She Started Investing in Her 50s, Now She’ll Retire with Rentals!

Ashley:
If you’re sitting there thinking you can’t get started in real estate because life’s too hard or you have this going on or you can’t do it, today’s story is with Beth and she’s going to provide you the motivation and inspiration to know that you can do it. At one point in time, Beth was going through divorce, had a struggling failing business, had $70,000 in IRS debt and on the verge of bankruptcy, but she made it out and she ended up getting her first real estate deal.

Tony:
And in today’s episode, Beth is giving us not only how she got out of that very precarious and difficult situation, but how she built a cashflowing real estate portfolio that includes flipping, long-term rentals, mid-term rentals and short-term rentals all in the span of a few years. So if you want the tactical guide along with the motivation, then this episode.

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

Tony:
And I’m Tony J. Robinson. And with that, let’s give me a big, warm welcome to Beth Smart. Beth, thank you so much for joining us on the podcast today.

Beth:
Thank you. Glad to be here.

Ashley:
Beth, you were a new single mom. A business had just ended up in your name and you were dealing with a federal tax lien. So the margin for mistakes was basically zero. What was the first domino that fell? What happened that turned your life from manageable to I’m in survival mode and how quickly did things spiral for you?

Beth:
Well, so first I’m going to start by saying it’s so hard to talk about my past because it was such a painful time. And that was about 20 years ago. So that’s the timeline. So I’ve come a long way in that 20 years, so I’m happy about that. But at that time I had a new business. I had a nine-month-old and I had a two-year-old, and I was realizing that I had a horrible marriage. So it was just one thing after another. I had also had a bankruptcy, and that was kind of the first flag that told me, “This is not a good marriage,” because it just was all part of that bad marriage thing. So I had a bankruptcy that I kind of went through by myself. And then I was getting letters from the IRS saying, “You need to be audited.” And my husband at the time had said, “Just ignore that.
” Well, when you ignore the IRS, they do not like that. And so I did get a tax lien.

Tony:
That’s like one of the people that you can’t ignore is the federal government, I think when they asked for-

Beth:
Yeah. Well, I know that now, so thanks. Yeah. Well, and I don’t know.

Ashley:
But you trust someone and you trust them to know what to do.

Beth:
That’s right. And I was trusting him that he was going to give a good advice because when people talk with authority and I don’t know, for me it was like I’ve learned now not to just trust anybody because they act like they know what they’re doing because that’s not always the case. That’s actually probably rarely the case. So I’m not sure if I’m answering your question, Ashley, but there was a lot of dominoes that just kind of fell over all at once. So I had a new business that I really didn’t know anything about. I had started a med spa with my husband at the time and he was working for a laser company. So that’s how we got into that industry. And then with this new little baby and a two-year-old and this new business, and then I’m like, “Oh my God, I have a terrible marriage.
I need to get out of it. ” And oh, I have a bankruptcy and oh, I have a tax lane and everything has to start over. So it was like a clean slate and that’s what happened.

Ashley:
What was the moment like when you realized that you couldn’t live like that anymore, that you had to figure something out once you found out about all this stuff going on, what were kind of the first steps that you took to make some changes?

Beth:
So the last straw was, and I’m laughing because it was like, what a stupid last straw. So we had bought a house during that whole subprime lending thing. So I knew that that was going to be a horrible thing when that seven-year note came due or whatever. And I was cleaning our three-car garage because it was just a mess. And I’m a person of order and everything has a little place. And I had spent the whole day after working at the business and raising these two little kids by myself because he was traveling. I organized the garage because I thought this is going to be nice when he comes home from traveling. And he came home and trashed the garage. And I was up that night and I saw the garage and I burst into tears and I’m like, “I can’t do this anymore.” It was just everything else.
I mean, we were in debt, we just had nothing to our names. And my husband, he wasn’t home a lot because he was traveling for this business. And that was my last straw, was the dirty garage.

Tony:
Beth, I applaud you for having the courage to recognize that you weren’t happy in the situation and kind of stepping out of it, but then that also kind of puts you, like you said, in a very unique situation where now you’re newly single, two young kids. And I guess walk us through what happens with the business. You said you started this business together, but it seems like you became the person really running it after the fact. How did that come to be? How did the business fall into your lap?

Beth:
Well, we had signed a lease in a mall and we had to be open seven days a week, which was working when he had quit his job and we were supposed to be working together, but he was not working. And so when the divorce was processed and he moved out, I had to be at the office every day, even though we didn’t have any clients, even though there was no money coming in, but we had about $15,000 in monthly expenses that I’m like, “Somehow this has to … I have to pay these bills.” And somehow people would come in and spend money and buy my laser services when I needed them too. And it was the first time that I really realized I’m going to be okay that there, even though I don’t have support and I don’t have the people around me and I don’t have a rich uncle to help me, somehow miraculously people would just come in and buy things and I’m like, I’m going to … I started to notice that I got all the junk out of my life and I was cleaning up my messes and I don’t know, the universe just started to help me.
And so it was during that, it was 2007 and 2008, which was another weird period. And people were just, they would come in and spend, they’d give me their credit card and they would charge $7,000. And I needed, how much did I need that day? I needed $7,000. And they would just come in and charge. And I’m like, “This is weird.” And then I would sometimes never see them again. So I had to handle everything from the finding a tax accountant and paying bills because I knew that paying taxes was really important. I’d learned that and I just had to pay the bills. Then I asked the leasing company with the mall if I could just be open six days a week. And they said, “It’s actually, we never do this, but it’s in your lease that you don’t have to be open seven days a week.” So that helped a lot.
Yeah,

Tony:
That’s of course. And I mean, again, I think a lot to put on one person’s shoulders, but when everything was kind of chaotic, you mentioned the federal tax lien, you mentioned bankruptcy, a lot of the options were off the table for you to try and get stable. So what did you kind of tackle first, second, third to start putting the pieces back together and rebuild your own personal financial foundation?

Beth:
I went through all our expenses for the business and I had an employee who was a … Just she advocated for me. I don’t even remember who she was, but she came in and she was helping me run the business and she called up the Yellow Pages because we had a monthly charge of like, I don’t know, $5,000 or something for Yellow Pages. And this is when back in the day people actually advertised in the Yellow Pages, but that was going out because this was all pre-Google and all that. And so she got rid of that Google or that Yellow Page ad for me. So that helped a lot. So things like that. So it was just minimizing my expenses and then just praying every day, “Okay, I need to make $3,000 today. Okay, I need to make $100 a day. I need to find a cheaper place to live that’s just as safe, that is more convenient and closer to work.” So I’m juggling a million things and it was just like, “Oh, I’ll do that one today.
I’ll do that one today.” So that was my modus apperandi, is just deal with it.

Tony:
How long after the divorce and you becoming the sole owner of the business do you feel like it took for you to get to a point where you could kind of breathe again?

Beth:
Well, I think it probably took about two years of just one day at a time, one hour at a time and making it. And okay, I have a little cushion of money in the account. I have this bill paid off, this bill’s about to be paid off. So I think it took about two years. And I remember when I felt like I was safe and I was secure and I was going to make it, and I had a friend come into the store and she’s like, “I’m going away to Estes Park. I’m in Colorado.” She said, “I’m going to go away for the weekend. Do you want to get a cabin and bring the kids and go with us?” And I thought, I looked at the numbers and I’m like, “I can afford to do that. I can afford to pay someone to be in my store.
I can afford to go rent this little cabin and enjoy myself.” But it was two years after the drama. So what would that have been, 2010? Yeah.

Ashley:
Beth, during this time, did you create any rules for yourself that maybe you’re not going to base your decisions on fear anymore or that you’re not going to worry that your kids can’t depend on you? Was there anything that kind of went through your mind that you realized from this point and this experience that you weren’t going to let that control you anymore?

Beth:
I know during that period, my rule was I wasn’t going to fail. I wasn’t going to end up homeless. I wasn’t going to end up living in my car. I wasn’t going to lose my kids. I had a fear I was going to go to jail because of this tax lien. And my biggest, biggest fear was that I knew my ex- husband wouldn’t bring my kids to visit me. So when you’re operating in that level of fear, it’s like nothing is scarier. So the rules I created where I was never going to be in that situation again, but that also I needed to learn to trust my gut that if somebody comes in and tries to sell me something and I think it’s a stupid idea, then I’m going to learn how to say no, because I didn’t really know how to say no. I didn’t know how to advocate for myself.
And so I mean, it was like basic core rules that I was creating of don’t give away your soul.

