Full-Time Job, Full-Time Mom, and Full-Time Wealth From Rentals with Ashley Kehr

Brandon: This is the BiggerPockets podcast show 348. This is the BiggerPockets podcast show 348. This is the BiggerPockets podcast show 348. Hey! What’s going on, everyone? This is Brandon, host of the BiggerPockets podcast here with my co-host, David. What’s up, David? How you doing?

David: Doing great. We had an awesome interview today with Ashley

Brandon: Yeah. So, good. Yeah. Ashley is a real estate investor from the Upstate New York area who’s just absolutely crushing it in her business, has a ton of great, great tips to talk about today. I mean, everything from how she uses partners, including her very first deal, no money down, with a partner, using a strategy that I absolutely love. How she’s involving her young kids in her real estate business in a really phenomenal kind of inspirational way. Very cool story there. She talks about how she buys property using a commercial line of credit, which you’ll love that. A very, very neat tactic and really just a lot of good stuff.

Brandon: She tells us great story doing the deal deep dive about how she did this BBBR deal and pulled out more money than she ever had into it. So, it’s not just no money down but better than no money down, which is super cool. So, all that and more today on the show.

Brandon: But before we get into that with Ashley, let’s get to today’s quick tip.

David: Quick tip!

Brandon: So, while recording today’s show with Ashley, I asked her actually on the show if she’s going to be at the BiggerPockets conference this year and she said, “Yes.” But you know who else is going to be at the conference, David?

David: Who else is going to be at the conference, Brandon?

Brandon: You are and I am and Josh Dorkin is and Scott Trench is and J. Scott and all sorts of great people from BiggerPockets podcast world and just BiggerPockets authors, people who are on the blog, on the forum and a thousand others excited real estate investors.

Brandon: So, everybody who’s listening to this, this is probably your very last chance to get tickets because I’ll likely sell out within a couple days of this podcast airing because 250,000 people are going to hear this announcement right now.

Brandon: Here’s the deal. You can save $200 on the conference to be able to come hang out with us. If you use the code lastchance200. That’s one word, lastchance200 when you’re checking out. Just go to BiggerPocketsConference.com. It’s October 6th through the 8th at the Opryland Resort in Nashville, Tennessee. Again, it’s going to be amazing. I credit a lot of my success in life is to conferences. You go there. It totally excites you, gets you motivated, gets you pumped up. You learn a ton. You meet potential partners, lenders, hard money lenders, funders, whatever. Really good stuff. So, I’m excited. You excited, David?

David: Yeah. I can’t wait, man. I’ve had that one on my calendar for a long time and like you said, most of the big changes in my life, the big jumps in my success came right after something like this. You don’t always know how it’s going to affect you but when you come home, you just feel different. You just feel like you just … You climb to the top of the mountain. You look down at what you want your life to be. Now, you’re coming back down with clarity that you didn’t have before. So, it’s going to be an incredible investment. You got to be there. Plus, you get to hang out with Brandon and I and listen to how fun Brandon is in real life. That alone is worth the cost of admission.

Brandon: You mean me sitting in the corner sulking and trying not to be noticed. That’s pretty much how I handle public appearances. It’s great. If you want to see that, come to the conference. Again, coupon code was lastchance200, and that’s it.

Brandon: Now, let’s get into today’s show. So, like I said, today’s guest is Ashley. She is @wealthfromrentals on Instagram. That’s how actually I got to know Ashley was from Instagram. If you want to follow BiggerPockets and Instagram, just follow @biggerpockets. You also tag #biggerpockets when you’re posting on Instagram or on Twitter.

Brandon: We check that stuff. We like to see success stories. Next time you buy a property, you’re at the title company, you’re analyzing a deal. You upgrade to pro, a pro membership, whatever. #biggerpockets. You can also tag @davidgreene24, tag @beardybrandon or @biggerpockets. We like to jump into those things and have a kind of a take this from the podcast into the real world of Instagram. Is Instagram a real world? I don’t know.

David: It’s a world I spend a lot of time in. I really try to answer every message that comes in on Instagram when people take pictures of me, I try to share it on my story and spread the word because if you’re wanting to learn about real estate investing, you should be following people that are doing it. A lot of people that tag us are like Ashley, she’s a great follow. You want to see what she’s doing.

Brandon: Yeah. Follow her. Yeah. She’s awesome.

Brandon: So, All right. Well, with that, enough introduction. Let’s get to today’s show with our guest, Ashley.

Brandon: Ashley, welcome to the BiggerPockets podcast. Good to have you here.

Ashley: Hi. Thank you so much for having me. I’m really excited to be here.

Brandon: Good, good. Yeah. This is another one of those match made on Instagram moments because I got to know you-

Ashley: That’s right. Yeah.

Brandon: … on Instagram, which is great. It was like that with-

Ashley: I know.

Brandon: Yeah. Keep going. I want-

Ashley: I was going to say I’m surprised you didn’t say, “No. She’s a stalker. Keep her [inaudible 00:05:54].”

Brandon: No. This is good. I hear what’s cool about Instagram is you get to see people, what they actually do, their stories and all that so I was like, “Wow! She’s like a legit investor. She’s crushing it.” So, we’re going to learn today about how you’re crushing it but before we get into crushed-it Ashley, let’s go into getting started Ashley.

Brandon: So, how did you get your very first deal? Why did you decide real estate and what was your first investment look like?

Ashley: So, when I graduated college, I got an accounting job at a CPA firm-

Brandon: Oh, I’m so sorry.

Ashley: … [inaudible 00:06:27] … I know. I lasted six months,-

Brandon: Okay. Yeah.

Ashley: … like to tax season. I decided I was just going to be a stay-at-home mom.

Ashley: Then, my friend’s dad actually needed someone part-time just to manage some apartment complexes. So, I agreed to do it. It was a little tiny room with boxes of papers and a drawer full of keys. He’s like, “Here you go. Can you work with this?”

Ashley: So, I started with 40 units. Now, it’s 80 units. I just looked at what he was doing, and he has a bunch of commercial properties, too. I just said, “Why can’t I do that?” So, I found a partner who had money. I said, “You know, I’ve been doing this for a year at a big complex. I know what I’m doing, and I can handle a duplex.” So, we looked at one duplex, and we bought it right away.

Brandon: Nice!

Ashley: There’s no other offers. It was in a really small town.

Ashley: Then, from there, I just started growing and going out on my own, but that was how I got my start is I took a job where I was involved in the day to day. It really made me take action. I think if I didn’t leave my accounting job and go to this, I probably never would have gone into real estate investing at all.

Brandon: That’s such a good point. I think that getting started that way, I think a lot of people overlook that, the idea of why don’t I get started with a job sort of situation rather than necessarily jumping right in? Because sometimes, that can be the first step, the baby step, the training wheels that somebody needs to be able to invest. They’re just, “Hey. I’m working for somebody else.”

Brandon: I used to paint houses for my mentor, Kyle. I would just paint houses for him for $300. I was the cheapest house painter ever to live but $300, whatever. I would paint it in two days, make $150 a day. It was awesome. That got me comfortable with the idea of owning rentals. More and more, as I worked with him more, we still have a great relationship today. So, really good way to start.

Brandon: But I want to know more about the partner thing. I mean, you found a partner who had money. How does that work? How do you just find a partner? Family, friends, some guy on the side of the street with a sign?

Ashley: So, it was actually the guy that hired me. His son, so I said, “Look what your dad is doing. You should do this, too.” He’s like, “You’re right.”

Ashley: So, I broke down the deal for him, explained how it’d work. He put up the cash to buy the first property. So, we formed an LLC together. Then, we purchased property in cash and he held the mortgage.

Ashley: Well, a couple months later, we found another apartment we wanted to buy. So, we went to the bank, put a mortgage on the first property and took his cash back. He held the mortgage on the second property. That’s still how it is today on those two properties.

Ashley: So, but the biggest thing was pitching to him, just like how this can work and showing him examples of, “Look. Your dad is doing it. You can do it, too.” And I just showed him what kind of money he could make because he’d be building equity in the building. He’d be getting some of the cash flow and he was getting interest on the mortgage, too so it was actually a pretty lucrative deal for him. Then, I managed everything. He does nothing for it, which sounds like a bad thing, but he’s the money guy, and I take care of everything for him.

Brandon: I love, love, love, love, love that. I talk about this on webinars a lot, the same topic. If you can bring some experience and you can bring some knowledge to the table, you don’t need to bring the money. Find somebody else who’s out there who has the money and doesn’t have the knowledge, the experience. They’re not sitting in a commute right now like a lot of people are, listening to a BiggerPockets podcast episode. They’re sitting in their commute right now listening to 80s rock. So, there’s something different about the people who have the knowledge and experience. You leverage that. I think other people undervalue that.

