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Rookie Podcast 34: School Teacher Making $72,000 a Year in Cashflow with Amy Barber

Rookie Podcast 34: School Teacher Making $72,000 a Year in Cashflow with Amy Barber

39 min read
Real Estate Rookie Podcast

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What do you get when you combine Dave Ramsey-style frugality with aggressive deal-finding tactics? You get teacher Amy Barber and her fiancé, Jay – and their $6,000 monthly cashflow in rural Iowa.

In this episode, Amy shares her strategies for buying foreclosed ranch houses in cash, cleaning them up, then refinancing so she can repeat the process again and again.

Think no one’s doing deals during the pandemic? Well, she’s bought 4 houses in the past 4 months, and plans to keep going until she’s making enough to comfortably leave her W-2 job.

If you’re looking for guidance on how to build the financial foundation so you can invest in real estate from a position of strength, Amy’s story will fire you up and get you ready to take that most important next step toward “getting rich slowly” just like her.

By the way, Amy came to our attention through the Real Estate Rookie Facebook group. If you find other awesome investors who would make a great fit for the show, tag us or send them to biggerpockets.com/guest so they can apply.

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Ashley:
This is Real Estate Rookie Show, number 34.

Amy:
There’s a lot to learn in the area of real estate, but it’s not impossible to start early or to start late because we’re in our 40s, and some people would say, “Oh, that’s too late to start,” but I don’t think so. It’s never too late to start.

Ashley:
I am Ashley Kehr, and this is my co-host, Felipe Mejia. I just got back from my eight day rural tour, Alabama with Felipe. We got to hung out with other investors. Then I went to Houston and met a turnkey provider surveying company. Then I went to Seattle for the PNW Bad Ass Wealth Expo, and that was great. I got to speak on that virtually, all the speakers were there. We went to a hoarder house, found so many great treasures, and it was shocking because I’m over here buying $20,000 houses, and this was a hoarder house that needed like 200,000 in rehab that was purchased for $900,000. Crazy to me, but it was really cool to see and got to meet a lot of people and see some old friends from other conferences, so that was great.

Felipe:
Yeah. I think a lot of people are missing the BiggerPockets conference that should have happened this year.

Ashley:
I know.

Felipe:
But I’m excited about it next year, but I know a lot of people were really excited about that. But that is not what we’re here to talk about today. Today, we’re here to talk about Amy Barbara, who is an amazing investor. She’s got a great niche. I’m not even going to give it out, but she talks about how she finds great deals and how she was able to acquire such a massive portfolio by creating, even systems that she doesn’t have down perfect yet, but does have some type of system. What I really like about her is that she does have a vision and a goal for her real estate investing. She’s not investing all willy-nilly. She has a reason as to why she’s investing in real estate, and she talks about, she’s not afraid to get her hands dirty. Really good episode today.

Ashley:
Yeah, the thing I loved is she talks about sacrifices and delayed gratification, how they’ve missed out on a ton of stuff the past 18 months while they’re growing their portfolio, and they’re already up to $6,000 in cashflow.

Felipe:
Awesome.

Ashley:
Hi Amy, thank you so much for joining us today. Why don’t you tell everyone a little bit about yourself and how you got started in real estate?

Amy:
Awesome. Okay. Well, I live in Iowa, and in 2010, I lived in Des Moines, the capital of Iowa, and decided to relocate my family to a small town, about two hours Northwest. I tried to sell my house. It was the end of the recession, and it was on the market for like six months and it was time to move, and I was stressed out. My realtor said, “Why don’t you just rent it out?” And I was like, “I don’t want to do that. I don’t want to rent my house out.” My mortgage was like $1,300 a month. It’s $250,000 house. I envisioned everything that could happen, go wrong with it, would, and he’s like, “Well, look, it could be on the market for another year.
You’re going to pay this mortgage, or you could rent it. I have a renter for you.” I was like, “Well, what would rent be?” He’s like, “Well, 1750 a month.” I was like, “Really? Someone’s going to pay that much for rent. That seems absurd, but okay.” I agreed to it begrudgingly and went ahead and rented it out anyway. I quickly learned, wow, this is pretty lucrative cashflow. It was paying my mortgage. It was a newer house at the time, so it didn’t really need a lot of repairs or anything like that. I literally was making upwards of $400 a month cash flow doing nothing.

Ashley:
That’s awesome.

Amy:
I know. I know. I stumbled upon real estate. I was married at the time, and my husband did not … He’s the one actually that didn’t want to rent it more than me. He kept saying, “We got to get this house back in the market. It’s such a liability. We’ve got to get it back on the market. It’s such a liability.” And I’m like, “I don’t think so. We’re making $450,450 a month and not doing anything. Why don’t we just keep it?” And he’s like, “No, no, no. It’s a liability. I’m worried, I’m stressed.” We didn’t really agree on it, but it was from that moment that I thought, in the back of my mind, this is going to be a secondary source of income for me someday. I’ve always had two jobs. I learned hard work when I was young, and I thought, this is the easiest job I’ve ever had. Of course, everything went well. I had the same renter for seven years that paid 1750 a month.

Ashley:
Wow.

Amy:
I know. I know. A great guy, ran Trader Joe’s, single guy. It was awesome. It was really awesome. Yeah.

Felipe:
That’s really interesting because I think a lot of times people maybe don’t have the best experience with renters at the beginning, and then sometimes that let’s people, or allows them or wants not to rent going forward.

Amy:
Absolutely what I envisioned. I envisioned a train wreck happening. Because you hear stories. That’s what you hear. So, you’re right.

Felipe:
Looking forward now, and then we’ll kind of get into the meat and potatoes, but what is your 30,000 foot view of your portfolio now? What does it look like? Where are you at? And then we’ll kind of dig into one.