Ashley:
Beth, how much was the tax lien for?

Beth:
Well, I think I owed $10,000, but because I had ignored him the interest, I think it was $70,000, which when you’re not making any money, it could be $70 million. It was just a lot of money.

Ashley:
I mean, that could be with someone’s whole year’s salary, $70,000. Yeah. And especially when it was only 10,000 knowing that it could have been taken care of, but yet all the penalties and interest. Wow.

Beth:
Yep.

Ashley:
Next, Beth is going to walk us through the exact pivot that made real estate feel possible and the boring insurance call that later protected a $60,000 outcome. That’s coming up right after a quick word from today’s show sponsors. Okay. Welcome back. So Beth had rules, but real estate investing starts when reality tests them. So Beth, walk us through the exact moment you’ve stopped insisting on a cool market and chose a market that actually worked for you. Okay.

Beth:
So we’re going to flash forward about seven years and my medical spa is doing really well. My divorce is completely over and I have met a great man named Patrick. I’m going to refer to Patrick a lot.

Tony:
I love that this story has a happy, not even the ending, but a happy middle part. Yeah,

Ashley:
Happy transition.

Beth:
There’s a good transition and that’s what changed everything. So I’ve gotten out of the mall, they let me out of my lease, which also never happens. And then I rented office space in an office building and I could be open whenever I felt like it. And I met this man online, whatever those things are called, online program. And we were destined for each other. It was just a great fit. And he was an executive chef. So I had manifested a cook into the family. Thank you because my … I don’t know. Anyway, that was a good thing. That was a good big sign. And he ended up after a couple of years quitting his job as a chef and he came to work for me. So we were working together and we were working and that’s when, and he had a little kid and I had little kids and they were … Well, now they were seven, eight and nine by then.
And we were just having fun. And I had a family and I’ve never really had a happy family. So we enjoyed a few years of having a happy family. One of the things that Patrick had was a little cabin in the mountains, and it was a little like a double wide mobile home that the previous owners had built a deck on. And it was just in a beautiful spot with Aspen Trees. And you could see all the Rocky Mountains and all the mountains, I mean, all around. And it was just such a peaceful retreat. We spent a lot of time there. We had a blast up there. And yeah, Ashley, I forgot your question. What was your question?

Ashley:
So go into how you had started in real estate.

Beth:
Oh, thank you. That’s a great question. Oh, yeah. How interesting that we’re on that this podcast and we’re going to talk about real estate. So we didn’t realize we were in real estate at that time, but we loved this. We loved the cabin and we thought other people should enjoy it. And this is when Airbnb was just starting. And I’m like, “You know what? We probably could make some money.” I think somebody would come to this … I mean, it was very rural. It was very rustic. It had running water, a bathroom and a shower and even a laundry room. And so we put it on Airbnb and we got somebody who spent a week up there and they loved it. And I realized we just owned this free and clear, but we didn’t even have insurance on it. And I thought if we’re going to keep renting on our Airbnb, we better get basic insurance on it in case something happens.
So we got a policy, we paid one premium, and I think it was like $30 a month. There was nothing. And we paid monthly. And like I said, we went there all the time. We were there at least every other weekend. And I always wanted to … I’m sorry I have to use my hands, but I always wanted to … It was just a mobile home, but I always wanted to pop the top so that you would have an even better view of all the mountains. And we went up one weekend. It was Halloween weekend and there had been an explosion and the top had popped. So I guess our introduction into true real estate began with the bang because insurance came up three times to inspect our claim and found that we hadn’t committed any crime to fraud. And we ended up getting … I think our claim was for $60,000.
So we got the full amount.

Ashley:
I want to make sure there’s no one in this, right? It happened to be vacant.

