Rookie Podcast 69: Putting Rentals on Autopilot While Living in the Dominican Republic with Becky Nova

Rookie Podcast 69: Putting Rentals on Autopilot While Living in the Dominican Republic with Becky Nova

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Becky Nova didn’t have a linear path to real estate like many others. She’s had times in her life when she was poor and times in her life when she was rich. Becky knew that she didn’t want to go back to those poorer times in her life, so when she was about to marry her husband, she was pushed to get herself out of debt and into a much more stable position. She worked a consulting gig, got herself debt-free, and decided she wanted to start house hacking!

Now, Becky is off in the Dominican Republic, running her entire portfolio of 10 houses completely remote. Even more impressive, Becky used traditional financing for those rental properties! So how does she manage properties all the way in upstate New York while she’s thousands of miles away on the beach?

Well-tailored systems and procedures is what Becky relies on. She refers to her phone as one of the best tools for real estate, since she can call her agent, her tenant, or her contractor whenever she needs something. Becky proves that you can run a rental portfolio long distance, and do it successfully to boot!

This did take Becky some time, though. She designed the life she wanted and made her rental properties fit around that life, which is sometimes the opposite of what us busy real estate professionals do. Now, she can relax and enjoy her time travelling because she put the systems in place to automate her business!

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Read the Transcript Here

Ashley:
This is Real Estate Rookie episode number 69.

Becky:
There is no reason in this day and age that people should be going door to door, picking up rent checks. Checks! Who uses checks? We don’t need to be doing this anymore. There’s always a way to do something electronic, whether if it’s those payments there, that’s the first thing that you go. There is no reason you should be doing that monthly.

Ashley:
My name is Ashley Kehr and I am here with my co-host Tony Robinson. And once again, we are back with another episode of the Real Estate Rookie podcast.

Tony:
Yeah, this time Ashley’s doing her like TV hosting with the mic in her hands. So if you watching YouTube you can see. And if you’re not watching this on YouTube, just go back and at least watch the intro and see Ashley do her really dramatic spin chair to kick the episode off.

Ashley:
I had to use three microphones today. We had two different recordings, and so I’m onto my third mic, but it’s actually the most fun because I can take it out, I can hold-

Tony:
Kind of dance around and do some things with it.

Ashley:
Like a weather girl.

Tony:
That would be great. So if our podcasting careers ever fail, at least we know we’ve got a backup biz, weather men and weather women for the local Buffalo TV show. Before we talk about today’s guest, Ashley, would you give an update in our life? I know you put some deals in recently. What else is going on in the real estate side for you?

Ashley:
Yeah. So I’m trying to help my brother buy a house hack in Rochester. So we’re actually doing it through a wholesaler. So we put in two offers. One is in negotiations, the other one we haven’t heard back on yet. And yeah, I think those are… Oh, and then I have two offers that are still pending that I put in a couple months ago, but the properties haven’t sold and they haven’t said no. So I feel like I’m still kind of negotiating with them, but I just asked for an update on one of the properties. It’s a triplex and it’s probably out of the four properties is my favorite, the one I want the most, it will cash flow the best and in an area I already have properties. So hopefully by the end of the today, I’ll get an update on that one too.

Tony:
The empire is growing. I love it. I love it.

Ashley:
Yeah.

Tony:
Gosh, I think we’ve got seven deals under contract right now, all short term rentals and then I just got word from the builder that we’ve got a relationship with here in Joshua Tree, that he’s got a few more that I think he’s going to, not offload, but he’s going to hopefully give us a good deal on, so shout out to Neil, Neil in Joshua Tree. I appreciate you brother.

Ashley:
Oh my gosh, don’t say his name. Everybody’s going to go after him now and try to steal your deal.

Tony:
That’s true. Bleep that out. Don’t give him his name.

Ashley:
Hey, because I just gave everyone that idea, I want a kick back, a referral fee.

Tony:
Yeah. So we’re going to be super busy the next couple of months, getting all these property setup. I think after we close in these next couple, we’re just going to pause for a little while. So like catch our breath and figure out what happens next. So more to come.

Ashley:
Yeah. I’ve said that too. Like, “Oh, we’ll let the cashflow just accumulate before we use it to buy new property.” And then another-

Tony:
And then you buy another property.

Ashley:
Yeah. So I want to kick off this episode talking about Becky Nova, our guest today. And I’m just going to read right from my notes. I’m not ashamed because I don’t want to miss anything. Basically, she gives you four steps to getting your first deal or getting any deal. So first you’re going to set your goal, what’s your destination? Then you’re going to work backwards and set your criteria, how to get there. Three, you’re going to analyze deals. You’re going to practice, practice, practice, and then fourth making offers. So she’s going to go way deeper into those four topics and those four steps of getting a deal, but that was my favorite part of this episode, and she’s also… Tell them about where she’s living now and how she’s doing virtual property management.

Tony:
So she recorded this podcast episode in the Dominican Republic. She’s not in another state, but she’s investing out of country. So for those of you that are nervous about investing in places that aren’t in your backyard, you’ll definitely want to listen to this episode because she gives her entire kind of framework and approach for building the teams and processes to be able to manage from out of the country. So really, really cool.

Ashley:
Yeah. So it’s not even just acquisitions. It’s actually managing the properties and hiring a handyman and what her tips are and how she finds them and also doing showings and everything like that. So this is a great episode to listen to.

Ashley:
Becky, welcome to the show. Can you start off telling a little bit about yourself, who is Becky and how did you get started in real estate?

Becky:
I always like to explain to people that I am a cancer researcher by day and a real estate investor by night. And actually I hate telling the story about how I got involved in real estate investing, but sure. I got involved in real estate investing because of my husband. And the reason I hate saying the story is because every time I tell the story, I always have to admit that he was right. So back in 2017, I was completely in debt. I was running my own business, trying to get this thing off the ground and my husband, then boyfriend, came to me at the time and said, “Hey, listen, I really kind of want to take things to the next level with you. I really want to think about marriage, family, house, kids, all that type of stuff, but you’re in debt. You can’t buy a house, you can’t do these things.” So he said, “If this is really what you want moving forward, let’s kind of work on that.” So I said, “Fine. I will show you.”

Becky:
I went out, found a way to be able to get a consulting gig that paid me a good amount of money for about three months of work, came back, got myself out of debt and then said, “Okay, I have the money for a down payment, but I don’t want to now buy a house and end up living paycheck to paycheck to pay mortgage at the end of the month.” So I said, I’m to come up with the way that we’re going to be able to make money off of buying real estate. And I tell everyone, I came up with this fantastic, fantastic idea where we were going to buy a duplex and live in one side and rent out the other. So sorry, Brandon Turner. I was not aware of how hacking at the time, but that was originally my start into real estate investing.

Ashley:
So does your husband tease you now that he was right?

Becky:
Reminds me every single day.

Ashley:
So let’s go back to kind of just getting your finances in order. Let’s just give some advice on that. What was a motivator to you to do that?

Becky:
I’ve been very lucky. I have done things in my life where I’ve made a ton of money before. Once again, I’ve worked in pharmaceutical research for many years. I actually quit my job. I moved to Spain where I used to run a tour company and I used to own a bar in Portugal. I made really, really good money there and I ended up losing my bar, came back to the States penniless, and I decided I never wanted to be broke again. So at that time that I decided, “Okay, let’s start our own business.” I wanted to be out of the 9:00 to 5:00 culture, so let’s figure out a good way to do that. But then I was just really living same thing. As an entrepreneur, every dime you make you put back into your business and it just wasn’t getting me in far forward. So one of my motivations was just I just didn’t want to be broke. I’ve lived being poor and I’ve lived having money and having money was just easier. So I said let’s do that.