Brandon: Here’s something funny. I found that people often will say, if I tell them that I do that because I used to do that all the time. That’s how I got started as well in a lot of ways. I tell people, “Yeah.” They don’t do anything. They just put in the money and we split it 50/50. I get two completely opposite reactions. Some people are like, “Well, why would they need you? They don’t need you. You’re taking advantage of them.”

Brandon: Other people are like, “They’re taking advantage of you. Why would they need you,” or, “Why would you need them? You’re giving 50%? You’re crazy. I’d give them 20%,” but other people are like, “Well …”

Brandon: It’s just funny. It’s just all perspective, right?

Ashley: It is. Yeah.

Brandon: I don’t know. Yeah.

Ashley: We’ve worked together for a while now so right now, we have four properties together. One is a six unit. Then, we’ve also sold two that we had in our portfolio.

Ashley: But I started with another partner, too. This one probably two years ago. He was just a friend and he had a couple of his own properties. We found this town that just, it was a renter’s town. People just couldn’t afford the housing. So, we bought a couple property there we did everything 50/50.

Ashley: So, we split the money or then when we refinanced, we both were on the mortgage. He does the maintenance side of things and then I do the leasing and tenant relations, stuff like that.

Brandon: With the same partner?

Ashley: No. This is a different partner.

Brandon: Oh, okay, okay. A different one. Okay.

Ashley: Yeah. So, this would be my second partner. Yeah. So, I have two right now.

Brandon: So, again, you’re showing that, now, that was a different way to use a partnership. I mean, I [crosstalk 00:11:58]-

Ashley: Right.

Brandon: This is good, right? So, some partners are money partners. They put up all the money and don’t do any work. So, I had some partners like that, too and other times, your partner is, “Hey, you’re 50/50, let’s just divide the roles and divide the money.” That’s fine as well.

Brandon: So, again, people when they get that stuck moment of like, “Well, I don’t have any money. I can’t invest.” There’s always a way to figure it out.

Ashley: There’s always a way to find money, too.

Brandon: Yes. Yes.

Ashley: That’s what I learned.

Brandon: Yes.

David: So, Ashley, let me jump in. I want to ask you, you said that you went to your boss’s son and you said, “Hey, we should do this deal together.” Tell us how you posed that proposal to them, what you said to help him see this is a good idea because a lot of newbies want to do the same thing, but they don’t know how to have that conversation or what they should say to get somebody else involved in their deal.

Ashley: Okay. The first thing that I did, and I remember it actually pretty vividly, is I just put little nuggets of information in his ear. I didn’t overwhelm him with the numbers, anything like that. I just gave him examples of people we knew including his dad, of, “Look at the success they’ve built.” His uncle had done the same thing with real estate.

Ashley: So, I just put little nuggets in his ear. Then, when I actually found the property, I brought him the numbers and everything. By then, he had already had interest in real estate investing, and I had piqued that in him.

Ashley: So, he looked at the numbers and he went with me to see the property. He actually had a roommate at the time who was pretty handy. His roommate was like, “Hey, I can help you guys even renovate a part of this,” and stuff like that.

Ashley: So, it was just kind of putting the bug in his ear and just building it up. Then, just when I was ready to take action just like, “Hey, look. Here’s this opportunity right now.” Just, I showed him what he would be making off interest just over 15 years and what the potential cash flow was and then just the equity we would build in it.

David: So, you explained how the whole thing would work at a general level and let him kind of let that sink in? You didn’t make him make a decision right then?

Ashley: Yeah.

David: Then, when the opportunity came, it sounds like you kind of had the whole thing figured out already. He didn’t have to do something he wasn’t uncomfortable with. You said, “Here’s what I need from you. Here’s how the deal’s going to look. Here’s what we’re going to do.” Really, that made it very easy for him to say, “Okay. I’m on board.” You made that easy for the person to partner with you, right?

Brandon: Mm-hmm (affirmative). Yeah.

Ashley: Okay. One thing we did was start the LLC. So, we got a life insurance policies on each other, so if something were to happen to him, I could use the life insurance policy to buy him out and vice versa.

Brandon: That is so smart.

Ashley: Or buy family out.

Brandon: I don’t think anybody’s ever given that tip on a show of 350 some episodes. I don’t think anybody’s ever given that tip, so way to [crosstalk 00:16:42]-

David: It’s so good.

Brandon: Yeah.

Ashley: Yeah, because I was married-

David: It speaks to people’s … Oh, sorry.

Ashley: [inaudible 00:16:48].

David: I was going to say it speaks to people’s fear of losing money more than, “Here’s all the money you can make.” You came out and showed this person how they are protected before you said what you need from him.

Ashley: Yeah. We did an operating agreement and then the life insurance policies because I was married and he wasn’t at the time. So, if something happened to him, it would go to his family members, and I didn’t want to run these properties with his two siblings and his parents. He didn’t want to run the properties at all so if something happened to me, he’d rather just buy my family out and then just sell everything, probably.

David: And who did you use to help you structure that agreement?

Ashley: We used an attorney.

David: Okay. Did you just Google an attorney?

Ashley: It was the attorney that we did for the closing on the property they were going to have. It was an attorney I had actually used before for when I built my own house and we’ve used her for various things. So, it’s just a small, local attorney. She actually gave me a draft that she uses for the operating agreement. She let me go in and make it specific to how I wanted it and then she just approved it, rewrite it and everything but it saved a lot on legal costs of me, actually filling in that information, stuff like that.

David: And approximately, how much did that cost to have that drawn up?

Ashley: I think it was maybe $200 at most.

David: There you go. What an awesome way to spend $200, to get your investor to feel comfortable partnering with you.

David: All right. That’s awesome. So, let’s fast-forward to where you are today. Tell us what your portfolio looks like.

Ashley: So, right now, I have 15 properties, and it’s 30 units. Then, I currently have two property under contract and its six units. One of those properties is a duplex and I’m actually doing my first wholesale deal with it,-

Brandon: Nice!

Ashley: … so I’m really excited about that because I wanted to do that for a long time, but I wasn’t sure if I’d have buyers or anything like that. The four unit that I wanted, the guy would only sell it to me if I took the duplex, too. So, I negotiated a really great deal. I found a buyer for it and I’m actually just to sign the contract over to him two weeks ago.

Brandon: Nice. Congratulations. That’s very cool.

Ashley: Yeah. Thank you.

Brandon: So, that’s an interesting strategy that I don’t know if people think about enough but when you’re negotiating on a property, oftentimes you can toss in another property as well that they have. Maybe you don’t want that property but toss it in and maybe you can wholesale that one out or sell it out.

Brandon: In fact, we’re buying these eight mobile home parks right now. One of them, it’s fine, but I didn’t really want it, but the guy wouldn’t sell without including that one. So, like, “All right. We’ll take it. It’s an average deal, but we’ll take it.”

Brandon: Then, either we’ll make it a decent enough deal or we’ll just sell it off. Even if we sell it for what we have into it, it doesn’t really matter. It doesn’t bring down the average. It just get it out.

Ashley: Right.

Brandon: Yeah. That’s very cool. 15 properties, 30 units, two under contract. That’s awesome. I mean, you’re obviously crushing it.

Brandon: How do you manage all this right now? You’re still a property manager that deals with all the interactions of the tenants?

Ashley: Yeah. So, my own properties and the ones I have partners are completely separate from my job, so I actually have property management software that I use. I use Buildium. Everything is remotely. I could be on a beach right now and manage my real estate. The only thing I can’t do now or I can’t do remotely is basically showings, but I have a bunch of people I can rely on to do that. So, that is [crosstalk 00:20:23] today.

Brandon: So, I use Buildium as well. For those who don’t know what Buildium is and I swear this is not an advertisement for Buildium or anything but what do you like about Buildium? What does it do for those who never heard of property management software at all? What’s the benefit of having good software? Again, there’s Buildium, there’s AppFolio, there’s a lot of good ones out there but, yeah, both of us happen to use Buildium.

Ashley: Yeah. I use AppFolio for my job. I love that, too.

Brandon: Oh, nice.

Ashley: But, Buildium, it’s so great because you can keep all your bookkeeping in there. You can pay your bills out of there. Then, each tenant has a portal so in their tenant portal they can submit their maintenance request. They can pay rent online. Then, they can communicate through Buildium if they want, but it’s just really nice. You can upload all your documents. I upload all my bills that I pay to their self. I ever need to go look back at a bill, it’s attached right there in my bookkeeping.

Ashley: There’s also to list your property, they give you a website you can use. You can list your property on the website. Then, they also can post it to Zillow, Realtor.com, Apartments.com, all these different websites for you with just a click of a button instead of manually having to go and list them. Then, people can contact you who are interested in your apartments and you can set up showings. I think there’s even a new feature now where you can set up the self-showing, so you select when you’re available. Then, people go online and they say, “Oh, I can do 3:00,” and they click it and they get a confirmation like, “Someone will meet you there at 3:00 p.m. and …” Without a lot of the phone calls for leasing at least.