Beth:
Yeah. Yeah. Nobody was hurt, but one of the bedrooms, the bed had melted. So something horrible had happened, but I’d made one insurance premium or payment. And I mean, I was crying. We both were just in shock that it’s like somebody popped the top and melted the windows and broke everything. And anyway, yeah, it was so sad. It was awful.

Tony:
Beth, I know that the insurance situation was obviously terrible because obviously we never want that to happen to our properties, but it also becomes this kind of moment where you really do launch into real estate investing. And I want to talk about that, but before we do, you said, “Hey, we’re going to fast forward about seven years or so. ” And you go from this very difficult situation, post-divorce, newly single, businesses struggling, to happily married, family’s there, business is doing well. How does someone separate the difficulties of a moment from their identity? Because at times someone who’s going through something difficult can start to internalize that situation as part of who they are. And the reason that I asked this is because I was just talking to an investor last week and we were having a conversation. She was almost in tears because she had this property that wasn’t performing well.
And she was like, “I just feel like I’m a failure.” And I know that there are other people out there who have gone through similar situations, whether in their personal life, their business, whatever it may be, who start to internalize these difficult situations as part of who they are and they start to question their ability to be successful at anything. How did you not fall victim to that?

Beth:
Well, I don’t know that I didn’t fall victim for that. When you’re a self-made woman or a self-made human being, I mean, when you try something, whether you do it intentionally like, “I’m going to go try doing this, ” or you just have to fall into it and make it work. When it’s not working, you do have to take a look at yourself and say, “This is not working.” And there’s something that I’m not good at. And so some people don’t do that self-analysis and go, “Okay, what can I learn? I need to learn. I need to ask somebody. I need to read a book. I need to now, today. We didn’t do this back then. Listen to a podcast or whatever.” So I think people who fall victim to, “Oh, I’m a failure,” it’s because they’re not looking to learn and they’re not looking for what else?
There’s something I don’t know. I better figure it out. So at least that’s what I did. It’s like, this is not who I want to be. I want to be a different kind of person. I want to be a success. I want to be somebody who has achieved things. And I didn’t know how to do that. I didn’t have anybody showing me how to do that when I was growing up. So it’s like, all right, I’m going to listen to the people that, the science of getting rich, the science of personal achievement, the secret. I mean, there’s what you think about, you bring about, that’s something that I learned during my whole divorce is that book movie came out the secret. It’s all about the law of attraction. I didn’t know anything about that, but it’s true. What you think about, you do

Tony:
Bring about. Yeah. Well, Beth, I appreciate that because again, I know there are a lot of folks who are listening that just don’t have the confidence to move forward. And I feel like that’s what stops a lot of people more than the technical know- how, more than the … They’ve read all the books, listened to the podcast, watched YouTube videos, but they’re just missing the confidence piece. So I think it’s always important when we can talk to someone who’s gone through the kind of peaks and valleys of life and business and can show that Sick and With it has a positive impact. But going back to the insurance story, so you guys, obviously the terrible thing happens, but then you get this big check from your insurance company. What do you guys do with that? Do you rebuild the cabin? Do you turn it into another short-term rental?
What happens next?

Beth:
Well, we did love that location, but it was really far from anything. And our kids were getting older and we thought, “This is just too far from anything, so let’s find something else. Let’s take this money.” I think we paid off a car, but we still had a bunch of money. Plus we sold the land for, I think, another 40,000. So that was like 100,000. Today, I would do it so different, but back then we’re like, let’s go find another kind of retreat center. That’s how we looked at it was a retreat. And so we found a realtor and we’re just driving around, looking on the MLS and found this house in Cripple Creek, Colorado, which is this old gambling town and found this house one block from the casinos that it was in the middle of this little town. So of course in hindsight, it’s not at all what we were looking for, but it’s exactly what we needed.
It’s this 1895 Victorian. It was painted purple and blue and it’s just so cute. It just was so cute. And so it was in December and when we went to inspect it, the water wasn’t even on and we’re like, “It doesn’t matter. We’re going to buy it. ” We just knew in our hearts that this was our house. So we took that money from our explosion, our bang, and we bought this house and we went out and furnished it with period pieces. We’d walk into a thrift store and it’s like, that’s the perfect couch, which I don’t really recommend buying account furniture from thrift stores, but it was like, that’s the perfect furniture. So I think we got it furnished within a week and we spent New Year’s Eve there.

Ashley:
Did you have to do any repairs at all?

Beth:
No, no. Well, once the water got turned on, there was a leak and we had that fixed, but that was it. Otherwise, it was perfect. It had a detected garage with a studio above and we’re like, “We can rent that out. This’ll be fun. It’ll be so much … It’ll be lovely.” And so we were there New Year’s Eve, I remember, and we were staying there and I’m like, “Wait a minute, we have a mortgage on this now. Wait, this isn’t relaxing. We have a mortgage on it, so we’re going to have to do something about this. ” And so that’s what we did with that money. We bought really, truly, our first investment property.

Ashley:
And how much did you purchase it for?

Beth:
Oh gosh, I think it was maybe 200,000. It wasn’t very much, but this was probably eight years ago. So now it’s worth more, thank goodness. But we still have it actually.

Ashley:
Oh, really? That’s awesome.

Beth:
We rented that summer. We put it on short-term rental because I was such an Airbnb expert by then with our cabin and that one tenant that we had, but we put on … And it is a block from the casinos. So that was people would come up for the weekend and they loved it and it was convenient and it was adorable and all the things that we loved about it, other people loved about it. Well, then fall came and nobody really goes to Cripple Creek for the weekend because it’s cold and snowy and it’s not that much fun. So then, okay, we got to get a tenant in here. So we found a property manager and she got it rented. It probably took a couple of months, but so we had long-term rentals in there, long-term tenants there for, I don’t know, two years. And that’s when we started really learning about real estate.
And we’re like, if we converted the garage to another unit, then we could have a duplex. So we actually now have a duplex. We converted that to a duplex. So that’s a nice cash flowing property. Yeah.

Tony:
$200,000 for three units is pretty solid. So you guys take that money, you use that to launch into your first true real estate investment, but you don’t stop there, Beth. I know you go on to start experimenting in all different types of real estate investing. So what was the next deal after this? And my mind is blown when you said 18.95. I don’t even think I’ve been inside a house that was built before.

Ashley:
Come visit me, Tony, and a lot of them.

Beth:
Right? Yeah.

Tony:
Said 1895. What came next?

Beth:
Well, we didn’t really realize we were investors. We were just getting the mortgage paid. And then COVID hit and our business, we still had our medical spa and it got shut down. And my husband had always wanted to be a real estate agent because he loves looking at real estate. He doesn’t like helping people buy real estate or sell real estate. He just likes to look at real estate. And so during COVID, he got his real estate license and I’m like, all right, I’m going to be a part of his life and help him with that. And so I found this Facebook page and this woman was teaching how to be a real estate investor. And so every night, it was a fine night program. We listened to that and we learned all of the real estate techniques, the Burr method and flipping and house hacking and wholesaling.
And our minds were blown. We’re like, “We could totally do this. ” So that’s like giving a little kid a dollar back in the day and go into the candy store. So that’s how my husband was. He’s like, “Now we’re going to go buy real estate.” So we knew Denver, which is where we’re at, the Denver metro area was too expensive. And so Pat was looking in Pueblo, Colorado, which is two hours south of Denver. And I grew up in Colorado Springs, Colorado, which Pueblo, it was like the armpit of the world. It’s just the nastiest place in the world. And so when he’s like, “Look at all these properties without Pueblo.” I’m like, “We’re not buying En Pueblo. It’s disgusting there.” And he’s like, “No, no, really, really. Look at how cheap the properties were.” And they were. I mean, at that time Denver, the average price was $600,000 just off the MLS.
And in Pueblo, it was $150,000 for the same kind of cute little house. And I’m like, “Yeah, but it’s Pueblo. So no, gross.” Well, at that time also there was this TV show on Netflix called Undercover Billionaire and Grant Cordon got sent to Pueblo of all the places in the world and he’s like, “This is the greatest town in the world.” And I’m like, “I don’t even know who Grant Cordon is, but okay, if that guy says that it’s a good place, we should go check it out. ” So again, on a New Year’s Eve, we went, that was when we do everything apparently. So we went down to Pueblo and state New Year’s Eve and we looked around this town and Pueblo, Colorado is the cutest little town in the world. It has a city park and a zoo and old little Victorian homes.
And I mean, there’s some yucky places, but there’s a lot of history. There’s a big reservoir. So I’m like, all right, let’s go buy, let’s look down here. So we ended up finding … So we found out about how to get on wholesalers lists. And so we, I’ll make this very short, we found a property and we went and walked through it. And during that time, it was so chaotic. It was like you could walk into a house, and this is what one of the realtors said that we met at the flipping house or at the house that we were looking at. He’s like, “You could have dog poop on the walls and you’re going to get three offers above asking.” And I’m like, “What?” That doesn’t even make any sense, but it was true. So we toured a house, we put a bid in and we got it.
We got this house that we were going to flip. It was below market. I didn’t understand why they were using a wholesaler because it was a great house. They should have just put it on the MLS. But I know that’s one of those mysteries in real estate, right? It’s like, why did they do it that way? I don’t know. But anyway, it was to our advantage. So yeah.

Tony:
I just want to ask because obviously you’re still in Colorado, but it is a new market for you. And you mentioned it briefly, but you said we got it on the list of a wholesaler. There are a lot of rookie investors who don’t understand how to start building those connections with wholesalers who have the keys to unlock all of the deals that tend to make a little bit more sense. So what did you actually do to get in contact with these wholesalers in a market that you didn’t actually live in?

Beth:
I think probably at that time, my husband went on Craigslist and said, “I want to buy wholesale properties.” And there were just people there where they’re like, “Hey, want to buy this below cost.” Now you can Google buy wholesale properties and they’ll find all these companies and that’s what they do. And they go out and they door knock and they get these properties under contract for below cost. That’s a whole world that I’m not interested in. I would never want to be a wholesaler. It sounds on paper like it would be fun. You just go help somebody get out of their house they’re going to lose and you help them pay off their whatever, but I just didn’t want to do that. Yeah. Right. And so anyway, so we just bought another flip just recently and I’m like, why is this property being sold to a wholesaler?
They could just sell it anyway. I’m sorry, I’m rambling. I ramble.

Ashley:
Tony, didn’t you wholesale deal for a little while?

Tony:
Yeah, we did back in 2021, I think it was. And yeah, I mean, a lot of it was us getting cussed out by home sellers saying that we were the 18th person to call them today and how did you beep this and you should beep this and all these other kind of crazy things, but we dig it if you do, which is I guess the price you have to pay.

Ashley:
Now, when you saw your $65,000 profit, what did you do next and why did you choose to roll it into two more properties instead of just taking the win and pocketing it?

Beth:
So that was how much we made from our very first flip. It took us about, I think a month, maybe six weeks, and we fixed everything, which now we don’t do that. But even then we turned around and we sold it in two days. We actually only got one offer.

Ashley:
Two days. Wow.

Beth:
Yeah. And we made a profit of, if I did the numbers right, which who knows if I did, but we made about $65,000. So what we found is that it was so much fun. And real estate in general is just fun. And it was fun taking this kind of house that just needed some love and making it, improving it and giving more life to it and then turning around and finding somebody who’s like, “This is my forever house. I love it. I want to buy Buy it. And then we made money at it. I mean, it was fun. So we took that $65,000 and instead of spending it on something that we didn’t want, we’re like, let’s keep going and let’s stay in Pueblo. And so my husband, who loves looking at real estate, found a house that was, it had it for sale sign in the front, but it was not on the MLS.
And he called up the agent and he’s like, “Yeah, that’s for sale.” Well, it’s not on the MLS. Oh, well, I don’t know. So we looked at that and the price was right. It was like $160, $70,000. It didn’t need any work. And it needed a little cleaning and some paint, but it had hardwood floors. The bathroom was fine. It had clawfoot tub in it. And we had a contractor who had helped us on our flip. And he’s like, “You should do this as a short-term rental and we’ll manage it for you. ” And so we’re like, “Okay, because it’s two hours away and we can’t do a short-term rental, but we know how much money those can make. So let’s turn this into a short-term rental.” So we bought that house in June, middle of June, and I immediately got it set up on Airbnb and we had it booked for the 4th of July.
So it took us two weeks to turn that around. And we had it booked for, I think, four straight months and made, I mean, so much money. It just was fun. It was fun because people loved it. And then I love helping people, but I also love making money. And I learned from my med spa, those two things are not mutually exclusive. You can have fun, you can help people, and you can do what you’re supposed to do. So that’s what we were doing. The other thing that we did with that $65,000 profit is actually, we bought two properties down in Pueblo. One, we turned into a short-term rental. We actually closed on both those properties on the same day, and we were going to just flip that other property, but we ended up losing our contractor because he got really burned out because we were moving at the speed of light, and he was managing these properties and having to turn them over every couple of days.
And then the one kind of challenge about Pueblo, Colorado is August is super hot. And so that’s by now we’re into August and he got burned out and he quit managing the short-term rental and he quit finishing our flip.