Becky:
One of the best tips that I can give for that is definitely thinking about a budget and also setting up a savings account that you do not see. I did that. I set up a savings account. My husband and I were both on it and I had… I then made him change the password, so I couldn’t access it. Takes a lot of trust, but it was really cool to see every couple of months, how much money I’d been able to save when I couldn’t just take it out and use it for whatever I wanted.

Ashley:
That’s a great point. Even for my family, when we went on our debt-free journey and then when we started following the Dave Ramsey path, getting our reserves built up, we put our savings in a separate bank that wasn’t in our town. Like you have to drive 30 minutes to get there really and it wasn’t so easy and to transfer money, you could only transfer a certain amount and it would take two days to transfer into our regular bank account. So I love that advice. Yeah, you’re putting trust into someone to have the password to it, but that’s better than being tempted to go in and spend the money.

Becky:
And we had regular check-ins with our finances at that point in time. So I knew that he would always kind of give me an update, but I also… our agreement was that I had to ask him if I needed money from that account. So I would have to be really, really sure that that was something that I needed money for if I was then going to have to tell him, “Hey, this is what I need that cash for.” So it was really helpful for me to kind of think about, is this a want, or is this a need? And that really made… it kind of opened my eyes to what are my goals that I want to get to and what sacrifices can I make now to have that in the future?

Tony:
Yeah. I’ve got a couple of thoughts on that process. First. I love, that approach of really having the awareness to know like, “Hey, this is the best way for me to reach my financial goals.” But I think what people struggle with is that they rely almost too much on willpower and they don’t focus enough on the environment that they’re living in or the environment that they’re operating in. And what you said is, “I’m not going to rely on willpower to not spend this money. I’m just going to make it really, really difficult for me to do so.” And you set up the environment to support those goals. And it really translates to real estate investing as well, like you can’t just rely on willpower to maybe consistently research potential deals or to consistently submit offers.

Tony:
And sometimes putting yourself in the right environment can be the catalyst to make those things happen. So whether that’s partnering with somebody else or having an accountability partner, or just putting your goals out on your Facebook or meeting with other people, but kind of putting yourself in a way or in a situation where you’re not just relying on your willpower to make something happen is really powerful, so I love that approach. Big mindset guy, that one kind of piqued my interest.

Becky:
No, it is. Systemizing things and asking for help, whether it is getting your finances in order versus figuring out how you’re going to buy that next property. When you’re able to kind of share that, and I agree with you, Tony. I like the idea of putting that out into the universe of what you want. It just somehow makes it a little bit easier to be able to obtain that.

Ashley:
One thing too, to add on to that is that don’t be embarrassed to ask somebody about helping you with that, but also they probably want to, because if they’re talking to you about it and trying to help you already, they would probably be ecstatic to… Because they love that stuff and helping you get on track and teaching you about finance. So don’t be afraid to reach out to someone, especially if they’ve talked to you already about their own finances or about different strategies for personal finance. Becky, what does your portfolio look like now?

Becky:
So now in the past two years that we’ve been kind of collecting up our properties, we now have 10 rentals. So we have two single apartments, two duplexes and a quadplex.

Ashley:
Awesome. And how long was it that you acquired those?

Becky:
Just over two years.

Ashley:
Congratulations.

Tony:
Yeah, that’s a really, really good pace. So I think we just talked about this with our last guest as well, but how are you financing all of these deals? I think people can kind of wrap their heads around how to get that first deal financially, but when they start thinking about the second, the fifth, the 10th, they kind of lose the confidence that they can make it happen. So what strategies are you using to fund these deals?

Becky:
So for us, we’ve actually been very fortunate to use traditional financing through this whole way. So we definitely took advantage of home of owner occupied properties and using the mortgages where we can have a little bit less of a down payment of it down, that’s been a huge help to us. And then we have been able to look for opportunities in certain places. So for example, one of the properties that we own, so out of the five, four of them are in New York and we do own one in the Dominican Republic. And the Dominican Republic, this is where my husband’s from. It was very important for him. And don’t get all excited. It’s not that fun beach property. It is not on waterfront. It is not a short-term rental. It is a long-term rental in the capital. He really wanted… It was incredibly important for him to be able to buy a property that would be able to provide housing for the locals, for the people that live there year round.

Becky:
So when we bought that property, clearly, that was at a very different price point than the quadplex we bought, 30 minutes outside of Manhattan. So we had to kind of shake up and say, “Well, where can we kind of afford and what would that look like? And how does that fit into our properties?” We still live on that same budget, those same kind of low budget kind of ideas as we’ve gone through this entire journey. We’re not now saying, “Okay, well, now that we have this extra income coming in from rentals, now we could go do this or this vacation.” We do, we do celebrate, we do enjoy, but we take our profits and we roll that right back in. It’s almost the same strategy I talked about earlier. We now have our business accounts set up for the rental properties as their LLCs. So when that money goes there, that stays there. It doesn’t come into my account for me to go shopping or for me to go out or for us to change what we’re doing with our lifestyle. That’s still a business side.

Becky:
And one thing that I think has been important for us to be able to do is to sit down kind of on a regular basis and say, “Where are we financially? Where do the two of us want to get to in the long run? What do we need to kind of do to get there?” If our goal is to have a gorgeous mansion, single family home, and be able to eat caviar every day, like, okay, fine. That’s going to be a very different kind of price point that we have to get to within our goals, but we can at least kind of come to a place where this is the lifestyle that we expect and what we want that to look like and we’re now working towards that goal. I think it’s important for people, I feel like I hear this a lot through people starting out a real estate investing that it’s like, “Oh, I want to be an investor. What do I have to do to be an investor?” And it’s like, no, no, no, no. But what does investing mean to you?

Becky:
And real estate is a vehicle to get us to where we’re going, but we first need to figure out what our destination is. So for us what’s been helpful is saying, “Well, that’s where we want to get to.” So we know what that lifestyle is going to look like. We know what we kind of need to be able to bring in. So we haven’t gone out and spent all of our profits. We just actually move on to purchasing the next property with that.

Ashley:
So what you’re saying is you’re going to determine what that end goal is, what you want, and then you kind of break it down from there. So for example, you want to… You see yourself living on the beach and having certain things. “Okay, how much do those things cost?” And then work backwards. “Okay. How many properties do I need to buy to get that amount of cashflow, then how much money do I need to save to purchase each of those properties?” Is that what you’re saying to kind of take a backward step, you start from the end and work your way backwards and really get detail on those steps as to what it’s going to take to get you to the next step and the next step, the next step, and get you to that goal?

Becky:
Yes. I am a huge proponent of financial independence. That doesn’t necessarily mean that you’re just going to not work or not do things that you enjoy, but really having that choice in life for what you want to be able to do and how you want to spend your time on earth here. So for me, what was important was us kind of saying, “This is what we want to get to now, how do we do that?” And then when you work backwards, we took that really that long-term goal is what we set up first and then we’re now breaking that down into short term goals saying, “Well, what do we actually have to do? How was that going to kind of fit right now? And what does that bring us as a lifestyle to be able to enjoy?” So, as we talk now, my husband and I have been living in the Dominican Republic for about three and a half months or so. This was something that was really important for us to do and we’re actually not spending a penny more than we would living in New York right now.

