And then him and his wife lived upstairs in the upstairs apartment and his daughter lived in the basement apartment. And so when they were like vacating, the whole building was being vacated. So there was going to be like no current tenants in there. If I were to buy this place, but I knocked on the door, asked to see it, said, “I’m an investor and I’m just interested in seeing it. ” He gave me about an hour tour and told me the history of everything because he had been there for like 42 years and he said he wanted to list it for about 425 on the MLS and he had already talked to a realtor. He was already getting ready to list it. And I looked at it, I kind of thought in my head how much work it would need, mostly cosmetic, but it would need like a total upgrade if I wanted anyone modern to want to rent and offered him 300 and gave him flexible closing dates because they were like in their 80s and they had lived there for 40 years.
They had a lot of stuff in both the apartments and in the commercial space. And I offered 300,000, said we can be flexible on closing whenever you want to in the next six months. And they really just appreciated the flexibility of that and accepted the offer the same day. And so yeah, today that cash flows. So the mortgage on it is 2,000 a month and the upstairs tenants pay 2,000 a month. And so the mortgage is completely covered through them. And so then all the office spaces are 500 a month, so I cash flow 2,500 in the office spaces and the basement apartment I rent out for 1,200 a month.

Tony:
Wow, what an incredible deal. So Alana, you kind of glossed over, I think the really brave part of your story because the building was not listed, right?

Allana:
Correct.

Tony:
And did you have any relationship to this owner prior?

Allana:
No, I had never met him before.

Tony:
So you just walked in and said, “Hey, I know this isn’t for sale and I know I don’t know you at all, but I think I want to buy this place.” That takes a lot of courage. Were you nervous at all walking into that building and what did you actually say to open up that conversation? Do you remember what your first word to him was and how you kind of broke the ice? Because a lot of folks, even if they hear that opportunity, they’re maybe just a little bit too fearful to actually drive over Open the door and say hello. So how did you navigate that?

Allana:
Yeah, I was nervous. I think my drive for owning my time and having financial freedom is so much stronger than those nerves. I didn’t even realize at the time how good of a deal it would be, but I had thought … I knew there was a lot of rooms in this chiropractic office and I’m like, a multi-tenant facility would be so cool, renting out to all different businesses. And so yeah, I think my first words were just like, “Hey, I heard you might be retiring, not sure if you’re thinking of selling this, but I would just love to take a look at it. ” And he was so open to that. Like I said, he was in his 80s and he just loved telling me about every single room, the history of everything. And I think just building that relationship. And I also asked him why he’s retiring.
I made it not just about me, but also about him. And he actually had a massive heart attack. And so me working for the American Heart Association, that’s what I fight for every day through my normal job is heart research and funding and stuff like that. And so I just think we formed a really good connection. That’s maybe hard to duplicate, but yeah, it worked out really well. And I’ve been sending him pictures. He texts. He’s older, but he texts. And so as I was renovating, I was showing him pictures so he could see where the place he built his life for 42 years, what it looked like now and stuff like that. So

Ashley:
Yeah. That had to be a little bittersweet.

Allana:
Yeah. I was like, “Does he want to see this? ” I’m like, “I think he would. I think he would want to see it. ” He was definitely ready to move, but it was just very overwhelming. I mean, I’ve moved seven times in the past couple years, just hopping from living in a property that I’m working on to … It’s stressful to move. I can’t imagine being somewhere for 40 years and then moving. So yeah, very cool guy.

Tony:
So Alana, this sounds like another home run deal. And I feel like you might be fighting for the title of best cash flow per deal from all of our guests so far. But even with all of this, you’ve been wrestling with the question of growth versus freedom. You mentioned you have 15 units right now, and obviously the portfolio has scaled, but you specifically talked about a moment at BPCon when you heard Chad Carson, a friend of the Real Estate Rookie podcast that kind of changed your way of thinking. What was that moment and what exactly was it that kind of clicked for you?