Amy:
I’ll just give the quick version fast forward. I literally tried for seven years to get my husband on board to buy her some rentals. We live in a small town, and one came up, a three bedroom house came up for $16,000, and I was like, we have to buy this. We had the cash at the time, and he’s like, “Nope, not doing it, not doing it.” We had some marital issues anyway, but I ended up getting divorced, and after my divorce, I met a guy named Jay who does home foreclosures for a living, and he was a total real estate junkie. Like, he knew a lot about real estate, and I just really enjoyed talking to him. For that whole seven years, I didn’t have any other properties. Jay didn’t have any either that he owned, but he worked on the property preservation side of things and he was actually recently divorced too and was getting ready to purchase some.
We kind of had agreed to go into business together. We, of course, started dating too in that timeframe. That was only 2019, so that’s why I say I’m still a rookie, even though I had my first rental in 2010, this was just year and a half ago that this all went down. Jay bought his first property in 2019. He bought his son a house in a college town, Lincoln, Nebraska, and rents out two of the rooms to two buddies. Then we bought two other houses … He bought two other houses later in 2019. I say we, because we have them all together now, but in the last four months, we’ve bought four properties. We have, let’s see, I have it written down, I better look. [inaudible 00:06:47].

Ashley:
You know what? I think that’s a good thing. You can’t remember how many, because you’re …

Amy:
I know. Literally, guys, it’s been a whirlwind. It’s [crosstalk 00:06:54].

Ashley:
Yeah, to get four.

Amy:
And we’re blessed because we have access to see foreclosures, and know what, and Jay’s very handy. He knows what’s wrong with them. He knows if the rehab is going to be atrocious or not. So, we have a little bit of an inside advantage, but it’s been incredible the last year. So, our cash flow is over $6,000 a month right now, and it’s really just coming together in a year and a half, other than my first property.

Ashley:
Congratulations on that first, or that cashflow, but I want to go back to Jay. So, you mentioned he does home foreclosures, and he’s on the preservation side. Can you expand on that a little bit for us?

Amy:
Absolutely. He’s a contractor that contracts works for banks, and he does everything from evictions to winterization, to grass cuts, to repairs, a lot of repairs, roofs, citing, a lot of water, fixing up leaks and things like that. He owns his own company and has about 350 properties in his queue that he goes to on a regular basis, and snow removal in the winter, because we get snow here, unfortunately. Yeah, he can just see the insides of these properties often.

Felipe:
Snow is good, but it’s interesting the way that you and your, now husband, look at it, because when I first started in real estate, I had a negative view of what I now call my super power, which, and it sounds funny saying it out loud, but all I felt that I knew it was man, I was like, this is interesting, because all I know is plumbers, framers, drywall, guys, and handyman. I don’t know anyone in real estate. Real estate investors would be like, “Seriously, dude, you have the perfect team. You know everyone in the game, all you got to do is go buy the house.” It didn’t click for me. But for you, you were like, no, Jay knows, has this insight, he works on homes. You guys saw it as a positive versus, oh, that’s all he does.
I think a lot of times as investors, when we’re starting out, we don’t realize that what we think is just our job or just the connections we know are actually probably our best resources to building our portfolio or our cash flow. We hear that a lot on this podcast where people are like, “Well, I used the people in my network to further my real estate,” and it sounds like that’s exactly what you did.

Amy:
Right. Absolutely. I want to add a little bit of piece of the story because this is important, and why we’ve accelerated our properties, our cash loads so quickly is we went on vacation in early 2019 and we were sitting by the pool and we happened to be sitting by this guy named Jeremy. Jeremy was a real estate investor in Kansas city. He’s actually an orthodontist too, which I thought was awesome. Because I was like, oh, orthodontist invest in real estate too, don’t they make enough money they don’t need to do that? But anyway, and he told me about BiggerPockets, or us about BiggerPockets, and I literally, since that day, have listened to BiggerPockets every single day. That is a huge part of our story because there’s a lot to learn in the area of real estate, but it’s not impossible to start early, or to start late. Because we’re in our 40s, I turned 40 this summer, and Jay’s 49. Some people would say, “Oh, that’s too late to start,” but I don’t think so. It’s never too late to start.

Felipe:
Amy, I think that’s amazing and you’re absolutely right. There’s no such thing as a certain age to start in real estate or a certain time to start in real estate. There’s never a good or a bad time. The best time is to do it now, and just get started in real estate. With that, I want to ask you, what was your mindset? Because I’m sure you got some negative feedback from people that are like, “Oh, you shouldn’t start in real estate now. You should have started in your 20s.” What was your mind shift to go ahead and start investing in real estate?

Amy:
Well, we still get a lot of negative feedback. In fact, people are like, I think you guys are idiots for spending all your money, because we literally, and I’ll talk about that in a little bit, but we literally spend every last penny we have, we can save and reinvest it right back into our business. But my mind shift was, I saw the cashflow. Jeremy told me his story and I was like, wow. He was cashflowing an enormous amount of money, more than he made as an orthodontist actually, which I thought was incredible. I didn’t even know that was possible at the time. My mindset there was, well, I don’t have to have a degree in orthodontics or a doctor … I don’t have to be a doctor or a lawyer. I’m a teacher, so I make peanuts compared to some, but I can cashflow just as well as any of those people. Yeah, so that was kind of my mind shift then.

Felipe:
Amy, it does sound like you allowed yourself to say, hey, I deserve this cashflow. I do deserve it. I think that’s a mind block that a lot of people have. Sometimes maybe we feel like we just don’t deserve that success or that cashflow. I think you were able to get over that and say, yeah, I do deserve it at whatever time of life I want to start that, so kudos to you. I think that’s amazing. Ashley, go ahead.