Ashley:
That’s awesome.

Becky:
I’m actually really proud of figuring that one out too, but it was something that we looked at… And we could have done this in a completely different way. We could have went like complete baller status here. We could have said, “Okay, who cares about the profits in New York? We could just kind of live here. Let’s just splurge.” And if that’s what we wanted to do, that’s perfectly fine if that’s what our goal was. But for us, that wasn’t. My husband’s an immigrant to the United States. I came from a poor family. We really wanted to create a different type of wealth for us moving forward and for our future family. So for us, it was let’s look at that lifestyle, how much money do we need to obtain those types of things? Now, break it down. Break it down into, well, now we acquired that first property. Cool. We got that. We’re now living for free after that first property. That is huge, especially in New York.

Becky:
How many people can say that they get paid to live in New York City? We are very, very fortunate and blessed to be able to say that. But then it said, “Okay, well, now that we’re living for free, what are we doing with that couple thousand dollars a month that everybody else is throwing away on rent? Let’s now use that to create then more income for ourselves.” So we’ve been able to continue to roll one property into the next, but we’ve been able to use traditional mortgages for all of our properties so far. Doesn’t mean in the future, that won’t change, but it’s worked for us.

Tony:
Now you’ve mentioned New York, you’ve mentioned the Dominican Republic. What are all of the markets that you guys are currently invested in?

Becky:
Sure. So besides the Dominican Republic, we also own in the Bronx, which is actually where my husband and I used to live. We also then own right outside of New York City in Yonkers, which is about 10 minutes over the border for the Bronx. And then we also own in upstate New York.

Tony:
No, yeah, no, I love this because I’m curious because New York is obviously an expensive market, right? It’s pricey to buy there and you hear a lot of people saying that you can’t do traditional real estate investing in those markets. So is your strategy, the traditional long-term rental in somewhere like the Bronx, or are you using some other strategy to make it worthwhile for you?

Becky:
You’re completely right. People say that all the time, these competitive markets, these high cost of living areas, and it’s absolutely impossible. And I’m here to say that that is wrong. That is wrong. That’s a great excuse to not be able to go forward. That’s a great excuse to kind of cop out and say, “Oh, well, I guess I can’t be real estate investor. I guess I can’t buy a property because I live in New York or California.” But it is not true. We’ve been able to buy multiple properties in the past couple of years in this high cost of living area.

Becky:
But you have to look at the tools and the resources that are around you. Once again, starting as a house hack is a great way to just get in the game. It’s a great way to… Starting even with just a duplex, you just have one other rental property coming in. If your strategy is to do buy and hold, it’s a great test of the waters for do I want to be a landlord? Do I want to do some renovations? And it’s a cheaper cost of entry to be able to do that. And you also hear in New York area or these other high competitive areas that there’s no deals out there. That’s a thing. I’m sorry, I’m going to call BS on that. Like these are just kind of these things that we create in our own minds that are just putting up these blocks saying that we can’t do that. There are deals.

Becky:
My husband and I picked up another cash flowing property in New York during COVID just a few months ago and that was a great opportunity for us. And we’re just sitting there and all these other people I see around us and I network in New York are sitting around being like, “Oh, I can’t find a property.” And I’m like, “Cool. I’m making now an extra thousand dollars a month because I looked, I asked.”

Tony:
Let’s touch on that point. So how are you looking and finding these deals?

Becky:
Sure. So the best piece of advice that I can give for people that are looking for properties and looking for deals is to tell everybody that you know that you are looking for a property. I feel like so many people, just as I was talking about the finance before, when you sit in your corner, in your home and you keep this idea in your head of what you want, great, but you then have to do all that work by yourself. If you start doing networking and start telling people, everybody that you talk to, you start telling them, “Hey, I want this property. Hey, I’m looking for a property. Hey, if you know keep me in mind.” They’re going to start to associate that with you and then all of a sudden it might be a couple of months down the road, but someone’s going to call you and be like, “Hey, my friend was telling me that her grandma’s selling her house, can I put you guys in touch?”

Becky:
So I think it’s important to get out there. So some tips that I would share about networking is join local networking groups. Figure out what you can be a part of that is in the area that you are looking in to be able to purchase. So even if you’re looking to be a long distance investor, you can still find and join these local groups to be a part of that. Become a part of your community. Show up at quality of life meetings, show up at chamber of commerce meetings, go to those things. And when you go make sure to tell everybody there what you are looking for, stay in contact, get to know those people, follow up with. But that all of a sudden now multiplies, because now it’s not just you looking for a property, now you have a hundred other people that you just told that are also now looking for a property for you. So that completely increases the amount of opportunities that you have to be able to find a property.

Becky:
And that was actually how my husband and I found our off-market fourplex, which was literally across the street from our current duplex, which ended up being one of our best properties that we’ve been able to buy to date. So the story with that was we bought the duplex and I didn’t know this at the time, but… So this neighborhood that we bought this duplex in, it’s just this older neighborhood, right on the waterfront in Yonkers. It’s this very quaint, cute area and it’s very old school. There’s a lot of people that have lived there for 30, 40 years. And when we were having our realtor do the appraisal for the first duplex that we bought, that little old granny from across the street, kind of comes walking over, tap him on the shoulder and is like, “Hey, I don’t know you. Who are you?” She sits on her porch all day, keeping an eye on the neighborhood.

Becky:
So our realtor just said, “Hey, actually, someone’s buying this house. We’re doing the appraisal. I’m a realtor.” So she goes, “Oh, stay in touch. I might want to sell my house in the future.” So he took the steps I talked about in networking. Told her he was a realtor. He then actually stayed in touch and followed up with her. I stayed in touch with him and the second we closed on that duplex, I was hooked on real estate investing and I was like, “This is amazing. This is the best thing ever. I need to do this all over again.” And my realtor was like, “You can’t buy another house now.” And I was like, “Oh yes, I can.” So I stayed in touch with him and kept saying, “Hey, I’m going to figure out how to buy my next property. I’m going to figure out how to buy my next property.”

Becky:
Six months later, he called me and said that he had an off-market fourplex right in my neighborhood so that we were able to kind of put together a deal and we actually closed, oddly enough, one day to the year. May 22nd, 2018, we bought a duplex, May 22nd, 2019, we bought a quadplex right next door with a parking lot. Talk about great benefits of being in New York City.

Ashley:
Wow. That is so cool.

Tony:
Yeah, no, I love that. And the fact that you’re doing it in New York, right? You’re doing it in the New York market, which is super expensive. Now, I guess one other… Well, first great advice on how to find deals. Ashley and I said this all the time that if you’re a real estate investor, you have to let people know that you’re a real estate investor even if you’re not yet a real estate investor. Right? Even if you haven’t done that first deal yet, you got to let people know that it’s what you want to do. So I love that you’re echoing that same thought. But one additional question. So in a market like New York, what is your criteria that you’re looking for? I think every market kind of dictates something different, but are you only going after the small multifamily or are you also considering single family homes? And then I guess what is it that you look for to say, this is a good deal for us?

