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Meet the Investors: Switching to Rentals After 15 Years of Flips With Cindy Veit

Alexander Felice
5 min read
Meet the Investors: Switching to Rentals After 15 Years of Flips With Cindy Veit

I’m going to tell you a story about why it’s so, so, so important to invest in people on the BiggerPockets Forums. You never know what those relationships with people you don’t know can turn into.

Meet my friend Cindy. We have been talking on the internet for five years, but we’d never met. And it’s just incredible that you can meet somebody digitally and you just have no idea what it can turn into later. Learn about a great project Cindy has underway, and hear her great story. I’m not going to make you wait any longer.

Let’s meet Cindy.

The Investor

Hi, my name is Cindy Veit. I’m from Cary, North Carolina. I’m married, I have two kids, and I started real estate investing about 15 years ago.

Back when I started real estate investing, BiggerPockets wasn’t around. I would go to my local REIA meeting, and it was through my REIA meeting that I found out about BiggerPockets. So that was probably seven to 10 years ago.

And I spent a lot of time on BiggerPockets meeting people. I actually met Alex there, trying to find out who in Fayetteville were the players.

The Property

I bought this house in Raeford, North Carolina. It’s a cute little house. It’s a three-bedroom, one-and-a-half bath. I have been doing a lot of fixing and flipping lately. This house kind of looked at me and said, “Maybe it should be a rental.”

I have done a lot of flipping, and I know what it takes to make a retail property sell. I need to figure out and get a good balance of what it takes to make a rental property rentable. I’m still confused on how much I should fix up a rental property.

For example, in the property in the video above, I’m keeping the kitchen cabinets. We’re going to paint them, we’re going to freshen up the place, and we should get a great tenant in here.

I’ve been investing in real estate for 15 years, but I am still learning. There’s so much of a difference between a fix and a flip and a rental property. And I’m still learning along the way.

I tend to make my rentals look like my flips, but I have to look at cash flow and see what really makes sense. Will I get the same tenant in here whether or not I do brush nickel knobs versus if I keep the old brass ones?

Related: Meet the Investors: From 1 to 37 Rental Units in Under 2 Years

Some of the things aren’t so exciting. We put a new central heating and air system in. This house was built in the ’70s and it actually had ceiling heat. So I had an electrician come in, disconnect all the ceiling heat, and the HVAC system has been replaced. I chose to replace it because it was from 1994, so I didn’t want to put a tenant in and be worried about the HVAC system going bad.

Down the hallway, it has three bedrooms and one-and-a-half baths. There’s a bedroom, a full bath with a stand-up shower. Then there’s another bedroom, then the master bath with a half-bath that is pretty disgusting.

When you send out marketing material and you say, “We buy ugly houses…” This is ugly and this is what we end up buying, but it works.

I do have to say that every time I close on a property, I do still get these little jitters like, “Oh, did I buy ‘good enough’? Is it going to work?” And it does work out in the end. I should have confidence in myself, because I’ve bought a lot of houses.

This one is ugly, but it doesn’t take that much to make a really nice bathroom.

What I liked about the house is it has really good bones. It had a solid roof, it’s got vinyl siding, it had vinyl windows. I knew I was putting in the new HVAC system. I know that because I bought it low, it doesn’t really matter what my exit is going to be—I’ll be profitable either way.

Small house exterior. View of entrance porch with stairs and walkway

The Numbers

As long as the bones are good, you can make any house into something much better.

I bought it for $31,126, which is cheap. I think it can rent for $850.

For rehab, I’m looking at about $21,000. The biggest cost is the HVAC system and the additional electrical work that I needed to get. I also got some pine trees taken down, so that is a large portion of the rehab expense.

Trees are not cheap. I spent $2,000 to get four trees taken down in the front yard. I got a great deal on the trees.

Right now with COVID-19, getting loans is a lot more difficult. I’ve got the advantage that I have a lot of equity lines that I have access to and so I might keep the property on a line of credit right now until things settle down with COVID-19.

If I hold it for 12 months, then the bank that I normally work with can do a great loan for me and I can bundle some rentals together and just do a big commercial loan.

Related: Meet the Investors: BRRRR-ing 3 Deals in 6 Months With Dan Weidman

A lot of beginners are always trying to find out how to pay for houses. In the beginning, when we first got into real estate, we had a house, we had no kids, and we had an attic. And my husband actually finished off the third floor of the house, and then we got an equity line on the house. The equity line was $153,000 on the house.

I turned that equity line $4 million worth, between buying and selling, buying and selling with the $153,000 equity line. It took about 15 years.

But it’s a testament to how everybody starts with different resources. There’s a tendency when you’re new to think, “well, I just don’t have that.” But they don’t think about it. Everybody has to build it themselves.

And that’s what we did, we did the attic. We didn’t have a reason to have the attic space, but we knew it would add equity to the house. And then we finished it and then we got the equity line. The sole purpose of getting the equity line was to have money available for cash to buy houses.


The Advice

For my new investors, what I would recommend is study as much as possible, but don’t be afraid to do it. You’ve got to learn from your mistakes. And I learn all the time with every property that I buy. There’s a learning curve with everything.

This is the first house that I bought that had radiant heat in the ceiling. I’ve never bought a house with radiant heat. I learned that it costs $50 dollars per circuit to get taken out, but my numbers were good enough, so it will still work. But with every property, I learn.

As a real estate investor, I’m surrounded by a team that helps me and helps get the project done. It didn’t happen overnight. There were a lot of mistakes that happened along the way. A lot of bad contractors. And again, you can’t learn from your mistakes unless you’re making the mistakes.

I have spent a lot of money on gurus and BiggerPockets wasn’t around when I first started doing real estate. I had to go to seminars, spend thousands of dollars, and now I just listen to the most recent BiggerPockets Podcasts. So I’m educating myself on Airbnbs, on different types of rental properties, and it’s just a great source of information—and it’s free. So why not do that rather than go spend all that money on a guru?

Real estate has changed my life and I’m so excited I got into it and got out of the corporate rat race. It gave me the flexibility to do what I want when I want. It allowed me to be home with my children and watch them grow.

But still, for me, I got to advance my career when I wanted and as I wanted to. And now it’s giving me the financial freedom to do what we want, when we want.

And what’s great is my kids are seeing the value that we have gotten out of real estate, the freedom that we’ve gotten out of real estate, and how you can still have a very successful career and not work 24/7 and love what you do.

And when you love what you do, it really isn’t work.

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Have you bought any ugly houses? How did you transform them?

Tell us your story in the comments.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.