Brandon: Yeah. Yeah. Having that software, just something to be able to manage your life and your … So many landlords today are still running most of their business in their head, and they’re trying to figure out how to do it. And I’m not saying you can’t do it that way or on a bunch of spreadsheets but, man, once you get into a good property management software, you’re just like, “Where has this been all my life?”

Ashley: Right. Even the leases, now everyone can sign electronically, so you just help someone who wants an apartment. “Okay. I’m going to send you the lease and submit your whole deposit online and pay your security deposit.” It’s really convenient.

Brandon: Yeah. That’s awesome.

David: What’s funny is how many people don’t get into real estate investing because of these notions they have that they’re going to be taking phone calls at 2:00 a.m. and having to deal with stuff that when you talk to successful investors, this never comes out of their mouth. I never hear someone we interview say, “Oh, it’s these toilets that are always overflowing that make me hate my job.” But that’s always what people who don’t get in think it’s going to be like. The reality is, there’s software that’s designed to do the work that people used to have to do. These complaints may have been legit 45 years ago but that’s just not the case anymore.

David: You said the only thing that’s not remote is showings but, really, if you have someone that can do it, that’s remote, too. That’s something Brandon and I spend a lot of time talking about is we want to grow, but we don’t want to hate our lives. So, how do you systemize what you’re doing so that you keep growing?

David: One of the things that I think I’ve done well with my agent business is systemize it so when I’m in Hawaii with Brandon, I’m still putting deals together. I usually do a couple listing presentations from Hawaii and come back to new listings that are going on the market and buying new clients. I know he’s mentioned Buildium several times, so I know he really likes that app. I would just highly encourage everyone that has any idea, “I don’t want to get into investing because it will be messy or time consuming.” It won’t be if you do the things that Ashley’s doing.

Brandon: Yeah. That’s [crosstalk 00:23:53].

Ashley: Yeah. It’s just putting these systems in place has made my life so much easier. I don’t think without property management software, I’d be able to handle all of this at all. It’s just so convenient. It’s really not that expensive, either, when you look into it.

David: So, that’s a really good point. Can you tell us what some other apps or software that you use to make your life easier are?

Ashley: Yeah. Yeah. The first one be the property management software. Then, to communicate with my tenants, they can do it through the property management software, but I actually have a Google Voice number. So, I created a phone number that I just give out to my tenants, and I have the app on my phone, so when they call that number, my phone will ring. It will say that my company, Colt and Farmhouse Development, someone is calling from that so I know that it’s a tenant calling.

Ashley: Then, I can text them through that. Then, I set up a voicemail specific to them like, “I’m not available right now but please leave a message. If this is emergency maintenance request, please call this number. You can also contact me through your portal,” and just stuff like that. So, it’s not someone who’s calling my personal cell phone, getting, oh, all this long list of other places they can call or what to do. So, that’s been very convenient for me.

Brandon: Yeah. That’s very cool.

Ashley: But then, yeah, but also with the property management software is I do everything paperless now, so I even have a scanner app on my phone. So, every time I get a bill in the mail, I scan it in and then I attach it to the payable in software. OneDrive and Google Drive is another one I use. I actually use both of them right now just so I can look up anything whenever I need to. It’s right there at my fingertips. It’s just so amazing technology now that you really can work from anywhere with using different apps like that.

Ashley: And then I use Everlance to track my mileage. That one, even when I go to the post office, I’ll track it because I have a PO Box specific to my rentals. I do that anytime I go to a property, I’ll track it.

Ashley: Then, to find deals, I use LandGlide and onX Hunt. So, if I’m driving around, I have my kids trained to look at meters on houses, so they see more than two meters, it’s, “Mom! Look, look.”

Ashley: On LandGlide, you can go right on and look at the parcel, see who owns it, see where they live. It even tells you the percentage of land coverage, so if it’s 20% wooded, it will tell you that. Then, it gives you a link to the county link. You can look up taxes, stuff like that.

Ashley: Then, onX Hunt is actually a hunting app. It doesn’t have as much as LandGlide but you can actually see the satellite image of the property so how many buildings are on it, is there a pond? Is it wooded? Stuff like that. So, I-

David: What’s that called? onX Hunt?

Ashley: onX Hunt. Yeah.

David: Oh, cool. That’s awesome. No. That’s super helpful.

Ashley: It’s for hunters. It’s when they’re hunting, so they can look up people’s property, who owns their land, if their deer they’re tracking went onto the person’s land.

David: Oh, that’s interesting.

Brandon: Yeah. I’ll say it. Yeah. That’s awesome. I’ve not heard of that one but it’s a cool idea.

Brandon: So, yeah, the app thing, obviously, the more systems you got and clearly as somebody who likes systems, you build these things out because they make your life easier, but I’m wondering, as a property manager now, as a landlord, as somebody who owns and manages their own properties, I guess, what can you tell people who are listening to this who are nervous about buying and managing their own properties because I manage my own for the first decade, well, my wife and I did. We still do … My mother-in-law manages a lot of them for us now since we move to Maui but for those … And David doesn’t. David doesn’t know. He did his first one and he didn’t want to do any more.

Brandon: So, people who are considering getting into the game, should they manage their own property? Should they not? Is it harder than you think? Is it easier than you think? I guess, what kind of advice or words of wisdom can you offer to people who are in your shoes X number of years ago?

Ashley: The first thing I would say is get a job in the business. I mean, there is constantly listings for leasing agents. A Sunday leasing agent to show properties. It’s one day a week, couple hours. That is a great way to learn about managing a rental.

Ashley: Then, the second thing would be find someone who already does it and just run things by them. You purchase your first property and just bounce things off them. There’s so many real estate investors that are willing to share. Even on Instagram, so many people share how they do it, even checklist, I see of the move out cleaning checklist, I see so many people sharing on Instagram.

Ashley: But I would say either find a job, even just a part-time one or find somebody that you can bounce ideas off and can help you get started.

David: Yeah. That’s fantastic. Speaking on Instagram and looking on your Instagram, one of your most popular post on your Instagram, which by way. What’s your Instagram? It’s wealthfromrentals, right?

Ashley: Yes. Yes.

David: Okay. So, one of your more popular ones is about how you helped, I think it was your sister buy a duplex. Is that right? Can you tell that, explain that story?

Ashley: Yeah. Yeah. My sister graduated college. She was 20 years old, and she got a job at a hospital. So, we were looking at houses for sale in the area and I convinced her, “Do a duplex.” I showed her what I’m doing and how it could work for her.

Ashley: So, I got into real estate investing too late to house hack. We had already had our forever house, I guess. So, I’m living through her doing it but she agreed, so we started looking. We put an offer in right before her 21st birthday. It was for a duplex. The asking price was 139,900 and been on the market for about four months, I think. We negotiated down to 134,000 with a new roof put on before closing.

Ashley: So, when she turned 21 before she closed and she went and got an FHA loan. So, she got really low interest, I think 4.3% and then three and a half percent down payment.

Ashley: So, the deal was that I would give her the down payment. It ended up being around $14,000, so she would put me on the deed as 50/50 but she’s the one on the mortgage. So, I don’t have another mortgage counting against me on my credit because a lot of times, the banks max how many loans you can have on a property. So, she moved into the apartment. There’s people living upstairs paying 550. Her mortgage payment was 1050 a month. So, they ended up moving out when their lease ended. She had renovated the downstairs a little bit and she moved upstairs.

Ashley: So, now, she’s renting the apartment out for 1,005 for the downstairs and she’s living upstairs, so she’s paying $45 towards her mortgage right now. She’s loving it and she redid some of the upstairs, too, and now she’s … It’s almost been a year since she moved in. So, with the FHA loan, she could move out and get another property with another FHA loan and kind of do the same thing again.

Ashley: So, we’re starting to look again at another property, but it’s been really exciting to share this with my sister, I guess, and get her started so young.

Brandon: Yeah. That’s one of the most valuable things. We don’t talk about it a lot but one of the most valuable parts of becoming a real estate investor and really learning this is not just your ability to build wealth for yourself but your ability to influence those around you, to change their destiny forever. Everybody from your sister to your … You have kids, you said, right?

Ashley: Yeah.

Brandon: So, your kids. They’re going to have a different life because you invested in real estate, because you know this stuff. I kind of help supplement my parents’ retirement now. Like, they’re retired and because they were in a deal with me and then I basically took that deal and we made all the profit from it, I turned it into a loan. So, now, I pay them on this, just a note basically from the next 20, 30 years. As long as they’re around, they get this extra income now to support their retirement. I don’t know. Some of the really cool things about real estate.

Brandon: So, I also heard a rumor that you did something similar to what I did with the buying a property for your kids. Can you explain that?

Ashley: Yeah. So, I love when you talk about it. So, I took three properties that I have. I’ve designated one for each of my kids. I want to do exactly what you’re doing for Rosie.