Becky:
One of the best pieces of advice is I always tell people that they should keep their eyes closed, but their ears opened. And what I mean by that is you should know your strategy, know the path that you’re going on. So don’t get distracted by all these other things that people are saying, and everybody else is doing. You know your path, you came up with your goal and you’re working towards it, but keep your ears open because you never have any idea of what opportunity is going to present itself next, especially once again, if you’re networking with these people an opportunity is going to come to you that might just not necessarily be your exact strategy, but it’s going to be something that might be able to work for you. So to answer your question, Tony, my husband and I focus on the small multi-families that are buy and holds. We look for things that don’t… We don’t do the complete rehabs. That’s just not our wheelhouse right now. We look for things we are not afraid to do work.

Becky:
We’ve had to rehab quite a few properties before, but our goal is not to focus on those larger properties right now and we also don’t focus on single families, but we do kind of, if we came across something like that, and it did fit what our criteria is, we would then kind of probably move after that. What we look for criteria wise is we always look for properties that are going to give us about $500 cashflow per month per door. That’s what we look for, especially in a market like New York.

Ashley:
Becky, how important do you think it is for a rookie investor to put together a criteria list of like, this is what you need to… This is what I want, and this is what I should look for? What do you recommend on that?

Becky:
I think that should be the second thing that you do. The first should be, well, what do I want, what am I trying to get to? And then your second should be, how am I going to do it? I really think that sometimes we overcomplicate real estate investing. I think there’s really three steps. One, figure out what you want to get to. Two, figure out how you’re going to get there, coming up with your expectations and then three, go do it.

Ashley:
That’s great advice and I like the order of that too. So first you’re going to set where you want to go, and then how are you going to get there? And then you determine your criteria. One of the reasons I like it is because then you’re going through deals faster and you can analyze them faster. And it cuts out the waste. So you’re not wasting your time analyzing deals that if you had your criteria checklist in front of you, you could already say, “Okay, I’m not even going to waste my time because it doesn’t fit my market or the street that I want or doesn’t have the amount of bedrooms I want.” Yeah. What else would you say would go along with that? So when you’re analyzing deals, what do you use? Do you use a specific report or anything like that?

Becky:
I’ve usually gone to DealCheck. That’s the app that I tend to use and I use the information from there and then from Rentometer. Usually, those are just kind of my snapshot. That’s what I stick with. And when I first was starting out, I would actually practice every single day where I’d have to go and analyze three deals. My rule was to get really comfortable using the different apps, using the different calculators that you can use out there and I would just practice. And I would just pick random places. They usually were in New York, but I was analyzing, you just kind of go on realtor.com, Zillow when you just kind of dream and you’re like, “Let’s see what’s in Indiana. Let’s see what’s in Zillow. Let’s see what’s in Texas.” So I would go and then just practice for those different things.

Becky:
And then I would go back to my criteria sheet and say, what is it that… Does this match what I was looking for, or not? Kind of just like I said before, one of the most popular kind of posts you see in Facebook groups or conversations is, well, how do I get started in real estate investing? The second one is then how do I know if it’s a good deal? And honestly, the only person that can say if it’s a good deal or not is you because your criteria needs to match what your specific goals are, not everybody else’s. It needs to fit what you particularly you’re looking for. So I would go, I would practice every single day. I did that for weeks where I was just analyzing deals to figure out what would work and what fit my criteria or not. And then I even took that a step farther and then I would pretend like I was buying there if I found something.

Becky:
That was even just relatively close to criteria I was looking for, and I would reach out to property managers in the area, I’d reach out to realtors in the area, I would call lenders in the area just to learn more about what that area was like to learn about the process to buy in that area. And it kind of got me into good practice of finding and learning about the people that I would need to interact with and work with to be able to get some of these deals done.

Tony:
Becky, what you just said, all of the listeners need to go back and replay this part of the interview a couple of times, because it’s so right, like what you said, a lot of people ask the question of, how do I know if this is a good deal? And what you just described is how, as a new real estate investor, you get better at analyzing deals and you get better at understanding what your own criteria is. Like when I first started looking for deals for my first investment, the criteria that I used initially is now very different than the criteria that I use today, but the only way that I was able to evolve that criteria was by doing exactly what you just said, which was analyzing tons and tons and tons of deals. And each time you analyze a deal, you get a little bit more comfortable and confident in what it is that you’re looking for and then eventually you can almost ballpark what something’s going to do without even really running through the calculator. So I love that approach. I love that advice and I hope everyone follows it.

Tony:
And just one quick plug for BiggerPockets, like Ash and I have both used their calculators in our investing careers. So rookies, if you’re listening and you haven’t checked out the BiggerPockets calculators, make sure you do. We’ve also got the DP insights, which helps you understand what the rental rates are in your market as well. So lots of tools for you guys to make that happen.

Tony:
So, Becky, I want to talk a little bit about how you’re managing these properties. Are you doing this yourself from the Dominican or are you going somewhere else or what’s the process you guys have in place?

Becky:
Funny story, this whole being in the Dominican Republic was actually supposed to be a test. My husband is not the risk taker. I am. So my goal is really to be able to live six months in the States, six months then kind of out of the country and really in the Dominican Republic. So my husband only gave me one month to do this as a practice. So we are actually… So we do self-manage all of our properties already, but we are managing this year during the time that we’re staying in the Dominican Republic is actually to test out managing our properties from abroad. So after the first month of being here, it went so well that that’s why we actually decided to stay another three months. We were like, “Oh, this is so much easier than we thought it was going to be, so let’s just continue to stay.”

Becky:
And one of the things that really helped us there was systemizing how we manage our tenants. I feel like I see a lot of the times different investors that are self-managing themselves. They’re kind of run around with their heads cut off like chickens here and they’re like, “Well, this problem popped up. So now I got to take care of this problem and this problem popped up so I got to take care of this problem.” And that’s not the way that my husband and I run our rentals. We put systems in place from the very beginning. So from even our tenant screening process, we place our [inaudible 00:30:38]. We then do a pre-screening. We then have people see the property. They then go through an online application. That is our screening process. It’s the same way every single time.

Becky:
Once they get to signing that lease, that lease has all of our other processes already put into place. It explains what you should do for maintenance requests. It explains the difference between an emergency, like there’s a fire in the house versus your light bulb’s out. We kind of make sure that people understand where that scale of things are.

Ashley:
And that they should probably call 911 for a fire too, not even the emergency maintenance line.

Becky:
Exactly. Yes. And we actually had to write like, please call 911 first, then call us. So we had to be very specific about those things, but we’ve explained kind of what that order looks like and how those things also go. Next, my husband and I also delineated responsibilities. So we know what he does. He tends to do more of the day-to-day type thing, which is either following up with with making sure that people have paid rent on time. He handles the maintenance request. If anything needs to be looked at first before then we actually go and hire somebody, he will go out and do that. I more do the finances, the legal side, and then I push our business forward. I’m always the one looking to figure out how we’re going to grow the portfolio next. So we kind of stay in our own lanes, which just helps in a relationship anyways, when you’re working with your partner.