Amy:
And we were willing to work hard. Real estate, we won’t lie, it’s a of work. It’s a lot of time and a lot of work, especially when we’re rehabbing these properties, almost all of it, we do ourselves. We spend all of our free time and all of our free money, extra money on real estate, but it’s going to be so worth it. Because we’ve already hit goals that we wrote down on paper. We’ve exceeded goals, and we’re continuing to set higher goals and we keep having to raise the goal bar, but it’s pretty awesome feeling, that I’m making more in real estate cashflow than I did do as a teacher with a master’s degree.

Ashley:
Amy, let me ask you this. Have you been making sacrifice?

Amy:
Oh, yes. Lots of them, like every weekend. Weekends used to be like, oh, let’s go biking. We love to bike, or let’s go boating, and we do some of it still, but a lot of late nights, when I get off work at four o’clock, I go to … I, last night, went to the property that we have rented October 1st that we’re not even close to having done, yikes, but to paint, and sacrifices every single night and weekends. So, yes, lots of sacrifices, but you know what? It’s worth it. Because we have a goal and our goal is to get rid of our W-2 jobs and do this full time, because I love it. I truly, truly love it. It’s fun. It’s fun and it’s … and the real estate community is really, really awesome. We’ve met a lot of great [crosstalk 00:13:08].

Ashley:
Yeah, I wanted to highlight that about you because that is so important, that investors see that a lot of times you build such a portfolio that you have and have that cashflow, you have to make sacrifices. So, you set goals, you made sacrifices, and look at what you’re doing now. You just said that you’re dominating your goals and you have to keep raising the bar. That is awesome.

Amy:
Right. Another good sacrifice we make is we both drive. Jay’s truck has 386,000 miles on it. He did put a new motor in it.

Felipe:
Get that man another truck.

Amy:
I know, right.

Felipe:
Amy, go get that man another truck.

Amy:
I know. He’s like, “Maybe we should stop buying properties for a minute and get a truck.” No, we bought a motor. We bought a used motor and put a motor in it. Now it’s [crosstalk 00:13:49] forever.

Ashley:
Wow. Yeah.

Amy:
I drive, my Chevy Cruze has 220 some thousand miles, but that’s another sacrifice. We don’t make payments on anything except our bird payments. That’s it. We don’t have debt. That’s a huge sacrifice. We aren’t keeping up with the joint Joneses. Our neighbors, on both sides of us, have brand new vehicles, both of them. Brand new trucks, mind you, Jay’s always like drooling. I’m like, “Someday, honey, someday.”

Ashley:
That’s awesome. I love that, and I love when people incorporate real estate with being in a debt free journey. I love that.

Amy:
Yeah. That’s really actually truly what got me started too, is I took Financial Peace University, Dave Ramsey’s course in 2006, because I was up to my eyeballs in debt. I learned quickly that you have to give every penny a name and I didn’t put it towards real estate back then, but I paid off all my debt and I had no payments. Yeah, it’s definitely a part of our journey, big time, because we’re huge budgeters and we’re huge live between your means type people.

Ashley:
Do you recommend that people who want to get started in real estate, that they become debt free first, paying off their personal debt, or do you think it’s something they can do simultaneously or what are your thoughts on that?

Amy:
It depends on how much debt. I think you could do it simultaneously if you’re aggressive with it and you go the extra mile. Like I said, I’ve always worked two jobs. I’ve always made sacrifices, not just in real estate, but it’s … I think the best time to start as now. If you can do it simultaneously, do it, but definitely, definitely, look at getting rid of all that excess debt that’s not your bird payments, because that will hinder you. Definitely.

Ashley:
I definitely agree with that. I did simultaneously. I started buying property before I even knew of Dave Ramsey and that like, I always thought debt is normal. We never had credit card debt, but we had financing on our vehicles. He had a line of credit on our house. Yeah, thank you for that. I love talking about personal finances and real estate because I do think they go hand in hand. You need to have a good foundation in your own home, in your own finances to be able to manage a business, and investing in real estate is a business.

Amy:
It absolutely is a business. Yes. Yeah, and you’ve got to exercise your delayed gratification often, because that’s really what we’re both really good at. We’re both really good at delayed gratification, and it’s something we’ve had to learn to be good at, but we didn’t go out and buy a boat this summer when coronavirus hit when all of our friends did. We didn’t buy a camper or a new vehicle. We have delayed gratification, because you know what? Someday we’re going to get to do that. But that someday is going to be when we hit our goals and we get to a certain level, replace our jobs.

Felipe:
I love that you said that. I’m going to chime in a little about the camper situation. I bought a camper during coronavirus, but let me tell you what we did. Before we make decisions like that, what we do is, how can we … any liability we want to purchase, how do we make it into an asset? Which is why I haven’t bought my Tesla yet. Right, Ashley?

Amy:
Yeah.

Felipe:
Because I haven’t figured out how to make it into an asset. But what we did is, we said, okay, if we can buy the RV and we can make the payments on it, what we ended up doing was buying in cash. But what we’re doing is we’re actually renting it on Airbnb and Outdoorsy, and it’s making my money back, and I’m estimating a year and a half, and the longevity of this is about eight to 10 years, so I should have all my money back within a year and a half, a year from the RV from just renting it on Airbnb and Outdoorsy, and then I should be able to keep it for the next eight years still working well before having to dump any money into it, and it’s an experience for me and my family, so forth and so on. So, we did end up doing it, but I wouldn’t have bought it and just left it sitting in the parking lot.
That’s not what I would want it to do. When I buy a liability, if it doesn’t allow me to turn it into an asset, then I don’t purchase it. That’s that like entrepreneur real estate investor mindset. If I want a toy, how can I make it into an asset?