Tony:
I just want to say that’s the biggest fear for every real estate investor is that you build a relationship with someone and then for whatever reason, they don’t follow through. They kind of stop mid-job because now you as the investor are left to pick up the pieces. And I want to talk about that, but before we finish off the serve at the contractor, we’re going to take a quick break to your road from today’s show sponsors and we’ll come back and finish that story. All right, welcome back. We are here with Beth and she just broke the news that her contractor kind of burned out in the middle of not one, but multiple jobs. So I guess Beth, maybe describe the moment that the relationship kind of broke, I guess, what went wrong, what did it put at risk and what did you do in those first 24 to 48 hours to try and keep things moving along?

Beth:
I remember where Pat and I were both standing, we were supposed to go to dinner with our contractor and his wife, and we had made plans to go to this little Mexican restaurant and they called and said, “Oh, we can’t go. We have to go do something else.” And we knew what that meant. We knew that they were quitting because of other things that had happened. And we both just looked at each other and said, “What just happened and what does this mean? Because they’re doing this and they’re doing this and they’re doing this. And oh my God, what are we going to do? ” And so sure enough, they’re like, “We’re not doing this anymore and give us our money that you owe us and here’s the keys and good luck.” So we went on Craigslist, my husband’s really good at that and he found another person to finish this house, finish the house that we were flipping.
And we shut down, I think we probably had a couple more short-term rental appointments or bookings that we finished. And I found a cleaning lady who would go in and she moved those around for a couple months, but it was just too much work. So I’m like, let’s turn that house into a medium-term rental. And to answer your question, Tony, sorry, you have to deal with it and it’s like all hands on deck and what are we going to do? And you have to focus on solving the problems. So okay, we got to finish the house. All right, find somebody to finish the house. We got to find somebody to clean the house because we can’t do it and turn it over because we have bookings. You just have to find somebody. And when you have that laser focus on finding what it is you need, because it’s not like it’s life and death, but it kind of is because it’s your business.
It’s like the universe really does conspire to help you and you find those people show up. And so the contractor that we found to finish the flip, he did a really good job, but he moved at the speed of a sloth. He was so slow. So it should have taken about a month. It took him like three months. And so it was done in November. Well, then it’s too late to try to sell it. It’s in Colorado at least. You just can’t sell anything in that fourth quarter. So we ended up turning that property. We put that on the market to … No, what did we do? We turned that into a long-term rental, which wasn’t the goal. That wasn’t what we were going to do with that money. I wanted that cash so we could buy another flip, but we turned it into a long-term rental.
We actually still have that property and we’re on just our second tenant in, what is it, four years. So that turned out, it turned out okay. The house that we had is a short-term rental, we turned that into a midterm rental, and that went really well for a couple of years also. And that was nice money and pretty easy money. And that cleaning lady that I had found, she would go in after the month or however long that contract was, she would go in and turn that over. And then we just had a couple of bad experiences and I’m like, “Let’s just turn this into a long-term rental.” So we still have that property also, and that’s been a very nice investment for us. It’s still booked. So yeah.

Ashley:
Beth, after having to learn how to pivot and change strategies, what are maybe some things you implement now when you’re managing a project or a rental that you wish you would’ve done before?