Becky:
But when we then put those systems in place, we know what we’re supposed to be expecting and our tenants have a good sense of comfortability about what they should be doing. So it also really decreased a lot of those random calls, it decreased a lot of the random messages here and there, or a tenant asking us questions like, “Hey, it’s garbage day.” Like, “Wait, what day is garbage day? Where do I put the garbage? It’s supposed to snow tomorrow? What do we do?” We’ve laid all those things out for them, so that way it’s very easy to say, “Okay, yeah. As referenced on page five of your lease, this is the process for that. If you have more questions, let us know.” But usually once we kind of laid all those things out at the beginning, people have been able to kind of follow that and that’s really been our system.

Becky:
The only thing that we had to come up with that was a little bit more challenging was just kind of a New York, Northeast, Northern state kind of issue is coming up with snow removal plans for being at a multifamily property. And I know it’s so easy just to think you could hire these things out, but believe it in New York, that’s probably one of the most expensive costs. If anybody’s looking for extra work, definitely move to New York and start a snowplowing company, you’ll make a killing, but those were the little things that it was one or two little issues that we just had to solve a problem for and then it’s been smooth sailing. And now our tenants have really been on autopilot for the four months that we’ve been living at the beach.

Ashley:
Yeah. Becky, I want to just dive into that a little bit as to, what were some of the most complicated things to do remotely and to turn your management system into a virtual business? So the first thing I think of is showings, like any vacancies you have, how do the showings work? And then also you mentioned that if there’s repairs your husband would sometimes go first, check it out before you actually sent a vendor. So what are some of those things and how do you work them out?

Becky:
It’s funny you mention that because we actually, about two weeks ago, one of our tenants, our longest standing tenant actually called us and said that he was going to break his lease and move in with his girlfriend and that he was… That’s it, he was out. Now we actually made a deal with them when we bought that property because it had an outdated kitchen. Let me actually go back here. So he was our first tenant that moved in, which was fantastic. Also talking about, always tell people what you want. I actually randomly told the bartender that we had just bought a duplex and we’re renting out the other apartment, that bartender then became our tenant, worked out fantastic. I’ve actually gotten three different tenants from all telling bartenders randomly enough. So this guy moves into our apartment. He was our first tenant. It was great for kind of that learning curve. Like I mentioned earlier, it was a good testing ground to see if we wanted to be landlords, to see how we would like this and how we would set it up.

Becky:
He lived with this one other girl, they were just friends. I said to my husband, I’m like, “These two are so in love, they’re going to fall in love. That’s going to be it.” My husband’s like, “No, no, no. I don’t see what you’re seeing. I think you’re crazy.” A year into it, they could not stand each other. They actually ended their lease because they just hated each other so much. She moved out and then he couldn’t stand that same size apartment so he moved, like I said, we bought the quadplex across the street. He could not afford to live by himself necessarily, but since that property was outdated, we said, we’ll cut a deal with you for rent but you just have to live with a little bit of an outdated kitchen. Twenty-Five year old bachelor. He’s perfectly fine with this. He’s happy for the deal and he’s now on his own without this crazy psycho chick, right? Yeah.

Becky:
Year later he ends up dating that girl. They got back together. They’ve been dating for months and now they’re moving in together. So we couldn’t be happier for him.

Ashley:
What a weird cycle!

Becky:
They came back together. I can not wait to be invited to their wedding. I mean, they’re a great couple. So that’s where I get my retribution on my husband that he’s like, “You’re right. They were supposed to be together.” And I’m like, “I know, I know.” So anyway, he moved out so now we have this vacancy while we’re not there, but the problem is we still have that outdated kitchen. So we are actually renovating that kitchen from abroad at the same time as finding that new tenant to move in. So the best thing that I did when I came down here is something that every single person listening to can absolutely do and we will do. And that’s bring your phone with you. In my phone has contacts, in my contact list is a realtor that can show the apartment, is my mom’s number who can show the apartment if I have an open house. She can open a key, nice and easy. We can get this done. Right.

Becky:
I have our contractor, I have our handyman and also we were able to work with a super that lives on our street, who already has to shovel out a driveway, that has to change light bulbs. He’s also a trained plumber. So he’s actually now our first point of contact and we’ve actually had probably, I don’t know, it just kind of worked out randomly that when we decided to stay that extra month, that we’ve had more kind of maintenance requests come in, perfectly fine. Not a problem. Because I know what I do. I just pick up my phone, call our super who’s now our first point of contact, he goes, looks, he either fixes it in 10 minutes, like what my husband would be able to do or then he says, “Hey, you guys got a problem.” And then I pick my phone up and then I call my plumber or my contractor.

Becky:
So I’ve been able, for example, the kitchen renovation that we’re doing right now, I was able to order all the appliances from Home Depot’s website and get it delivered because that’s what I would do if I was in the States anyways, or if I was across the street or if I owned in another state, I’m still going to get those things ordered. I was able then to be able to call and figure out if the project would be able to be done by our handyman or a contractor, got estimates from both of them, for what I wanted to do, I then picked out all the materials I wanted from the website and I sent them all the pictures of what I wanted them to do. We already have our credit card number on file at Home Depot so we don’t even have to give anybody our credit card number. They can just go, pick up what they want and what they need on our account, go do the work. Easy! And I’m still doing all that from sitting on a beach in the Dominican Republic.

Ashley:
And then you probably get the receipts emailed directly to you.

Becky:
Yeah. As soon as they check out, we get that. Actually this morning, we had one of our other tenants that lives in the property, about an hour outside of New York, he was having a problem and it’s of course that LED light. In New York, remember we live in small apartments, our tenants don’t have ladders. So sometimes we do have to help with the light bulb changing scenario. So all of a sudden I got a receipt through an email on my phone and I realized it was actually my father-in-law who’s also a licensed electrician actually went and was fixing that light bulb for us while we were here. Got the email, know exactly how much it costs. It already went into my accounting for the month. Done!

Ashley:
That’s great. That’s what I’m so interested is like running businesses virtually remotely and how do you take something that people have been doing in-person for so long because property management, even when I started five years ago, probably longer, seven years ago now, actually it was like, my office was in the building. The building was built in 2002 and it was built with an office in it for a property manager to be onsite.

Becky:
Well, think about a year ago, literally a year ago, basically from when we’re filming this right now, a year ago, we all thought we had to go to offices to do work. We all thought we had to sit in a conference room next to somebody to be able to have a conversation with them. So if we’ve learned anything over the past year, guys, it is that everything could literally be done virtual. There is a solution to absolutely everything out there and all you have to do is figure out what that solution is. There is no reason in this day and age that people should be going door to door, picking up rent checks. Checks. Who uses checks? We don’t need to be doing this anymore. There’s always a way to do something electronic, whether if it’s those payments there, that’s the first thing that you go. There is no reason you should be doing that monthly.

Becky:
Maintenance requests can all be handled electronically and have that system in place. We have that first maintenance man, whether it’s my husband or right now the superintendent that we’re borrowing, that we’re sharing with another homeowner, which also kind of keeps cost down. That’s now outsourced. Everything else that we can do I can literally run my business from a phone.

Tony:
Now real estate investing from out of state can be tough, but you’re doing it from out of the country and you’ve just kind of explained that it’s your team that’s really allowing you to do that. So if I’m a new investor and I want to kind of replicate what you’re doing, how do I go about finding trustworthy people to add to my team? Like, how did you find your handyman? How did you approach your super, these people that you’ve kind of assembled? How does someone replicate that process?

Becky:
It does go back to one of the earlier points of what I said, which is to always tell people what you’re looking for. The best place to start is referrals. The best place is to go and be able to say, “Hey, who do you know that does this?” And when you find somebody that you know, like, and trust, ask them who then they use. So for example, I mentioned my husband’s Dominican. This probably is not going to be too big of a shocker, my husband plays baseball. In the United States he actually plays baseball in a Mexican baseball league that happens to be sponsored by a law firm that does workers’ compensation suits for workers that might get injured. So when he plays ball, he’s playing with every type of vendor and service industry you can find. So we just kind of went to the baseball field one day and was like, “Hey, who over here does general contracting. I need a fence built.”

Becky:
So we got those guys. They became our general contractors. They were somebody that we had referrals for, we had references for, we knew personally. We gave them a project. It worked out fantastic. Then we said to them, “Hey, actually we need help fixing a rod iron gate. Can you do it now?” “No. Not really our specialty, but I know somebody that does.” So then we were able to kind of build our team from referrals, from one person to the next. So that’s been incredibly helpful for us is once again, if you need something, ask, tell people, tell people what it is that you’re looking for. It’s much better to start with those types of referrals. You shouldn’t have to go to Googling an electrician on Google here. You should be able to ask where other people are using.

Becky:
So even if you’re doing this from out of state, you can completely go on Facebook and find a local, maybe a mom and dads’ group or a neighborhood group. And you could post in there and say, “Hey, I happen to own a property in this town, in this neighborhood. I’m looking for somebody that can do this. Who do you guys recommend?” And just start there, but at least then you have somebody that’s kind of getting referrals and I’ve gotten great references and also great opportunities have come from me connecting with people just because I joined a community group in a completely different state.

Ashley:
Becky, I’d love your advice on this and I just want get to our rookie deal, but I want to dig into this one more step because I really want-

Becky:
Sure.

Ashley:
… your advice on this. So when you’re asking for recommendations and references, how do you handle it when you get a reference from like say a family member to use, oh, like my husband, or my brother, or you get a reference from a family member that you already know isn’t going to work for you. Or even when you do hire them from one job and it doesn’t work out, how do you handle those situations?

Becky:
If it’s a referral that I don’t like, I usually blame my husband and I’m like, “Oh, I had talked about it with my business partner. We decided to go in a different direction. He wasn’t okay with that.” That type of thing. It’s always kind of good, but no, no, no, for me what’s really important is also to be very upfront and direct. So I have no problem saying to somebody, “Hey, listen, we gave you this project. We thought it would work out. Unfortunately, this just isn’t really a good fit.” When it comes to that family member that I know is not going to work out, honestly, Ashley, it usually falls apart by the other person before it even gets to me. Then there are the people that they don’t return my phone calls, which is my biggest pet peeve. If I call you to give you money and you don’t want to return my phone call, that is it. I’m moving on. That is it.

Becky:
But usually those other people that aren’t right, they kind of tend to weed themselves out. They then you don’t hear from them again. They tend to kind of move, but otherwise, if you have to, sometimes you have to be direct and even you can set a line and say, “Honestly, for the way that I’m running my business, my rules, unfortunately I don’t work with family members. I don’t hire friends of friends.” Or whatever that may be, and then draw that line in the sand, so that way it won’t hurt your relationship with that person just because it’s literally, sorry, that’s my standard. This is how we do our business practices and then that way it doesn’t make Thanksgiving uncomfortable.

Ashley:
Thank you. That’s great advice. And I’m definitely going to take that because I’m awful at confrontation and I avoid it at all costs. So thank you. But Tony, take us to the rookie deal. I’m excited to hear… So we’ve heard all of the backend stuff, so I want to hear about a specific deal now.

Tony:
No, and it’s been great information so far, Becky, like you’re dropping a lot of knowledge for the rookies to absorb, so I love it. So, yeah. Let’s take some time. Let’s focus in on a specific deal. So do you have one in mind?

Becky:
I was just saying I would love to talk a little bit about our COVID baby house as I like to call it.

Tony:
COVID baby house. That sounds like fun. So we’ll set the table a little bit for the listeners, but just some kind of quick hitting questions and then we’ll do a deep dive from there. So what city was this COVID baby house in?

Becky:
So it is in a city… it’s not even a city. It’s a village of Goshen, New York. So it’s about an hour outside of New York City.

Tony:
Got it. And what did you purchase this property for? What was the purchase price?

Becky:
We paid 280.

Tony:
That’s actually pretty reasonable. I think when people hear like suburbs of New York, they think like exponentially expensive. So that’s actually a pretty reasonable purchase price. Was this a single family duplex, triplex?

Becky:
This was a duplex.

Tony:
Just like bedroom baths on each side. Do you recall what it was?

Becky:
Upstairs is a one bedroom, one bath with an office, which is then… We found out was actually two bedrooms, which was just icing on the cake for us. And then the bottom apartment is three bedrooms, two baths.

Tony:
And do you recall offhand what it costs you guys total cash to close to get this deal?

Becky:
About 80,000.

Tony:
Cool. So we’ll dive into what happens, how the deal ends after you give us your story. So tell us the whole story. Where’d you find it? What was the process of making this deal come to life?

Becky:
So this deal was actually not supposed to come to life. I promised my husband I would not buy a house in 2020. I promised my husband, I promised my accountant, I promised my financial advisor. That’s it. We made the decision in January, 2020, we were not buying a house. We had just closed on our property in the Dominican Republic in December, 2019. We had just bought the quadruplex in May, 2019. We were not buying a house in 2020. That was the rule. That’s what I agreed to. But as we all know, COVID hits in March. So, okay. We don’t really know what’s going on with this. I work in the medical field. I didn’t even think that this would be going on as long as it was. So a couple months into it. It was probably in May that I was kind of like, “Wait, this might be a really good opportunity to buy a house.”

Becky:
Everybody here is all of a sudden leaving New York city. They’re all looking for extra space, not necessarily right where I live in Yonkers, right outside the city. They wanted to go up to the Hudson Valley about an hour away. So I was like, okay, but people it’s a little bit more difficult to kind of get mortgages. All of a sudden the mortgage industry just kind of get a little bit tighter on who they were lending money to. So I was like, okay. So the typical people that want to be able to buy, actually can’t, they’re kind of stuck as renters. Interesting. And then also a whole bunch of sellers are freaking out because they feel like their houses won’t be able to move. Right now we’re in the middle of this pandemic. This is crazy. Everybody’s really confused. So I decided to pivot.

Becky:
As I mentioned earlier, my husband and I really liked kind of right outside of New York City. We liked to have the duplexes to quadplexes. We liked properties that we can kind of put our stamp on a little bit that we would prefer to buy empty. And we wanted something close to us. We wanted like within 30 minutes away where we’re living. But I said, “No, this is worldwide pandemic. We need to think differently. We need to pivot just as the entire world has.” So I changed my criteria. Just as we talked about how you have to set those expectations, you have to realize that your life is going to change over time. You need to update your goals. You need to update your criteria and expectations and what you’re looking for. So I completely changed our criteria. I still wanted that multi-family but now I wanted it to be within an hour of my house, so I would be able to… So I could still manage it myself. I didn’t have to worry about including cost of a property management at that time.