Amy:
Yes. We’re the same way. We just bought an acreage that has a huge 2,400 square foot house on it, but it has two outbuildings, giant, giant outbuildings. We thought, okay, that can be camper and RV storage, because it’s seven miles from arena at a lake. Yeah, you’re right. You can buy toys, but you always have to think of them as investments, not liabilities definitely.

Felipe:
Exactly, like you said, put a name to every dollar. All right. That’s a little bit of how you got there, or how you got into real estate and 30,000 foot view. Do you have a deal for us today that we can dig into and look at the nuts and bolts of how you invest, or you have one in mind?

Amy:
Sure. Yeah. I’m going to give you our little tiny 1200 person townhouse. It’s in Manson, Iowa, tiny little town, but we bought a 1970s ranch style house for $23,000, and the structure of the house is great. The roof was great, the siding’s great, windows are great. The inside was trash, meaning they left, it was a foreclosure by the way, they left all their crap, so it looked disgusting. I’m sure to a lot of people, they walked in and thought, nope, no way I’m doing this, but really, all the house needed was a good, deep cleaning, which took a long time. It needed flooring and paint and appliances, that’s it. So, we paid $23,000 cash for this house.
We put about $5,000 into it because we did most of the work ourselves. We had dump fees for all the garbage. We had some painting over mold. We had flooring and appliances. About $5,000 and the ARV is, it’s worth, well on Zestimate or Zillow, says it’s worth $87,000. So, we have about $28,000 into it. It’s worth 87,000, but it’s a buy and hold for us. We’re renting it for 850 a month.

Ashley:
Are you going to refinance that?

Amy:
We are. Yeah. Actually, Jay’s actually talking with the banker today. We just got it rented out. We just finished it, got it rented out. September 1st, they moved in. Yep, he’s going to refinance that and use those funds for our next deal or do deals, because around here we can find properties anywhere from the $20,000 to $40,000 range for … Our kind of niche is he likes those ranch style houses that are quality built because they seem to rent easily. It had a two car attached garage. That’s kind of what we look for in properties, for now.

Ashley:
Okay, so putting 28,000 into it, and you think the Zestimate is correct, that it’ll be close to 87,000?

Amy:
Yeah, actually, maybe even more, because real estate is hot right now, but yeah, it assesses at the county for around 80.

Ashley:
That’s awesome. That is so exciting. That is a huge margin.

Amy:
Yeah, it is. Yeah.

Ashley:
Lots of equity.

Amy:
Yup. Yup.

Ashley:
Very cool. What were some of the lessons learned during this deal?

Amy:
Well, the lessons learned is, like you said before, we have to make sacrifices. We spent, I don’t know, probably 200 hours cleaning out people’s garbage, and it was disgusting. It was moldy. Some of it was wet. The basement was a little damp. The power had been shut off and was off for quite some time, so the basement was damp. All that stuff and the basement was nasty, moldy stinky, but a lesson is, if you’re not free to get your hands dirty, which we’re no. We wore gloves and masks and did the work ourselves. It’s going to take work. There’s no such thing as get rich quick, but you can get rich slowly and easily with hard work in real estate.

Felipe:
Yeah, I would agree with that, Amy. I think you guys would agree that a lot of times real estate is just doing what others won’t do. Like you said, I don’t even know how many people looked at that house, but you were able to see the value in it. I always tell my friends, and even the people that I help with in real estate, they’re always like, “Well, I need to find properties that match this deal,” but every house doesn’t work for every deal, some houses are bird deals and some houses are flips and some houses are this, so you need to identify your goal, find your niche and then look at rental properties or bird strategies or whatever your strategy is and get houses based on that. Don’t just go to everything that shines like gold, but figure out what works best for you. Following up with that though, Amy, what does the rents look like now in that house? What’s the outcome of that house, if you will?

Amy:
We listed it for $850 a month. It’s in a smaller town, like I said, so it’s not in the city by any means. It’s not like it’s my $1750 a month house, but it’s only two bedroom also. So, it’s two bedroom, two bath, and it’s $850 a month, and we paid cash for it all, so it’s a hundred percent cash flow, minus repairs and taxes and insurance. But yeah, so it’s pretty lucrative I’d say. We had a ton of interest in getting it rented. We might’ve been able to charge more, but I would rather charge a little bit less to get quality renters versus charge the upper tier of things.

Ashley:
After you refinance it, would you expect your cashflow to be with the mortgage payment?

Amy:
Well, I’m thinking it’ll probably be maybe $300 plus a month, almost probably around $400 a month.

Ashley:
Yeah, that’s great.

Amy:
Yeah, definitely.

Ashley:
Really exciting.

Felipe:
Amy, what’s your goal with real estate? I’m sure this deal falls within your goal of real estate, and earlier you had talked about quitting your W-2 jobs. What do you see is your strategy to reach that goal and how do you plan on doing that?

Amy:
That’s a great question. Our goal is, like I said, to replace our W-2 jobs. Our goal was 10 doors by the end of this year, and we just purchased a duplex, so that got us to our 10th door. Our goal really is just to get enough buy and hold properties to triple our W-2 income right now with cashflow from rentals. That’s our goal. I guess I could still use some work in goal setting. I need to talk to some people about real estate goals, be more detailed about them, but right now, just our overall goal is about triple our W-2 income with rental income coming in.

Felipe:
I like that because Amy, it’s interesting that a lot of people get into real estate investing and can’t even begin to tell me or anyone that, or even if they’re on social media or whatever, they can’t seem to regurgitate their goal. They can’t seem to tell someone what their goal is. At least you have a vision of where you’re going. A lot of people just get started in real estate investing and don’t have that. They don’t have a goal. They don’t have a vision. They don’t know where they’re going. They’re just buying real estate, and then that’s why they fail. One, they don’t have a passion for it. They’re not willing to put in the work. Two, they’re not willing, like you said earlier, they’re not willing to go in and clean up a house that just needs lipstick and cleaned up and you can rent it and make $400 cashflow.
Then thirdly, I think a lot of times, like I said, people just don’t have a vision or a goal as to where they’re going or why they’re buying properties. They’re just buying them, and then at the first time that one of those houses hits them in the mouth with a boiler going out or a toilet they get stopped up, they quit because they don’t have a goal as to why they’re investing in real estate. When someone, like let’s say that I’m self-managing for example, and someone calls me at 2:00 in the morning with a toilet problem, I’m going to get that fixed as quick as possible, because I know that it’s only 20 something days before that rent’s due, and that’s all I’m worried about.
It’s interesting to me that … I think it’s great that at least you have a vision and a goal as to where you’re going, whether you’ve really toned that down, I’m sure you will as the days go on, but I think it is really important for our listeners to understand that it’s very, very crucial to have a goal and a vision as to why you’re investing in real estate.

Amy:
Right.

Ashley:
Amy, are you self-managing your properties?

Amy:
We are. We are. We plan to. Yeah, we plan to. Because Jay travels … We do have properties in about a 200 mile radius, so they’re not just all next door to us, but Jay travels for his property preservation stuff, and so he’s in these places at least once a week, usually more so that’s why we can self-manage easily, because he’s super handy, so he can do any of the work. We had to replace a water heater last week and he went and did that all by himself. It was awesome.

Ashley:
Do you have any systems in place that you can recommend to our listeners, like any software you use or apps you use? How do your tenants get ahold of you?

Amy:
Well, my biggest app that I use every single day on my phone is mint.com. It’s just a budgeting app, but I’ve looked into Cozy, but it looks like it got purchased by apartments.com. I just signed up for [Sesser 00:26:27]. You were talking about that [crosstalk 00:26:29].

Ashley:
Yeah, I started using that too on one property.

Amy:
I need to. I literally just last week signed up, and we’ve been hustling to try to get this other rental finished by October 1st because we already have a signed lease, so I need to take the time to get into it. I’m a little old school. I need to get more versed. I need to talk to some of the younger folk about what they used for … but it looks like Sesser’s free, so that’s really awesome.

Ashley:
Yeah, and you can store your documents in it. I really like it so far just for the one rehab I’m using it on.

Amy:
Right. I won’t lie. Our growth has been pretty quick and we’ve been hustling to get these properties done. I told Jay, I said, “This duplex that we purchased after that, we’re going to take a little break and we’re going to get organized.” We have them in both of our names. We’re not very organized as far as systems go, but that’s another goal. I have a few goals set, and one is to get organized, another is to get involved in a meetup because you talk about that a lot, Ashley, and we don’t have a meetup post to us. Two hours is the closest one, but I know we can do it virtually. We have yet to do that because like I said, we’ve just been hustling and hustling, buying properties, rehabbing them, getting the rented out. So, we need to take a little breath and get a little bit organized and start networking a little bit more. Those are two goals we have going on right now.

Ashley:
Yeah. You guys are growing so fast, and I’m assuming, if you keep going, you’re just going to grow more and more, so you might as well put those systems in place. It’ll make it easier and faster for you guys to grow. Have you heard of Asana before? It’s a free workflow website and they have an app.

Amy:
Asana.

Ashley:
Yeah, it’s Asana, and you can actually build your systems right inside there. You can create checklists. You can attach like Google docs, spreadsheets. Actually, Felipe and I were at an event together and we did like a presentation on Asana, showing everyone how I take a rehab and I put all my systems in there and you can assign tasks to people so you could connect your vendors to it. It’s really great. It’s free. You can upgrade to get some extra features, but …

Amy:
Okay. I do use Google docs a lot. In fact, I have one Excel spreadsheet on Google docs that has all of our rental information for each rental, so the tenant and the address, all the important information, the payments they’ve made, but there’s got to be something more automated. I don’t know. I just haven’t taken the time to do it. Good, Asana, I’ll look into that. Thanks.

Ashley:
Yeah. You’re welcome.

Felipe:
Amy, it’s interesting that we’re talking about systems, because I recently met a gentlemen, I think he’s got very close to a hundred single family homes in a really small town outside of where we live. I asked him about his systems, because he’s just been doing this, and he always talks about how he does it old school. He said, well, literally, I just carry around my notepad, and I have house one, rent paid, rent not paid. House two, and he puts out …

Amy:
Okay. I’m not quite that old school.

Felipe:
He puts bills and tickets and he just literally will rip them out of his notebook and say, hey, house, whatever needs a new boiler or whatever, and he’s like, yeah, I could have always upgraded, but this is what I know to do and this has made me very wealthy. So, he never switched his … and I’m always like, well, dude, just get an iPad and it’s going to be like the same thing. He’s like, no, because I can’t rip it out. He just gets this joy of like ripping out his checklist that it’s done. It’s just really that we’re talking about that. I think that, as you grow, I think it’s great to have those systems where you can just plug and play where ultimately you’re growing into a bigger system versus continually growing out of smaller systems. I think you’re right, in maybe giving yourself a month or so, to create systems where you’re like, okay, this system will hold 100 homes.
I can do this, and I’m at home six, seven or eight, so that you can be plugging in the next two or three years worth of homes into this system that you’ve already created, where you don’t have to worry about growing out of it for the next five, six, seven years. Then you’re able to build a great well-oiled machine, and then your job from there is going to be just to keep oiling the machine. This way you don’t have to create a new system every time you get a new house. I always tell the people that I help, and I’m like, “Hey, look, make sure that you’re growing into systems, not growing out of them, because if you’re growing out of systems, then you’re just going to have to keep creating a new system and creating a new system.
Even since we’ve started this podcast, Ashley has always challenged me to create systems that are going to help me with my portfolio. I think it’s great that you want to give yourself some time to create a system, or as you continue to grow and buy real estate, you can plug and play those into a giant system that you’ve created that can hold your portfolio.

