Going All in on Real Estate Before Doing Her First Deal

0:00Yeah so my first two deals were wholesale transactions so I was able to through my own direct to seller marketing campaigns was able to find some properties and sell them to you know quote end buyers let me be honest though it was real real easy because my end buyer was my husband and his business partner who were flipping home right so that was a very like oh let's get our toe wet then I realized as I continued trying a wholesale just how difficult it really was I have to give it to wholesalers It's a Grind right not only are you finding the property but then you are also finding a stable end buyer right who is actually interested in the property it's it's a lot of work and I just I I I wasn't in love with that transaction right

0:49And I was like okay well I don't want to keep sending out these massive marketing campaigns and and and really doing the the wh sale process so I kept getting leads right but I thought instead of like wholesaling these properties what if I keep them for myself you know I was my confidence was growing right as I had more conversations with with sellers I was like maybe I buy one of these and I keep it as a rental or potentially flip it and so the next two opportunities that really kind of landed in my lap were were properties that I knew from where they were located were better rentals as opposed to Flips like when you look at the the neighborhood it was a neighborhood of renters right

1:38Not of homeowners so I knew right off the bat that okay the exit strategy here needs to be you know to hold as a long-term rental so that's that's what I did the next two one was a single family the next one was a seven unit I think that was a mistake maybe I I was I it was a little bit too big for my britches I still own it today right and I'm still working through you know the challenges every single week but I really I really enjoyed the renovation process right and I think that was even a learning as well because I here I am new to real estate I know it's not HGTV status but I'm still wanting to make these properties beautiful right yeah but I'm in renter neighborhoods where I don't need right the beautiful ceramic

2:26tile right and it's like the you know the type of rehab that makes the most sense for these types of properties was a little bit different so I think another lesson right I overspent on the rehab right because I'm trying to make properties almost better to some degree than they needed to be for the the exit strategy that I was leveraging right so I can I can say yeah I probably spent a little bit too much money on those initial rehabs because I just didn't really understand what was the best way to do it but that's a part of the the journey right as a real estate investor is learning you know the kind of the the the quality of of repair that's needed depending on the exit strategy that you're that you're using yeah and I did the same thing

3:15in the beginning too and that you realize that you just don't get any return on investment for anything above a certain level in certain neighborhoods and I think a lot of my listeners are probably familiar with the town that you bought that in because a lot of my listeners are from the Chicago area and I read your your blog article about that seven unit that you bought in C met City Illinois which thank you is yeah yeah it's it was a great article by the way if if others want to want to read that it's at BCB collective. Net and which is Tessa's website and it was great because it it shares The Good the Bad and the Ugly and you know and there was all of it which is typical on a on a deal especially one that's you know you the thing that impressed me is you bought it for $25,000 so anytime you

4:03Can pick up a seven unit for for 25 Grand you know there there should be some meat on the bone there to to make it work but but I'm sure there's a a ton of Lessons Learned as well and I was Cur I guess maybe if you could share a little bit more about how that deal played out and why you decided at the end that it's not one that you would probably do again so yes I did buy the building for 25 Grand which I'm sure people are like that doesn't even make sense and it doesn't really make sense how I bought it was I assumed a tax lean okay pretty big one one in the amount of $130,000 okay oh wow so when you put that into

4:51The equation right it's it's like I really bought it for what if I could do math 155 right yep and can you explain what a tax lean is too for people who aren't sure sure so when when homeowners don't pay their their property taxes right for a certain amount of time those taxes go up for sale for investors to purchase right and to quickly explain it when an investor does purchase you know a a a default taxes right or delinquent taxes they essentially like have rights to the the property if not paid off in a certain amount of time okay in the in the timetable is two years so I knew I had time on my side right so I had a tax buyer right who had invested

5:40In this property as well and I knew that the Clock Was ticking right that I had two years to renovate stabilize this unit refinance it where I could not not call it my own because I was the owner of it right but I had this big lean kind of hanging over my head and I think if I were to do it again I would have just found the money to pay that lean off from the very very beginning from my initial purchase right instead of hold it and the reason is is because when I bought it the tax lean was only $98,000 so over the course of a year right which is how long it took me to you know rehab stabilize and refinance the building it grew from 98 to 130 got it okay so just for for listeners

6:28Who to clarify this a little bit so basically an investor comes in the the owner's way behind they buy the tax lean they get an interest rate on the money that they've invested and the the owner has two years to pay it off until they basically can take the property but in that time the the lean is increasing in size correct yeah due to the like massive interest rate right that's tied to it yeah so it was it was a risk right that I took and it's definitely a strategy I actually did that on my first property too and it worked out fine but still I I would not personally purchase like that again I would rather just you know get rid of those leans from the onset

7:18And call it a clean slate from the beginning so yeah so I went to work right rehabbing the seven unit and you know I I started started in the Interior right you know let's get these units renovated so I can increase the rents I had inherited it with six out of the seven units occupied right but the rents were at 500 or less so I knew I had a lot of opportunity there I mean a renovated unit was going for about a thousand right so I knew I could you know double down on the income but I just had to do the work to get there so I did that I renovated five of the seven units I couldn't do the other two because those two tenants stayed right and wanted to remain in those units and I was okay with that and you just