Becky:
Two, I wanted tenants that were in place. In place, which I know people think is completely crazy and that’s a kind of a risky thing to now do at the beginning of the evictions and everything like that, that are on hold. But I said, I want to know, because I want to see what their track record is. I want people that are already existing that already know how the house functions. I don’t have to kind of get involved and teach them how the house works. Also, I didn’t have to drive that hour. I’m a New Yorker. I don’t like driving. So I didn’t want to have to go to this house to go do those showings and things like that.

Becky:
And number three was I wanted a place that was turnkey. I wanted a place that had no work that needed to be done. It literally was buying it and we were going to collect rent checks at the closing table. That was exactly what I wanted. We found one property at first that did not end up working out. We found that we actually got the accepted offer in New York. At a point in time, you could only see a property when you had the accepted offer. They weren’t doing open houses. You weren’t able to go see properties as easily. So we already had the accepted offer. We got there and we realized that the owner actually had another offer, but was trying to bring them up since it was an all cash deal. So he was using our accepted offer to basically just kind of raise the price on them.

Becky:
Totally fine. It was a blessing in disguise because the property ended up needing a ton of extra work. The tenants weren’t all about what was kind of going on. Wouldn’t have worked out for us. So we found this other place. I looked at it just a couple of days later, it had one on the market, like the day before. And I remember going to this open house and you had to wait outside on a line. And it was all these like older men in their suits and their dress pants and I’m kind of dressed like I am now and I’m like the only girl there. Actually, I stood out so differently, they took actually each different buyer into the house to go see the property individually following all COVID restrictions. And the seller’s realtor actually thought that I was somebody who’s like secretary, because I was the only woman looking at buying the house.

Becky:
And she actually, when she called my realtor to follow up on this, she kind of called the realtor and was like, “Oh, so was Becky’s buyer, are they interested?” And my realtor is like, “No, no, no. Becky is the buyer.” So that always strikes me as interesting. So the house was actually listed for 250. So I know I said, I bought it at 280. This is very typical in New York. I love when people talk about when they get deals and they pay less than the what the listing price was. I’ve never experienced that ever. We’ve always ended up going above ask, but I looked at it, it met the three criteria that I mentioned before. It was within an hour to my house. Had tenants that were paying that were already there that had leases and it also was completely turnkey.

Becky:
When I was able to do and run my numbers, as kind of Tony mentioned before, when you have so much practice with it, it gets a little bit easier and faster to do. I knew that even at the number that I offered at 282, not 280, but at 282, I actually knew even at that, that I would still be cashflowing about a thousand dollars a month, which put me at my $500 per door. So even at that number that worked. So I was perfectly fine going over ask because I knew that was what I needed to get that deal done.

Becky:
I also did something that one of my favorite things to do when competing on properties, which is to do an escalating clause. I knew what my top number was. I knew that I can actually go a little bit higher than that 280 if I needed to. I was okay for this property going down to $400 a door for cashflow, somewhere around there, I would have been fine with, but I loved this property and it just fit with us. So what an escalating clause did is it put in what my starting number would be at and it said what my final number would be, meaning that if somebody happened to outbid, my 282 offer that my offer would actually go in an increment above there. So the increment that I set was actually $5,000. So for example, if I had offered 282 and someone came in and said, I’ll offer 285, my offer would go up to two 90 and then I set a cap at that.

Becky:
So I knew based on my criteria, I was not paying more than, I think I said it, 298 or 295, somewhere in there. I wasn’t going to a 3. That the market did not support, that did not work for me. I would have walked away, but I knew that I was comfortable going up to whatever I said it was set it at, like 295. So I ended up not needing to do that, but it’s one of my favorite things to be able to do in competitive markets. So that way it stops a back and forth between you, a realtor or a seller, another realtor. It just makes it a little bit flow better.

Ashley:
I just heard about that probably six months ago, because we didn’t really have it in our area and then I went up to another market, like an hour and a half from here. Like, yeah, you have to do that here if you even want to be considered, as you have to put in that escalation clause and you did a great… I was going to try and jump in there and ask you to explain it, but you read my mind and you did a great job of laying that out for the listeners. Yeah.

Becky:
Oh, thank you.

Ashley:
So after that, what happened? Did you do any renovations? How did you get new tenants in there? How did that whole process work after you closed?

Becky:
Sure. So, like I said, our offer ended up being 282. We did an inspection, realized that there were very few things that needed to be done, so the owner actually agreed to lower the selling price to 280, which is how we came up with that final number so that way he didn’t have to do any of the work that we were requesting. None of the work needed to be done immediately. So that really worked out in our favor, saved us a couple of grand, but we actually really didn’t have to do anything there. The tenants were actually completely in place. They were on leases. We knew that they would be there. We were able to do our due diligence on that. It’s really important when you buy a place and then you’re inheriting tenants that you actually check and ask some questions about them as in, how were they screened? How long have they been here? Are they current on rent? Do they pay rent on the day that rent is due?

Becky:
Simple questions. We are allowed to ask those questions and you should, especially with what’s kind of going on in our market right now with evictions being on hold, tenant screening’s incredibly important. Do not be afraid to buy a property when inheriting tenants, because there are amazing tenants out there. Our tenants in this property in Goshen are absolutely fantastic. We were so fortunate to be able to meet them. And when we closed on a house, we actually went and were able to meet them in-person. We sat down and just as had mentioned before, we went through our lease, which laid out how we work, what our systems are that we have in place and how we like to run our business. And our tenants have actually said that they feel much more organized. They love that they don’t have some guy knock on their door for rent every month. They liked that they could send it electronically. They liked that they can put in a request and know that we’re going to get back to them within 24 hours and we’re going to have stuff handled and that we do that at really rapid speed.

Becky:
Tenants want to be heard, this is their homes. We might be the owners, but this is their home while they’re renting it from us. So to us, it’s really important to make sure that we actually take care of those service items for them. So that has really helped us. So our tenants are actually happier with this system. So it did take us clearly a couple months to close with everything that’s going on with COVID, that kind of slowed things up. But like I said, we were able, we got to the closing table and we literally got paid for those rent checks. We actually closed on September 30th, the last day of the month and we still received the rent from those two tenants on the 30th and then we got paid for both apartments on October 1st. Couldn’t be anything better, no work to be done, rent deposited automatically.

Tony:
Getting paid at the closing table, there’s nothing better than that. Right?

Becky:
I took my check for like a $12 for the one day and I was like, “Yeah, baby, we’re going out.”

Tony:
So I want to Greek out the numbers for the listeners here. So you said that you’re cash flowing about a thousand dollars per month on both sides. So that’s about $12,000 per year, total cashflow. And you said you invested about 80 grand into the deal. So if my math works out correctly, you’re at about a 15% cash on cash return. For a market like New York that gets kind of a stigma for being super expensive you’ve found a way on a turnkey deal to make a really, really good cash on cash return. So I’m just highlighting that because I want listeners to know who are also in expensive markets that as long as you go about it the right way, you have the right strategy, you have the right approach, you have the same tenacity, Becky that you approached it with, there are good deals to be found.

Becky:
And that’s where it’s important to know your numbers. As I mentioned with that escalation clause, I knew what the top number I was willing to go to us because I knew what my numbers were, I know what my cashflow was. And as Ashley and I were talking about before, I knew what my criteria was for what a place that would work for me was or not. And if it didn’t fit that criteria, it was moving on to the next property.