Ashley:
Another reason I love systems too, is so that when you are ready, those systems are in place to outsource stuff. I’m in the process of outsourcing all my bookkeeping and I have a pretty good system down, so it’s just handing over the QuickBooks file. Here’s my checklist, what I do, here’s how you access everything. You’re already cashflowing $6,000 a month. What’s it going to be when it’s triple that? You’re not going to be wanting to take your tenant calls or anything like that, but also you’re going to be like, I’m done with my W-2, I’m free. Let’s go travel. Oh, wait, we have to hire people to do all this stuff.

Amy:
Right. Oh yeah. There’s that.

Ashley:
Yeah. We had to work on that first. That’s why I think it’s so important to do your systems now as you’re building your business, or even taking a break to put those systems in place so that you can grow faster and outsource that.

Amy:
Sure. Yeah, I Googled systems actually, just a while back. Zillow had a spreadsheet or someplace to put tenant information and property information, but it was only, I think up to eight properties or six properties or something, so it wasn’t even big enough for what we have already, so it’s like …

Ashley:
Yeah. Well, let’s move on to our next segment. This segment is where we ask you about a key player on your team or someone that has really added value to you. We call this segment, the …

Felipe:
MVP, MVP, MVP.

Speaker 4:
MVP.

Ashley:
Though Amy, who would be a key player that has really helped you grow your portfolio?

Amy:
Well, this was a little bit of a hard question for me because I have so many key players, so it’s hard for me to narrow down to one person, but obviously I’ll say Jay, because he has access to foreclosures, and without that, we wouldn’t have been able to purchase these many properties we have. I’m going to say my realtor, Rick, who, in 2010, talked me into … told me I’m an idiot if I don’t rent my house out, because without him, and he was also a property manager too. So, he knew how lucrative real estate was. But without listening to him, I wouldn’t have figured out how accidentally awesome real estate is. Then my third one is Jay’s brother, Jerry. His wife stays home and they have two kids at home, and they homeschool and travel all over. I was always like, how did they do that?
It’s because they have about 20 rental properties in Omaha area that they’ve purchased and they’re debt free. They don’t owe any money anymore. They’re done purchasing, buy and hold with their 20. I’ve talked to Jerry and his wife, Tracy, a lot about just simple things like, what does a lease look like, and what are important things they need to have? Insurance and things like that. We’re constantly calling them asking important questions because … and then I’ll obviously say Jeremy, the guy that I met in Mexico that told me about BiggerPockets, because I literally have learned so much. That’s what really got me motivated, and the Facebook groups too. It’s motivating to see people post snippets of their story, that it’s important. It’s important learning.
For me, podcasts are awesome, because I can multitask. I have a little bit of ADD, so I have to be moving, and so I can listen and learn at the same time, while I’m painting or cleaning out a stinky basement or whatever the heck I’m doing.

Felipe:
A stinky basement. Amy, what would be your go-to if you didn’t have access to those foreclosures?

Amy:
Well, we kind of drive for dollars too. Jay, especially, he’s constantly looking for deals. Every morning and every night I’m catching him on his phone, he’s looking for deals. One of the properties we found was an estate sale that we went to. We just happened to see the sign driving. Because there’s different companies that do property preservation, so you’ll always notice a sign on the door of a foreclosure. We don’t know of all the foreclosures, but we drive around and look for those signs. But anyway, in driving and doing that, we found this estate sale, this acreage that we just bought. I think it’s multifaceted. It’s looking online, it’s on Facebook. Our duplex we found there driving around talking to people.
Ashley says it a lot. It’s really important to share what you do and talk to people about what you do because people will start referring you to, hey, this place is going to go up on auction or whatever. They’ll think of you when it comes time for a real estate sale. I guess it’s not just foreclosures. We’ve only bought, I think only two of our properties actually were foreclosures. The rest have been talking to people, driving for deals and things like that.

Ashley:
I like that, that there’s multiple ways to get deals. It’s not just like, you have to do it this way and this is how you’ll get the deals. There’s so many different options for that.

Amy:
Yeah. Definitely. Yeah., and I think it’s knowing what a deal is. We’ve spent a lot of time running numbers, and it’s important to know, is this a deal or isn’t this deal? And what’s our bottom dollar in an offer we’re going to make and how can we make this a buy and hold deal for us?

Felipe:
Yeah. I wanted to get to that because I wanted people to understand and people that are listening that it’s not all about just, oh, well Amy has access to foreclosures, so that’s why she’s so successful. I was hoping that you were going to say what you said, which was you drive for dollars. You look at auctions, you have foreclosures. You’re building a big funnel up here of a bunch of deals that can come in, and then you allow it to shrink and then you buy the best of the best. So, it’s not about, oh, well Amy has access to this, or Felipe’s wife has access to the MLS, or Ashley lives in a city where she can buy $30,000 properties. It’s just that we’ve created a big funnel to get a bunch of deals and then we just buy the creme de la creme.
We find the best that we can and we buy those properties. It’s not about that I have a more advantage than anyone else, it’s just I’ve built a bigger funnel. Like you said, part of that funnel is also telling people that you’re a real estate investor, and that you’re looking for these types of houses. So, putting it out there for everyone to know what you’re looking for and what you’re doing is going to find you more deals than if you just kind of keep it to yourself, you’re sitting behind a computer all day looking for deals. It’s why not have a hundred people help you find deals. Tell everyone you know what you’re doing.

Amy:
Right. For us, part of that funnel too, is purchasing property that’s not right next door to us. We’re not afraid to drive two hours. Our rule of thumb is about a two hour radius. I guess one house is in Lincoln, that’s three hours. For us, it doesn’t have to be all in the same community. We’re looking for the best of the best deals. And we found rocking deals way, way, way lower than appraised value deals. We’re not afraid to drive somewhere out of state investing. That’s one of our goals too, is maybe to expand a little bit and do a little bit more out of state investing. My cousin lives near Cleveland, and I’ve been looking at some real estate there. There’s pretty good deals we had there too. As we expand and hopefully quit our jobs so we have some more flexibility to travel a little bit, for us looking outside of the area we live is important too.

Ashley:
Well, thank you, Any, for sharing your MVP and also giving us an insight into how you’re finding your deals. That was great.

Amy:
For sure.

Ashley:
If anyone wants more information, you can go to biggerpockets.com/rookie34. Let’s go to our rookie request line. You can reach us anytime at 1 (888) 5-ROOKIE. Leave us a voicemail with your question, and it may be played on the show for a guest to answer. Here’s today’s question.

Arsen:
Hey, my name is [Arsen 00:38:33] I’m from [inaudible 00:38:34] Washington. My question is, how do you manage to have real estate while having a W-2? And you mentioned in your last podcast that it takes about two years. You want to keep that up for about two years to be able to get finance from the bank. Can you talk a little bit about that and the difference between not having a W-2 and getting approved without a W-2? I’m just trying to better understand. Thank you.

Amy:
I think that was actually one of my teaching points that I had written down, because I think as long as you can keep your W-2 job, and as for me, I’d say even longer than two years, because I plan to go probably three more. I have a pension too, and it’ll be fully vested in three more years, so it makes no sense for me to quit before that. But I think as long as you can do both, again, you’re going to have to make those sacrifices. You’re going to have to be working long days, sometimes 15, 18 hour days. But as long as you can do that, you have to begin with the end in mind, to know that these days aren’t going to be this long in this amount of time. But I think keeping your W2 job is extremely important, because not only is it helping with your cashflow to fund these deals, it’s helping you at financing along the way.
Our goal is to keep them for at least three more years, and we’ve already been doing this for a year and a half or almost two. Yeah, I’d say as long as you can … I mean, especially if you’re not completely miserable, then keep those jobs.

Ashley:
Yeah. The banks like to see that steady income that you have that W-2 income coming in, and you’ll get better terms on your financing, better interest rate. If you don’t have your W-2 anymore, a lot of banks will want to see that you’ve been doing your business for two years and they want two years of tax returns to show that your real estate business is profitable. That’s kind of the difference there. Felipe you’ve been unemployed longer than I have. What has been your experience not having a W-2?

Felipe:
Yeah, absolutely, so I wanted to get to FIRE, financial independence retire early, as quick as possible. So, the moment that my cashflow took over my W-2 income, I quit my job and never looked back. But the biggest hurdle that I had was not having a job, banks were kind of hesitant at first to lend to me. Then the second was credit. Even though I had great credit, without having a job, they would be like, okay, well, you don’t have a job and your credit is not above 800. I’m like, Jesus, I have a 780 or something like, I’m fine. They would be like, well, we need like almost a perfect score, plus we want to make sure that you have a job. My biggest hurdle was that, not having the perfect job. What I realized was, like you said, I had to wait two years before being able to invest in real estate again.
What I did was I just started finding partnerships. I just started finding partners for the last two years, and now I’m like completely thinking about just staying away from banks, not dealing with them. Hard money for flips and partnerships for buy and hold, and then we just bar and get everyone’s money back, and then we’re in a long-term 30 year mortgage, and that’s fine.

Ashley:
To elaborate, your partners are the ones getting the mortgage in their name because they have W-2 jobs, or they have had studied income [crosstalk 00:41:46] tax returns.

Felipe:
Exactly. What I do is exactly what I do is I partner with high-earning individuals in their W-2 jobs that want to invest in real estate, but just can’t or don’t because they don’t have the time because they have a 60 hour work week, but they’re like, dude, I really want to invest in real estate. To me, those are perfect partners that they’re educated in real estate, want to do real estate, just don’t have the time, but they also love their job. One of my partners works at Tesla, and he just doesn’t want to leave, and I wouldn’t either, but he’s like, but I really want to invest in real estate, so we pull out a loan in his name and I’m on title, and then I run the deal here and it’s a perfect setup and we love to do that.

Ashley:
And Felipe’s like, I really want a discount on a Tesla, so let’s be partners.

Felipe:
Oh, I’ve tried, and not even employees at Tesla get discounts or something. It’s ridiculous. Then one of my partner, it’s really interesting because one of my partners is like a tax guru, and he helped me out with a lot of my tax situation with my CPA, but he’s also really good with credit scores. He showed me how to call the Bureau for my credit and help me get that in perfect alignment. Big shout out to Christian. He’s probably listening to the show, but he was able to show me how to better my score by just calling, and that helped out a lot. When you don’t have a W-2 job, guys, you really want to make sure that everything else is on point, and part of that was [crosstalk 00:43:10].

Ashley:
And Felipe’s going to write a blog post on this and put it on BiggerPockets.

Felipe:
I guess now I have to.

Ashley:
Holding you accountable.

Felipe:
Oh my God.

Ashley:
Let’s go on to our random questions. Amy, these are just random generic questions, sometimes related to real estate that Felipe and I either pick from a list or just randomly think of. Felipe, go ahead. I’ll let you take the first one because I didn’t look yet what question I want to ask.