Ashley: So, they each have a 15-year mortgage on it. My kids are only five, three, and one so plenty of time to pay off the mortgage before they’re ready to go to college, but I want to have it paid off. Then, when they’re ready to go to college or start a business, whatever they want to do, I’m going to refinance the house and let them use that money to start their future.

Ashley: So, it’s really exciting because they know which house is designated to them. I mean, my five and three year old do. We talk about should we do this and this update in this house or, “Okay. Your tenant paid rent this month.” I try as much as I can to get them involved in it. They do showings with me and stuff like that so …

Brandon: That’s so cool. I love that you took that advice because like, “Yeah, I did that.” I like to pretend that I, at the time, I knew exactly what I was doing but in reality, I was just like, “I had a property,” and Rosie was born that week. So, we closed that.” Then, I was like, “That’d be cool if we put this on a shorter-term mortgage and paid it off before her college.” I think that’s how it turned into college hacking or whatever you want to call it today but anyway, I love that you actually just took that and ran with it. Now, you have …

Brandon: Again, I tell that story a lot about how we can help our kids avoid all their college debt entirely but the real, the best part for me is that Rosie and your kids as well get to see the power of real estate investing for the next 20 years. It’s not something they heard mom talking about or dad talking about. It’s like, “No, that’s mine.” And yeah, Rosie’s going to be doing her own profit/loss statements when she gets old enough to do it. That’s her math. And she’ll get to do all that stuff. I don’t know. I think it’s awesome. So, kudos to you on doing-

Ashley: Yeah. This morning, actually, my three year old in the car. He’s like, “Mom, I really like that house.” He’s like, “When it gets older, can we buy it and rent it out to somebody? Can somebody who let their …” I was so proud of him.

Brandon: That’s so cool.

David: Yeah. Did you tell them, “Well, does it have two meters on it?” Go look.

Ashley: Yeah. It was a single meter. I did have to train him better at that one.

Brandon: Come on, three year old! Let’s go! Come on.

Ashley: Yeah.

Brandon: That’s funny. No, that’s so amazing. They get to learn. They get to grow. They get to see this. So, yeah. If only more parents could find more ways to involve their kids in their real estate. I don’t know. I had such a great time. I mean, Rosie was only two at the time, but we’re driving around. I don’t know. This was a few months ago. We were visiting back where we lived the last decade. We were looking at all of our properties, driving around. It was just me and Rosie in the car. Heather was at her mom’s or something. I was just explaining to her at two years old like, “This is our house. We own this.” She had no idea but it was fun to be able to try to explain it to her and then she-

Ashley: Yeah…

Brandon: .. was cute the other day. I mean, a day or two later, she was like, “Are we going back to one of our houses?” Again, I don’t know if she knew what I was talking about, but she must have at least understood somewhat like that. That’s like a toy, like daddy owns that. So, anyway.

Ashley: Right, right. You’re planting that seed.

Brandon: Yeah. All right. Let’s move onto some specifics about today, let’s go how are you finding deals? How are you offering on them? I mean, are you still using partners. Then, how do you finance them? Let’s go through some of those specifics before we get to the deal deep dive.

Brandon: So, we’ll start with yeah, how do you find deals today in this market and where are you finding deals? I don’t even know where you’re investing.

Ashley: So, I’m outside Buffalo, New York and farm countries, rural areas. I’ve been going off on my own now back purchasing properties. I use a commercial mortgage line of credit to actually purchase properties. So, when I decided I wanted to go out on my own, I needed more money. So, my husband has this old farm house that he had purchased from his parents. It was paid off, and we were actually renting it out at the time.

Ashley: So, I went to a bank. It’s a small community bank here. They pitched me a commercial mortgage line of credit. So, it appraised at 130,000. I was able to pull out 108,000. I had to file it as a mortgage being commercial, but it acts like a line of credit. I can pull off at any time and I pay interest-only payments on it.

Brandon: That’s cool.

Ashley: It’s variable. I think right now, it’s at 6.75%, but it has been amazing for me to be able to make cash offers. It’s really helped me.

Brandon: That’s cool.

Ashley: And I like it because it’s not on my own personal residence either. I know a lot of people use key locks to do that, but I like the safety that I’m not risking my own house to …

Brandon: Yeah. That’s cool.

David: I do the same thing. It’s an awesome tool. A lot of people balk at hard money rates and never even stop to ask, “Well, if I already have an asset with equity in it, how could I use that as collateral?” I call it giving a loan to yourself for really, really cheap, right?

Brandon: Yeah.

Ashley: Yeah.

David: I’m paying a bank 6% off of my own asset as opposed to a hard money lender that want maybe 9, 10, sometimes up to 14% interest. It functions like a bridge loan. You use it to buy the property. Then, it’s a really easy way to BRRR if you buy a fixer-upper property with that money, then you fix it up. Then, you go refi it into a traditional 30-year rate and probably even less than six and a half percent. You pay off your line, you’ve got that money to go buy your next round of houses and you don’t need to keep cash in the bank.

Brandon: Yeah. Is that actually what you’re doing?

Ashley: Right. It’s not really …

Brandon: Are you refinancing them, then and pay back the line of credit? Yeah. Perfect.

Ashley: Yeah. Yeah. So, the money isn’t pulled off for that long. Maybe three, four months and then it’s just payback offs. You’re really not paying that much interest. It’s definitely worth it.

Brandon: Yeah. Yeah. That’s one of my favorite strategies for investing is if you have the equity, if you can get a line of credit, whether it’s on your own property or on another one, that is some of the best money to get. Yeah.

David: What’s awesome is that in 5, 10, maybe 15 years, those three properties you bought with a commercial line will then have enough equity in them that you can do a commercial line on those and then go buy the next round. And it’s like these trees that you plant and then they grow and then you can use those to do the next one. That’s how you kind of expand exponentially. What’s important is that you get started by partnering with somebody or not worrying about toilets overflowing or all the dumb stuff that keeps people from taking action so that you get to that point where everything’s kind of rolling with momentum.

Brandon: Yeah. That’s good.

Ashley: Yeah. And to kind of add onto that, one thing, too, that I do to systemize everything is I have a company that I work with that they just do maintenance. So, they’re like a property management company but just maintenance so that’s really helped, too, where even if there was that 1:00 a.m. call of toilets overflowing on my voice mail, it just says, “Please call for this emergency maintenance.” They pick up on that phone call, and they go and take care of that and then they inform me the next day what went on, but it has been very helpful to go and find someone that will do that for you for those very few … They’ve only, I think once maybe gotten a midnight call for something in the five years I’ve been doing this, but if you could find someone who’ll do that for you, too, that helps a lot.

Brandon: Yeah. The midnight call thing, to go back to that real quick. Everyone talks about it, and I’ve been doing this now for 12 years. I’ve had one. I had one middle of the night call. It wasn’t even an emergency. I’ve had one 10:00 at night water pouring through kind of a problem. I’ve had a lot of rentals over the last 12 years and that’s twice. Both of them, I could have just called a contractor and … Yeah. It’s silly.

Brandon: So, all right, so how do you find properties today? How are you finding deals to buy and what are you looking for?

Ashley: Most of them, I’m finding on the MLS. I work with the realtor. She sends me deals pretty often and then I check Zillow every day but just there’s not a lot of competition in our area, so I’ve been finding a lot of deals that way. Then, if I see a for sale by owner, I’ll call on those. Even if it’s not a multifamily, I’ll call and ask, “Hey, do you have any other properties available?” But mostly, it’s-

Brandon: Ah! Good.

Ashley: … been word of mouth, too. Just, I tell everyone that I buy rental properties so that has definitely been helpful.

Brandon: Yeah. And are you only looking multifamily? That’s the approach all of you want is multifamily?

Ashley: Yeah. I have the one single family and that’s the old farmhouse, but the rest are duplexes and then a three unit and a six unit.

Brandon: Why is that?

Ashley: I think that the overhead, I guess. I like as many people under one roof as possible, especially with me for my job managing the apartment complexes.

Ashley: So, the one apartment complex is 40 units. Then I have 30 units, but I feel like I run around a lot more managing stuff with, “Okay, we’ve got these six yards to cut the grass this week.” I got to make sure my guys put it in and stuff like that where at the apartment complex, just one lawn to worry about.

Ashley: So, that’s really my biggest thing is I don’t want to have a ton of single family homes and continuous maintenance on all of those.

Brandon: Sure. Yeah. That makes a lot of sense.

Brandon: So, what, in your business fires you up? What do you just love doing? Where are you in the zone and flow where you just like, “Yeah. This is my game”?

Ashley: I love analyzing a deal and getting that aha moment like, “Yes, this property is going to work.” I used to be afraid to submit lowball offers, and I used to be afraid of what my realtor would think and what the seller would think. But now, I get excited like, “Okay. This is so loaded. This would be awesome if it was accepted.”

Ashley: And I love helping other people. I have two good friends that invest, too. One started investing about the same time I did and the other one just about a year ago. It’s just really fun to bounce things off each other and go look at a deal together and say, “Okay, shall we partner? Should we … One of us buy it or what?”

