BiggerPockets Money Podcast

How to Be Financially Independent by 40 — As a Single Hourly Employee With No College Degree – BiggerPockets Money Podcast 113

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This week we sit down with Bianca DiValerio, a flight attendant who makes an hourly wage, has no college degree, experienced THREE short sales during the economic downturn, and yet is STILL financially independent—all before turning 40.

How did she do it?

She saved her money. She didn’t spend it on things that didn’t matter to her.

There is literally NO secret sauce to her story. In fact, she thought she had her future planned out! She had purchased three rental properties to provide a stream of passive income—only to lose them to short sale when unexpected special assessments of $5,000 each became too much for her to afford.

And yet, she saved her money. She didn’t spend it on things that didn’t matter to her.

And she dug herself out of the financial hole that the short sale pushed her into. She pulled herself back up and started her nest egg over, saving enough to pay cash for a unit in the same building, so she’d never lose her home again.

She’s turned that into a rental, lives in a caboose five months out of the year (yes, a TRAIN CABOOSE), and while she has enough money to never HAVE to work again, she enjoys her job, can literally choose when she works, and is living her best life.

Bianca is proof that you can recover from an unplanned financial catastrophe, thrive, and STILL reach financial independence—all before you turn 40. You just have to follow the proven path to financial freedom.

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Mindy:
Welcome to the BiggerPockets Money Podcast show number 113 where we interview Bianca DiValerio, and get her story of reaching financial independence on her own without a college degree or a high flying salary. We’ll also talk about her setbacks on her journey, including short sales of the properties that she thought were going to support her in her retirement.

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Bianca:
So this came up the other day, actually, I was at dinner with my parents and my grandparents and they were talking about my sister’s obsession with horses and I looked at them and I said, “Was I ever obsessed with anything?”

Bianca:
And she said, “The only thing you’ve ever wanted your whole life was money.” Which is really strange because at four years old, I was selling door-to-door newspapers and wrapping paper just to make money, but I had no reason for money.

Bianca:
It’s not like my parents were making me buy my own food or anything. So I don’t know where it came from, but it’s always been there and I shouldn’t say it’s an obsession, but it was something I felt I needed for some reason.

Mindy:
Hello, hello, hello, my name is Mindy Jensen and with me as always, is my astounding co-host Scott Trench. Scott and I are here make financial independence less scary, less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life.

Scott:
Wherever you are in your financial or life journey, you can begin rapidly moving towards a position capable of generating a great income, saving a huge percentage of that income and setting yourself up to make larger and larger investments on your way to financial freedom.

Scott:
Whether you want to retire early and travel the world, go on to make big time investments and assets like real estate or start your own business, we'll help you build a financial position capable of launching yourself towards your dreams.

Mindy:
Scott, I’m super excited to have Bianca on the show today. Did you hear me just a moment ago, she didn’t have a high flying salary. She does actually have a high flying salary. Bianca is a flight attendant. So while she makes her salary flying high, it is not one of those enormous salaries that frequently we hear about on this episode.

Scott:
I think it’s an outstanding pun Mindy, great job.

Mindy:
And there’s more at the end.

Scott:
Yeah, there’s a lot. There’s plenty of puns today. No, this was this was a great story. Bianca’s story is real. It’s not optimization. There’s no college degree like you mentioned involved. There’s no advantages that are brought to the table.

Scott:
It’s just hard work, setback, sacrifice, and then discovery of FI and getting after it and I think it’s amazing to see what she went through and still get back into investing and real estate even after it wiped her out.

Mindy:
Yeah, Bianca’s tale is a really, I don’t want to say great, I don’t want to say I love her story, because I don’t, I hate her story, I hate that she had to go through it. It’s a good cautionary tale of what can happen in real estate when you don’t pay attention to the numbers, when you don’t make an informed decision when you’re purchasing and that sounds like I’m talking smack about her and I’m not.

Mindy:
She is like so many people who think, “Oh, if I can save up for the down payment, then I can afford the property.” Not all properties make for a good rental and not all properties are going to cash flow and she’s got a great story of what happens when you don’t run the numbers properly.

Scott:
Yup, absolutely. But before we get to today's show, I want to do another quick tip this week. We discussed this later on, but it's in the concept of capex and maintenance. So capex and maintenance are items that every landlord or investor is going to have to deal with or every homeowner is going to have to deal with over the lifetime of their owning a property.

Scott:
It includes things like replacing a roof, replacing your kitchen, replacing appliances, plumbing, electrical, these large infrequent expenses that you have to plan for. Our guests today got hammered by unexpected capex hits, right?

Scott:
And if you’re not prepared for capex things that can really devastate you downstream as you own property and the easiest way I think to think about these is to think, “Hey, I can’t really compute these, but I need to a lot a certain amount towards that.”

Scott:
Maybe it’s 150 bucks a month on average over the course of 30 years for those types of expenses for a new well-maintained property and maybe it’s 250 or 300 bucks a month for a property that’s older or less well-maintained and it depends on your market.

Scott:
So talk to other investors, learn how to estimate those things, but then, also go into your ownership of the property with the reserve of five figures or 10, $15,000 in cash that you set aside to handle those things because the one thing you can know, Mindy always likes to say this is that if you are well-prepared with that cash reserve, you won’t have a major capex problem, but when you don’t, that’s when you’re going to have the water heater, the electrical system, the supply of plumbing side, the roof all go out at once and kind of cripple you. So make sure you’re prepared, save up, have that cash ready to go before you make an investment neither your home or the next rental property.

Mindy:
Very well said Scott. I have nothing to add. Let’s bring in Bianca. Bianca DiValerio, I’m excited, exuberant, delighted, so pleased that you are here today to share your story.

Bianca:
Well, thank you so much for having me. I’m very delighted to be here in your bedroom, former bedroom.

Mindy:
Former bedroom.

Scott:
All right, well, since Mindy is beyond words, I’ll ask it this time Bianca, where does your money story begin?

Bianca:
My money story begins with, I don’t know, if I think about money dating back to the earliest memory, it’s when I was four and going door-to-door selling newspaper or it was wrapping paper actually that my sister was supposed to be doing and was not for some reason.

Bianca:
So I was doing it because I wanted to make money and I don’t know why I wanted to make money. I was four years old. I didn’t have use for money, but I wanted it and I wanted to hoard it and that just began a lovingly long career of hoarding money, I guess.

Mindy:
The money hoarder, that’s a really good way to phrase it. So to be clear, let’s look into your childhood for a second. You had a secure childhood, correct? You weren’t needing money because you had to go and buy food for your family?

Bianca:
No. Yeah, definitely not. I had a middle class upbringing, I would say. I mean, my parents fought a lot about money. My dad was the breadwinner and my mom stayed home with us. She had three kids within five years. We’re 24 months apart, or no, I’m sorry, 16 months apart and 14 months apart.

Bianca:
So there’s a lot of baby rain in those days and so she was always trying to make ends meet and I think my parents fought about it a lot. So it became a security issue for me at a very young age that if we had money, maybe we wouldn’t fight so much, but I didn’t know what money was for at that time, either.

Mindy:
That makes sense.

Bianca:
Yeah.

Mindy:
So let’s fast-forward a little bit older. What does your high school look like?

Bianca:
High school years, I worked, I got out of school early to go to work and I worked in a lovely place called the Pancake House which fired me, but like I said it, by that time, I knew the purpose of money and part of my purpose for it was to move out of my house.

Bianca:
My parents had divorced by that time and I wanted to have a little bit more of a free life where I could live under my own roof and make my own rules, that’s parent’s biggest threat, right? Is that we would live under their roofs and so I wanted that to be me and like I said, I’ve been working since I was four, but my first W-2 job was at a nursing home waiting tables that is not really a thing, but we made it a thing and you made 25 cent tips so it’s terrible.

Bianca:
And that’s when I moved down to the Pancake House and I loved it. I loved working there, I loved making money, I loved being responsible for it and for my own hours and for getting up in the morning and doing it all, but I still couldn’t move on until I was a little bit older.

Bianca:
And once I was on my own, it takes on a whole new meaning at that point, right? You have to create your own security financially and yeah, it’s interesting, and I think now that I’m older, money has a whole new meaning to it. So it’s kind of evolved over the years.

Mindy:
How old were you when you moved out of your parent’s house?

Bianca:
So I used to go on like Grateful Dead tour for the summers so I don’t know if that counts because I was out and on my own financially to do that, but I’d always come back home and then I moved out to Oregon, I think I was 18 or 19 and I can’t remember which, and part of the reason was because my mom wanted me to have insurance, health insurance and I didn’t have a job that provided health insurance.

Bianca:
So I had to go to … I went to community college for a year in Chicago, and then when I realized that I didn’t want to have to pay for school and I didn’t know what I wanted to be, then I took my money and cut and ran to Ashland, Oregon for a couple of years.

Scott:
So this Ashland, Oregon is where you kind of start first living on your own?

Bianca:
Yeah.

Scott:
As an adult, right? What’s your financial position at that point? Do you have debts? Do you have savings? Any income?

Bianca:
No, I didn’t have any debts because I spent a lot of time with my great grandmother’s growing up which sounds kind of weird now. I didn’t hang out with kids. I spent a lot of time with old people and they came from a different era.

Bianca:
They lived within their means and that was just drummed into me. I needed to do that as well and so I never had any debts. I did go to community college while I was out there to stay on my mom’s insurance, but I paid for it as I went.

Bianca:
So I was working three jobs while I was out there. Well, I felt like I was working two full-time jobs and then a part-time job, but I was working my butt off just to be able to do it and to be out of the house. So yeah, I was a hard worker and I still am except the last seven months maybe haven’t worked as hard.

Mindy:
Wait, wait, you’re getting way ahead. We’re going in chronological order starting at the age of four, and then you jumped to seven months ago. So I want to address the comment you just made about your great grandparents living in a different era, being from a different era and my great grandparents were also from a different era.

Mindy:
I mean, this was before credit cards, if you didn’t have the money, you didn’t get the thing, that’s just how it was and I don’t remember when credit cards were invented, but that kind of seems to be maybe the start of people buying things they couldn’t afford or I mean, and yeah, I would never buy something that I couldn’t afford because I don’t want to be in debt, but it’s so much easier for people now to just, “Oh, I’ll throw it on a credit card. I don’t have to pay that.”

Bianca:
Yeah. Well, and there’s a difference too for some people who are buying things that can’t afford, but that they need whereas I think we’ve taken it way further in society where we’re buying things we can’t afford that we want and I’ve just never been someone who wanted a lot of things because what was more important to me was taking care of the things I needed and then also being able to do the things that are fun to me, but I wasn’t going to go into debt to do those things and even when I … Like I said, I was traveling around with bands when I was younger, I made clothes and jewelry and sold them on tours so that I could afford to be there.

Bianca:
I wasn’t going to go in debt to do that either. So I think that there’s a difference in the needs and the wants and I and I hate to say, “Well, I’ve never had debt because I haven’t, but I’ve also haven’t had too much disparity that I would have had to go into debt for it.”

Bianca:
I chose to move out, I chose to go to school, I chose to do these things that I don’t want to say that people who chose those things aren’t doing them for their own reasons and going into debt for their own reasons. It was just something that I wasn’t willing to do.

Scott:
No, I think it’s a great outlook and what was your educational background here over the next couple of years? You said you did a little bit of Community College and then you went out and worked three jobs. Was there any further education?

Bianca:
No, I don’t have a college degree. I didn’t get my associate’s degree because I didn’t know what I wanted to be. I felt like I was wasting time and I was definitely wasting money when I knew how hard I had to work to make each of those dollars to pay for the school that I wasn’t even interested in. It didn’t make sense to me.

Bianca:
There’s certain people who grew up knowing they want to be a doctor or a psychologist or a vet or whatever it may be, I didn’t have that. I wanted to be all of those things, I couldn’t narrow it down and so those people, I’m really, really happy that they go to school and pay the money to do it because we need those people. It just wasn’t what I wanted to do.

Scott:
I think it’s awesome. I think it’s a different perspective. We haven’t had very many people on the show who have made progress towards early financial freedom that don’t have a college degree which I think makes you fairly unique in that regard.

Bianca:
Yeah, and I have to say, it is one of the things I think about a lot too where, “Oh, if I had done that, what would my life turn out as?” I don’t have regrets really, but I do sometimes think, “Well, maybe I’ll go back and get it just because.”

Bianca:
Because I think back then, like I said, I was thinking about every detail of it. “Well, what am I doing this for because I don’t really know what I want to be.” Whereas now, I can just take the classes I want to take just for the education of it and I did, that’s what I did then, I did all the psychology and sociology classes that I could do, but I got some math and science like, “Oh, I’m not paid to do this. I hate that stuff.” Which is funny to say I hate math, but I love addition.

Mindy:
So I think that’s … Actually, I think it takes a really strong person to go against the grain and say, “College isn’t for me. I know everybody’s supposed to go to college, we are of about the same vintage and at the time that we were growing up, you went to grade school, you went to middle school, you went to high school, and then you went to college.”

Mindy:
That was how you did things and I went to college. Also not knowing what I wanted to study, I studied the dumbest thing ever, fashion design, it was the dumbest thing for me. No offense to anybody who is studying it and really loves it. I didn’t really love it.

Mindy:
It was a dumb idea for me, I should have studied business, I should have studied plain old liberal arts, anything would have been a better choice because I spent a lot of money and I don’t work in the field, I only worked in the field for a very short time.

Mindy:
I don’t miss it at all, it was not my thing. So I think it’s really … It takes a really powerful mind to say, “I’m going against the grain. I’m not doing all of this. I’m going to make my own path.”

Bianca:
I have two comments on that. Number one, but you dress so fashionably, so it worked out and I think it was a little bit easier for me because my mom didn’t go to college. So I grew up with her saying that she didn’t go to college and that she wished she had, looking at the jobs that she had to do to make ends meet especially after the divorce and she was very successful at what she did and she did it for a long time.

Bianca:
She was a secretary at the high school we went to, but I’ve always been the black sheep also between my three sister or two sisters and me. They both went to college, they both followed exactly the cadence of what life is supposed to be, right?

Bianca:
I mean, we talk about growing up and you go to … Well for females now, they go to college, maybe a few generations ago, they didn’t go to college and you meet somebody, you get married and you have kids and the whole everything, and I have never been that way and so in knowing that my mom didn’t go to school, I didn’t have all the pressure.

Bianca:
I think I felt a little bit of it, maybe I should do this because I know she wants it for me, but I also was … I was out of the house, I was making my own rules and I really stood by that. I played your rules while I was under your roof and now I’m having my own and I’m very strong willed in that way. So there wasn’t them talking me out of it or anything and it turned out okay I think.

Mindy:
Well yeah, I think it turned out okay. When I’m interviewing you to hear about how your life sucks.

Bianca:
Well, if you want to talk about it, I could tell you that too.

Mindy:
Well, I do actually want to talk about the not everything is sunshine and roses.

Bianca:
Yeah.

Mindy:
But are we there yet? We have covered college age.

Scott:
Well, I thought the story was you graduate high school, you move to or you quit Community College and move to Oregon, and then you immediately begin a perfect journey towards financial independence, making no mistakes, working three jobs and get there rapidly, is that right?

Bianca:
In two years, two years from the time I [crosstalk 00:16:00]

Scott:
Awesome. Well, let’s hear about it.

Mindy:
[crosstalk 00:16:02]

Bianca:
Yeah, so the problem with not having the college degree at that time, I think it’s a lot different now. There’s a lot more entrepreneurs out there was that I didn’t make a lot of money and I’ve never made a lot of money, but I did say in the same job, not two years, but now 18 years, and I became a flight attendant and that is, again, a different type of job, a different type of lifestyle.

Bianca:
It’s not following much cadence of anything because your hours are crazy and your lifestyle is crazy, but it did provide me some stability in terms of having income, as well as having insurance which again, was very important to my mother and also, it gave me exactly what I needed which was to have freedom. That’s all I wanted was freedom and with my job, I’m able to make my own schedule basically at this point for sure, but when I was younger, I knew I worked four days on, three days off, it gave me a lot of time to do the extra things that I like to do.

Bianca:
And now that I’ve been there a long time and make way more money and I don’t have to work as often at all, I could give away my trips if I want to. So I think that not going to school and not having a degree served me in some way because I’ve had this flexibility, but it took me a lot longer to get to where I am now and of course, there was the real estate issue in between which I think is where you were leading me.

Mindy:
That is the …

Bianca:
The downfall.

Scott:
In that first year, how long were you at Oregon working those three jobs? And then when did you transition to be a flight attendant?

Bianca:
I lived in Oregon two and a half years and I was dating someone at the time moving back to Chicago for a job prospect that I had, I was going to school like I said for sociology and psychology. But ultimately what I wanted to do was be a teacher.

Bianca:
And again, I didn’t want to do the Science and Math to do it and my aunt at the time was working in a suburb of Chicago, she was a Montessori School teacher, but there’s like two teachers in Montessori, so one is the main teacher one is the not main teacher, I forgot what they call it now.

Bianca:
Anyway, so she was leaving and she offered me her position knowing what I was doing for school and do you really want to commit your time and energy into getting a degree for education? Why don’t you try it out first? And so we moved to Chicago, and I tried it for two years, including the summers and I hated it. I hated education. And at that time, and it wasn’t the kids, I loved the kids. I just didn’t like the politics in it and yeah, that’s just not [crosstalk 00:18:33]

Scott:
How about the parents?

Bianca:
Okay, I didn’t want to say that. I wasn’t a big fan of the parents or the politics, so.

Mindy:
My sister is a teacher, and she has the same comments. It’s difficult to have these conversations with these parents. Sometimes the parents just don’t care. Sometimes the parents care way too much.

Bianca:
Yeah.

Mindy:
And I’m assuming that with the Montessori School, I’m not very familiar with them, but I’m assuming they are of the care way too much about maybe things that aren’t quite that important?

Bianca:
There’s both sides. I was working two year olds and three to six year olds. So they’re very young and very smart, but where I was at, the north side of Chicago, a very wealthy northern suburb of Chicago, there was a lot of carting them around, but not a lot of activity for their brains and you could see it, you could see how engaged they were in class, the kids, but they come back from the weekend and you’d have to start over. There wasn’t enough, I don’t think … God, this sounds like I’m trashing parents. I don’t want it to sound that way, but …

Mindy:
No, but being a parent is really hard.

Bianca:
Yeah.

Mindy:
It’s so easy especially now, it’s so easy to just hand your phone to them and be like, “Hey, watch YouTube while I’m doing this thing.” And that’s the worst thing for the kid.

Bianca:
Yeah, and I get why you do it too. I nannied for a long time. I get why you need that time and those breaks, it just for me, I wasn’t seeing the side that I wanted to and it could be that I had very young children, but it just wasn’t what I wanted to devote my life to.

Bianca:
And so yeah, one night I was at dinner and my sister’s husband at the time, his brother was a pilot for the airline I currently work or have always worked for and his wife was a flight attendant and they started talking to me, I was talking to him about travel.

Bianca:
I’m like, “Well, you should be a flight attendant.” It had never occurred to me, of course, because who thinks about a crazy job like that? And I was like, “Well yeah, you two.” And so I thought, “Well, I’ll go apply.” And I did, I applied to three companies, and I got in with the one that was best suited for me and here I am, all these years later.

Scott:
So this is about five years after high school graduation.

Bianca:
Yeah, I was 23 when I started as a flight attendant.

Scott:
In that period you just described, were you accumulating cash? Were you saving and investing or was that … What kind of happened to your net worth over that period?

Bianca:
I was saving. I don’t recall my net worth at the time, but I have always been a saver and at that time, I wasn’t spending anything. I was living a very modest lifestyle. I was sharing housing with my then boyfriend. We weren’t lavished in any way.

Bianca:
So I was definitely saving money, but when I got my job at southwest, I was making money a lot easier and then that’s when I decided I needed to do something with it and I wasn’t investing or anything, I actually didn’t start investing in besides my 401(k), I didn’t start investing until 2015 and in a brokerage account or anything outside of my 401(k) and I didn’t pay attention to my 401(k) until way after probably around 2007 or ’08 I think is when I realized I had a 401(k), it’s something I had started early, but I just didn’t pay attention to it.

Bianca:
So yeah, investing didn't come till later, but the saving was always there and when I got my job as a flight attendant, I also want to gain a real estate license because I was spending a lot of time at home. I got hired right after September 11th, no planes were flying, they didn't lay us off, but we weren't flying at all and we had a lot of downtime.

Bianca:
So I needed something else to do and I was interested in why am I paying this woman's mortgage when I could just have my own mortgage and so it got me interested in real estate and from there, I bought my first place and then got my license.

Mindy:
So when you say you weren’t investing, you weren’t investing in the stock market, but you were investing in real estate before 2015?

Bianca:
Yes. I think I bought my first place when I was 24. I can’t do the time on that. So I don’t know what year that was.

Mindy:
Right after you became a flight attendant, you got your real estate license, you bought your first property, was that your primary residence or was that a …

Bianca:
Yes.

Mindy:
Okay.

Bianca:
It was my primary residence for the first year, then I realized why did I buy in this area when all my friends live in the city and so I sold it within a year and then bought a new place in Chicago and I had that one for a year and it was a studio.

Bianca:
I had that studio for a year and then another studio came available in the building and I thought, “Well, I’ll buy that one and that way, it would be like me having a two bedroom and having an apartment, but I’d actually don’t ever have to see my roommates and live with them.” That was the idea and it worked out for a while anyway. See, I had the two units.

Scott:
Were you also acting as a real estate agent?

Bianca:
Yes.

Scott:
In selling houses for other people?

Bianca:
Yes. I wasn’t too active at it and basically, flight attendants were my main focus and first-time buyers because I had gone through the process of first-time buying and I hated it because my realtor was not my favorite.

Bianca:
She was also my landlord so that’s why I didn’t want to pay her mortgage anymore and so yeah, so I bought my place and then a couple of my friends were buying places and that worked out well for me at the time, but we’re also talking about 2005, 2006, 2007, we’re leading up to Not a great time in the market and all these first-time buyers just bought. So looking back you could see it coming, but at the time, I didn’t.

Mindy:
I was in that market at the same time that you were and yeah, you couldn’t see it at the time. There were, what’s that movie? The Big Short? I still haven’t watched it yet. I really need to watch it, but those guys were really smart to see that.

Mindy:
I wasn’t really paying attention to that. I just had my first baby in 2007, I had another baby in 2009 and I wasn’t really paying attention to what was going on, but I didn’t see it coming. I just assumed that real estate always goes up.

Bianca:
Well, the people that were paying attention were also the people pulling the strings. So when you look back at it, you can see that, but when banks are giving you zero percent down loans, and you have no skin in the game, what's going to happen when it goes to crap? You're going to walk and a lot of people did so and then I did, but I had skin in the game.

Bianca:
I put 20% down on all my properties. So I had a lot to lose, but this is a couple years later, I didn’t want to lose my primary residence and that’s where I was heading was not being able to float everything. So after I bought those two properties, I have two properties in one building, I decided to buy another park and my boyfriend in that was living with me, “Let’s buy a bigger property, a one bedroom because that’s so big for two people in a very small one bedroom with that.” So we did that and we rented out the place that we were living in before so now I have two studios, plus a one bedroom.

Scott:
Were these cash … Was this a calculated investment decision where you knew that the cash flow would exceed the mortgage payment and your expenses or …

Bianca:
Definitely not because I think I was paying 200 over for those properties. I’m paying $400 a month to keep them which was fine at the time. I could afford that, that was not a problem. So I knew I was losing a little bit, I didn’t know anything about a 1% rule.

Bianca:
I wasn’t paying attention to any kind of leveraging or anything, I just was … If I save 20% down, I could buy this property. That’s what I thought, that was the old school knowledge was. If you can afford 20%, you can afford a property, that’s not true because when all was said and done, I had $500,000 in mortgage debt and I was making $40,000 a year. There’s no way I could apply for a home that costs $500,000 if I only made $40,000 a year, but if you did it gradually, you could.

Mindy:
And these were bank loans?

Bianca:
Bank loans. Yeah.

Mindy:
And did they take into account that you were renting out the other properties? I mean, even then, so a little side note, I actually lived earlier than Bianca. I actually lived in the same building that she did in Chicago. So I’m familiar with this this building. It’s a neat building. We didn’t know each other at the time.

Bianca:
Side side note, is it weird now that I’m living in your house? Right after you lived in this house? Does it feel like I’m stalking you because I feel like I’m getting closer and closer?

Mindy:
Not yet. Maybe the next time. But no, so these are, I mean, I love that building. I thought it was so cool. It was right in the middle of a cool neighborhood and I can see where you’re buying these properties. I bought one there too.

Bianca:
Yeah.

Mindy:
So when you did the math, when you were looking at the properties, they’re going to cost X and I can rent them out for X and my mortgage payment is X. So did you think to yourself at all like, “Hey, this is a bad idea.” Or did you …

Bianca:
Yes. So again, I don’t know Math very well, I only know addition. So my thought was two properties are better than one property, but also, they were covered. They were covered as in they had renters, they had tenants. What I didn’t see coming was the economy crashing, my tenants leaving or not being able to pay as one didn’t for six months and stayed in the property and would not move out.

Bianca:
So now I’m covering her mortgage, I didn’t see two special assessments because I had two properties in the same building. I didn’t see that coming. So that’s $5,000 per unit while they’re not rented or while one’s rented, but no one’s paying and the other one is vacant.

Bianca:
I didn’t see and by the time that came, I had already moved in with my husband to another house and we were renting the third condo now that I had. So I had three condos. All had lost over 60% in value. None of them could be rented for what the original mortgages were.

Bianca:
It was a mess. And really, I was in real estate, I knew real estate, but I didn’t understand how badly I was putting myself underwater. I didn’t understand what would happen if the entire economy tanked. I didn’t get that.

Bianca:
I thought, “Oh, if my tenants move out, and they can’t afford to pay, we’ll just get new tenants and everything will be awesome.” But a lot of people were moving, fleeing the city because I had studios, those are for single people, they’re for single young people usually. Guess where the single young people were moving to?

Scott:
Back home.

Bianca:
Their parent’s basements. Back home. So who am I going to rent to now? And by this time, I’m living in the suburbs with my husband in our new house which we got at a steal because still, the economy was tanking and we’re taking advantage of it, but everything else is being taken advantage on the other side of me and my husband wasn’t on any of those loans, they were all mine, I bought them all before him, none of this was his problem financially.

Bianca:
And one day, he looked at me and like you said Scott, you asked earlier about debt, I had never been in debt my whole life. I’ve never not paid a bill my entire life. I prided myself on my 840 credit score or FICO score. I was a lunatic when it came to money and saving and hoarding and all that stuff.

Bianca:
When he looked at me and said, “You have to stop paying. You cannot continue this.” It was terrifying for one. I was embarrassed, I was ashamed. I went through such a range of emotion, but he was right. He was right. I couldn’t afford to keep doing it and I wasn’t going to claim bankruptcy because I wasn’t bankrupt, but I put all … Every single cent I was making was going into those properties and I was still underwater.

Bianca:
So it started a long three-year process of short-selling three of the properties and during that time, we also divorced. So I lost the house as well. I signed the house over to him and didn’t take anything from it. I moved into the last property that was still vacant which meant I had to move that girl out somewhat forcefully, and move into there and the disgusting habitat it had become and it really was … Cleaning her place out was probably the lowest point because I’m cleaning someone else’s filth who also is in a really … She was a drug addict.

Bianca:
She was in a terrible position in her life and I have to kick her onto the streets because I have nowhere to go either. It was terrible. It was just not a great place to be, so.

Mindy:
So when you bought these properties, did you have any reserves? You had said you saved up 20% to put down on them. Did you have any extra or was that kind of, “Oh, I’ve got 20%, let me throw it all at this property.”

Bianca:
Yeah, that’s basically what was happening is every time I saved up a big cushion, I would get a new property and then start from zero again because it didn’t occur to me I was going to lose my job ever because and it should have because a lot of airlines had gone down after September 11th.

Bianca:
But in that way, I was a little bit naive, let’s say a lot naive, but my job stayed stable. It was really the economy and everyone moving out at once and not being able to get tenants that became the biggest problem and so what I should have done and what Scott, I credit you for, and we’ve had a conversation about this after one of the camps that you spoke at is having that reserve is so important, and it’s the one thing that I now tell people is put it in whatever safe account you have and leave it there and don’t worry about it.

Bianca:
Just have it just in case and it’s something that I didn’t think about and I know that seems completely naive right now, but I was always the type of person who was able to pick myself and dust myself off and move forward, I never didn’t pay rent.

Bianca:
So it didn’t occur to me people would leave in the middle of leases, I would never do that. It didn’t occur to me people lose a job and not get another, I would never do that. I always found a way to make money and so it didn’t occur to me that other people couldn’t or wouldn’t or didn’t.

Bianca:
That part was a huge eye opener for me and when you are in real estate, you’re depending on your tenants to pay your money and pay your rent and without that buffer, it can go down real fast.

Scott:
Yeah, I love it and I think to your point on reserves, just to cut … Because since you mentioned it all …

Bianca:
Yeah.

Scott:
Share my kind of philosophy on that. When you buy a property like a single family or even a duplex or something like that, I think you need to have the down payment, plus closing costs, plus your expected repairs, plus 10 to $15,000 at least for that first property and you leave that you set it aside and you don't use the down payment on the next property.

Bianca:
Yup.

Scott:
You buy another one, you add 10,000 to that reserve and then if you ever need to spend a lot of money like for example, you have a $5,000 capital call, or what was it called? Assessment? Special assessment?

Bianca:
Yeah.

Scott:
Then you take it out of that reserve and you go into emergency mode and you don’t take any money out of that property or other things until you build it back up at a level that you’re comfortable with. So for me, I’ve got three structures. I think I’ve got like $35,000 in reserve that just sit there and I don’t touch it unless I need it for those properties and then I do not take a distribution again until it was built back up.

Bianca:
Yeah, and that’s exactly when you said that it clicked in my head because that’s exactly what I didn’t do and I should have and now, every property I have which is only two and one I live in. Every one I have has its own fund of money.

Bianca:
Having it for one is not enough for me, but also, in this point in real estate for me, I buy my real estate in cash which I know a lot of other people don't feel good about because they want to have leverage and use the money that's just sitting there, but for me, that's where I'm at right now and I might get back into it in a different way, but the only way that I felt comfortable again to buy anything was to buy it in cash and strangely, in the same building that I had to short sells in, the building that Mindy and I both love is where I own my current property.

Scott:
Wow, I love it. Wait …

Bianca:
Full circle.

Scott:
So what year was it when you found yourself scrubbing out the drug addict’s apartment and hitting the low point of this?

Bianca:
Probably 2012 and that’s further after the collapse of everything. So what happened during the collapse of the housing market at least was in the beginning, they would not refinance investment properties. Now, all my properties were investment properties. So I couldn’t move back into that specific one and refinance it.

Bianca:
Well, first of all, because I'd have two other short sales, but they weren't doing loan modifications either and the loan modifications are what got a lot of people back out of it and securing their homes again, but they didn't do loan modifications if they were investment properties.

Bianca:
So all this time that I’m calling and saying, “Hey, this is what’s going on, let me tell you my story.” They’re like, “We can’t help you because those are investment properties.” And that’s why that’s the initial comment of my ex-husband now is to say, “You need to let them go then because if they’re not going to help modify them, then there’s no way you can keep afloat.”

Bianca:
Now, later on, they did do loan modifications for investment properties, but by that time, everything was too underwater. So 2012 is when I owned the last property and like I said, she hadn’t paid in six months, and I was trying to float it for a while, and I couldn’t and when I finally got on with the bank and said, “Hey, this is my primary property now, I know …”

Bianca:
And that was the only property that I bought with a investment type of mortgage. So all the other ones were bought as me being the homeowner. So I don’t know why it worked out the way that it did, but that was the last one that was left and because it was an investment loan, they couldn’t modify it and I went back and forth forever with them every single day, getting a new packet in the mail, every single day, calling every single day them saying I missed a page which I know I didn’t.

Bianca:
Everyday again it reassigned to a new case, it was awful and yeah, so I think that was 2012 and within … I think in 2012 was when it finally did close as well. So I think about it six months later, it finally closed and …

Scott:
So the refinance closed?

Bianca:
No, I didn't get a refinance. The foreclosure … Not foreclosure, I'm sorry, it's a short sale, the short sale closed. So for six months prior, she lived in there and didn't pay, for the next I think five months I lived in there and paid my taxes and assessments, but I stopped paying the mortgage because I talked to the lady at the bank and I said, "What can I do to get this up to speed?

Bianca:
And she’s like, “Well, you’ll owe …” I can’t remember what it was at the time, 16,000 or something. And I said, “Okay, and the property is worth 40,000.” And I bought it for 100,000. She said, “Yes.” And I’ve already put 20,000 into it because I put 20% down.

Bianca:
And she said, “But we can’t modify it and because you’ve had these other short sales …” She’s like, “Honestly, my advice is to stop paying.” She’s like, “We can’t do anything if you don’t pay for two months.” And it was like, “Well, if I don’t pay for two months, I get further behind.” She’s like, “Yeah, but they won’t close it if you don’t pay.” So basically, she was telling me to just stop paying.

Scott:
That’s amazing.

Bianca:
Yeah. And then the same conversation I said, “Well, then where can I send the keys? Because I’ll move out.” And she said, “It doesn’t work that way.” I’m like, “But I would rather you just take it?” And she’s like, “No, you might as well just stay there because they’re not going to take the keys. You have to wait until they find a buyer and they close.” I’m like, “Okay, I guess I’ll stay here.”

Scott:
That’s an absurd statement coming from the bank.

Bianca:
Yeah, and a recorded call at that.

Scott:
Yeah.

Mindy:
So I think what is so easy to look at now and so difficult at the time is that a housing crisis of this magnitude hadn’t happened before.

Scott:
Right.

Mindy:
We had not had this level of foreclosures and short sales and people stopped paying and all of this until 2008, ’09, ’10, ’11, ’12. So the banks were kind of in new territory and I think by the time you … They got around to short sailing this one, maybe they figured it out and it sounds like she really was helping you.

Bianca:
I think she was empathetic. She heard a lot of stories I’m sure at that time and actually, one of my friends, Marianne, she works in that division of the bank, not that specific bank, but she’s like, “We hear these stories all the time and it’s awful because you really can’t do anything.” And it is, what really was terrible about it was real estate was my passion.

Bianca:
I loved it. I still love it. I am a psychopath on Redfin. I am looking at everything everywhere. I know when new properties are up, I’m crazy about it, but it was a love affair that went terribly wrong and I didn’t see all the facets of it and I think that woman was helping me for sure.

Bianca:
I wish I had know more earlier and that’s one of the things that now I think that that’s why this story is important and I hate to tell it because it makes me look like a complete doofus, but it’s important because there’s a lot of people who are in real estate now that haven’t been through that before.

Bianca:
They haven’t been through the downturn. They’ve maybe seen their parents, but they were probably at college, they really don’t know and when I see the way people are using leverage now, when I see certain advice being given, it makes me cringe because I know the other side of it and I’m a cautionary tale.

Bianca:
I get that that’s not going to happen to everyone. I get that I was way beyond stupid in some cases, but I also see how it happened to me too and I see how it can happen to others.

Mindy:
Well, you can see how it happens now that you’ve gotten to the end of it, but during the time, were you making purchases that you knew were going to lose money? No, real estate always goes up, it has always been the prevailing factor.

Mindy:
So of course, you’re going to put your money in real estate because it’s just going to go up and that crash was enormous, but you’re absolutely right and I see this in the BiggerPockets forums all the time. People are like, “Oh, I don’t have any money. I’m just going to jump into real estate.”

Mindy:
Or I wouldn’t say this and it makes me crazy. “I want to get into the real estate game.” It’s not a game, it’s a business and you could lose a boatload of money if you don’t do it right and Scott’s comment just a few minutes ago about having adequate reserves, you’re never going to fail by having too much in reserves.

Bianca:
Right.

Mindy:
Scott has $35,000 just sitting there doing nothing, waiting for the day that it needs to be deployed and if he never needs to buy a new roof or furnace or air conditioner or hot water heater, or appliances or any other thing, he’s still going to have that $35,000 and …

Scott:
That is absolutely killing my return. It’s hurting my ROI because it’s part of the investment process, but is necessary to prevent, to reducing my risk on the [crosstalk 00:41:03]and one other thing with this whole discussion here, this is what I think is the whole point of the BiggerPockets Money Podcast or a major point or part of it.

Scott:
I know that if you’re listening to this, you’re probably thinking about investing in real estate at some … At least with part of your portfolio and the point of this is to help you build that financial foundation that can help you successfully with lower risk invest in things like real estate, or whatever it is you want to do to avoid some of these things. So that’s why it’s so valuable to hear your story Bianca.

Bianca:
But, well yeah, and it’s funny, you talk about the ROI. Yeah, for sure. It’s ruining your ROI, but that’s like the equivalent of not wearing a seatbelt because it doesn’t make you look sexy. Well, guess what? It’s there in case there’s a crash.

Bianca:
Your money sitting there is in case there’s a crash, in case all the things that many said happen at one time, you can afford, maybe not all of those things, but for me, it was vacancy on top of assessments. It wasn’t just the fact that I was already paying $200 a month, I could continue to pay $200 a month, it was that I had a huge special assessment and vacancy, that’s the problem.

Bianca:
Now, if the roof had blown off or there was a fire or anything else, I certainly wouldn’t have been able to keep that it up for very long, but those aren’t the things that happened to me, but they can happen to somebody else.

Bianca:
So I’m thinking, “My risk tolerance is way low at this point.” Right? Think about all the things that can go wrong and be prepared for them all. We talk about this also in FIRE, like what is enough, I’m happy to work a couple extra years to make sure I have more than enough and that’s the same with real estate. Now, I’m happy to have a way bigger buffer to make sure I have more than enough just in case.

Scott:
Now, let me ask you this just because since we’re on this topic here. I’m a new investor, I’m listening to the show and I hear Scott say, me, say that, “Hey, you need $15,000 after the down payment, after your closing costs, after expecting expected repairs.” And I’m saving a thousand dollars a month. Right?

Scott:
Is there a time to be a little bit more aggressive in getting your first property and then aggressively building up that reserve downstream if the trade-off is delaying entry into the game for two, three, four years in your opinion, having been through that risk? What’s the right answer to that dilemma?

Bianca:
Yeah, that’s a tough one. Again, this comes down to risk tolerance. My thought on that would be if you can’t afford to lose it all, don’t do it at all. If you don’t have somewhere to go when it all goes to crap, don’t do it and I didn’t think I had somewhere to go.

Bianca:
I’m sure I could have moved in with my parents, but that was not for me an option because I had been out of the house for so long. I didn’t expect to have a divorce on top of the market crash, that was a whole other emotional thing I was going through.

Bianca:
So my thought is if you can’t … I think it’s the same and I know I’m going to get killed for this, but I think it’s the same with investing in the market. If you can’t afford to lose it, don’t do it and I thought that way for a long time and of course, I feel differently now because I have money, I have a buffer, I can afford to lose things so I take way more risks now, but it’s the same thing if we’re looking at just credit, okay?

Bianca:
If we go back to the credit cards, if you can’t afford it, don’t buy it and that’s a very, very simple, I don’t care if it’s a Snickers bar. If you can afford it, don’t buy it. If you can afford a house, don’t buy it. If you can’t afford all the things that are going to go into it, don’t buy it.

Bianca:
I know that’s very unsexy to say. I get it, real estate is fun and it’s a great time and all these different things. I get all that, but I’ve been through the wringer with it, and I couldn’t afford it, and I bought it and look what happened or maybe I couldn’t afford to keep buying as … I probably could afford the first and second ones, maybe not the third and fourth ones.

Bianca:
So know when to stop is another thing because I think that’s the flip side is once you are good at it and everything’s going well, and you keep doing it. Same House of Cards could come down so know when to stop.

Mindy:
Yeah, that's why I live in flip. I think that to answer Scott's question, "What do you do? When is it a good time to maybe not have total massive adequate reserves? When is it a good time to get in anyway?" When it's your primary residence that you're house hacking or that you are buying ugly and forcing the appreciation by making it look nicer. That kind of thing I think makes it, I don't want to say okay to buy without reserves.

Bianca:
Yeah.

Mindy:
Never okay to buy without reserves, but that makes it easier to buy when it’s your house. I mean, you were able to move back into that property. Those special assessments in that building were killer, the guy who turned it into a condo should be shot.

Bianca:
Yeah, there’s a lot of problems there.

Mindy:
He did a lot of bad things, but yeah, you should have held him accountable.

Bianca:
And also, let me amend what I said. I agree, if it is your primary residence and you’re just getting into the market, I think that yes, it’s good to take that leap because it’s scary. It is scary. I was scared when I bought my first place, but I bought well within … I went under what they said I could afford in a mortgage.

Bianca:
That’s another thing, don’t max out. It’s your first property, chill out a little bit. Don’t fall in love with what it looks like and … No, buy something that’s sensible and live in it at least a year. My mother always said to date someone a full year before making any kind of commitments to them, I have not followed that, but what she was meaning to say was go through all the seasons, go through all the seasons with your home.

Bianca:
We have a mutual friend that didn’t go through all the seasons and had bought her first property and it was a bit of a doozy and she was already talking about buying another property and I was like, “Girl, go through the four seasons, you have to do it.” And just like making any big choice with a man, make the big choice with your … Commit to your house and go through the four seasons.

Bianca:
So I do live by that, I live by that now, to have it for a while before you start making other decisions because if it’s working out great in the beginning, you really want to jump all the way in. Well, sometimes you get some weird quirks and habits out of a man or a spouse I should say, or out of your property that you didn’t see coming and you want to be sure that you know it in and out especially in all the seasons. So anyways, a little advice from mom there.

Mindy:
That is, thank you Bianca’s mom. That was great advice and I do like that you said, “Don’t buy the most house that you can. Don’t get the biggest mortgage possible when you’re buying your first property.” I absolutely agree with that because you don’t need that added stress. The bank is like, “Oh, you could totally afford it.”

Bianca:
It’s a stretch number.

Mindy:
You know what? Be comfortable with that number. Be comfortable with that number and still be able to put things in reserves and still be able to save and invest outside of your home and all of that because like I said before, you’re never going to fail having too much in reserves, having more than you need in reserves and Scott, thank you for totally ruining my comment by saying, “Oh, it’s killing my ROI.” You know what? You’re doing just fine Scott.

Scott:
Yeah, I’m earning 2% on that instead of the 15 to 20% I hope to earn in my investment property, in terms of my IRR, but that is, it’s just part of the investment. It just brings it down a little bit, but it reduces my risk so much that it’s absolutely worthwhile.

Bianca:
And that’s why you’re sitting where you are.

Mindy:
Exactly. Okay.

Scott:
All right, hope you’re enjoying the show. We’ll be right back after a word from today’s show sponsor.

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Bianca:
Yes.

Mindy:
You had four properties, one was with your now ex-husband that you signed over to him?

Bianca:
Yes.

Mindy:
And now you have three left. You went through a short sale, you went through another short sale, and then you moved into the third property which then eventually also went to short sale, not foreclose.

Bianca:
Yeah. No, it was already in the process of being short sold and I got the girl out and got myself in and tried to do the loan modification because I thought, “Well, if I live in it, maybe it will be my primary residence and they will take pity on that.” And that is not how that worked at the time. So then that’s the result.

Mindy:
Okay, so you said earlier that you had an 840 credit score that you were very proud of.

Bianca:
Yeah.

Mindy:
What happened to your credit score after three short sales?

Bianca:
Well, okay, I was afraid to look for the first year, so I didn’t.

Mindy:
That’s fair.

Bianca:
Yeah, and then after that, I would say it was around 600 and I’m proud to report just many years later, it is now back to almost 840. So I think it’s like at 830 right now.

Mindy:
Okay, and for those of you who are listening who don’t know, 600 is actually not a good credit score. The FICO [crosstalk 00:50:52]

Scott:
But it’s not terrible either.

Mindy:
It’s actually pretty bad. FICO goes from 350 to 850?

Bianca:
I think so, yeah.

Mindy:
Which is like 500 points, that's huge, but until you get to about 650 or 700, that's bad. So 350 to 700, or 350 to 650 is a bad credit score which doesn't make any sense because that's not the middle of it, but until you get to 700, the banks are like, "Oh, no." So okay, so fast-forward past the short sales. What were you doing? You still had your job as a flight attendant?

Bianca:
Right. So let me go back to the short sale thing real quick.

Mindy:
Oh, sorry.

Bianca:
That first year, I don’t know what happened. But remember, I didn’t have any other debt. So for me, it was going to move up a lot faster. So I don’t know what it was in the first year. It could have been lower than that, but that was … Being able to … I started working double time so that my loan to debt ratio was way crazy because I wasn’t spending anything.

Bianca:
I moved into another rental in the same building. Yeah, they couldn’t get rid of me. So I moved into a rental there and I rented it for a year. Yeah, a year and in that time, I went back to work and I went back to work hard because now, this was in 2012, 2013.

Bianca:
Now, I don’t have any where to put my money, I have no reason to be saving because I’m not going to do real estate anymore. That was my love for I don’t know, almost 10 years at that point and since I didn’t have focus for money, I was like, “Well, I’ll just start hoarding again.”

Bianca:
And because I was over … Going through those short sales is very, very depressing time for me, going through the short sales plus the divorce and moving and all these things that were going on. So I wasn’t working much because dealing with the banks was a daily occurrence and so when I started working again and now I’m making way more money than I have all the years prior, I think I was maxed out at that time, I was there at least 13 years by then maybe.

Bianca:
So anyways, I’m making good money now so now and I’m working smarter. Now I can work whenever I want. I don’t have a husband I’m coming home to, I’m working time in a half a lot. So my salary went up a lot and in that time, I saved a whole bunch of money in the next year, right before my apartment came up for renewal, there was a property upstairs that came up for sale.

Bianca:
It wasn’t a short sale, but it was very inexpensive, I had bought my properties for 100,000 at the top, they were selling it for 65,000 and it was one of those back corner units. Remember those that looked over the garden?

Mindy:
I lived in that one.

Bianca:
Okay. Yeah. That’s where I moved and I bought it and I bought it in cash. So what I did in that year of saving money and working my butt off, afforded me the option to buy that property in cash when it came up. Now what happens to the short sale is you cannot buy a property with a loan.

Bianca:
No bank will give you a mortgage for four years after a short sale even longer after foreclosure. I think it’s seven after a foreclosure. So I knew I wouldn’t be able to buy anything, but I also knew, now I’m paying someone else’s mortgage again and that really killed me.

Bianca:
So for that year and a half, after the last short sale, I worked my butt off, saved up a whole bunch of money and was able to buy that property and what’s weird about it was that property was way under what it should have been.

Bianca:
So I don’t know why they were ditching it, but I was very, very happy to grab it and after that, having a property that I owned outright meant I had no mortgage, I had very … The taxes and assessments were around $300 a month, that is my cost of living, $300 a month.

Bianca:
Well, if I’m working my butt off now, now I can really start saving and get my head back in the game. So that is where everything just launched from there.

Scott:
Well, so keep going. What happens in the next couple of years?

Bianca:
So 2015, I came across the FIRE movement and started reading a bunch of blogs about money and about retirement, which I never even thought I’d retire because I love my job, I still love my job, but it gave me a new goal. It gave me a new financial goal.

Bianca:
I’m living in this property, I don’t want to touch real estate with a loan again, but I want to save money so what do I want to save for and when it came up with getting able to retire early, I’m like, “All right, that seems like a good goal for me.”

Bianca:
And so I worked my butt off for quite a few years and yeah, last year, I became FI so at 40 and I have to say, that is with the incredible help of the market. The same market that killed me before has now helped me, but I’m also very, very much aware that it’s possible the market could crash it at a time and I don’t consider being fired to be the end all be all to my work life.

Bianca:
I kept my job, I intend to keep my job at least a few more years to build a big buffer around it. I still have very low cost of living. The property that I owned in Chicago is rented. I bought it for 65, it rents for 975 so I make a killing on it now.

Mindy:
Oh. Nice.

Bianca:
And then my other property that I live in half the year is a caboose in Lake Geneva, Wisconsin, also bought in cash. So my cost of living is low in the summers and then in the winter right now I’m living in the Jensen house paying rent, I have roommates, so that keeps it low.

Bianca:
But yeah, I haven’t figured out my long-term plans in terms of housing. I know I have somewhere always in the summer and I’m looking for somewhere to spend the off season.

Scott:
So you don’t want to spend winters in the caboose?

Bianca:
I can’t, they closed it. Yeah, which is the joy of the caboose too is that it’s only a seasonal property. So I’m there for five months of the year and it’s a great time while I’m there and then I go somewhere else when it’s cold because I don’t like winter, so.

Mindy:
And Lake Geneva, Wisconsin has plenty of winter.

Bianca:
Yeah, and this is a winter that does not compare to anything in Denver or along that area.

Scott:
Which is why you’re here in Denver in February for a [crosstalk 00:56:37]day that we’re recording this on.

Bianca:
But it’s sunny, it’s outside.

Scott:
Today. Yeah.

Mindy:
Today it’s sunny. We did just have a snow storm yesterday. So okay, you just rattled off a bunch of stuff. Scott, and I know your story. I want to be a little clarifying for the people who are listening who may not know what you’re talking about when you say you live in a caboose. This is an actual train caboose.

Bianca:
Choo-choo. Yeah. It is a train car. It’s a train car attached to 32 other train cars. So there’s a line of 33 cabooses and they’ve been there for quite some time. I want to say since the ’80s, but I know they turned it over to condos in the ’90s, mid ’90s.

Bianca:
So the man who started this caboose community had started it as a hotel which was a great idea. They were going to cut the train lines, he thought, “Well, let me bring up these cabooses, I’ll make a hotel out of it. It will be a great vacation property.” And it was.

Bianca:
They didn’t make it to be lived in full-time. So all the pipes are exposed underneath. So it would freeze, it would freeze real fast. So when the weather gets cold, they turn off the water and once it gets better, they turn it back on.

Bianca:
So in those months, you cannot live there, but so it’s a train line of 33 cabooses near the town of Lake Geneva, it’s about a half mile walk into town, a half mile basically to anywhere you’d ever want to be and it backs up to a forest preserve so it’s really pretty and beautiful and quiet and then if you want to have a little bit more drama and fun, you go into town and create chaos.

Bianca:
So I really love it and Lake Geneva has a special place in my heart as it does for most Chicagoans because it’s only an hour, hour and a half north of Chicago and it’s our little lake to go to when all the tourists are in Chicago at that lake.

Mindy:
It’s the Chicago Riviera.

Bianca:
There you go. That’s exactly what it is.

Mindy:
Okay, so you have your caboose that you own outright?

Bianca:
Yes.

Mindy:
You have a condo in our shared building that you own outright. I have a search by the way set up for any more properties that come up in that building because I like that building still.

Bianca:
Oh, you just lost the foreclosure. I know, sorry.

Mindy:
Okay, we’ll talk after. And you still have a job. So let’s address this for the internet retirement police. You still have a job, why do you still continue to work? You have all the money you’re ever going to need Bianca.

Bianca:
I am one of the people and this is going to sound terrible, but I do not … It’s not that I don’t believe in the 4% rule, it’s that I don’t trust in any rules because I thought I played the rules properly with real estate.

Bianca:
I thought I played the game by the rules and that they changed the rules. So for the market, yeah, right now, I got 4%, I’m good, but if the market takes a downturn, I’m concerned about that and I’m concerned about it because I am on my own, I don’t have … Look at what happened with when I think about my job and my line of work, what happened with the airline industry after 9/11.

Bianca:
There was a lot of layoffs, a lot of furloughs, a lot of things that I can’t control if that happens again … Not that that’s going to happen again, but if something similar happens to the airline industry, that’s my job, that’s my only lifeline.

Bianca:
I don’t have an education to fall back on, I don’t have a husband, I don’t have … There’s a lot of things I think about financially. I can’t take the risk and I get that a lot of other people feel their, but they might not have gone through what I’ve gone through financially.

Bianca:
So that’s one reason. The other reason is that in 2022, I can retire with full flight benefits from my airline. So if I am only a few years away from that, why would I leave now? I worked all this time, that’s the ultimate travel hack, right is to be able to fly for free anywhere in the United States, and for a fraction of the cost, anywhere in the world. So I worked this hard for it. I’m not about to leave now.

Scott:
So I love this perspective, when I pulled retirees and I said, “How many people who consider themselves FI actually have 90 or 95% or more of their … I forgot what it was, it was one of those two, more of their income, I forgot how to phrase this question a couple years ago, but only 5% of the respondents five or 10, I’m butchering this, basically, only live off the 4% rule from stocks.

Bianca:
Right.

Scott:
Almost everybody who’s FI has a backup plan, whether that’s real estate investments, a pension, Social Security, a business, whatever, almost everybody’s got stuff in excess of that 4% rule. In fact, I think it’s only Amy and Tim …

Bianca:
Rutherford.

Scott:
Rutherford that I’ve actually talked to who seriously have almost all of their assets in stocks that and they’re living off of the 4% rule basically. They’re the only people I’ve ever talked to that are solely based on that.

Bianca:
Well, and let me add of those five, or maybe 10% of people, how many might never work again, some might go back to work, right? And Tim and Amy are new to the whole FI thing, and they just moved out of their house.

Bianca:
They’ve just started traveling full-time. They might get bored with it. Who knows what’s going to happen? Hi guys, but also, I’ve been off work for seven months.

Bianca:
We talked about purpose and everything else that comes after FIRE and what do you want to do with your time? I don’t know that still. I have not figured that question out. I only had a few years to think about this before it happened and now, I’m still trying to figure out what am I going to do with my time?

Bianca:
What am I going to do with my life? I didn’t work for seven months and I just went back to work a couple weeks ago, just to do something and it’s not because I don’t enjoy sitting here and hanging out with you guys during the middle of the day because I do, but I’m also surrounded by people who don’t have all their time off.

Bianca:
A lot of my friends are still working. My family is still working. The FIRE community is great if you’re really connected to it which I am in a lot of ways, a lot of my friends are from this community, but they also have their own things that they’re doing.

Bianca:
So if I’m just here to hang out and play, that’s going to get boring real fast, and it has got boring real fast. I love to travel, I see my friends a lot, I’m creating the caboose community in Lake Geneva, I’m trying to get a lot of other people there. I want to make that community better.

Bianca:
So that’s my main project, but for seven months of the year, that’s not happening. So what do I do in those seven months? And right now, I don’t have an answer for that.

Bianca:
So that’s another great reason to not quit your job if you don’t know what passion it is burning inside of you that you want to have all the time to devote to that, don’t leave your job.

Bianca:
If you hate your job, by all means, if you have the money and you’re fired, leave your job, you will find something else, I have no doubt that if I left my job, I would find something else, but I don’t hate my job. So there’s no point in leaving.

Scott:
Yeah, and that doesn’t mean that the fact that you’re technically fine with the 4% rule … What that means is that maybe you’re not content to just say, “All right, this is going to last me forever and I’m very comfortable with that.” But you’re never going to work a job for a miserable boss or in a miserable environment again, and that’s the power that this has gotten you I think.

Bianca:
That’s the opportunity, right? That’s where I get to choose now what I do, and I will say that it also makes me a better worker. When I go to work, I’m happy, I’m not there because I have to be there. I’m there because I want to be there.

Bianca:
And I’ve been that way for a few years anyways, because I knew I was going to hit this goal pretty fast and because of the whole real estate thing, I think I have a different outlook on work now.

Bianca:
I’m very delighted to have it and I will never treat anyone poorly while I’m at work, but I think happy people breed happy people. So if you’re miserable in your job, you’re going to make everyone around you miserable.

Bianca:
If you can get out, get out, but that’s also having the opportunity to do it is by saving that money and be able to take that risk and I’m happy that I have it, I’m glad I could take a risk if everything goes to crap, great, but there’s no point in it right now for me.

Mindy:
Yeah, like I said, with the rentals and having the reserves, you won't fail by staying at your job even after five, but there are so many people who hit their number and they're like, "Oh, what do I do now? There's so many retirees who don't correct age retirees like 65 year old retirees."

Bianca:
Yeah.

Mindy:
Normal retirees, not early retirees who don’t know what they want to do and I mean, what is it you retire and then you die? Well yeah, because you’re not doing anything.

Mindy:
You’re sitting around, watching TV or whatever it is you’re doing, you have to find a passion and being … Reaching your goal is fantastic, now you don’t have to work that job that you absolutely hate, but if you don’t hate your job, don’t quit until you know that you have something that you want to do more than spend your time at work.

Bianca:
Yeah, and there’s one other facet of it for me is there is a mental mind fudge. That is very clear on that, that goes with working from the time you’re four years old until now 41 years old, never taking the time off, always doubling down if I had to.

Bianca:
There’s something about that where all of a sudden when it stops and you’re not getting a paycheck, that messes with me, and it still … I’m not used to it, it’s very strange to build up and then have to draw down.

Bianca:
I’ve never had to do that and it’s scary to me and I’ve done it a couple times in the last year that I have taken money from a savings accounts to put it into my normal account because I don’t want to take from any of my investment accounts and it scares me.

Bianca:
It scares me to see and here’s the fun part of it. My overall net worth is still going up despite me doing that, but it still scares me because I know that a lot of that is inflated because of the market.

Bianca:
So when the market actually does start to go down, and no doubt it will at some point, what is that going to feel like? So right now, my feeling is if I could still be adding to it, or at least this is my goal this year is I want to make enough money to not touch anything, any savings account or anything. That’s it, I just want to make enough money to survive which last year, my total expenses were around 24,000, 25,000.

Bianca:
So if I make 25,000 this year, I’m happy. I don’t need to save more, but I don’t want to spend anything. So that’s me trying to get over that hurdle of not making an income to where I was making it before and hopefully that will be a good gap for me.

Scott:
Yes, yes and that $25,000, are you including your rental income from that or is this wage or earnings?

Bianca:
No, so now I do weird things with my rental income as I offset what I’m paying for rent. So I pay a certain amount for rent, I get a certain amount for rent and I just kind of cross those out and then whatever is in between, I put that in this income.

Scott:
Okay.

Bianca:
Yeah, so I’m making $200 a month or something. So basically, it’s a wash. So I’m trying to do it that way just because things get weird with my spreadsheet, sometimes it’s before tax, sometimes it’s after.

Bianca:
Everyone does it differently so I don’t want to say specifics and then people like, “Well, I’m doing it different. So that doesn’t count …” who cares, but yeah, so it’s around 25,000, including rent, but being offset by my other rent.

Scott:
No, I love it. I think I’m going to do something similar in the next year or two. I’ve been house hacking now for seven years and it’s been a very successful enterprise there, but I am ready to stop house hacking [crosstalk 01:07:42]next year, I’m getting married this year, that stuff.

Bianca:
Time. It’s time.

Scott:
I think I might buy a rental property, an apartment building or something like that, somewhere else, and use the cash flow from that to pay the rent somewhere a little nicer.

Bianca:
Yeah.

Scott:
Now that I’m here and that’s some kind of concerning the same thing and I love that approach.

Bianca:
Yeah, it’s kind of fancy too, your living to your place. I don’t even want to pay for this, I’m not paying rent because someone else is paying my rent for me, but still, if I was living somewhere else, then it would be income instead so I don’t know.

Scott:
Yeah.

Bianca:
I’m offsetting right now, but yeah. So I think last year, my W-2 income was 29 or 30,000. So if I could just stick with that, then I’m golden.

Mindy:
Yeah, and that’s kind of my goal too is I don’t want to draw from my reserves. I want to take my W-2 income and make sure that I can live off of that and I was laughing so hard because Scott is the CEO of BiggerPockets and he’s house hacking.

Bianca:
That’s my favorite part.

Scott:
Yeah, I live at a dumpy duplex which is nice. I like my duplex, but it’s …

Mindy:
I’ve seen his duplex, it’s not located in the best part of town. It’s not like your first one.

Scott:
At some point, I want to move into … I’m going to try the fancy apartment for a year and I’m going to cash flow it, that’s my …

Mindy:
Oh my goodness, Scott, as soon as you move in.

Bianca:
It’s a big deal, it’s a big deal.

Mindy:
As soon as you move into that fancy apartment, the FI police are going to come get you.

Bianca:
Yeah.

Scott:
That’s all right.

Bianca:
And I’ll say that, “You know what? All the housing that I’ve lived in has been kind of in sketchy areas or has been very small.” I lived in a tiny house last year and the caboose is basically a trailer park on a line.

Bianca:
So yeah, I think about that I haven’t chose to do the fancy stuff yet. Although I’m living a very fancy house now in a very fancy area. I’m renting it though.

Bianca:
Housing being the number one expense if you can get that under control, if you can say no for a little while too fancy, then you can say yes, when you can afford it which Scott clearly can do, plus he’s got a lady, it’s time, he’s married and it’s a big deal.

Scott:
We’ll see.

Mindy:
What do you mean we’ll see?

Scott:
No, we’ll see if I can afford, if I can make it cash flow, yeah.

Bianca:
I’d say my ideas would be different. My ideas of housing would be a lot different if I was living with someone or if I had children. Obviously, I wouldn’t be living in a caboose full-time with a full family.

Bianca:
Probably, I don’t know, I’m a little strange, but everyone makes their own decisions for their own reasons and for me, I’ve been able to make all my decisions because I’ve been on my own to do them. So it’s different.

Mindy:
I’m looking forward to spending some time in a caboose with the rest of the family and see if we can … What is that? 19 square feet or something? I can’t remember how …

Bianca:
It’s three. It’s three square feet.

Mindy:
Yeah. It’s not a big …

Bianca:
It’s spacious.

Mindy:
The caboose is not big, but it’s super cool. I am very excited to hopefully buy a caboose this year.

Bianca:
Yeah, I think it’s about 200 square feet.

Mindy:
Yeah, that’s about it. Yeah. They’re not …

Bianca:
We’ve got three now, almost four so between that, we can put all you guys in your own caboose.

Mindy:
Woo-hoo. Oh, that’d be great. I know Daphne is knocking on the door. Okay, this is way off track. Oh, I didn’t mean to do that, that’s a [crosstalk 01:10:50]

Bianca:
Boom, it’s so easy. It’s so easy.

Mindy:
That’s something Scott could say. I feel so proud now. Okay, we have gone way off the bend, is that a [crosstalk 01:11:03]one? I’m not trying to be …

Bianca:
We’re out of line.

Scott:
Oh, there you go. That’s really good. Yeah.

Mindy:
I quit. I quit this whole thing. Goodbye. Okay, well, is there anything else you want to share before we go to the famous four?

Bianca:
No, not that I can think of.

Mindy:
Okay. I am going to actually call this the famous five this week because a listener named Sally suggested a new question.

Bianca:
Oh.

Mindy:
Her question is, “When looking to the future, what are your economic concerns? What keeps you up at night?”

Bianca:
Ooh, this is good. Enough, really that is still the thing is having enough. If I’m looking at my own financial economic … Yeah, my own economic concerns, but outwardly, it is that the same thing could happen again.

Bianca:
We could have a huge crash and people aren’t prepared for it and I have said this before, I didn’t want to be the poster girl for short sales, but I think that it’s important especially with the age range of people that are investing these days in real estate is if they can listen to me and hear this awful tale and take anything from it is to not leverage and to be ready, be prepared like Scott has done so well at.

Bianca:
Yeah, so I think that’s it. My main concern is to be aware that there will be a crash in some way, whether it be real estate or just the market in general and to be ready for it.

Mindy:
Yeah, like I said, you won’t fail if you have more than you need in your reserves.

Bianca:
Hopefully.

Scott:
Well, with the famous five, does this mean that we flip the question order?

Mindy:
Sure.

Bianca:
You guys are really throwing me off.

Scott:
All right.

Mindy:
No, I’m going to ask the second one. I’m going to ask this one too because …

Bianca:
Oh no, I’m starting to sweat. Go ahead.

Mindy:
Bianca, what is your favorite finance book?

Bianca:
Oh, okay. I’ve thought really long and hard about this and I’m not going to name one because now, too many of my friends and acquaintances have written books and I just … It would be awful to leave someone out, but I will say that my favorite type of book because I don’t read a lot of finance books anymore, because I think my finance is personal and the types of books I would read would be personal.

Bianca:
So and since it’s personal for everyone, then they should just figure out what works for them, but I really like to read travel logs. So I read for pleasure now and yeah, so travel logs.

Bianca:
So based on that, I would say there’s one that I really love which is called A Walk Across America with Peter Jenkins, so highly recommend and also just for fun, Stranger in the Woods was just a great great book. That’s it.

Mindy:
Oh, wait. Stranger in the Woods. I was thinking A Walk in the Woods, nevermind.

Bianca:
Oh no, that’s a great book also, but Stranger in the woods is really cool.

Mindy:
Okay.

Scott:
So, of what we talked about, what do you consider to be your biggest money mistake?

Bianca:
Not being able to see what happened. It’s so funny. My first boss in real estate, my first broker said there’s no crystal ball, there’s no crystal ball and he wanted that to be drilled into my brain and it was to some extent until it was me.

Bianca:
I was supposed to be telling my clients that that there’s no crystal ball, what will happen in the market? But I wasn’t paying attention to it myself. And what I should have seen coming, I didn’t.

Bianca:
And yeah, so the biggest mistake is not being aware of if they’re offering zero down, what’s going to happen when people don’t pay? And what’s going to be happening when the market collapses?

Bianca:
What’s going to happen to all the people who don’t have skin in the game? If they could just walk, what happens to me? So yeah, I think it’s just not being aware and also maybe definitely being over leveraged without having a big enough shovel to dig myself out.

Scott:
Oh great.

Mindy:
What is your best piece of advice for people who are just starting out?

Bianca:
If they’re just starting out paying attention to their finances, I would say to start tracking your spending. You don’t know where it’s going until you really, really, really see where it’s going.

Bianca:
And you go to Target for one thing, you end up spending $200 and God knows what and it’s funny, these days, I have started to do that. I have loosened the belt and the belt is falling off … My pants are falling down. It’s terrible.

Bianca:
So I have to start tightening up a bit on that. But yeah, really, pay attention to where you’re spending, what you’re spending on and is the intention the same? Are you getting out of it what you think you are, what you’re hoping to, what hole are you trying to fill with your spending because it’s very emotional, why we do what we do, and why we spend on what we spend on and if you can make the correlation between the two, you’re going to get there a lot faster.

Scott:
I’ve never had this problem with Target so it remains a mystery to me. Yeah.

Bianca:
Oh. I don’t go in there now because I just don’t.

Scott:
Yeah, the same. What is your favorite joke to tell at parties?

Bianca:
Okay, I knew the storm was coming, I’m a terrible joke teller. I crack jokes based on what other people are saying, but I’m not good at setting it up and delivering so I’ve written some down for you. Are you ready?

Scott:
All right, perfect.

Bianca:
They’re my favorite topic. Okay, I’ll do two. What you call a wine hangover? I’m very proud of this one.

Mindy:
Oh, I don’t know.

Scott:
A grape time. I don’t know, what?

Bianca:
You’re so close.

Mindy:
A raisin time?

Bianca:
No. Ready?

Mindy:
Yeah.

Bianca:
The grape depression. So you are right there. Okay. I’m sorry. All right, all right.

Mindy:
That was good.

Bianca:
Did you know that wine doesn’t make you fat? It’s not really a joke I guess. It makes you lean against walls, tables, chairs, and sometimes ugly people. How’s that? And that’s it and the other one is just too corny, though maybe right up your alley. Okay, fine. I’ll say it.

Mindy:
That’s Scott’s favorite.

Bianca:
Okay, what did the little grapes say when the giant stepped on it?

Mindy:
Ouch. Squish?

Scott:
I don’t know, what?

Bianca:
Nothing, he just let out a little wine.

Mindy:
Oh.

Bianca:
You had that. Come on. That was so for you.

Scott:
I was thinking it could be something related to raisins, but I couldn’t get there in time.

Bianca:
So close. So close.

Scott:
Awesome.

Mindy:
Bianca, where can people find out more about you?

Bianca:
Well, I used to write a blog in a Miss Mazuma. So I am Miss Mazuma on Twitter and Instagram and one day, I might go back to writing, but right now, there’s nothing there. So yeah, Miss Mazuma.

Mindy:
Yes, I am encouraging her to resurrect her blog because I thought it was great. So maybe if everybody tweets her @missmazuma or since … I don’t know how you do it on Instagram, I’m terrible and Instagram.

Bianca:
Yeah, I don’t know either.

Mindy:
Just send her notes that say, “Hey, bring back your blog because we miss it so much.” Okay, great. Bianca, thank you so much for your time today. I am so glad we finally got this all sorted out.

Mindy:
For those of you who are listening, stick around past the end because we’re going to have all the bloopers that came from the beginning of this.

Bianca:
We’ll be there a while.

Mindy:
I recorded the intro about 76 times before we finally got it right so you can hear a bunch of different things that will make the beginning of this make a little bit more sense.

Mindy:
Bianca, I’m just really, really glad you were able to share your story because I do see a lot of people on the BiggerPockets forums talking about investing in real estate with no money, investing in real estate with a dollar. Don’t do it. Don’t do it because you don’t want to in five years from now, tell Bianca story.

Scott:
Well, I’ll put a caveat on that. You can invest in real estate with no money down or a dollar, but have a big reserve.

Bianca:
Yes, yeah.

Mindy:
Okay. Okay, yes.

Bianca:
And I’ll say even through everything I’ve been through, I still love real estate. So that’s the problem is once you get in it, it’s really hard to leave it so you’ve got to be strong, it’s so hard to be strong when you see the perfect house and it’s just, yeah. Anyways, good luck out there guys.

Mindy:
Okay, well, talk to you soon.

Bianca:
All right, bye.

Mindy:
Okay, that was Bianca DiValerio. From Miss Mazuma. Scott, what did you think of today’s show?

Bianca:
Oh, I thought it was great. I thought this is something that a lot of people can really learn a lot from. I think her story is relatable and repeatable for a lot of folks in a lot of ways, but really, just like the lessons here, I think are so informative.

Bianca:
We always hear about people who’ve been successful with real estate, we’d rarely hear about people who have failed, especially when in retrospect, I don’t think Bianca’s decision making was particularly bad relative to what was going on in that period.

Bianca:
I think she was making relatively smart decisions in a lot of ways given the hand that she had been dealt at the time and I think that’s what really is so powerful that we can take away and learn from.

Mindy:
Yes, I completely agree. She has a really good story for what can go wrong and like I said before, I see so many people in the forums who are asking questions that just tells me they’re going to make a big mistake.

Mindy:
I am going to be sharing this episode so many times in the forums. Just, “Hey, you need to listen to this show because this is what can happen when bad things happen.”

Mindy:
And like you said, I don’t think this was necessarily Bianca’s fault. At the time, real estate could only go up, it never went down. It never went sideways, it was always just the way to go.

Mindy:
So the banks were absolutely at fault for lending her so much money on her salary. I mean, that just doesn’t make any sense. But we could rehash it forever. I really hope that people took the lessons to heart and are going to be a little bit more smart with their purchases.

Scott:
Yeah.

Mindy:
Okay Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
Okay, you heard from Sally who asked a fifth question today. Sally also gave me today’s sign off from Episode 112 of the BiggerPockets Money Podcast. He is Scott Trench and I am Mindy Jensen saying toodaloo kangaroo. Let’s hop on out of here. I’m trying to get to you Scott.

Scott:
Oh my God, this is just an average Joey pun. All right.

Mindy:
Okay, and stay tuned for all those terrible, terrible outtakes that we had. There’s like 76 times.

Scott:
Yes.

Mindy:
Okay, thanks for listening. Bye. Take two. Bianca DiValerio from Miss Mazuma. Are you doing this Miss Mazuma? Are you resurrecting it?

Bianca:
I don’t know. Eventually, who knows.

Mindy:
Okay. Then I’ll stop. No laughing. Okay, go.

Bianca:
The speaker you’re talking about or the microphone?

Scott:
The microphone.

Mindy:
The microphone.

Bianca:
Got it.

Mindy:
Oh, there we go.

Scott:
There you go. All right. Yes.

Mindy:
So much better. Should we try this one more time?

Bianca:
Why not? We’re so good at it.

Scott:
Yes.

Mindy:
Bianca DiValerio, welcome to the BiggerPockets Money Podcast. I’m so excited that you’re finally here. We have finally made this happen. I know that you’re laughing because we had a bit of SNAFU getting you on the show.

Mindy:
I’ve known you for a while and I’m very very excited to have you on the show because I really like your story and I want you to share it with people because I know that everybody else is going to love your story too.

Scott:
I thought we were mixing it up and going with exuberant this week?

Bianca:
I’m upset that you said you’re excited, delighted, exuberant, what is this? Take 522.

Mindy:
Welcome to the BiggerPockets.

Bianca:
Okay, stop drinking in the morning.

Scott:
We could have just gone with that.

Bianca:
We could have gone with that.

Scott:
Yeah.

Bianca:
We could still go with it. Just start. Go.

Mindy:
You can’t drink all day if you don’t start in the morning.

Scott:
That’s right.

Mindy:
Oh.

Bianca:
Delighted to be here Mindy. Thank you.

 

Watch the Podcast Here

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In This Episode We Cover:

  • Bianca’s journey with money
  • How she avoided having debt
  • The problem with not having a college degree
  • What happened after she became a flight attendant
  • How she got into real estate
  • Her thoughts on investment
  • The importance of having cash reserves
  • Her credit score after three short sales
  • The moment she came across the FIRE movement
  • Her experience living in a train caboose
  • Reasons to not quit your job
  • And SO much more!

Links from the Show

Books Mentioned in this Show:

Tweetable Topic:

  • “If you can’t afford to lose it, don’t do it. If you don’t have somewhere to go when it all goes to crap, don’t do it.” (Tweet This!)
  • “Go through all the seasons with your home.” (Tweet This!)

Connect with Bianca:

The BiggerPockets Money Podcast is for anyone who has money… or want to have more! Join BiggerPockets Community Manager and Podcast Director Mindy Jensen and CEO Scott Trench weekly for the BiggerP...
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    Katie Rogers from Santa Barbara, California
    Replied 7 months ago
    Uh, I saw it coming. I just didn't know when, and I was only a tenant at the time, not a string puller. You see, I understood that wages pay for mortgages, and I could see that the ratio between wages and PITI was becoming unsustainable. But here's the thing: If I could see it, then definitely lenders and agents could see it. But what did agents say in those days? "Hurry up and buy before homes become even more unaffordable." Even more unaffordable. That was the tell. So I did not buy. Here is what I did not see coming. I did not expect that 20% down could not buy a house in my community between 2008 and 2012. During those years, either the house was unlendable or hedge funds were snapping up decent houses by offering 100% cash.