Felipe:
Put me on the spot. No, it’s fine. Amy, as you grow in real estate, and this is one question that I love to ask because I always like to dig into people’s mind here, who is someone that you would love to meet in the real estate game that you haven’t met or talked to yet?

Amy:
I’m going to say Brandon Turner, because when I started listening to Bigger Pockets, he was really inspirational to me, and his story’s amazing. His story is a lot like my story. We have a lot of actually eerily similarities. We were both born and raised in the Midwest. His dad [inaudible 00:44:12] mine was too. I had a lot of credit card debt at a young age, so did he. I just would love to talk to him and pick his brain in person in Hawaii, of course. Yeah.

Ashley:
Hint, hint, Brandon.

Amy:
Yeah, Brandon, hello. Yeah, that would be what I would do, I would say.

Ashley:
During the episodes, I write down good time codes to publish on social media, so I’m going to write down this time code, so that little clip of hint, hint to Brandon gets … that you want to be flown out to Hawaii to talk with him.

Amy:
Right.

Ashley:
Okay. Usually, we like to ask what real estate, software tool or app you like to use, but I want to take a little different spin on it. Is there any movie or YouTube video, something like that, that you’ve used to guide you through your real estate journey, or maybe even a podcast besides the BiggerPockets Podcast?

Amy:
Oh goodness. You know, honestly I’m not a movie person. I have terrible ADD, so for me to sit there and watch a movie, I’ll fall asleep. In fact, I tried to watch The Social Dilemma last night, and I literally watched it for like five minutes and I couldn’t do it. I was out. Ooh, that’s a good question. I actually like BiggerPockets Money lot too. I didn’t mention that earlier, but they talk a lot about real estate on there too. I’ll be honest. The only podcast I listen to are BiggerPockets, Ricky Real Estate, BiggerPockets and BiggerPockets money. I’m kind of a let down for that question, but no, I’m not a YouTube person either. I don’t really spend a lot of time on my phone. I’m always going and doing.

Ashley:
Yeah.

Felipe:
There’s nothing wrong with that. Heck, I know a lot of people that listen to one or two specific podcasts, listen to those religiously and then just build a massive portfolio off of the wisdom of just that. I think that’s just fine. Amy, I got the next question then. What is the best habit that you’ve formed in real estate that’s allowed you to grow exponentially, and then what would you tell our listeners is a great habit that everyone should have when they’re trying to grow their portfolio?

Amy:
Okay. A habit I have, well, I’m going to go relate this back to the budget. A habit I have is constantly looking at our cashflow in our reserves and what we have that we can put back into our business. I’m constantly checking mint.com. That’s where I keep my budget, and looking at what kind of money we can put towards our business. I guess I’m constantly thinking … I guess another habit would be, Jay and I are constantly talking about it. Every single day we talk about our goals and we talk about, can we have this project? Can we have this to finish at this property, so just keeping it at the forefront of your daily activities is just talking about it and talking about what’s going on in your business.

Felipe:
I like that, putting it out there.

Ashley:
For the last question I want to know is, what is going to be the first system you are going to put in place, that you are going to write down and have put together?

Amy:
I’m going to finish. I signed up for Sesser, but I haven’t inputted anything. I simply just signed up and then I didn’t get to it. That, and then Asana. I want to look into Asana, I wrote that down. That sounds like it’s a pretty quality system.

Ashley:
We’re going to hold you accountable to that, and when your episode airs in a couple of weeks, we are going to check back with you …

Amy:
Awesome. Good.

Ashley:
… to see how you did in those.

Amy:
Good. Yeah, like I said, our next rental is rented out for October 1st. We’re finishing up the painting. Then we truly are taking a little break to get these systems in place because it’s been a whirlwind, and I’m exhausted.

Ashley:
Well, Amy, thank you so much for being on the show today with us. Can you tell everyone a little bit more about where they can find out some information about you?

Amy:
Yeah. I’m a little old school too. I do have Instagram and Facebook, but I don’t have a specific real estate blog or handle or anything like that, but I’m on the Rookie Real Estate Facebook page. My name is Amy Joe Neiland on there.

Ashley:
What’s your Instagram handle?

Amy:
It is, ooh, I have to look. That’s a good question. I just click on there. Oh, it’s @amyjoebarbara. That was my former married name. I’ve kept that one. Actually, another goal I have when I get some time and it takes some time, is to maybe create a real estate themed one. I only really ever used Instagram to keep up with my teenage daughter. Most of my friends are on Facebook because you know, I’m 40. I hope to set up a real estate Instagram in the near future, but like I said, I got to get some systems in place and get that done first.

Ashley:
Yeah. Well, we look forward to talking to you in a couple of weeks and see what you put in place, and thank you so much.

Amy:
Awesome. Yeah, I like interactive with everyone on Facebook, so that’s been awesome for me, and encouraging the new the new people. Awesome.

Ashley:
Good. Good. Well, thank you very much.

Amy:
Yes, thank you guys. Appreciate it.

Watch the Podcast Here

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In This Episode We Cover:

  • How Amy got started as an “accidental landlord” during the Great Recession
  • Buying 4 properties in the last 4 months
  • Finding deals through her fiancé’s job in foreclosure preservation
  • How they bought a foreclosed house and created $50k in equity
  • Taking Dave Ramsey’s course to get her finances under control
  • Delaying gratification and making sacrifices to create enough cashflow to quit her W-2 job
  • Working 2 jobs and doing real estate on the side
  • And SO much more!

Links from the Show

Rookie Deal

  • 3 Bedroom Foreclosure found on Facebook
  • Purchase price: $23,000
  • Rehab Cost: $5000
  • Rental Income: $800/month

Amy’s MVPs

  • Her business partner and most recently her fiancé: Jay

Connect with Amy: