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The Vice-Principal Who Built a 9-Unit Rental Portfolio on The Weekends

Real Estate Rookie Podcast
43 min read
The Vice-Principal Who Built a 9-Unit Rental Portfolio on The Weekends

Who says you can’t have it all? The career, the love, the wealth—it can all be yours if you want it and work for it. Today’s guest, Mackenzie Grate, works hard so she can have it all. Working full-time as an assistant middle school principal, Mackenzie spends her nights and weekends as a real estate investor and agent. She owns two single-family homes, a fourplex, a duplex, a short-term rental, and her primary residence. 

Mackenzie’s real estate investing journey started in 2017. While living in her apartment, she rented out her extra room and decided to buy a home once rent prices became a little too high to handle. From there, she started looking for her first deal by googling the three fastest-growing job markets in New York. She then chose the market she wanted to invest in, asked a friend to go upstate with her, and started driving for dollars. She put in an offer on the first house she saw and closed on the home. But was she doing it alone?

There is a common misconception that when you invest with a significant other, they have to be involved to be on board. Mackenzie’s relationship with her husband proves that involvement doesn’t equate to support. He supports what she’s doing, but he isn’t an active part of her investing journey, and for them, that works. He shows support by doing other everyday tasks at home, giving Mackenzie more time to work and pursue real estate. This freed-up time is essential for Mackenzie as she juggles all her endeavors and earns her nickname, the “Mack of All Trades.”

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Ashley:
This is Real Estate Rookie episode 227.

Mackenzie:
I was living in apartment, a two bedroom apartment for many years in East Williamsburg. And although I didn’t own the apartment, I guess I was kind of house hacking in a sense that me and my husband, boyfriend at the time, would live in one room and we would rent out the other room. We were there for a very long time. And there just came a point where I was like, “We’ve got to buy. This is just crazy. The prices are going up.” So we ended up buying a co-op in Brooklyn, and that was a game changer. I was like, “Oh man, it’s possible for us to buy?” And then after that, that’s when I really got the bug. Then I was like, “Okay, I’m ready to buy more.” And of course, New York City, I was like, “I better look elsewhere in order to start this sooner rather than later.” And that kind of kicked off the journey.

Ashley:
My name is Ashley Kehr and I am here with my co-host, Tony Robinson.

Tony:
Welcome to the Real Estate Rookie Podcast, where every week, twice a week, we give you the inspiration, information and stories you need to hear to kickstart your investing journey. And I want to start today’s episode by shouting out one of our rookie audience members, Sarah Price. Sarah left a podcast review for us on Apple, and she says, “Absolutely amazing. I highly recommend listening to this podcast for some inspiration and to hear valuable tips on how to get started in real estate investing.” And Sarah, that’s why we do it because we want to inspire people, we want to help people get started. So if you are an avid listener, if you’re a part of the Rookie community and you haven’t loved us to review yet, ask yourself what are you doing with your life because the more reviews we get, the more people we can find. The more people that find us, the more people we can help, and that is our goal. So Ashley Kehr, I know you got your mom in there with you today. Seems like it’s a different kind of podcast and day.

Ashley:
Yeah. So my mom’s actually sitting at my kitchen counter now patiently or unpatiently waiting, she said, for us to finish. So yeah, I have my mom live in the studio today. How exciting. So I guess I have to give a shout out to my mom, right? Isn’t that what you do with your…

Tony:
There you go. Well, once you’ve made it you got to give a shout out to your mom. She was the first one. But I’m excited for today’s episode. We’ve got MacKenzie Grate on the podcast. MacKenzie, first, she’s just like a ball of energy. I love her enthusiasm for real estate investing. But she’s also a hustler. She’s got a full-time job as an assistant principal. She’s an agent on the nights in the weekends. She’s also a real estate investor who’s done, I think, multiple different strategies in the world of real estate investing already. So love, love, love her approach in her story.

Ashley:
She kind of goes through these rules and touches on accountability, like trusting yourself, property management, all these things that she kind of defines for us as to what has really helped her become the investor that she is today and how she got started. And then she also touches on what it looks like at home with her spouse, how they’ve built their business, and what roles they each play in that business and in their household too. So I think that’s really nice to touch on sometimes.I think some people struggle with that is to what’s okay, what’s not okay, how to get your spouse on board, what if they’re not on board, what if they don’t have your sport, things like that. So I think listen to this episode and they might help you find some clarity on that.

Tony:
Yeah, she also does a really good job about halfway through talking about how she broke through the fear that she had about getting started. I think we have just a really in depth conversation around how to get over that. So if you’re struggling from analysis paralysis right now, this is a great, great episode for you in how to get started.

Ashley:
And also, we had some technical difficulties during this episode, so we are actually finishing the recording at another date. So for you guys watching on YouTube, it’s going to be workout flawlessly for Tony because he is always in the same spot and he always has the same black T-shirt, but me, I find a different place to record every single week [inaudible 00:03:59] that I probably will not even remember what I was wearing today to wear it again when this has finished recording. So yeah, if you notice that change on YouTube, that is why. Just some technical difficulties. But we get to talk MacKenzie again, so that’s the great part about it.

Tony:
Actually, no, that’s not what you’re supposed to say. You’re like a celebrity. And celebrities always have to do an outfit change halfway through whatever’s happened. And so that’s what it is.

Ashley:
From now on, for all the intros, I’m going to make you and our producer patiently wait while I change outfits. Going to touch up on my makeup.

Tony:
Well, MacKenzie, welcome to the Real Estate Rookie Podcast. We are so excited to have you. Before we get into the nitty gritty of the real estate investing side, just tell us a little bit about who you are.

Mackenzie:
Thank you for having me. I’m MacKenzie Grate. I live in Brooklyn, New York. I invest upstate. During the week I’m an assistant principal at a middle school here in East New York. And then nights and weekends, I am a real estate agent/investor.

Tony:
Wow, so you’re just a little busy, huh?

Mackenzie:
Just a smidge.

Tony:
Yeah. So assistant principal, real estate investor. And then you said you’re an agent as well?

Mackenzie:
Yep. I also sell real estate. That started during the pandemic.

Tony:
Got it. So give us a backstory, MacKenzie. How does an assistant principal get caught up in the world of real estate investing?

Mackenzie:
Yeah, well, I mean, it’s a well known secret that we don’t get paid a lot. We do it for the love of the job, not necessarily the paycheck. So I always grew up with a single dad, he did a lot of construction and whatnot, so I was always interested in buying real estate. And then once I moved to New York City and got started in education, I realized that dream was going to be a little bit harder to attain if I didn’t figure out something on the side to push me towards that. So doing research and whatnot, I looked into real estate and it just seemed like a perfect fit. So I started to invest myself. And then like many people during the pandemic, I did a whole bunch of research and really reexamined my life and decided I also wanted to sell real estate. Since then it’s just really snowballed.

Ashley:
Did you get your license first before you bought your first investment or you invested first and then decided to get your license?

Mackenzie:
I invested first in a town that I had never been to.

Tony:
Been there.

Mackenzie:
Yes.

Ashley:
Well that’s really cool. But with the licensing side, just real quick, because this is something rookies always ask is, “Should I get my license? Does it benefit you as an investor?” So can you kind of talk about the pros and cons of that real quick?

Mackenzie:
Absolutely. There’s benefits and there’s definitely drawbacks. Different states have different rules, but in New York City you have to be very careful if you’re a realtor, especially going after off market deals because there is a theft of equity law. So I have to fully disclose that I’m a realtor when I’m purchasing any sort of property. So in that sense, it’s a little bit of a hindrance sometimes in finding off market deals. But I will say this, it’s definitely helped grow my network. It’s taught me a lot about houses and what to look for. It’s really just helped keep me in the game, so to speak. So I would recommend it if it’s something that you’re passionate about, yeah, go for it.

Tony:
Yeah, we had David Greene on the podcast not too long ago. His recommendation to folks was, don’t get your real estate license just because you want to be a real estate investor. Only get your real estate license if you also feel that you have a passion for helping people buy and sell real estate, because the skill sets, even though they’re both in the world of real estate investing, that the skill sets to be a super successful agent are definitely very different than the skill sets needed to become a very successful real estate investor. But for some folks, definitely those two worlds combine and mesh really well.

Mackenzie:
Yeah. And for me, the idea was just that it would help accelerate that cash, I have to invest. So that was part of it. I was like, “Man, if I could do this on the side…” Which I realized too, it’s very hard to do it part time. It really is all encompassing, but it definitely helped speed up my acquisition in terms of my portfolio.

Tony:
So on that note, MacKenzie, if you wouldn’t mind, just share with us what your portfolio looks like today. How many units do you have and how long have you been investing?

Mackenzie:
Absolutely. So I started in 2017 up in Kingston. I have two single family homes there, a fourplex, a duplex, and then an Airbnb that I just added this year. And then I own my primary here in Brooklyn.

Ashley:
So with your primary, when you purchased that, did you have any idea of real estate investing or was it just an emotional purchase, “I need this house”? Or was there some kind of strategy in purchasing that property?

Mackenzie:
Yeah, I mean, I definitely… I was living in apartment, a two bedroom apartment for many years in East Williamsburg. And although I didn’t own the apartment, I guess I was kind of house hacking in a sense that me and my husband, boyfriend at the time, would live in one room and we would rent out the other room. We were there for a very long time. There just came a point where I was like, “We’ve got to buy. This is just crazy, the prices are going up.” So we ended up buying a co-op in Brooklyn, and that was a game changer. I was like, ‘Oh man, it’s possible for us to buy?” And then after that, that’s when I really got the bug. Then I was like, “Okay, I’m ready to buy more.” And of course New York City, I was like, “I better look elsewhere in order to start this sooner rather than later.” And that kind of kicked off the journey.

Tony:
MacKenzie, you said that you bought a co-op in Brooklyn. I’m not familiar. Every time I talked to my friends from New York, Ashley taught me about Wells and winterizing your HVAC unit, whatever the heck that means. So what is a co-op? I’ve never heard that phrase before.

Mackenzie:
So they’re usually I would say in big cities, but essentially I own a share of the building. I don’t own my actual unit. Of course I can still do all of the things that I want like fixing up the unit. You just have to run it by a board. So essentially there’s a board that oversees all of the decisions. There tends to be rules and maintenance fees. Some people like that, some people don’t. I personally like it because it definitely helps maintain the value of my property and there’s someone else who’s getting out there doing the snow blowing and taking out the trash and all of that stuff. But yeah, it’s just a way to live in a community that’s similar to condos except you don’t own the physical space, you own a share in the building essentially.

Ashley:
What is the benefit of that? So when you want to move out of your unit, are you selling your share then of the property? Or how does that work?

Mackenzie:
Yeah, your shares are linked to your specific unit. So it’s essentially the same thing. You’re selling your unit. Whoever is buying those shares is going to be moving into your unit. I think the benefit of it is that it requires a lot less maintenance because you don’t have to do that. Also, it really protects your property value because the board is looking out for the best interest of the overall building. So for example, and looking back, you always rethink certain decisions, but I can’t sublet out my apartment. Part of that is because they don’t want a lot of turnover. They want people who are buying into the buildings, sticking around a long time have that pride of ownership. So they put certain rules in place in order to protect the overall investment of the building. And they also on your behalf negotiate good deals. So for example, Spectrum. Our whole building has a special agreement with them so it’s super cheap, but they’re able to do that because there’s like 500 units in the building.

Tony:
All right. So a couple questions here. Sorry, my head’s spinning. This is something new to me, which doesn’t happen often on this podcast. So with this co-op, and you mentioned the board, who elects those board members? And are they also residents of that building?

Mackenzie:
Yes. We all do. Actually, in my building they take it very seriously. When I tell you they take it seriously, they hire a company to come in and make sure the votes are correct. We’ve got one of those old fashioned voting machines where you pull down the lever, but it’s legit, yeah. Anyone in the building can get nominated and run and then you give a speech and there’s like an election period every single November. I don’t know the exact number, I think there’s maybe nine total. It’s three year terms. Every year, three more people come up for election. Anyone in the building can look in on the meetings. We’ve been doing it on Zoom lately. In theory, you can have a say if you want, but it definitely also… I appreciate the people on the board because it tends to be older folks who are retired who have the time, who are really excited about it.
Our building specifically, they do more than just take care of the place. They also throw parties. We have a Christmas party every year, usually happens in January, so you get to know everyone. We have dog events because a lot of people in the building have dogs.

Tony:
So it’s almost like an HOA, but on I guess kind of a different setup. So last question, the co-op, from an appraisal standpoint is your unit appraised the same way a non co-op unit would be appraised or is there a different process related to that as well?

Mackenzie:
It’s the same process, but I would say they would use a co-op unit to do the appraisals. So a condo would not be a comp that they would pool for that. The reason for that being is just condos tend to appreciate quicker in value, I would say at least here in New York City. Maybe it’s different elsewhere. But yeah, so they’re going to pull similar stuff from other co-ops in the area.

Ashley:
How did having your first primary unit kind of set the tone or the pace for you jumping into real estate? Did it play a role at all as to all of a sudden you have a ton of appreciation or equity in your property?

Mackenzie:
Yeah. So for me it helped me get over analysis paralysis, which I know many people suffer from. I myself was a sufferer. As soon as I bought this place, we were very nervous because we had lived so dirt cheap, sharing this room in an apartment that had never gone up in rent and we’re like, “Can we afford this? I don’t know.” We’re running the numbers over and over. So finally when we moved in and we realized not only could we afford it, but we had a lot of extra money that we would continue to save, that’s when it kind of hit me, I was like, “Dude, I waited way too long to do this. Imagine if I had done this before where I could be now.” So once we realized that, it was less than a year until I bought my first rental upstate. I was dead serious at that point, I was like, “Okay, all this extra money that we have now, because we still are living well below our means, that’s going directly toward our savings account so that we can buy our first property.”

Ashley:
Okay. So you had mentioned earlier that you bought a property in a town you’ve never been to. Was this your first investment property then?

Mackenzie:
Yep.

Ashley:
Okay. So how did you find the town and what made you decide on that market?

Mackenzie:
Yeah, so I googled the three fastest growing job markets in New York State at the time. Two of them were near you, Ashley, and I was like, “That’s just too far for me to travel.” The third one was Kingston, New York. That’s only 90 miles north of the city, so I literally called up my friend with a car because I didn’t have a car at the time and I said, “Hey, you want to drive me upstate and I’ll treat you to lunch and we’ll shop for houses?” And he’s always game, he was like, “Absolutely, let’s do it.” So we drove up there. I love the realtor that helped us. She’s still a good friend to this day. She took me seriously. It was one of those things where I came with my numbers, I had a short list of properties I wanted to look at and she was just like, “Let’s do it.” Sure enough I put an offer on that first one and I have never looked back. I was able to get it. It was awesome.

Ashley:
MacKenzie, I love your energy on this. And I hope everybody listening to this is just getting pumped up to grab a friend and go driving for dollars looking for properties after listening to this. So then tell us more about getting that first deal of just how did you get comfortable with, “Okay, I live this far away.” I feel like there’s that fear sometimes. And even me, I’ve only invested besides in Seattle, around my area and my market. How did you get comfortable that you couldn’t physically be at the property every single day? And not that you need to, but it still sits in the back of your mind getting comfortable with investing out of state or out of your market.

Mackenzie:
Yeah, I mean I always knew I would need a property manager just even with my day job, there’s no way I could be addressing stuff in the middle of the day. So that was part of the numbers always. That was part of the plan always. So that’s what made me feel comfortable. Granted my first property manager, I did end up parting ways after a couple of years because I learned some hard lessons about that. But for me it was just if you get a property manager, ultimately they’re responsible for taking care of it and I could still go about and do whatever else I needed to do.

Tony:
Just to clarify one thing, and I want to make sure we don’t gloss over this. So it was the purchase of your initial primary residence, that co-op, that took away the fear that you had that was associated with buying real estate. Once you got over that initial fear, that’s when you felt confident enough to move forward with buying that investment property. Am I recapping that the right way?

Mackenzie:
Yeah, I think before I bought that primary, I didn’t think it was possible. You know what I mean? So once I bought that first one, I was like, “Wait a minute, I just went through this process.” If I can buy one from me, I can certainly buy another one and rent it out and then just kind of keep that ball rolling.

Tony:
So it makes me think of Dave Ramsey, right? Regardless of what… I know, a lot of real estate investors feel different ways about Dave Ramsey and what he preaches, but I think part of what’s made him so successful are these baby steps that he has to financial freedom. And it’s like anyone can… Even if they can’t, I guess, believe that it’s possible to become a millionaire or have generational wealth, what they can believe is, “Can I pay down this one credit card?” And because he’s built this framework around these baby steps, I think that’s why some you have bought into what he’s preaching. And it’s like what you did, MacKenzie, it’s the same thing. Like you said, “I want to be a real estate investor, but that idea seems a little bit too scary or impossible at the moment, but maybe what’s a smaller step I can take that is possible.” And for you it’s like, “Okay, let’s go buy this co-op. Let’s go buy this house for us to live in.”
Once you take that first baby step, you’re like, “That actually wasn’t nearly as bad as we thought it was going to be. Now let’s take that next step.” So I think it’s such an instructional lesson for people that are listening that, yeah, maybe the idea of being a big real estate mogul doesn’t seem possible right now, but what is the next step that is possible? Is it meeting that agent? Is it getting pre-approved? Is it walking that property? Whatever that next step is that you are comfortable with, identify that and use that to catapult you forward.

Mackenzie:
Absolutely.

Ashley:
MacKenzie, I want to talk about your husband with this. Were you married already when you went and purchased this property or did you purchase this before you were married?

Mackenzie:
Yes, both of them we were married at that point. We actually got married and we still had a roommate at our other apartment. But yeah, no, we bought this primary together. And then once we bought our first investment property, I kind of told him that we were going to do it. Luckily I have a super supportive husband. He definitely asked questions and was nervous, but I went up there and I came home that night and I said, “Hey hon, we’re going to buy an investment property.”

Ashley:
And he just said okay?

Mackenzie:
He said okay. He was definitely nervous. I am definitely more the person who’s going to go out there and take a risk. He asked a lot of questions about the numbers, where it was at, but ultimately I was able to show him. And this was another step that helped me overcome analysis paralysis, is worst case scenario in this situation if they didn’t pay a dime, whoever our tenants were, we would be able to cover the rent. So I showed him that and I was like, “Okay, that would be really bad. That hopefully won’t happen. But if so, then I guess we’ll pay the rent while they’re not paying.”

Ashley:
So how active is his role now? I mean is he active in deal analysis or handling tenants or anything like that?

Mackenzie:
No, he’s not really involved at all. It’s just not his thing. Of the two of us, I’m more of the handier person. I was raised by a single dad. He does the laundry and the cooking and the pug watching. But yeah, it’s mostly me who does the investment and I kind of let him know when we’re going to buy something or when I’m thinking about buying it, I always run it by him. But most of the time he doesn’t even see the property until the day we close and he’s up there to sign the papers.

Ashley:
That’s very similar to my situation. We have separate things. He has the farm, I have my real estate investing. It’s at the point now where it’s like, “Oh, we have new tractors. Oh you went and bought new tractors? I bought a house last week too.” It’s not even a comparison anymore, you don’t have to tell. It’s just like we’re running our own businesses and it’s not affecting the family money. As long as it’s not affecting the kids or anything like that, it doesn’t matter. We’re operating our businesses. And I think sometimes it can get like, this real estate investing is risking so much that you need to discuss every single thing with your spouse. And this will definitely vary upon relationship, but if you looked at somebody that owns, say a construction company or whatever, and their company goes out and buys a new bulldozer or whatever, that’s part of their operations and that’s going to make them more money because they have this bulldozer now to be more efficient.
Are those business owners, are they going and asking their spouse like, “Is it okay if I spend that money to do this?” And I would say a lot of the time the answer is probably no. At least businesses I’ve been involved in where it’s a business, it’s like this is a business expense, this isn’t a family matter and maybe it should be, it shouldn’t, I don’t know, but I think that you have the support and that your spouse trusts you to make those decisions, is they don’t have to be involved.
I remember talking to an investor before. He was really struggling, like, “I just try to get my wife involved, I tried to get her to do the bookkeeping or do something or maybe communicate with the tenants. She just doesn’t want to do with it.” That is okay. That’s fine. You can hire somebody to do that. As much as it would be nice to get that free labor from your wife, you don’t need to have her involved. It’s the support and just the trust that you are going to make good decisions. And if there’s bad decisions made too, that they’re going to stand behind you and say, “Okay, how can I help you so that we can remediate this? We can fix this.”

Mackenzie:
Totally. That whole accountability piece I think is one of the things that I had to learn along the way is, if I’m convincing my husband to jump into something that he’s not comfortable with or this isn’t his thing, he doesn’t enjoy like I do, then I have to be in a place where I’m ready to take full accountability for all of the decisions and work through the problems. Because problems will arise. And that doesn’t mean that he doesn’t want to help, but at the same time I need to figure it out in order to grow as an entrepreneur myself.

Tony:
Yeah. MacKenzie, you mentioned the word accountability and I want to go back to that, but before I do, just to piggyback on what you were saying, Ashley, about the spouse piece, it’s like so many rookies who are listening, they, I think, mix up the terms on board with involved. And so many real estate investors want their spouses on board. That doesn’t necessarily mean they have to be involved. If you have that trust between you and your spouse, that’s them being on board, right? If they’re saying, “Hey, I trust you to make the right decisions, I trust you to go out and buy that right property,” that’s them being on board. Them being involved would say, “Hey, let’s analyze this deal together,” or “Hey, you go find the deals and I’ll go manage them.” And there’s different levels, right?
So you can have the spouse that is like against real estate investing that doesn’t want to do it at all. You can have the spouse that says, “I’m okay with doing it, I just don’t really care for it, but you go do it on your own.” And then the third level would be like, “Hey, let’s do this together.’ So for the rookies that are listening, understand which one of those dynamics fits your situation. Don’t try and force your spouse into it if they’re giving you their blessing, but they just don’t want to be your partner.

Ashley:
And MacKenzie too, you mentioned that your husband does the cooking, the cleaning, he takes care of the pups. That’s a huge benefit. That’s so nice that you have that. You don’t have to worry about that and you can focus on the real estate investing too. So I think there’s a lot of different things your spouse or partner can be doing for you that is actually helping you because you don’t have to take time away from real estate investing to do those things. And for the people who just tuned out for the last five, 10 minutes when we were talking about having a spouse or partner, if you are single, think about where your goals are and find somebody who has a skill set that can help you with whatever your real estate dreams are. So you want to build a house from ground up, date a contractor.

Tony:
But Ash, I think even if you don’t have a spouse, I think the idea of the supply in a partnerships is just as true. It’s like say that you have a money partner and it’s like what does that dynamic look like. The last thing I want to mention on the spouse piece or just the trust piece is that I agree with you Ashley about you gave the example of you and Dave with him with the farm and with the real estate business. But I think that level of you do your thing increases as the business scales, right? So if you think about Amazon, Jeff Bezos, when he bought Whole Foods, do you think he went to his wife at the time and said, “Hey honey, I’m thinking about buying Whole Foods. What do you…” No, absolutely not, right? Jeff Bezos is running Amazon. But when Jeff Bezos left his job and he told his wife, “Hey, I want to take our savings and fund this little online bookstore. Are you okay with that?” I’m sure there was a very in-depth discussion they had at that point.
So I think for a lot of folks that are just starting, if you’re taking maybe your life savings and you’re putting it into real estate, there does have to be that probably really deep discussion about what you guys want as a family. But as a business scales, and we’ve seen the same thing on our side as well, is that’s when that trust starts to grow a little bit more and you have that higher level of autonomy.

Ashley:
Yeah, that’s a great point because you’ll get to the point hopefully we’re not using any of your family money. You’re just taking cash flow from the properties you already have and then rolling that into something or doing creative financing and no money down deals too.

Mackenzie:
My favorite moment with my husband this year was after I finished the Airbnb, he turns to me and he is like, “This is up and running really well. I think we should do more of them.” Because he literally was just like, “This is…” He saw the fun side of it, the getting to stay upstate in the cottage and bringing the pugs. I was like, “Hey, if that makes him happy and that makes him on board, I am all about that because I don’t want it to be something where it adds stress to our relationship.” If this is what makes me happy, I almost look at, yes it’s a business but it’s also more my hobby and my passion. And that’s just not his hobby or his passion, so that’s separate. I’m fine with that. I would love a Chip and Joanna situation, but hey, every relationship is different, you know?

Ashley:
There’s business partners for that.

Mackenzie:
Yep, 100%.

Ashley:
Just look at my Instagram, it’s all littered with my business partner just because that’s the content, whatever. We’re putting the reels out of that because we do that together. So that’s why you can always find a business partner to do those cute Chip and Joanna Gaines videos.
So MacKenzie, at home you probably guys discuss your real estate investing I’m sure, because it’s so hard as a real estate investor to not talk about it. But for myself even, I would’ve been investing for maybe two years before I even found BiggerPockets and then I found this community and I was like, “Oh my gosh, there’s like-minded people out there.” Who are you using for accountability and how are you meeting like-minded individuals?

Mackenzie:
Yeah, I mean in the beginning it was the same thing. It was mostly books that I started off with. Then I found the podcasts and other podcasts. But now it’s friends that I have at the meetup. A lot of my clients are buying investment properties. So we definitely work closely together to get them up and running it. I have personal friends who are also entrepreneurs in different senses. They don’t all invest in real estate, but we tend to talk regularly about what are our goals and what do we want to accomplish this quarter and that sort of stuff. Some of it’s formal meetings, others are just informal text. You send each other a win. Or when you’re stressed out, “Hey, I’m about to make a really big decision. Can I just talk to you for five minutes? I just need some reassurance here.” And you’re clear about what it is. So yeah, it’s all different places you can find it for sure.

Ashley:
That’s like me and Tony in between podcast recordings where we have some time, it’s like, “Okay, let’s get into a therapy session here. We need to talk about what’s going on in our real estate investing. How can we help each other?”

Mackenzie:
Totally.

Ashley:
Okay. So you mentioned a little bit about your Airbnb property and your husband’s like, “Let’s do more of these.” So tell us about that property. Because I love when Tony starts to perk up and get excited about listening so and talk about short-term rentals.

Mackenzie:
Absolutely. Well, I actually never planned on doing a short-term rental. I got to be honest. What was happening was I would go upstate and do my long-term rentals. Each one I would buy and fix up and I would literally carry my air mattress and that’s where I would crash. So as I’m doing the project, I’d fix it up. And then after a while it just got so exhausting moving from place to place so I decided, “You know what? Maybe I should do an Airbnb because then I’ll be able to use it when I’m up there.”
But of course now hindsight 2020, the best time to rent it out is on the weekends. And usually I’m up there on the weekends. So now I have the challenge, the good challenge of it being so successful that I’m like, “All right. Now it’s always rented out. Back to finding the next one.’ But yeah, no, I decided to do that because it just seemed like the next step. I found a property that fit the criteria purely by accident, stumbled across it, and so I was like, “Let’s go ahead and try this out. Let’s do it.” I’ve read enough about it, I’ve learned enough about. It’s going to be more work for sure, but I know that there’s enough tools out there that can really reduce how much I have to manage it directly myself. So I decided to take the jump.

Tony:
Now you talked already Mackenzie that you’ve got a busy schedule, right? You’ve got the real estate agent work, you’ve got your day job of being the assistant principal. And you said when you started the long term rental piece, that you knew you had to get a property manager in place. Are you doing the same thing for the short term rental or how are you managing that property?

Mackenzie:
Yeah. So this is crazy and totally counterintuitive, but actually with the short term rental, although it involves more management, I am doing that myself, because the more I realize now, once you get it set up with all of the automations and whatnot, it really reduces the amount of managing that you do have to do. The other thing is upstate, and I don’t know if it’s like this all over the country, but to have a short term rental property manager, it is significantly more expensive than a long term rental property manager. The one thing that I’ve heard over and over is a lot of people get frustrated when that big storm hits, right? Suddenly every short term rental needs someone out there immediately because the electricity’s out or you got to get it plowed. And then they’re like, “Oh my manager’s backed up because they’re going to every other short term rental.”
So for me I was like, “If I’m going to put any sort of money into having a short term rental manager, I’d need them to be 100% on board.” And that’s asking a lot when you really look at it, if that ever were to come to fruition.

Ashley:
MacKenzie, I have to ask this because I’ve talked to Tony about this, even more Sarah about this. I have one Airbnb unit now, but I’m remodeling several, I’m going to have quite a few. What is your system or what are the softwares that you’re using to keep this so automated?

Mackenzie:
So this links back to also finding your perfect match elsewhere. I have a client who bought in Airbnb himself. I designed his and he helps me with the tech on mine. So he got me all set up on Guesty and PriceLabs and all of it. So it’s completely automated turnover Airbnb where it sends the email directly to my cleaner so she can book it. So all of that he has 100% taken control over and just set it up for me so that it’s pretty up and running. But those were the three main ones we’re using right now. And he’s always… What is it? Beta testing or whatever, trying out new ones and then calling me up and being like, “Hey MacKenzie, I’m going to switch this over because I found out this about this.” And I’m like. “Perfect, you just show me how to use it and we’re good.”

Ashley:
What is the one thing that you wish that you could automate with your short term rental business that you have yet been able to?

Mackenzie:
Oh, that’s a good question.

Ashley:
Tony, do you have an answer for that one?

Tony:
I mean, yeah, so many actually maintenance requests. We’re actually trialing some more software right now to try and automate that a little bit more. Right now our cleaner will either reach out to us or our handyman, but we have no good process of tracking all the open maintenance requests across our portfolio. So that’s been a challenge for us. And honestly, if we could find some way to automate the setup a little bit more, that would help a ton. But I don’t know how you automate building furniture, so that’s a bit of a challenge. But I say a big sticking point right now is the maintenance request piece.

Mackenzie:
Yeah, I guess I only have one, so it’s not a ton and I’m up there a lot in between. But I guess when you were talking, I was thinking about the cleaning supplies. Usually I just stock up, stock up, stock up. But sometimes there’s a situation where the one thing that I didn’t think to check for has run low. So some sort of system and I’m sure there is on Amazon. I’m going to look into this afterwards of automatic queue where it sends it out every three months no matter what.

Tony:
So what we’ve done in our business MacKenzie, and we’re still trying to refine this process, but essentially we have a minimum inventory level for each consumable that we have. And say it’s like, I don’t know, the hand soap. And so we always want to have five jugs at the hand soap. Once we get below two, we’ll order five more. That’ll get us back up. So it’s know what that repoint level is for each inventory item. That way you never run out. But anyway, hopefully that’s helpful.

Mackenzie:
Definitely.

Ashley:
Tony, have you looked into just using regular long term property management software and just using the maintenance feature on it, like Rent Ready? I mean it’s super cheap to use them. There’s other free things too where you just put in your units in that and it’s just used for the maintenance request and you can add in your vendors and then the handyman. Or the cleaner, the cleaner, whoever would go in and submit the maintenance request in there and then you can set it up so it’s emailed directly to a vendor depending on what the issue is, but you can track it all in there and see all the different tasks in the move in. And then whoever the handyman is that does it can market complete.

Tony:
I’ve actually never thought about doing that, but we just met with another company last Friday. They have a very similar system it sounds like, but built specifically for Airbnbs. But it’s definitely not free, or super inexpensive. So maybe I’ll have to check that out. That’s a good idea.

Ashley:
Yeah, because I mean if you have to get another app anyways, you might as well use one of the super cheap property management company ones.

Tony:
Totally. That’s not a bad idea.

Ashley:
Because I feel like it would fit whatever you need to do. The thing is that it’s just another app you need, but if you have to do that anyway, we’ll this other one.

Tony:
We got to do it anyway. Yeah, that’s a good point, Ash. I appreciate that.

Ashley:
Yeah. Okay, so MacKenzie, you’ve done short-term rental, long-term rental. Any other kind of strategies we haven’t heard about yet?

Mackenzie:
Well, I’m getting ready to do my first flip.

Ashley:
Awesome.

Mackenzie:
Yeah, I’m excited. I actually have always been a buy and hold type of gal, but my broker does a lot of flips and she wants to partner on one. So we are currently actively looking for that. When an opportunity like that comes up, you take it. She’s awesome at it and I know I’ll learn a lot so I’m going to do

Tony:
MacKenzie, one of the things that we talk about a lot on the show is having your buy box. I was pretty specific on that when I started in my long term rental investing journey. And even in the short term rental side, within each market we have certain kind of properties that we look for. But you’ve bounced around a little bit. You did the long term rental, the short term rental, so now you’ve got the flip. Each one of those probably has a different property that fits that mold. So do you believe in the whole buy box strategy? Or I guess what’s been your approach and how you handle that?

Mackenzie:
Yeah, I mean I definitely did early on, and I think that helps overcome analysis paralysis. If you’re someone who double, triple things through everything, then get that checklist going. My first two properties were single family homes. I had a very strict criteria. In fact, they ended up being two blocks away from each other just because it was that strict of a criteria. And then when the fourplex came along, it was in the area, but it wasn’t a single family and I was like, “I don’t know if I should be doing this. I’ve read about it but it doesn’t meet what I really was looking at.” My accountability partner, my friend Ann was like, “Just do it. It’s clearly a good deal. You’re talking about it. You won’t stop talking about it. So just go ahead and do it. It’ll work itself out.” And I was like, “Okay, I’m doing it. This is the biggest one yet.”
And of course it ended up working out. There were definitely new challenges that presented. Actually as I was fixing up one of the units in there, a duplex came on sale a couple blocks over. My other colleague, I had reached out, I was like, “Hey, that duplex joking around, do you want to buy it splitsies?” And she laughed. The next day she called me back and she’s like, “Yes, yes I do.” And I was like, “Okay, so I guess it looks like now I’m going to buy a duplex.”
So it started off very rigid with the buy box, but as I’ve moved along, I’ve definitely, at least for me, recognized that I have to let go of some of the control in terms of those checklists because the market is changing, because certain deals come by. I don’t want to be in a position where I’m waiting so much for that one specific type of deal that I let others opportunities pass that I could learn from. I’ve read a lot. I’ve spoken to a lot of investors. I have a lot of resources now. So if it is venturing into a new area, I think I’ll be able to figure it out. So it’s worth it at this point in my career to just keep making steps rather than waiting for something specific to come along.

Ashley:
So what you’re saying is kind of trust what you know and follow your intuition. What do you think about that? Is it all sticking and staying on the same path or it’s like it’s okay to vary in that sense?

Mackenzie:
Yeah, I think it’s trusting in yourself that you’re going to be able to figure it out and that you’re going to be able to solve the problem. I think the more that you just dive in any way, shape or form, it helps you to develop that sort of gut feeling of like, “All right, this is a pretty good deal. Here’s some things that could go wrong. Something’s probably going to come out of nowhere that I have no idea about, but I’ve made it through some other storms, I’ll figure it out.” Or if I don’t, I now have at least a network where I can be calling certain people who deal with certain things or I’ve heard them deal with certain things and say, “Hey, how do I deal with this? I don’t know about a septic tank. This is my first property with one. What do I do? It seems like it needs some attention. Help. Who do I call?” So just trusting in yourself that you have the capability to figure it out, or at least find the people who can help you figure it out.

Ashley:
So in this case, would that be your property management company asking them about that, like septic issues, things like that?

Mackenzie:
Definitely they are a great resource. I would say my broker, she’s done a lot of that and she’s usually the first person I call or text. I also have neighbors now in the area who they all have septic tanks too. So I’ll walk over to John’s house and be like… Actually there was a situation with the bear and I did. I literally went over to John’s after I saw that and I was like, “How do we get rid of that bear?” He’s like, “For starters, don’t throw food out.” I was like, “Okay. Noted.”

Ashley:
Was that your first bear incident?

Mackenzie:
It was. It definitely was. It was one of those where my husband had thrown out a can of soup. By the way, this was winter, early, when bears should be hibernating. I see him on the camera, a bear saw him through threw the next morning and I’m like, “Oh my gosh.” I showed it to him and he is like, “Yeah, I might have thrown out some soup back there.”

Ashley:
Tony, I think you’ve had a similar thing happen at one of your Airbnbs, right? I saw it on your Instagram

Tony:
We’ve had quite a few bear encounters at our cabins out there. They’re curious bears looking for some meal. We actually had a bear that almost tried to get into one of our guest’s car. They didn’t want to leave the property because the guests was like clawing to get in. We’ve all had those experiences. Better than a beaver though.

Ashley:
Yeah, actually we haven’t seen a beaver in so long at the property that we think they left because Daryl would keep digging up their dam. They haven’t come back. So I don’t know. We were hoping that it worked but it was like it could have been a cartoon. Every day Daryl go there and be so mad because they damned it back up with mud and sticks. He have to get a shovel. His shovel would break because [inaudible 00:42:18]. It was really funny. Actually, I probably should put a collage of the videos together that I’ve taken of them being so frustrated. But yeah, we haven’t seen them in a while so we’re hoping they’re moved to somewhere else.
Okay. So you guys heard us talk about in the intro as to we are having a couple technical difficulties and I just wanted a reason for an outfit change because I still have no idea what I was wearing when we originally recorded this, so I can’t think back a couple days. So we left off talking about the bear story, Daryl with the beavers. So now MacKenzie, let’s talk a little bit more about that bear incident. And if that happened when you had a guest at the property, since you’re self managing that, how would you have handled this situation like that? Or maybe you had a circumstance or something like that happened.

Mackenzie:
Yeah. Actually I would say probably a couple months later there was a bear on the property and I had this lovely British couple who were staying there. They texted me a photo of the bear. At first I was like, “Oh, I’m so sorry, just please make sure you’re inside. Please don’t leave any food out.” And they’re like, “Oh no darling, it was magical.” And I was like, “Oh thank goodness.” So pretty much what I do now is I updated the book, made it very much more bold, “Make sure you keep food inside” and just kind of warn them. Especially right now there’s a drought upstate, so a lot of the bears are coming down to the lower lands looking for food and water. So I also send a quick reminder, text this people who are checking in regards to the different things they need to do according to the drought, and definitely watching out for the bears is one of them. Not that there’s a ton, but you know.

Ashley:
My mom, we used to go… My dad used to take us up to Canada when we were younger and we’d go camping and stuff and they used to have the big garbage dumps where people would take their garbage and dump it into these huge dumpsters. Well, at dusk the bears would come and they would pick out of the dumpsters. So people would come and drive their car there. Its like you’re at the drive-in movies and sit and watch all the bears do this. Well my mom had this T-bird top Camaro and the bear bit the side of it and there was a bite mark in it. And to this day my dad never let her get it fixed. She had to keep it in there because he thought it was so cool.
Okay, well enough about bears. MacKenzie, I’m going to take us to our Rookie request line. This is where anyone listening can give us a call at 1-888-5-ROOKIE, and leave us a voicemail. Tony and I may choose it to play on the show as a question for our guests. So MacKenzie, are you ready for today’s question?

Mackenzie:
I am.

Ashley:
Okay. Today’s question is from Giselle. “I am calling from Brooklyn, New York. I’m a registered nurse that is interested in building my real estate portfolio. So I have been looking at homes in Connecticut as well as in Baltimore because you know those are areas that I can get to. And my question is, I work as a registered nurse and my plan is to try to work part-time as much as possible while I continue to develop my portfolio. What exactly you do you guys do for health insurance? Do you just do private, pay it out of your pocket? Is there something specific for real estate investors or entrepreneurs? I would love to hear answers to this question.”

Mackenzie:
Yeah, so that actually resonates deeply. So I work in the public school system and I’m getting ready to leave. This is my last year. That has been one of the main things that has held me back, that fear of not having health insurance. I mean, my husband got a new job that has better insurance, so full disclosure, I’m going to jump on his insurance after this, but I have a lot of friends who have already left their jobs. A couple things they do. I have one friend who works very part-time at Starbucks just to get the health insurance. And then I also have some friends who just buy it privately through Obamacare or whatnot and they just go through the different packages. A lot of them will do the high deductible programs, that way it’s cheaper each month if they’re fairly healthy. But I guess if you don’t have really good health, then you probably want to look for a part-time job or some sort of company that will provide it and help you out along the way. So you can work a few hours there but still maintain that.

Tony:
Yeah, that’s a great point, MacKenzie. I think one other option is if you’re leaving your full-time job, I don’t know if this is a federal thing or maybe it’s just California but there’s something called COBRA. COBRA allows you to continue your employers health insurers for I think up to 18 months. It is pretty stupid expensive, at least it was from you and I left my job, but that’s an option for folks. And what we do, what me and my wife do since we’re both self-employed, is we use Covered California, which is California’s version of Obamacare. So we’re able to get it through the marketplace. And like you said, we have a relatively high deductible, but that helps us keep our monthly costs down.

Ashley:
Yeah, that COBRA I’m pretty sure is nationwide because that’s offered in New York state too. Usually when you’re on a health insurance plan for a company is they pay a portion of that and that’s part of your benefit. So when you do take that option when you leave the job, you’re now responsible for your employee portion plus the employer’s portion. So I still work the very bare minimum for another investor basically to pay my health insurance. I get I think maybe $12 direct deposited into my bank account every week and the rest of it goes to pay my health insurance for my family. So I mean, definitely I think what I would recommend is if you have your W-2, stay with it for the health insurance or figure out ways that you can reduce it because it is so expensive to go out on your own.
But if you really are decided you don’t want anything to do with your job, you don’t want to pay COBRA through it, you don’t even like the health insurance plan, I would go to the FIRE community. So Financial Independence, Retire Early. Go into that community search, that hashtag, #personalfinance, anything like that on Instagram or Google, different podcasts. They are always talking about health insurance because these are people who are retiring early and they can’t get Medicare or Medicaid. I never remember which one is for people that are retired that are senior citizens. So I would recommend looking into those kind of groups and seeing what people are getting because there are co-ops where you join a co-op basically and you pay into it and it’s like a pool of money so everybody pays into it.
It may depend on what your health history is, but if one person has a medical event, they draw from that pool of money to pay for that person. So you may never use it, you may use it just like any insurance really. So those are different things that you guys can look at if you are in need of health insurance or trying to figure out what to do if you do leave your job.

Mackenzie:
I would also say talk to your CPA. So my CPA specializes in real estate investors. Sometimes it helps to just sit down and talk through the numbers with her. There’s the HSA and different programs where you can set aside money. So just talk to one of them and kind of see what their other clients are doing or if they have any suggestions that maybe you can use as well.

Tony:
Just as a quick note, there is an entire BiggerPockets money episode on this topic and it’s episode 279. So if you’re looking for a deeper discussion around this, episode 279 of the Money podcast.

Ashley:
Okay. So MacKenzie, we now have our Rookie exam for you. The first question is, what is one actionable thing rookie should do after listening to this episode?

Mackenzie:
I would say set down your specific goal, right? It doesn’t have to be big. If you’re really wanting to start out, put pen to paper and put it into writing. I’m an educator, so we’re all about smart goals where there’s an actual time frame and it’s very specific and measurable. So I would just start with that. It doesn’t have to be a perfect goal. That goal may change over time, but just getting pen to paper and setting a deadline for yourself.

Tony:
That’s awesome. All right. So next question is, what’s one tool, software app or system that you use in your business?

Mackenzie:
I’m using Guesty right now to help manage my Airbnb, and that is extremely helpful. I think I mentioned earlier about how it’s kind of counterintuitive that I’m self managing my Airbnb, which takes more work than my long term rentals. But one of the reasons why I’m able to do it is because Guesty is super automated. It sends out a text as soon as they book. It sends out a text to my cleaner. It puts it on my calendar. So it’s pretty awesome.

Tony:
I was the same way. We had several long term rentals that we use property managers for all of them, but we’ve self managed literally every single one of our Airbnbs as well. So who knows why? I don’t know why. I think it’s because it was so expensive to get a short term rental property manager that I was like, “I’m not paying someone 40% to do this. I’m going to figure this out myself.”

Mackenzie:
Totally. And I mean, what I’ve heard at least South State is as soon as that big storm hits, they’re nowhere to be found because they have too many Airbnbs. And that’s really when you need someone there. So I’m like, “All right. Let’s just not plan on that.”

Ashley:
Okay. And the last question is, where do you plan on being in five years?

Mackenzie:
Ooh, well definitely retired from the DOE. Sorry. I plan to have, of course, more investment properties. I also want to do more interior designing. So I have a lot of clients now who I’m helping them get their Airbnbs up and running and they’re asking me to design it and kind of train them and coach them through the process. So I hope to be doing a lot more of that in the near future.

Tony:
Awesome. Well, I want to take us over to our last segment, which is the Rookie Rockstar. So again, if you guys want to get highlight as the Rockstar, post in the Real Estate Rookie Facebook group and the BiggerPockets forums. You can slide them out of Ashley’s DMs. We’re always looking for good stories.
Today’s Rookie Rockstar is Nidia Intuda, and hopefully I said your last name the right way, Nidia. So Nidia says, “I couldn’t wait to be able to post this. I close on my first rental property, which is two units in Florida, and I represent myself as a realtor. Thanks so much to this group for the inspiration and the tips.” And the group she’s talking about is the Real Estate Rookie Facebook group. She says, “I’ve inherited tenants and I’m open to keeping the one in the smaller unit that the former owner says is a good tenant. They’ve been there for a couple of years with no rent increases and paying medium rents. They just did the binder, but they’re looking for ways to respond.” So anyway, congratulations to you on getting those first two units in Florida. It’s an amazing accomplishment and we’re excited to see where you go from

Ashley:
There. And also thank you for sharing your win with us too. I think it gives us motivation and everybody else that reads it and sees it that this is possible to do. So thank you to everyone else who does post the Real Estate Rookie Facebook group. And if you haven’t joined yet, make sure you check it out at Real Estate Rookie on Facebook. You can also subscribe to us on YouTube at Real Estate Rookie.
Well, MacKenzie, thank you so much for joining us for this episode. And thank you for joining us twice so we could complete the episode. Despite the technical difficulties, we won’t say who’s fault though it was Tony.

Mackenzie:
[inaudible 00:53:31].

Ashley:
We blame everything on Tony here.

Mackenzie:
Gotcha. Oh, yes, Tony, come on.

Ashley:
MacKenzie, could you let everyone know where they can find out some more information about you and possibly reach out to you?

Mackenzie:
Absolutely. I would say I’m most active on Instagram, @macofalltradesNY. I also have a website/blog, macofalltradesny.com.

Ashley:
Well, thank you so much for joining us. Everybody I hope you enjoyed this episode. I’m Ashley, @wealthfromrentals, and he’s Tony, @TonyJRobinson. We will be back with another episode on Saturday.

Watch the Podcast Here

In This Episode We Cover

  • The pros and cons of getting your real estate license and how to determine whether becoming an agent is for you
  • The benefits of owning a co-op and what it means to “own a share” of a building
  • How to find and capitalize on emerging markets that have strong rental demand
  • Investing with a spouse and how to find the right balance for your relationship
  • Property management vs. self-management and how to weigh the pros and cons for both
  • Managing a short-term rental and automating your processes to become the ultimate host
  • And So Much More!

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