8:06Just to clarify you did this all from Vegas or were you actually in Illinois doing I did it all from Vegas okay yeah which you know I am still a proponent of I mean I do all my investing out of state but I would I will be more Hands-On moving forward I did it pretty remotely relying on my my contractors and video footage and you know pictures which i' I've learned again another lesson right you know a picture taken at this angle and then take five steps back there's actually can be a huge difference you know that's true so I I'm sure you've experienced a little bit of that too absolutely it's amazing how fuzzy those pictures are but they want want to get paid they're their payment oh it's so

8:55True it's so true so yeah I mean I was able to successfully renovate it you know for the most part I I started on the interior I did a few Capital big capital expenditure repairs as well but I'll tell you like the building just keeps on giving right and and not in the way that I want it to give right in terms of you know things just keep popping up because it is an old building 1911 right and and while it's brick and it is a sturdy structure I had I I I had a what am I trying to say when you go in and have an inspector in right so I knew all the good oh yeah Home Inspection yeah but it they they just keep popping up right and I'm like how much longer can

9:43I hang on to this thing right until I'm upside down you know and you have to be really careful about you know the money that you put into these things you know making sure that you're able to get your Roi out and I think that I've learned a lot in this process understanding where do you start how how to what quality do you rehab right what's the next thing that needs to be done first you want to be done and so that in and of itself has been a huge learning curve for me got it yeah yeah interesting and how do you find deals like this because you mentioned you were doing some off-market marketing you're in Las Vegas you came across this deal and Kell you met City how does that all work yeah so I

10:31Was doing I mean what they call Direct seller marketing so I was sending out sometimes it would be text messages sometimes it would be you know ringless voicemail I specifically my strategy and and I was coached by a mentor on this and it's a strategy that I would use again right if I decide to do more direct to seller marketing is the the to No Surprise the tax Lan list so it is marketing to those homeowners who are behind on their taxes you know I had more positive conversations with homeowners against that list than I have any other list that I've ever worked before and I I've done it all right I've done the absentee owner I've done the vacant list I've done the the high Equity

11:20List and you know for those who pick up the phone right and and are willing to have a conversation with me they're looking for help right and when I can step in and help right it's there there's a good there's a mutual good feeling right there and and honestly I'm still I am still friends with the previous owners of the seven unit of the first single family that I purchased there's there's a lot of Goodwill and exchange there you know I felt like I was really able to help them you know through a hard kind of situation that they were going through and they enabled me to get you know my feet wet in real estate investing and and learn everything that I have today that's great yeah yeah it's win-win win that's that's

12:08What you want and how how did you come across that list or how where do you where dides somebody find a list like that on the Treasures website so comes out what every six months to a year depending on on the county it's easier to find you know on some treasure websites than others but it it is a list that is published right every depending on the tax sale right and that's what you look for is you know on the Treasures website there's typically an area that talks about a tax sale and it will tell you when the list comes out it's it's very it's like a calendar it's like clockwork right I know to expect it every about May in November in Cook County and that's when the the most recent lists are published and you know you've got to filter them according to the types of Investments right

12:57That you're looking for but I've I've met a lot of great people through that type of marketing and been able to help some along the way yeah and then so you get the list then and do you have a VA that kind of filters it and then sends the text messages or ringless voicemails I actually did it all myself so I'm did you wow yeah yeah so I wasn't at the I was I was new Kirby right I didn't I didn't deploy any extra Capital right that wasn't needed which I mean might not be the best thing to do right but I wasn't really looking to scale that side of the business I was just looking to get enough leads every month that would keep my real estate business moving forward yeah and so yeah I you know I

13:45Skip traced it I filtered it I was the one you know using the various softwares and platforms to send out those messages legally you know I know about the compliance rules and everything that you have to do to make sure you're doing it the Right Way and yeah I mean that in and of itself is a whole learning right takes a lot of trial and error not to get it right but just figure out how to do it easily right without wanting to pull your hair out absolutely yeah yeah and I but I love that you said that because I have pictures of my wife driving me around at night putting a bandit sign standing on the hood of the the car attaching them to to to telephone poles because that was the only thing we could afford in terms of marketing and it worked you know like it

14:33was very manual it was me doing all the work and my wife you know she was a getaway driver but you know it got the phone ringing with exactly what you said like people who are in a situation they don't want to list the property on the MLS they typically have some big problem that they need help solving whether they're a hoarder or we had one lady that got locked out of her house by the health department because it was so nasty inside it was a condo unit and a building building and her neighbors were just like so happy that we were able to purchase this from her and fix it up but that's the type of stuff you get from these off-market marketing campaigns that you're not going to find on the MLS and sometimes in the beginning you had to just get out there and do it yourself so absolutely that's great oh that's awesome I love hearing that you did the bandit signs I I would have done the same but my husband was like I I don't need

15:22You in those areas here in Las Vegas like I'm drawing the line texting you can do but I don't I don't need you out in downtown Las Vegas you know yeah this was prior to kids too so I was a little more daring I think at the time adventurous