Brandon: Yeah. Very cool. And then what about your future? Where do you want to head? Where do you see this going?

Ashley: I pretty much change my mind every single day. Some days, I just want to pay off all the properties, live off of the rental income I have now. Then, other days, I’m like, “You know what? Let’s scale. Let’s scale.” So, last week, I decided I’m going to sell the first duplex I ever bought. It should hit the market today, actually.

Brandon: Cool.

Ashley: And I want to use that cash to maybe buy a four unit, six unit, something like that. I want to scale up.

Brandon: Cool.

Ashley: That’s today’s idea of where I want to be.

Brandon: Yeah. And I know it changes.

David: Don’t feel bad about that because we all go through it. There’s entrepreneurial bipolarism that goes on, where one day, you’re on top of the world and you want to conquer the whole thing. Then, sometimes one small thing happens. You just, “I hate this. I hate everything about this. Why did I ever do this?” I go through that routinely.

Brandon: That’s funny.

David: Yeah. So, I want to ask you, Ashley, we don’t get a ton of women who are as into real estate investing as you are, and those that are are often asking, “Why are there not more women who are doing this?” Can you tell me a little what your experience has been like as a woman in the industry, if you found it was extra challenging or maybe there was some benefits to it, how you navigated this world as a woman and then what advice you have for other women that want to get started?

Ashley: Okay. I actually have a good story for that. When I had driven by this commercial property one time. There’s just a commercial sign out front for sale. I just called on it. Looked like residential units upstairs. It was a realtor. He said that his father owned the property and actually had more properties for sale, if I’d be interested in meeting him in the area and he’d show me all the properties.

Ashley: So that right there was great. I was really excited. So, I get to the property. I get out of the car. He’s standing there. We shake hands and stuff. He’s just standing there and I’m like, “Okay. Can we go in?” He’s like, “Well, is your husband getting out of the car?”

Ashley: So, it was a really [inaudible 00:45:33] of my husband. This is my husband’s deal or he was a part of it. I was like, “No. It’s just me. I’m the one interested in buying it.” So, I’ve actually ended up buying about 12 units from his dad from that deal. So, we’ve become good friends because of it but and then the six I have under contract now are from the same guy but-

Brandon: That’s cool.

Ashley: … it was just really funny that he assumed that my husband would be a part of it.

Brandon: You know what they say about assuming? Yeah.

Ashley: I honestly think it … Yeah. [inaudible 00:46:08].

Brandon: No. Anyway …

Ashley: So, I think it’s very easy to do because you don’t need to do the maintenance. There are people out there, they’ll do the maintenance for you. I feel like that’s why a lot of people don’t want to do it because they’re like, “I don’t know anything about the construction of a house. I don’t know how to repair things.” Well, I have no idea, either. My 21-year-old sister did a better job doing her own maintenance and updating in her properties than I ever could, but you can hire all that stuff out. As long as your numbers are good, you can make that work. I probably have had my husband go to a property one time in the last five years to do a repair for me. He is very hands off from it. I don’t recommend not having your husband on board doing it. My husband’s very supportive. He loves talking to me about it but I honestly don’t think he knows where any of my properties are.

Ashley: So, it’s just an interesting perspective that you don’t need to have a man to do that maintenance. I’m not a feminist, really, at all. I just … I just [crosstalk 00:47:14]-

Brandon: “I am a strong, independent woman.” Yeah.

Ashley: Yeah. Right, right. I wish my husband would do it with me because then we could just drive around and look at properties.

Brandon: Yeah, yeah.

David: That’s why you’re forced to recruit your three year olds to do it.

David: So, what about advantages that a woman might have in the industry that may be overlooked?

Ashley: Well, sometimes I can use the excuse like, “Oh, you know what? I need to talk to my husband.” If I don’t feel comfortable giving an answer right then and there, it’s a perfectly believable excuse that anyone’s just like, “Oh, yeah. Definitely. Okay. You don’t need to answer on something now.”

David: That’s great. Brandon and I use it with our imaginary partner. “Oh, I got to go run this by my partner.”

Ashley: Yeah. My one partner was on his honeymoon last week, so I used that to delay a furnace install that I [crosstalk 00:48:04] a better offer.

David: That’s funny. That’s really funny.

David: Hey, Ashley, what’s been your biggest challenge so far in real estate investing?

Ashley: Gosh. I don’t know. I think a lot of it was at first money, is until I got that mortgage line of credit but then, once that I found out that after that, I’d say tenant relations just you manage your own property, you really need to be understanding and you need to learn how to deal with your tenants because it can break you because they’re … And that, honestly, has been the hardest thing for me. Even at my job, I’ve grown so much from the day I started to now with handling tenants and knowing just what they expect, what I expect and how to draw a fine line between us and not give into anything and still be compassionate about their situation.

David: Yeah. That’s really good. And conversely, what makes you smile? What memory of the past few years since you got into this …

David: By the way, when did you get into this? I don’t think we asked that.

Ashley: It would be five years ago so 2014, when I bought my first property.

David: Okay. Wow! That’s so great.

David: All right. So, in the past five years, what memory just stands out to you as like, “That was a good day. That was something special”?

Ashley: I paid off my husband’s truck with my rental property income. I just loved that. The day I clicked that button and submitted that final payment because he has always supported me forever. It was just so nice to be able to do one thing for him, that was just, I worked so hard and I’m gone a lot just … I’ve been traveling to conferences lately. So, it was about a year ago that I was able to do that for him. Since then, I’ve actually paid off his farm equipment. I have a skid steer to pay off for him but just great, like showing all this time I’ve wasted on real estate actually hasn’t been a waste. I’ve been able to provide for our family and get his farm paid off, so that really has been worth all of it for me.

Brandon: That’s phenomenal. I mean, it truly is like your Instagram thing says, “Wealth from rentals.” It doesn’t happen overnight. Over time, it just gets better and better and better. That’s a cool thing about real estate, right?

Ashley: Yeah.

Brandon: Not only did you get wealth and people talk about that. You systems get better, so the work tends to be a little easier, or at least more manageable. You feel more comfortable. You make more money. You get more cash flow. Your equity goes up. Your loan gets paid down. It’s just wealth over time. It just grows. That’s a great story about that, how that’s kind of worked.

Brandon: Are you going to BP Conference, the BP Con?

Ashley: Yes, I am. Yeah.

Brandon: Awesome.

Ashley: Probably registered in the first five minutes [inaudible 00:51:09].

Brandon: That’s awesome. All right. Well, we’re going have a good time.

Ashley: Yeah. I will be going.

Brandon: Yeah. We’re going to have a good time. We’ll hang out.

Ashley: Good.

Brandon: Very cool. Oh, by the way. I think I said it in the quick tip at the beginning of today’s show but there is a discount code. I think it’s for … Yeah. It’s $200 off if you use code lastchance200. That’s one word, lastchance200. It’s a $200 discount. It’s the last chance to get tickets for the conference if they’re not already sold out. So, go to biggerpocketsconference.com, check it out. Sorry, Ashley. You didn’t get a $200 discount but-

Ashley: I did because I’m a pro member.

Brandon: Oh, there you go. Very nice. Very nice. Yeah. You got in there early. That’s awesome.

Brandon: All right. So, let’s shift gears here and head over to the deal deep dive.

David: Deep dive.

Brandon: All right. This is a part of the show where we dive deep into one particular property or investment that you’ve made, whether it’s good or bad and we find out more details about it. So, let’s go there now. Ashley, got a property in mind we can pick apart?

Ashley: Yes.

Brandon: All right!

Ashley: So, this one I did with a partner and it’s the partner that we’re 50/50 on everything. We found this property in a small town we’ve never invested in there before. The property was in a flood zone. It was vacant. The guy next door owned it and just wanted to get rid of it and didn’t want to deal with it anymore. So, we took a look at it.

Brandon: It was in a flood zone?

Ashley: Flood zone. Yup.

Brandon: And does that worry you at all because I own some properties in flood zones but does it worry you?

Ashley: It did. It doesn’t anymore.

Brandon: Okay. Why?

Ashley: So, well, the property was only $35,000 so-

Brandon: Wow!

Ashley: … if it did get washed out, it’s not going to have bankable loss, I guess. But we … Yes.

Brandon: That’s funny. What kind of property was it? Was it duplex or something?

Ashley: I said, “Duplex,” yeah.

Brandon: Oh, that’s right. Okay, all right, all right. After you said that … Cool. How about-

David: All right.

Brandon: Go ahead, David.

David: How’d you find the deal?

Ashley: Just on the MLS, so I started expanding the towns that I was looking in. This town actually had cheaper taxes than the other towns I was looking in but still had public, water, sewer, and a couple other things I looked for. Plus, it was in walking distance of the grocery store, stuff like that. It’s also very low income community. There was a lot of renters in that area and just, there was nothing available. Nothing available to rent there.

Brandon: That’s cool. I like that you’re not afraid of those because I’ve had a lot of luck in that kind of a situation as well like a smaller town, lower income. A lot of people are like, “No. You’ve got to only buy in Phoenix or Atlanta or Seattle or Denver where the market’s just crazy,” but I’ve had a lot of luck just with rental property in the small little towns that aren’t booming and growing. You don’t give it enough appreciation maybe, but I like that cash flow.

Brandon: So, you said $35,000. Was that what they’re asking, and you just paid what they’re asking, or did you do any negotiation in there?

Ashley: Yeah. They were asking 39,900 and we got it down to 35,400, I believe it was. We did a cash offer. It was our first deal we were partnering on. We did not know where we were going to get the money. So, it was a little nerve-wracking at first. We have used a hard money lender, each of us separately. We could always use him, but we just didn’t want to use him at this time.

Ashley: So, we went to a small, local bank and we just wanted to look at what our permanent financing would be so we could kind of finalize our numbers on the property. When we were talking to the loan officer about permanent financing once we closed, he said, “Well, how were you guys buying the property?” We just, “Well, we’re figuring it out,” and trying not to show that we had no idea.

Ashley: So, he’s like, “Well, you know, if you guys are interested, I could give you a 90-day unsecured loan, interest only at 8%.” So, our mouth kind of dropped like, “Really? You can do that?” He’s like, “Yeah.” We’re like, “Okay. We’ll do it.” So, we got this 90-day loan. The deal was we would come back. As soon as we closed, refinanced at the same bank,

Ashley: So, we did that. It took us three months to refinance after we closed, so we paid maybe three months interest on that 90-day loan.

Ashley: So, after we closed, we put an $800 fridge in there. That was all we did to the property. The appraiser comes in a week after closing. It appraised for 55,000. We had bought it for 35,000. So that super exciting.

Brandon: That must have been one fancy fridge right there.

Ashley: I know. We did go a little overboard but so we … But, it was the only thing we had to buy but-

Brandon: That’s awesome.

Ashley: … 55,000 so we’re like, “Well, we want to max out what we can get.” So, it end up being 41,250 or whatever we could withdraw from it.

Brandon: So, you took out more money that you even bought it for?

Ashley: Yes, yes. The bank wasn’t really happy about it but we had signed saying they would give us, I think, what it’s … 75% of the value or whatever so-

Brandon: That’s funny.

Ashley: … they worked with us, and they did it. When we closed, we covered all our closing costs, the extra money. We had, I think, maybe $2,000 extra. We just threw into a reserve account and [crosstalk 00:56:38].

Brandon: Ashley, No-money down is a myth. You can’t actually do that. That’s a scam. You can’t do it. So, clearly, you’re wrong.

Brandon: No, that’s awesome.

Ashley: Right. Yeah.

Brandon: So, I guess, David, [inaudible 00:56:51] your question. You can go.

David: Well, you just explained what you did with it. It was the BRRR method. I was actually thinking I wish I’d interviewed you when I wrote the BRRR book because that had been such a cool story to put in there. Like, how the fridge hack allowed you to pull out more than what you put in.

Ashley: Yeah.

Brandon: Fridge hack!

David: [crosstalk 00:57:05] property.

David: So, what lessons did you end up learning from this deal?

Ashley: Well, I just want to add one more thing about it that makes it a great deal, too, is that the property, it was 35,000 and it rents for 1,200 a month.

Brandon: Whoa!

Ashley: 600. Yeah. And so, that was another really exciting, great thing about the deal. I’m sure that also helped it appraise. We have told the appraiser we are going to list it for that. We didn’t have renters when they appraised it but it’s been really great property to have.

Brandon: Yeah. That’s phenomenal. That’s a 3% rule deal right there. That’s …

Ashley: Yeah.

Brandon: That’s cool.

Ashley: Yeah. I’m sorry, David. What was your question? I can’t …

David: What lessons did you learn from the deal?

Ashley: Okay. So, well, one thing would be the flood zone is don’t be afraid of weird things that come up. It cost us $1,500 a year to have the flood insurance. Our numbers still were great, even with it and we had to get the flood insurance because of the mortgage and maybe when the mortgage is paid off, we’ll drop it, self-insure it. I’m not really sure.

Ashley: But another thing would be don’t be afraid to contact loan officers and ask them for what kind of financing they can offer for your exact situation, like there’s just so many different types of financing, especially just the smaller community things.

Brandon: Do you want to know a funny story about flood insurance? I’m not giving this advice. I’ll warn people ahead of time. This is not advice. I’m telling you what a friend of mine does and it works out really well for him. Whether or not it works for everyone else, I don’t know, but he buys properties in flood zones and then deliberately will cancel the flood insurance right after buying it.

Brandon: So, when the bank finds out, they get this message. “You’ve canceled flood insurance. You need to put it back on.” He’ll be like, “Eh. No.” They’re like, “No. You have to put it on.” They’ll send him a little letter. He’s like, “No.” They’re like, “Well, we’re going to go buy the flood insurance and place it for you.” He’s like, “Okay.”

Brandon: So, they do that. It’s like half the cost of flood insurance. He’s done this numerous times. Lenders get a better rate on flood insurance than he does. So, he just canceled it-

Ashley: Wow!

Brandon: … and makes the lender put it on, which then it just comes out of escrow. He doesn’t have to deal with it and half the cost.

Brandon: Anyway, I’m not saying that it would work in every area but he’s found this trick and it just works. I had two properties in flood zones. I paid them both out to get out of the flood insurance because I’d rather just, yeah, self-insure basically. I’m like, “Worst case. Flood comes. Damage is the bottom two feet.” Like, I would say a five foot flood comes like crazy, right?

Ashley: Right.

Brandon: Damages the bottom two feet. I got to dry it out. I lose rent for a few months. I got to put new drywall on the bottom, new flooring. I’m going to be out 15,000 but I was paying 7,000 a year on this property for flood insurance because it was a really high flood insurance there. I was like, “Eh.” It’s not going to happen every other year, so I just decided just I was going to take the risk. Anyway, so that’s something to consider with flood insurance.

Brandon: One thing I don’t like a lot of flood insurance is, and again, I would still buy in a flood zone but it’s a subsidized program, which means that the government helps pay down so it’s not so expensive for people, but that comes and goes in fashion with whoever’s in office and what parties are there.

Brandon: So, I sometimes have worried that that adds a degree of risk to me that, oh, I don’t really want to do. Well if you’re a 35, $40,000 level, who cares? If you’re talking about a $500,000 property in a flood zone or your flood insurance is 7,000 a year, I’d be a little bit more concerned probably but cheaper areas, I don’t mind it but cool.

Brandon: All right. Well, that’s the end of the deal deep dive. Let’s head over to the next segment, the fire round.

David: The fire round.

Brandon: These are the questions that come direct out of the BiggerPockets forums. We’re going to fire them at you right now, Ashley.

Brandon: Number one from Colesha in Miami, Florida. “What is your criteria of a good deal? Do you look for a rate of return or are you looking for a cash flow number? What makes it a good deal for you?”

Ashley: Really, right now, all I’m looking for is cash flow, that’s what and putting as little of my own money down as possible, so it would be how much money I have available on my line of credit to use. If I can pay the whole thing through that and not have to withdraw from my personal savings, I see that as a great deal. Then, if there’s cash flow. Right now, that’s been my primary vehicle to [build wall 01:01:30], pay off debts, stuff like that.

Brandon: Cool.

Ashley: That’s what I look for.

Brandon: All right.

David: Next question from Nathan in LA. “I’m looking at a set of duplexes to buy in a rural California town.” Brandon, did you skip this question just so you wouldn’t have to say rural?

Brandon: I don’t know what you’re talking about, David. Shut up, man.

David: That’s comes from the [crosstalk 01:01:50]-

Brandon: Ask the question, right?

David: Long ago, the annals of BiggerPockets lore, when rural was an inside joke between Brandon and I. All right.

David: “The seller is offering summer financing and I’m trying to find a right price to offer. I cannot find any comps in the area. Do you have any tips for valuing property in a remote area?”

Ashley: Yeah. So, for me, I’m not looking for appreciation at all, so I really don’t look at comps at all because I’m looking at the numbers work for what the asking price is or what I want to offer. I’m not looking for equity. If you can have that cash flow and you can pay down your mortgage, you’re already building equity if your tenants are paying down your mortgage. I really don’t look at the comps when I’m looking at rural areas because I don’t care what other people are paying for houses. I want to pay what works for me on a house.

Brandon: I love it. Okay. Great.

Brandon: All right. Ryan from Phoenix, Arizona asks, “Hey, I just purchased a fourplex in what is probably a sea area. Two units are vacant and do not have washers and dryers but they do have the hookups. How much value do washer and dryers really add? Do you think it’s worth to spend a thousand dollars to add a washer and dryer in these units?”

Ashley: Well, if my $800 fridge [inaudible 01:03:10] value. No. Actually, what I have been doing, probably the last years, I don’t supply any appliances anymore. It’s really cut down on repairs and maintenance on appliances but also, I found so many people want to bring their own anyways, they either have their own or they want a nicer one with an ice maker and double doors and a lot more than I provide. I just [inaudible 01:03:40] anymore. I don’t think that you’re going to get that much value if the washers and dryers are actually in there, then if they weren’t but having the hookups definitely adds a lot of value right there.

Brandon: Yeah. I hate having washer and dryers in units that I supply because they do break and tenants do mistreat them and then who’s fixing it? The landlord is.

David: Yeah.

Ashley: Right.

Brandon: I’m not saying I do this, but I would almost rather like, “Hey, tenant. You go buy your own. Take it off the rent this month.” I would almost rather do that just so I don’t have to deal with it. Even if it’s like, I … Obviously, I’m not going to do that and that’s how much I hate dealing with repairs and maintenance on washers and dryers and dishwashers and garbage disposals and all of that crap.

David: I literally started doing that. In some states, it’s common to provide a fridge. In others, it’s not. Like in California, we don’t give a fridge, but in Florida, you do.

David: I notice that it’s not even the upfront cost of the appliances. It’s like you said, the reoccurring maintenance every year when they break it and you have to go repair it. I notice that just the labor and time to go over and repair the appliance is oftentimes a third of the price of the whole thing to fix a small piece.

David: So, what I started doing was noticing that that was the majority of the callouts. I just started saying, “Hey, let’s not provide a fridge and let’s tell them that they can have $500 off the move-in cost or the first month’s rent to bring their own.” It’s such a good investment, just to not have that stuff come up over and over and over.

Brandon: That’s cool and the tenants love that, too. “Oh, I can pick my own fridge out?”

David: Yeah. “My landlord bought me a fridge.”

Brandon: Yeah. That’s cool.

David: Treat it like it’s your own so I don’t have to fix it every time.

Brandon: Yeah. That’s cool.

David: Okay. Next question is from David in Greenville, South Carolina. Didn’t we just interview Josiah who was in Greenville or is there just a hundred Greenvilles? Was this a state [crosstalk 01:05:27]-

Brandon: No. Yeah. I think the same Greenville. Weird.

David: Obviously, Greens have done a lot to contribute to society. We keep naming cities after them. There’s a lot of Greenvilles, Greenburgs.

Brandon: Yeah. Greenboro.

David: All right. So, David, also great first name. I’m liking this guy more and more. “I understand that no one can really predict a true recession but is anyone else pumping the brakes on BBBR investing or being more cautious? My concern is getting caught with my pants down with high interest rate debt before I can refinance or assuming higher ARVs at the beginning of the deal but seeing it dip towards the end.”

Ashley: I’m all about what’s comfortable for you. If you are taking every single thing you have and investing it and you have nothing left, I wouldn’t even do that if there wasn’t a looming recession coming on. I think you should have that little bit of safety all the time and I highly … Even the property I did for the deal deep dive, that was no money out of my pocket but that doesn’t mean that I didn’t have money in my savings account in case that brand new fridge broke down the day after closing or whatever.

Ashley: I think that if there is a looming recession, just whatever makes you comfortable. If you want to pump the brakes, that’s fine but I wouldn’t say stop investing because there still are good deals out there. If you make the good deals, you can get into that fixed long-term financing and you said it so that even if a tenant moves out, you’re in an area that you can fill it or you are in multifamily where there are still other two or three units occupied. So, I wouldn’t say, “Stop investing,” if there is a looming recession but just use whatever you’re comfortable with.

Brandon: Yeah. That’s cool. I would concur. I don’t care for the recession looming or not but at the same time, I do my investing thinking that it might happen. Let’s say it’s 50/50. Okay. How does that change my approach? Little thing, I mentioned this before, but I’m going to start flipping here in Maui, like we’re building up a little flipping operation. Great.

Brandon: So, I’m going to make sure that if the market drops 15, 20%, when you’re in the middle of that flip, I’m still okay so I’m approaching it as if … Now, if it doesn’t happen, cherry on top. I just make more money but it also means, hey, I’m going to start flipping with partners. I’m going to bring in money partners who can fund the whole deal and rehab costs. Instead of going hard money, I’m going to use partners because yeah, I make less money but if something goes wrong, we just hold-

David: That’s right.

Brandon: … the property. Less risk. We hold the property. I mean, think of that. Let’s take, you go and flip a house or do a BRRR deal. It’s a $500,000 property because you’re in a more expensive area or a million dollar property. Yeah, you’re doing hard money and the recession drops you 15%, that’s going to suck but if you got a partner, okay, well, we rent it out for a few years. The partners only getting a 4% return during that time but who cares? That’s the risk they took. They’re not losing money. No one’s losing money. Again, it’s just a different way of looking at it, saying, “If this is going to happen, what do we do to prevent against, to make sure we don’t lose?”

David: Well, it’s odd he mentioned the BRRR method because I actually like the BRRR method specifically because it protects-

Brandon: Hell, yeah.

David: … you against a recession. If you got all your money out of that deal and the market tanks, who cares? You’re not taking a loss. You’ve already recovered your capital. In fact, you use that capital to go buy cheaper properties. It’s a good thing.

Brandon: But he can’t refinance it. I think that’s his point, like what if you can’t refi it?

David: Yeah, but he’s talking about the entire market dropping dramatically within your two- or three-month window of a refi. That target is so tiny when you compare the years and years of time that you’re hoping it won’t happen.

David: And even if it does happen, how’s that different than if you just put 25% down. If it drops 25%, the whole market does, which is huge, and you’ve refinanced for 25% less. That’s still the same as if you’d put 25% down on a regular investment property. You’re not really that far off of … Anyway, the BRRR method was still the best way to go.

David: I would probably say if you’re worried about a recession, BRRR investing’s the best way to go and just don’t buy anything that’s going to be a 12-month remodel where you’re exposed for a long period of time.

Brandon: Yeah. That’s a big thing right now. I don’t want to do massive rehabs that are … Yeah. I was doing an idea the other say with a $2 million property. They wanted almost two million for it but it’s going to be worth 2.5 and it’s 12 months of work. I’m like, “Jeez. Like, that sounds like so much fun, but I don’t want to be caught with my pants down.”

David: Do you want an analogy?

Brandon: I would love one.

David: It’s like when you’re playing musical chairs and there’s a ton of chairs and you’re kind of … Everyone’s goofing off and they’re dancing and being silly because they know there’s a bunch of chairs to go in. As the chairs get smaller, that’s like the recession’s coming. You start seeing you’re lingering really, really close to that chair before jumping to the next one because you know that music’s going to stop at any minute.

Brandon: [inaudible 01:10:08], yeah.

David: Yeah. You take a really long period to do your remodel and there’s a lot of chairs out there but if you really feel like a recession’s coming close, you only take deals that are a short little jump to the next chair and you’ll be okay.

Brandon: Yeah. We actually had a guest a couple years ago give a similar analogy, talking about how it’s like musical chairs. David Gudmundsen. I don’t remember the show number but we’ll put it in the show notes but he talked about how you use analogy, then he said, “What I realize is that I don’t need to be the last one out. I don’t need to be jumping from chair to chair at the last second. So, I sit down, I’m going to sit down and put my feet up and watch everyone dance. Then, when everyone scrambles for their chairs, I’m already sitting down. Yeah, I might not make the most amount of money in the world but that’s okay. I’m relaxed. I’m enjoying it. I enjoyed the run up and then next time, I’m going to do it again. I don’t need to be the last one in. I would rather be the first one out.”

David: That’s really, really good.

Brandon: [crosstalk 01:10:54].

David: A strong showing from Davids on today’s show.

Brandon: I know. That was another David.

Brandon: All right. We got to move on. Let’s get to the next and last segment of this show. It is our world-famous famous four.

David: Famous four!

Brandon: These are the same four question we ask every guest every week and, Ashley, we’re going to fire them at you right now but before we do, let’s hear from our buddy J. Scott on what’s going on this week or next week over on the BiggerPockets Business Podcast on Tuesday.

Brandon: Let’s hear from our buddy J. Scott about who’s going to be on the BiggerPockets Business Podcast on Tuesday. Really, alarm clock birds? Oh. Let’s hear from our buddy J. Scott about who’s going to be on the BiggerPockets Business Podcast this Tuesday.

Brandon: All right. Thank you, J. Scott as always. And now, let’s get to the famous four. Number one, Ashley, what’s your current favorite real estate investing book?

Ashley: I had a really hard time picking that because there’s a lot that I love, so I want to try to do something different. It’s actually … So, I’m from New York State. It’s the New York State Landlord’s Guide. It’s a guide that actually New York State put out and it goes through all of your legal rights as a landlord in New York State. It even has copies of the documents, too, if you need to file an eviction. It has the [broads 01:12:17] previously, the three-day notice. Now it’s 14-day notice. Then, your petition for eviction. It just has, it’s a very little bit book but it just has so much information. So if your state does something like that …

Brandon: Yeah, that’d be super helpful. A big change form three-day notice to 14-day notice?

Ashley: Oh, that’s been awful. There’s a lot of-

Brandon: Wow!

Ashley: … changes. They just happened in June. Yeah.

Brandon: Really?

Ashley: It’s like a month-and-a-half-long process now in New York State to evict someone. Even when you get your court date, they can go to court and say, “We want a two-week adjournment.” That was something new and … Yeah.

David: As if it takes 14 days to process the information that you stopped paying your rent. You just need to let it soak in and they really …

Ashley: Yeah. Yeah.

David: You know, I wasn’t going to bring this up, Ashley, but I did check out your Instagram page before we stated. I noticed that you have pictures with you in Brandon’s book but not my book. Just complete coincidence, I’m sure.

Brandon: Well, didn’t you win one of my books?

Ashley: Yeah. I won one, so if you send me an autographed book, I will definitely post a picture with it.

David: That was a very good turnaround actually. You nicely flipped the script on me right there. Well done. Counterpunch. All right.

Brandon: I’ve been doing free book Fridays on my Instagram. So, if you follow me at beardybrandon, you might get a free book on a Friday. And same with David. You still haven’t given away copies of your BRRR book.

David: I like how you just set me up for a free book Friday, just so I [crosstalk 01:13:48] with David.

Brandon: Yeah. I did right there. David is actually going to give out three copies of his books on his Instagram this week that this episode comes out. So, go to davidgreene24 at Instagram, David’s going to give out three copies. He’ll explain on his Instagram how that’s going to happen. You like that, David?

David: Has to happen now. And if you guys want to know what it’s like to be friends with Brandon, it is that all the time constantly. “We have a great show for you today. David’s going to tell you about today’s quick tip. Go.” And I just got to make something up right there on the spot or-

Brandon: You know, David, you can push your way to greatness or you can get pulled there, and I like pulling you there. That’s what we’re doing.

David: You absolutely do. That’s what it’s like. It’s like holding onto the rope of a water ski after you fall. I’m just killing. It’s underwater when you’re friends with Brandon. He’s always doing this. “Oh, you like BiggerPockets? Well, so does David. He’s right here. David, tell them everything they need to do to build wealth in 30 seconds.” Then, I got to go. He’s always writing checks that I got to cash [crosstalk 01:14:38]-

Brandon: There you go.

David: … with Brandon.

Brandon: That’s how you do it.

David: Thank you, friend, for seeing the best of me.

David: All right, Ashley. Back to you. What is your favorite business book?

Ashley: I chose Hug Your Haters by Jay Baer. So, this book is all about just how to have relationships with … It’s customer service-based so how did you feel with your customers, so I use it a lot when I relate with my tenants and even talking with contractors, vendors. It’s been really helpful to just, when someone says this, how to react. It’s basically like a kill them with kindness book but I scribbled in it and took so many notes since I read it but I highly recommend it to anyone who is managing their own rentals and how to deal with tenants.

David: That’s good. That’s a good title. Hug your Haters.

Brandon: Yeah. I like that. I’ve not heard of that. I love new books that people bring up new books on the show because that’s great.

David: All right. Other than having your kids look for the next investment property for you, what are some of your other hobbies?

Ashley: Well, we recently built a patio behind our house with a shelter and a fire pit so that’s one thing I love to do is hang out there with my family. Then, the second thing that would be travel hacking with credit cards, I’ve gotten really into it. In the past year, I’ve booked probably six trips all completely paid for for flights and hotels.

Ashley: So, it’s really helped me been able to go to conferences and have three coming up this fall. My flights are free and my hotels are free. I’m just paying for the conference itself, but it’s been fun to do with my kids, too.

Brandon: My business partner, Ryan Murdoch, who’s sitting right now beside the pool. That guys a rock star. He’s always traveling. We get on a plane. They come over to him. They’re like, “Thank you, Mr. Murdoch for being a diamond platinum special member. Can I rub your feet for you?” It’s ridiculous how they treat him like royalty. He’s just really good at the credit card game so he’s like … I don’t know. I get to fly first class with him because they’re just like, “Oh, you have a guest, Mr. Murdoch. Murdoch, here, let’s massage his toes, too.” It’s insane.

David: Ryan is a fascinating man. I tell you.

Brandon: Ryan is a [crosstalk 01:16:56].

David: Someday, someone’s going to write a book about his life, just a biography. It would be such a good read.

Brandon: It would be amazing. Yeah.

David: I was telling Brandon, I saw that movie Once Upon a Time in Hollywood, which is a very weird movie but Brad Pitt’s character reminded me exactly what Ryan is like.

Brandon: That’s awesome.

Ashley: Can he hear that we’re talking about him right now or is he just sitting out there?

Brandon: He can’t hear that we’re talking about him. He’s sitting there out there awkwardly looking at me, just shaking his head. Anyway, funny.

Brandon: All right. Last question, Ashley. What do you believe sets apart a successful real estate investors from all those who give up, fail, or never get started?

Ashley: I think the willingness to share how you’ve done it, what you’re doing because every time you share it, it gets yourself fired up and you get more and more excited about it to keep it going. Even on those hard days when it doesn’t seem like it’s working, just go and share it with someone who wants to learn. That’s part of the reason I started my Instagram account was I had literally no other social media, but I just wanted to share what I’m doing and to talk about it with other real estate investor. It really does get me excited.

Ashley: Even BiggerPockets, I probably found BiggerPockets maybe two and a half years ago and I’d already had six or seven rentals. After I found BiggerPockets, I just exploded. Within one year, I almost tripled-

Brandon: That’s awesome.

Ashley: … my portfolio, but it’s just, don’t keep it a secret what you’re doing. Share it with people because if they start doing the same, it’s just going to benefit you and help you.

Brandon: Fantastic answer.

David: Beautiful.

Brandon: I’ve not heard that one before either. You are bringing the fire on the famous four here at the end. So, well done.

David: Ashley “Fire” Kehr.

David: Okay. Last question of the day. Tell us where people can find out more about you.

Ashley: It would be at BiggerPockets Ashley. Then, my Instagram page, @wealthfromrentals.

Brandon: There you go and Kehr is K-E-H-R. What kind of … Is that Swedish or do you know?

Ashley: I’ve no idea.

Brandon: I don’t know.

Ashley: It’s my married name. I’ve never asked my husband.

Brandon: Yeah. It’s funny. I’m going to go with Danish. I don’t know if that’s a thing.

Brandon: But let’s get out of here. Ashley, thank you so much for joining us today. This has been fantastic. Of course, everybody go follow Ashley over in Instagram @wealthfromrentals. If you have any questions, comments, or concerns, well, keep them to yourself. Just kidding. No. Go to BiggerPockets.com/show348. At the bottom, there’s a comment section there. Write a comment to Ashley. Tell her what you liked about our show today, something that stood out to you. Ask her questions. All that can be done there, as well as links to all of those apps and programs and things she talked about earlier on the show, all there on the show notes.

Brandon: So, fantastic. Ashley, thank you so much.

Ashley: Yeah. Thank you, guys. I had a great time.

Brandon: All right. That was our interview with Ashley. Awesome show, awesome woman. This was just a good episode. I love these people who are in the trenches, building their business and doing it like such a smart, methodical way and she definitely fits that.

David: Yeah. These are some of my favorite shows where you realize this is just a normal person. They’re doing everything that anybody else could be doing. They just have the right mind-set. That mind-set is all that matters when it comes to being successful.

Brandon: Yeah. It totally is so yeah, very, very cool. Like we said, go follow Ashley over on Instagram, @wealthfromrentals. Check out the show notes at biggerpockets.com/show348 and make sure you sign up for the BiggerPockets Conference by going to biggerpocketsconference.com. Use that code. Was it lastchance200? No spaces. Just one word, lastchance200 and you could save a couple hundred bucks on the BiggerPockets Conference, if it’s not sold out yet. So, come hang out with us in Nashville. It’s going to be a lot of fun.

Brandon: So that’s all I got.

David: All right. On Instagram, she is Ashley@wealthfromrentals. He is beardybrandon and I am davidgreene24. When you buy your ticket, send me a message and tell me, “Hey, I’m going to be there. Let me know.” We’ll see if we can get something organized for all the people that reached out. Maybe Brandon and I will get together a little private mastermind, since he’s giving away my books for free.

Brandon: [crosstalk 01:31:58]. I am do that.

David: I’m going to give away his time at the conference here, so you can get to see what’s behind the curtain when it comes to the awesomeness of Brandon.

Brandon: Fancy, fancy.

David: Yeah. That being said, this is David for Brandon “Buying houses like toys” Turner signing off.