Allana:
Yeah. So during BPCon, I went to the fire panel and Chad Carson was on that. So the Financial Independence Retire Early Panel. And he talked a bit about this. And then afterwards, I also went to the BP Con bookstore and bought the book and read it in there as well. But that moment was him talking about being the small and mighty investor. That’s what the book is called that I read and being like, “Okay, why did you get into real estate?” And for me, I got into real estate to own my time. That is the number one most important thing to me. I want to be able to travel if I ever have a family. I want to be able to spend as much time with them as I want to. But the book talks about if you keep just growing and growing and growing, you’re not going to own your time or you’re going to be paying someone a lot more to manage those assets for you.
And so it just really kind of made me start to reevaluate my goals and why I’m doing this. And so yeah, I’m kind of just in a place of rethinking my goals because I’ve just been having so much fun growing and growing and growing. The house I closed on a couple of weeks ago was my 10th deal, but like, okay, so what is it going to take for me? What number does it take for me to be financially free and to own my time? And do I really want to grow that much past that? And just kind of thinking about that because at the end of the day, yeah, still my number one goal is to not have to work if I don’t have to. I want to be able to just own my time and live a life. I wish I would’ve started when I was 21 instead of 28.
And so that’s why I’ve aggressively been trying to grow so much. But now that I’m at that 15 doors and I’m cash flowing pretty good, I’m just starting to rethink, do I want to slow down and just keep the portfolio I have or do I want to keep growing or what does that look like? So that was a very pivoting moment for me in my thought process.

Tony:
And I think we see that a lot, right? A lot of folks when they first start, the focus is on scale, but as you start to build a portfolio of a decent size, the goals do start to shift and kind of evolve with you as a real estate investor. So I love hearing that. So Alana, you’ve done short term rentals, midterm rentals, flips, mixed use, flipping campers, but we want to know which strategies you would actually repeat and which ones are maybe just the one and dones. And we’ll cover that right after we’re from today’s show sponsors. So Alana’s tried almost every real estate strategy available to Ricky’s, but now that she’s heading again towards scaling the portfolio, she’s got a better sense of what actually works and maybe what she doesn’t want to do anymore. So Alana, let’s go maybe strategy by strategy, starting with short-term rentals.
Would you do more short-term renting?

Allana:
Short-term rentals, it’s possible. That’s possible in my future. I don’t think it’s the number one for the … I think it’s very profitable, but the time it takes. If I want to own my time, I don’t think short-term is the best for my goals. However, I do have a specific house that wasn’t Airbnb for about a year right now. I’m living in it because my little, that same little that I was trying to get custody above. She turned 18, so on her 18th birthday, she needed somewhere to go. And so I stopped Aurbin being the house we live in now and we live together now.

Ashley:
Oh, cool.

Allana:
Yeah. So the story kind of comes full circle. If we were to move out of this house at some point, this is probably the only one I might still Airbnb, but other than that, it’s not really a strategy that I want to seek out.

Ashley:
Now, what about midterm rentals? Is that kind of in the same boat for you as more of an active investment?

Allana:
Kind of in the same boat. I know that what I do like about midterm is I could charge more per month because it was the people that want just like a four month, a three month or four month or five month rental, or even six can be midterm. They really need it, and so they’re willing to pay that little bit more. However, still not the number one strategy I’m going to seek out. That’ll be more like word of mouth if it kind of falls into my lap. I would definitely do midterm rental, but not really in my buy box right now for what I want to focus on.

Tony:
And what about long term?

Allana:
Long term I think is where it’s at for me. All of my properties right now, I did all the math on it. A few weeks ago, I redid all the math after I bought my newest one and I should be cash flowing 48,700 a year if nothing goes wrong. So that includes like insurance, property taxes, all that stuff. Four structures, 15 doors, 48,700 a year is pretty good. And it’s really comfortable for having like those long-term leases, just knowing that that income is coming in, especially with good tenants. And so long-term is the strategy I really want to stick with. Again, like you mentioned, we mentioned briefly, I’ve done a full house flip, not against doing a full house flip again. It’s a great way to raise quick capital. Probably not something I’m seeking out though unless a wholesaler comes knocking on my door and presents a good deal.
But I think long term for me is just definitely the way to go. And again, for everyone, it really just depends on your goals. But for me, that’s the strategy I’m going to stick with. I think it’s the best for being able to own your time and be financially free at the same time.

Ashley:
And does that include another commercial building, the mixed use building too?

Allana:
Possibly. Yeah. I think that can be hard to find the right location and to make work. It works really well for me because I was able to do market research on what office spaces we’re renting for in the area and I just rented out a little bit below that because to me it was all cashflow. So the other least expensive I found in town was like 600 a month. So I went to 500 a month to be able to fill it up, get the word out there. And that’s just all cash flow to me. But I think it takes a certain type of commercial building. So if I did that again, I would want it to be like another mixed use, maybe not straight commercial unless the numbers just really worked out.

Ashley:
I have the same. I have two mixed used buildings in my portfolio too, and I really do like them for that diversification of two different asset classes in them, the commercial and the residential.

Allana:
There’s also the opportunity for like a tenant, an office tenant to also want to rent the apartment downstairs. So then you’re getting the same amount of rent and dealing with like one less tenant. So I like it for that reason too. That’s not the case yet, but I’ve had expressed interest in that from some of my tenants if one of the apartments opens up. Now

Tony:
Alana, you’ve also mentioned that you just closed on another property and this is a triplex in another town. How does this last or latest purchase fit into your overall kind of strategy that you’ve talked about, about hopefully getting back more time freedom? I mean, you mentioned the $48,000 a year in cashflow, which is phenomenal, but how does this triplex kind of fit into that overall plan?

Allana:
Yeah. So this was just, I actually told myself I’d never buy in this town because I wanted to keep everything really local. This is about 45 minutes for me, but the cash, I just can’t ignore the numbers. So again, they listed it for 199. I offered 200, just knowing that two in front of it looked a lot better, asked them to pay closing costs. They said, no. Then I said no. And so then they said, okay, we will. And so that was awesome. My mortgage on that house is 1340 a month and just one of the units pays 1,400. And so then the other units pay 400. One of them pays only 400, but he’s an older guy. He’s been there for 14 years. He’s on social security. I’m not going to raise his rent on him. And then another unit is 850. And so that tenant was found during the transition.
My offer had been accepted, but I hadn’t closed on it yet. And so the current sellers were like, “Hey, do you want us to try to find a tenant for you? ” And I said, “I mean, that’s great, but they were only renting that for 600 a month.” And I was like, “But I’m not going to take less than 850.” And they’re like, “You’ll never do that in this town. No one’s going to pay that. ” And in two days they had it rented for me for 850.

Ashley:
For 850? Wow.

Allana:
Yep. The unit that is going to be, he moves in January 1st, but it’ll be 1400 that covers my whole mortgage and then some. They were renting that for 900 a month. And so then I was like, “I’ll find a tenant for this one,” because I didn’t think that they would try very hard to try to sell it at 1,400. And I found this tenant within less than two weeks. So it’s definitely going to help me own my time.

Tony:
Alana, where did you find the actual deal?

Allana:
That was on the MLS. So I found that one on Zillow and I just was searching multifamily homes. I had tried to buy one in the town I live in, a duplex. Actually, while I was at BPCon, so I looked at this house back in, this duplex back in July, I said, they were asking 250. I was like, “No, it just needed so much work. It just wasn’t worth 250.” And they’re like, “Well, what would you pay?” And I’m like, “Well, you’re not probably going to say yes.” And they’re like, “Well, what would you pay?” I’m like, “Maybe 200.” And they’re like, “Yeah, no.” And I’m like, okay. So when I’m at Bpeakon, or I did one of the Sunday sessions before it all started, I think it was Chris Lopez. I’m in Chris Lopez’s class. And I get a text from that realtor from back in July that says, “Hey, they’re wondering if you’ll do 210.” And I was like, “Wow, I need to look at this again.
I look at a lot of houses.” And so I said, “Well, I’m in Las Vegas right now at BPCon. I can look at it when I get back Saturday.” And he’s like, “Okay, so set up a time for Saturday.” Monday was Indigenous Peoples or Columbus Day or whatever Monday. So all the banks were closed. And so I set an appointment with my lender for 9:00 AM on Tuesday, the earliest I literally can do it and then got approved for the 210. I said, put the offer in. And then they said, “You took too long. Nevermind.” I’m like, “Okay, you’re just trying to sell this based on emotion.” You know what I mean? It’s really important to take emotion out of any of the deals I do. And so that’s what got me back in the market to be like, “Well, now I really want another multifamily.” So I was just on the MLS just looking, looking, and I see this triplex in the town about 45 minutes away and I’m like, “I can’t ignore the numbers for how good this could be.
” And it was just really good shape. They really took care of the property. So a very good find for me.

Tony:
And Alana, what specific market are you in?

Allana:
Southern Minnesota. So I’m about an hour south of Minneapolis, St. Paul.

Tony:
Got it. What’s the name of the city?

Allana:
So I live in Fairboat. I have one here in Fairboat, two, my commercial mixed use space is in Owatonna, a duplex in Owatonna. And then in Austin is this new triplex.

Tony:
Because these are all amazing deals. Everything that you’ve mentioned, and the fact that it’s just on the MLS, I need to go to Minnesota now and add that to my list of places to go. I

Ashley:
Do love the Minneapolis airport. It is super nice.

Allana:
It’s a good airport. Until I started traveling a lot, I didn’t think so, but we have a good airport.

Tony:
So my last question for you, Alana, what would you say to the rookies that are listening who feel that they either don’t have the money or the confidence to get started?

Allana:
There’s always a way to get the financing. If there’s one thing I can say, there’s always a way. I had someone respond to, I had an Instagram story yesterday about, actually it was from Brandon Turner. He said, “People don’t want to buy real estate now because it’s expensive, but in five years, they’ll be wishing they bought now.” And I shared that and I had a couple people be like, “Dude, I’m broke. I can’t.” And I’m like, “There’s always a way to get the financing.” And also, I literally jumped in with both feet not really knowing anything. I had read Rich Dad Poor Dad. After I had my light bulb moment, I read Rich Dad Poor Dad. I was like, “I really need to find a house.” And then I just so happened, I told the story at the beginning and looked and I’m like, “Yep, I guess I’m doing it.
This might be my one best shot to get started and everything I’ve done, I have just bought and then figured it out later.” And so I would just say, have that confidence in yourself. There’s nothing different from me than from anyone listening or from you guys, from anyone listening or Mark, that first landlord that gave me the light bulb moment. There’s nothing different besides we just jumped in and decided that we wanted our future to look different.

Ashley:
Well, Alana, congratulations on all your success. And thank you so much for sharing your experience and giving advice to the rookie listeners to get started. I think that last little piece that you gave is going to be very inspirational and motivational to the rookies listening that are waiting to take that first step. And I think you’ve laid a great blueprint of how you just took action and got started. So where can people reach out to you and find out more about you?

Allana:
Sure. The best way to get ahold of me is probably my Instagram. It is Aspiring Slumlord. So probably the best way to get ahold of me. I’m also, I’m writing a book right now called Aspiring Slumlord that details every deal and how I walked through that. And then me and my, actually a girl I met at BPCON, so we started a podcast called Homies and Houses. And so in the future- I love that name too. Thanks. At Caesars, we went down to one of the bars and had dinner and stuff and just kind of came up with the name and we’re actually doing it. We’re recording weekly. So there’ll be new ways to reach out to us once that gains any traction at all. But yeah, thank you so much for having me. This was really fun.

Ashley:
Yeah. And congratulations. I can’t wait to check out your book and to listen to the podcast.

Allana:
Thank you.

Ashley:
Well, if you’ve loved this episode of Real Estate Rookie, make sure you subscribe to Real Estate Rookie on YouTube and make sure you’re following us on your favorite podcast platform. I’m Ashley, he’s Tony, and we’ll see you guys on the next episode.