Beth:
So the way we funded a lot of these projects was through my medical spa. So we don’t have that medical spa anymore. I sold that and now my husband and I both have W2 jobs. Why? I don’t know, but we do. And so what I wish I could- for lending, but you get loans. Yeah, exactly. And it is, it’s nice to have insurance and whatever. But I wish that I had been wiser with the budget and the money and really everything I’ve learned on BiggerPockets about how to analyze a deal. We would analyze a deal by going in and going, “What a cute house. Oh, we could paint it this way. And then if we do this. ” And we didn’t really run numbers like we’ve learned how to do now. And we’ve had to learn how to run the numbers because we just don’t have that.
I mean, my med spa was a cash cow. So if I needed money, we’d make some. That’s one thing I learned is like, “Oh, we need some money? Well, let’s make some. ” And that’s what I’m loving about real estate and why we decided to get back into flipping because I like making some money and flipping is a really fun way to make some money and I get to help people, I get to be creative. My husband gets to find things. He loves to find things and then we have a nice little payoff. So what I would do different is look at the budget and be a little bit smarter, which now that’s what I’m learning how to do.

Tony:
Beth, one follow-up question on the transition back to W2, because I think for a lot of folks that are listening, the goal is to get to, “Hey, I’ve got my own thing going and that’s kind of sustaining me, ” but you’ve ventured back into the stability that comes along with that. What was the decision-making process that you followed to say, “Hey, we’re going to put the MedSpa up for sale versus continuing to run that alongside the flipping and the other rentals that you own.”

Beth:
When we were shut down for COVID and we got to have a life and try other things, when then we had to go back to work for a couple of years, we realized how burned out we were. And it was one of those decisions that we kind of just made within a couple of days. It’s like, let’s put the business up for sale. And so we found a business broker and they had said, “Well, we’re going to take about nine months to sell your business.” And we’re like, “All right, that’s perfect because then we can make some more money and save some money and maybe even pay off one of these properties.” It sold in an hour. So we closed within a month. So it went from nine months of, I have a lot to do and nine months to, I have a lot to do in four weeks.
And so it was a miracle and we got out of there and yeah. So then we realized, okay, we still don’t have quite enough money and now we’re kind of bored. And that really was. We were kind of bored because we couldn’t do too much because we didn’t have that money that we were making. So we’re like, let’s go get jobs. So I started working for the post office. I thought that would be a fun job. I can get paid to exercise by walking. I can be outside and I could be by myself. I just needed my own, I needed to be away from having to wheel and deal and make sales like I had to do with the med spa. And then six months later, my husband started with the post office too. So we’re both mail carriers. If you work for the post office for five years when you started our age, we’re both in our 60s.
If we work five years, we get a pension. It’s not a big pension, but it’s cashflow for the rest of my life is how I look at it. And we also get to keep all our insurance. So I think that’s a win-win-win. So yeah, we have a job that’s going to give us cashflow.

Ashley:
I mean, that feels like a good retirement strategy.

Tony:
I love the concept of how you described it. If I am by myself, I don’t have to talk to anybody throughout there.

Beth:
Well, honestly, Tony, I’d never listened to podcasts. I’d never, nothing until I got this job because now I am by myself all day. I’ve got my headset on and that’s when I really discovered was BiggerPockets. I’ve been with the post office three years now, so I get paid to learn and I get paid to exercise. So yeah.

Ashley:
Well, Beth, thank you so much for joining us today. I really enjoyed this conversation. I still think it’s incredible that you made the $65,000 off one flip in a short period of time, and that was almost the same amount as that IRS debt you had. And I can imagine that took way longer than the flip did to actually pay that off. But congratulations on all your success. And thank you so much for sharing your journey and also the lessons you learned and what you would do differently too. So Beth, where can people reach out to you and find out more information?

Beth:
I’m not on social media, so my email is [email protected]. Who am I? [email protected].

Ashley:
Well, Bob, thank you so much. We really enjoyed having you on today.

Beth:
Thank you very much.

Ashley:
I’m Ashley, it’s Tony, and we’ll see you guys on the next episode of Real Estate to Ricky.