Tony:
Yeah. And I love how dialed in you are with your criteria, with your approach, with your whole methodology around real estate investing, because as you mentioned upfront, having those goals in place kind of dictates the rest of your real estate investing approach. So love this deal. Love what you shared so far, Becky. I want to take us to the next segment here, which is our Rookie Request Line. So this is where our listeners have an opportunity to call in and get their questions featured on the show. So for those of you that are listening, if you want your question on the podcast, give us a call at 8885-Rookie and there’s a chance we might play your question on the show. So Becky, are you ready for today’s question?

Becky:
Yes. I am.

Mike Henriquez:
Hello. My name is Mike Henriquez and I am from central Oregon. My question has to do with a hard money loan, I guess I don’t fully understand how it works. So my question is when you use a hard money loan for specifically for a bar property, are you essentially buying the property with cash? So more specifically, the question is when you refinance, are you refinancing into a 30 year mortgage and using that refinance you paid back the hard money loan, or are you setting that something like an LTV line of credits that you use to pay off the hard money loan and whatever credit is left over, you still use to find the next deal? Thank you guys. I love the show.

Becky:
All right. So there’s a lot within that. So first thing that I would suggest, like I said before, one of the best things that you can do is to use your phone. If you have questions from a certain provider, a great option is to call that person and say, “Hey, hard money lender, fill me in, how does this kind of work here?” So that’s always a good way to kind of break down how that’ll work. One thing to also remember is yes, you’re able to buy that property and that does come through as a cash purchase, but you also need to make sure that you have the money put aside because you will probably still have to pay that down payment. So you’re still, possibly using a private money lender or other options, to be able to have that down payment, but you want to keep that in mind, even when using a hard money lender, they still want to see that you’re going to have some money into the deal.

Becky:
But you are correct. When you move forward and you are ready to refinance. The idea of that is then you go and you get a traditional mortgage. So that means calling your bank. You can get that 30 year loan, maybe a 15 year loan, whatever you decide is best for your goals and then you actually take that money from that refinance and then that goes to payback the hard money lender. So that’s how then you are able to refinance and get rid of your obligations with the hard money lender, which usually are shorter terms, meaning that you have to pay that person back in a short period of time and they also tend to have higher interest rates than a traditional mortgage would be. So that’s absolutely the way that you want to do it. Refinance and then also if you’re lucky and you did it right, you can also cash… can put some more cash back in your pocket too.

Ashley:
Thank you, Becky. Mike, hopefully you took a lot of value from the answer. I thought it was great. So we’re going to move on to our next segment and this is where Tony and I will each ask you a random question. So mine is, I just want to know what would be your one piece of advice for a rookie that doesn’t have one deal, maybe they just found BiggerPockets. What would be your one piece of advice for them?

Becky:
My one piece of advice is go out and do it. Get started. So many people get lost in this where we feel that we need to know absolutely every single thing. Well, I will tell you, you will never know absolutely everything about real estate investing. There are so many different facets. There are so many different ways that you can be involved in real estate investing. Real estate investing means different things to different people. What is so important is for you to take action. It might not be perfect. You might not find the exact deal. You’re going to hit bumps in the road. It might not work out the way that you had planned and that’s going to be okay, but as you continue to move forward, you’re going to learn, you’re going to grow, you’re going to figure it out, you’re going to be able to do it and then you are there. Once you get into action, everything gets so much easier. It just clicks and makes sense and then you’re there.

Becky:
So stop sitting around, stop being worried that you’re not going to know everything because you know what, you’re not. So go out and just do it.

Tony:
That’s awesome advice, Becky. You’re dropping knowledge the whole way through. God, you’ve shared so much. I’m trying to decide on what I want to drill down on a little bit further. I mean, I guess my question comes or is related to managing remotely. So you talked about the importance of your team. Are there any other tools or like specific pieces of software that you use that have really helped you comfortably manage all of your properties from afar?

Becky:
Honestly, my phone. My phone is absolutely my best key. I’m kind of old school. I really like Excel. So I tend to manage all of my money and all my numbers through there. I use Neighborly for my tenant screening. Like I said, I use DealCheck. There’s a bunch of other calculators out there, like you mentioned, the BiggerPockets calculator is great and very popular. There are tons of ways to be able to get those things done. But for me, this comes down to needing to find a solution to a problem. And what’s so cool about our world right now is that all of your problems can be solved in your phone. You either know somebody that knows the answer to that question. You can use Google on your phone.

Becky:
You can always find the answer to something and figure how to get something done, but honestly, I feel like 99% of real estate investors’ problems can be solved with a phone call, whether that’s to your maintenance man, to your tenant, to your lender, whatever it may be, maybe your trusted realtor or whoever it may be. But usually by picking up the phone and making a phone call, you can get almost anything solved.

Tony:
Yeah, that’s so funny because when I was a guest on the Rookie show back on, I think like episode 10, they asked me that same question too and I said email. Just because I was building a lot of relationships with other investors through email. So it’s funny that you say that because real estate… And we say this a lot, right? But real estate is a relationship business and I think the better you are at cultivating relationships and just being a good person, the more success you tend to have. So whether it’s phone, whether it’s email, whether it’s meeting in-person, I think building those relationships is the most important thing. So I love that advice. So Becky you’ve been killing it. Before we let you go, I just want to give a quick shout out to one of our rookie rockstars. So listeners, if you want to be shouted out on the podcast, post something in the Real Estate Rookie Facebook group. We’re at, I think 24,000 members strong now.

Tony:
So every week we’re trying to shout some folks out from that group, but this week’s rookie rockstar is Rahul Sharma and Rahul just sold their first flip and they are looking for the next one, but they basically bought this one for $100,000 cash from an auction, but another 38,000 into the rehab and they were able to sell it for $210,000. So Rahul, great job. Congrats on getting that first flip done.

Ashley:
Well, Becky, thank you so much for joining us today. Can you let everyone know where they can find out some more information about you and where they could possibly reach out to you?

Becky:
Sure. So I share most of my story through a Facebook group that I started called Lady Landlords. So you can always find me there. If you just type in Lady Landlords on your search bar on Facebook. You can also find me on Instagram @beckynova, N-O-V-A, 24. And also if you head over to our Lady Landlords’ website I do have a financial cheat sheet that I’m offering to any of your listeners. So you can find that at lady-landlords.com/download.

Ashley:
Well, thank you so much. We appreciate you coming onto the show today.

Becky:
Of course. Thank you for having me. I appreciate it.

Ashley:
I’m Ashley @wealthfromrentals and he’s Tony @tonyjrobinson on Instagram. Make sure you guys check out the Rookie Reply. Don’t forget to join the Facebook group and if you’re loving the show, don’t forget to leave us a review on Apple Podcasts.

 

Watch the Podcast Here

In This Episode We Cover

  • Understanding what you really want and making your business fit your ideal life
  • Getting off thepaycheck to paycheck” hamster wheel
  • How Becky got 10 units in just over 2 years
  • Joining local networking groups and your chamber of commerce to find deals
  • How to find the best plumbers, contractors, electricians, and more through referrals
  • Having systems in place so your business can run itself
  • And So Much More!

Links from the Show

Rookie Deal

  • Listed Price: $250k
  • Purchased Price: $280k
  • Rental Income: $2600 ($1500 for one unit and $1100 for the second)
  • Taxes: $8500
  • Insurance: $1200
  • Finance: 25% (70k) saved from our other rental properties
  • Net Income: $900 a month

Connect with Becky: