Leaving the 9-5 Office Life to Start a Mother-Daughter Flipping Business

Ashley:
This is the Real Estate Rookie Podcast, 145.

Jan:
What if it doesn’t work out? Does that mean I can never get a job anywhere else ever again? Yes, you can. So what have you got to lose? It’s not like no one’s going to hire you because, “Oh, you tried real estate investing? You cannot work the W2 job anymore.”

Tony:
Welcome to the Real Estate Rookie where we motivate and inspire all of our Rookie listeners by going deep into the trenches with our guests and giving you guys actionable, real, usable advice that will help you get started in the world you are going to invest in. Ashley, I’m super excited to be here with you today.

Ashley:
Thank you, Tony Robinson. And as your co-host, Ashley Kehr, I am so excited for today’s episode, but before we dive into it, what’s going on? What is new?

Tony:
Let’s see. It’s been a super, super busy couple of weeks for us. We closed on a bunch of short-term rentals in the spring, summer we didn’t really do much, we just kind of stabilized and then this fall, we are right back into the thick of things. So we closed on one property last week and then we have one closing … what’s today? I think today. Today’s-

Ashley:
The second.

Tony:
Tuesday. Yeah, I think we’re closing today. So we might be closed already. Then we have one more closing probably in another week and we’ve got a couple of flips we’re working on. So just, man, just keeping our head above water and then we’re actively looking at some motels and hotels and different markets across the US. So I’m hoping we can get our first contract here soon.

Ashley:
Awesome. And you didn’t mention it when we recorded this episode. So could you please tell us about the property you have for sale?

Tony:
Yeah. So are talking about in Shreveport, my property that’s always for sale?

Ashley:
Yeah.

Tony:
So I just got an email over the weekend that there’s like a scheduled showing. So we’ll see how-

Ashley:
Wow. Good.

Tony:
… how it goes but fingers crossed that we get some good news from that one. But if anyone wants a recently renovated property in the City of Shreveport, Louisiana that is in the middle of a potential flood zone, then just, I am your guy, hit me up and we can chat.

Ashley:
That’s a great TikTok, YouTube, social media content for anyone, “Oh, I bought Tony Robinson’s house.”

Tony:
Yeah. Right? And if you’re not following me and Ashley on social, make sure you are. I’m @tonyjrobinson and she’s at @wealthfromrentals. That is where we try and sell all of our properties that we can’t sell in the MLS. So if you want the direct plug, that’s where you guys are going to find us.

Ashley:
And I’m also looking for campground. So anybody who has a campground send me a lead. I don’t have anything to sell right now.

Tony:
Yeah. What’s new on your side?

Ashley:
Well, I just picked up a check from my attorney’s office this morning and it was a reimbursement for a phase one environmental. So I had that self-storage facility under contract. It was with seller financing, great deal, I did the phase one environmental study, it came back saying they recommended a phase two because there is a, two commercial buildings on the property and one is a mechanic shop so they wanted to do subsurface testing. The owner of the property, the seller would not allow me to do a phase two on the property so I decided I’d no longer wanted to purchase it because it was unknown if there are environmental issues and the seller wouldn’t even let me proceed to find out if there were, so they found another seller and they asked me to cancel the contract and I said, “If you reimburse me for paying the phase one …”
Because I felt like that was very unfair that I shell out that money for the phase one. I did give them a copy of that so they are able to use that to give to other buyers and they would not allow me to continue with the phase two. So I held my guns and after about a month, they finally sent me a check and I signed saying that I was canceling our contract then they can go out and find another buyer now. So stick to your guns. I got my money back.

Tony:
I’m going to start using you for all my negotiations moving forward, Ash.

Ashley:
Tony, that’s so funny because you know that you are way better than me because of other things you’re doing. Oh gosh, but thank you for the compliment.

Tony:
But even with these negotiation skills, I still haven’t sold the damn house in Shreveport. So I’m guessing I’m not as good as I thought I was.

Ashley:
Well, guys, today, we have Jan on the show. So Jan went to Arizona, moved from Nebraska and she started over, she bought herself a condo and started going to auctions and buying properties off auctions to flip. So she’s partnered with her daughter and they’ve built quite a little business and she has completely done a 180 in her life from going from a 9:00 to 5:00 job to doing whatever she wants all day. And we really do kind of a deep dive into what that feeling is like to give you guys some inspiration and motivation as to, you guys can get there too. You guys can live the life that you want. So let’s get Jan onto the show and hear her story.

Tony:
Jan, welcome to the Real Estate Rookie. We’re super excited to have you on. We will get into your story. Why don’t you tell us a little about your background, who you are and how you got started in the world of real estate investing.

Jan:
All right. Well, it was kind of an accident. I always enjoyed doing home improvement projects and different things like that and when I was moving to Phoenix, oh my God, I was looking for jobs and I thought I can flip a few houses a year and make the same amount I’m going to make hourly having a boss, two weeks vacation and all the restrictions. So I just started researching it. My daughter was coming down here to ASU and I thought, it’s good time to get out of Nebraska and if I moved anywhere in Arizona, then she can get in-state tuition. So that was great so I sat on my laptop for hours searching different areas, I had no idea where exactly I wanted to end up.
I ended up in Ahwatukee area of Phoenix, which is wonderful. So I started investing through the auctions and stuff, my condo that I live in, I bought off the auction and we redid it and then the next two flips were off the auctions. So once I got into my first one, I realized that this can work and so I just kept at it. My first flip was kind of tricky, but it never discouraged me.

Ashley:
Jan, just real quick, before we get into any more, can you give an overview of how many deals you’ve done so far and what your portfolio looks like?

Jan:
We are working on our fifth flip right now. We would like to get into the rentals after the first year. I’m still debating if we want to do long or short-term, I need to research that a little bit more, I guess it’ll kind of depend on the numbers too and I’m hoping even to acquire a couple a year and continue to flip too. So we definitely want to keep our flipping going and try work some rentals in there too.

Ashley:
Well, congratulations. That’s awesome. I got your first five flips done. You said that you had bought your condo that you’re living in now at auction. So was this the first property that you purchased when you moved to Arizona?

Jan:
It is. Yes. Like I said, I did a ton of research online and I’d make spreadsheets with my numbers and I’d fly down here to Phoenix from Nebraska and go to the … well, first I’d drive by all these properties and then I’d go to the auction and look at my numbers. And so I was at the auction the first time and I got to talking with this girl and she’s like, “Oh, you’re single and don’t need a whole lot of room. This is a great area here in Ahwatukee.” And I thought, no way, I’m not bidding on that. I didn’t have around my numbers. So anyway, it came up for auction and they’re bidding on it and something made my hand go up and I ended up buying it. So the condo that I live in, I bought site unseen, hadn’t driven by, I knocked on the door and there was of couple guys renting it for a month to golf and yeah. So they left and left the key under the mat for me and then I came down here and redid it.

Tony:
Yeah. Jan, I want to pause for a second because you’re talking real casually right now, but I just want to kind of like recap the story that I’ve heard so far. You moved from Nebraska to Arizona and your first thought was, I want to start flipping, but I’m not going to go the traditional route, I’m going to go to an auction and I’m going to get my house from an auction, I’m going to get these from an auction, I’m just going to figure it out. That is a very brave way to get started as a real estate investor. Not only are you in a new market where you’re probably not super familiar yet with the lay of the land, but you also go the route of buying at auction which can present its own set of challenges and potential obstacles. So I think we want to pause on this auction piece for a little bit. So for the rookies that aren’t familiar with what an auction is, just break down what it means to buy real estate at auction.

Jan:
Well, that was a learning experience for me too and very intimidating. I don’t really think I realized what I was up against when I went down to the courthouse steps, which is probably a good thing because we went down there and it’s a lot of investors, a lot of wholesalers and you’re bidding against people that buy and sell these houses every day, they know their numbers and I’m the rookie down there like, “Okay, they’re not bidding on this, should I be bidding or just …” It was kind of scary. But like I said, with the condo that I bought, I really didn’t think twice, it came up and it just felt right. I hadn’t even ran my numbers on it, I knew I was going to live here so the numbers could be a little more flexible too because I was going to hold onto it. But somehow, I don’t really know how I ended up with it because I got a pretty good price on it and they must have felt sorry for me or something and like, “Let the girl have it.”

Tony:
Can you just break down what that auction buying process looks like for a real estate purchase. Is it literally some person standing at the front of the room saying, “300 going once, 300 going twice.” Or is it a different process when you’re buying real estate?

Jan:
That’s pretty much it. They have their whole list and they have them up on a screen on which one is up for auction, the address and they’re auctioning them off and it’s like an actual auction. It’s on the courthouse steps. They have their auction.com tent set up down there and you have to bring $10,000 cash for a deposit and then once you buy it then you have to pay for it by the end of the next day, if you don’t then lose your $10,000 deposit that you made.

Ashley:
Jan, is each auction the same or different? So if somebody’s going to an online auction or in-person auction, can you kind of describe where they can get the information of what they need to know before they go to the auction? And what are some of the terms? I’ve been on properties on auction.com before and I still don’t even understand all of the lingo and the terms, like there’s a 10% buyer’s fee or there’s a whole pack, all these different things. Can you go into detail a little bit as a rookie investor, what are some basics that you need to know before you even get to the auction? Like you just said, bring your $10,000 cash. So does that mean actual cash in a brief case, money orders, a personal check?

Jan:
It has to be a cashier’s check and they give you a number, a bidding number like at a regular auction. I really didn’t know a ton when I went down there, I had read through their website to figure out how it works and a little bit what to expect but auction.com does have some good information on their website and gives you kind of an idea of what you’re looking at.

Tony:
Actually I want to get to the point where I’m buying all of my properties with just briefcases full of money and that’s when you know you’ve made it and you can walk in with a briefcase.

Jan:
I’ve tried to get a close parking spot so I wouldn’t get abducted before I got to the courthouse steps.

Ashley:
Was the briefcase handcuffed to you?

Jan:
Exactly. Yep. Yep.

Tony:
So I want to talk a bit more about the auction process because I know that there are definitely some benefits that come along with buying at auction, but there are also I think limitations with the auction buying process that scares some people away. So I want to start with some of those limitations first. So what are some of the scarier parts or more challenging parts of buying property at auction?

Jan:
Well, first off, you don’t generally, very seldom do you have the opportunity to go inside the properties so you just get what you get. You can drive by them, look in the windows, things like that, which makes me a little uncomfortable because some of them are occupied so you really don’t want to go looking in someone’s window and they’re in there. Another thing is, they’ll be all listed and they can drop off at any time. So say someone’s in a financial hardship and their property is set to go to auction up until the last minute they can save their home and they file bankruptcy or they pay their mortgage and so you just don’t really know if someone’s still living in that house, if they’re trying to save it.
If it’s vacant, it’s one thing but … and then also even after you buy it at auction, it doesn’t always mean it’s vacant. So you kind of got to tread lightly when you’re approaching the house, you don’t know who lives there and if they’re still living there, they’re probably not happy about the situation they’re in. So you just want to be careful there. I’ve heard some different stories that haven’t happened to me but to others that it didn’t end well. And then you have to try evict them and get them out of their house.

Tony:
So there are definitely some challenges that come along with buying at auction but I think if I’m a first-time investor, I’m a rookie investor, the part that probably scares me the most is not being able to see the property before you purchase it but also the fact that you have to put down that non-refundable deposit if your bid is the winning bid. So go back to Jan and that first bid, what was going through your mind when you raised your hand or whatever signal, you got to wave at the auction to show that you’re the person that wants to buy the property, were you at all nervous about what you might find in that first property that you didn’t know about? And if so, how did you get past some of that fear around buying this property site unseen?

Jan:
It did make me a bit nervous. Like I said, I hadn’t run my numbers on it either so I’m like, “I’m I getting a good deal or am I not?” I was going to live in it so I thought I’ll have some time to recoup if it’s not exactly the best deal. I didn’t know what the property was going to look like. I also knew that I was going to redo it and refinish everything so if there’s holes in the walls, things like that, that’s not a big deal, you patch those, you’re going to repaint anyway, the big problem would be if you come in and all the electrical and plumbing is stripped, then you have a bigger problem. But it was also a condo so I couldn’t imagine that it would be stripped down to nothing just because it’s in a facility that’s monitored. But my first flip house is a different story and we can get to that in a little bit. That one was kind of interesting.

Ashley:
So Jan, with your experience, why would a rookie investor want to go to auction instead of working with an agent or working with a wholesaler, what are some of the benefits to that?

Jan:
I feel like you can get properties at a pretty decent price on the auctions. I started it just because I thought for sure that’s the only place I can get one at a discounted rate. I didn’t know there was an option of doing it on the MLS. I didn’t know that people bought houses without going through a realtor. I have learned so much. I’m like, “Oh, really? You can get them off market? Oh, that’s awesome.” I’m still working on that part of it. But unlike the auctions, the competition is kind of tough especially now because there hasn’t been much on the auctions due to COVID. So it’s picking back up again. I’m hoping to check it out for our next flip and see where it’s at.
But I’ve also met some wholesalers there as well and one of the wholesalers I was talking to, I’m like, “Okay, I’m not opposed to buying a property from a wholesaler.” I go, “But what if we’re sitting there bidding against each other on the same property?” And so he’s like, “Well, let’s talk about ahead of time and see.” I don’t mind if I can still make the numbers work and he gets a little cut, I just don’t want to be bidding against him and everybody else and paying more than we need to and then none of us succeed.

Ashley:
How many people typically show up at these auctions?

Jan:
Well, when I first started coming, gosh, when was that? 2018, there was a big crowd of, I want to say like 100 people. I’m a bad judge of that. But then as COVID hit, there’s like 25 because there’d be like three properties that would get auctioned off during COVID because all the Freddie Mac and Fannie Mae backed mortgages just weren’t going to auction because of the moratorium. So there was just a few, a select few but now I think it’s opened up more.

Ashley:
So during that time, did you stick with auctions or since the moratorium did you slim back on purchasing properties because there wasn’t such a huge selection or did you find another way to source deals?

Jan:
I ended up going through the MLS actually. I was fortunate to find properties that needed some work and they were under market value far enough that my numbers worked. So the last three actually we have gotten off the MLS and it’s worked great. Like the last property had been on the market since April, which is a long time considering the way the market is and I saw it had been under contract and fell out. So we went and looked at it, saw it needed work and made the low ball offer and they accepted it and then also gave us five grand towards the roof. So that was great.

Tony:
And people always say that there are no good deals on the MLS but you are living, breathing proof that that is not necessarily the truth. We just closed on a couple flips in Joshua Tree as well and we found two of those, three are on the MLS as well so if you look hard enough you can find the right deal. And I guess just as a quick size story, one of the properties that we have under contract right now that we plan to flip in Joshua Tree, it was originally listed at like 380, we came out … or maybe 350, it was listed at 350. We came to that seller, we offered I think 327, they rejected our offer, they were with someone else that was paying full price.
Two weeks later, the other buyer backs out. They come back to us and we get the property and the contract at 330. So just because a property is listed at a certain number on the MLS, it doesn’t necessarily mean that it’s going to sell for that amount. So if you’re lucky and you’re looking for a good deal, just submit the offer, even if it’s lower than what they’re asking, the worst thing that they’re going to do is they’re going to say, no, the best thing that’s going to happen is that they say, yes. So just food for thought.

Jan:
Right. The list price is what they want to get, it doesn’t mean that’s what they’re going to get, but what I’m selling them, I’m getting what I want. My mindset switches whether I’m buying or selling.

Tony:
Yeah. Well, let’s talk a little bit about that, because obviously this first deal that we talked about, this was your primary residence so it’s slightly different approach and business model than your flips. So as you’ve transitioned into flipping … well, I guess first let me ask this question, Jan, how much time passed after that first auction property that you bought for your primary residence, how much time passed between that purchase and your first flip?

Jan:
That was about six months probably.

Tony:
Okay. So relatively a short period of time.

Jan:
Yeah. I bought the property and then I came down for a couple weeks and worked on it and then moved a couple of months later to Phoenix and still tried to fix it up while I lived here and that was a challenge, but it’s done so that’s good. But then it was like October 2019 was when I bought my first flip.

Tony:
Your actual flip? Okay. So you have some success at the auction with your primary residence, you say, “Okay. I think I can do this for a flip as well.” If I already kind of rehabbed or made some renovations to this property, now let me try and do it for a profit. So when you make up your mind to go back and start flipping, do you go back to the auction to try and find that deal flow or is that when you found it off the MLS? Walk us through how you made that transition from your primary residence rehab to doing it as a flip.

Jan:
I was still at that point looking at the auctions because I still thought that was the only option. I was looking or going to the Maricopa County auctions which is all of Phoenix-

Ashley:
That’s the highest crime rate in the US, isn’t it-

Jan:
Yes. I think so. I’m still here and it’s going two years.

Ashley:
Yeah. And I remember people talking about that.

Jan:
Yeah. I know. Just even parking in the parking garage downtown, I’m like … I grew up in a town of 13,000. So I’m like getting out of my car, walking up, little small town girl in the big city. But the competition up there was more intense, more wholesalers and stuff and the investors. So I ended up going down to Pinal County and I got my first flip down there, which is just south of Phoenix. So my first flip ended up being in Florence, Arizona, which is about an hour from where I live, south of Phoenix. It kind of took us back a few centuries, but it worked out.

Tony:
So what was the experience like that second time around trying to acquire that property? Was it easier for you? Was it scarier? Just kind of walk us through how that experience went.

Jan:
I feel like it was scarier just because this is the one I had to make a profit on. So I went to the auction, gave my 10 grand. I had looked at my numbers, this one will be fine, it’s going to work great. So I bought it and then drove by it. That was another one that I didn’t end up driving by it ahead of time. So there’s a car in the driveway. So like you said, you don’t know, is someone living there? Are they not? So we were a little hesitant, knocked on the door, no one answered and then drove around the block and I’m like, “Okay, we’re going back.” So we went back and walked around the back. I’m like, “I own this place. I can knock on the door if I want.” So we went, ended up, I walked in the backyard and there was a donkey door so I thought, well, I’ll just stick my head in there and see if there’s anybody around. And there wasn’t. So I went on through and the ceiling in the kitchen was on the floor and there was water damage and mold.

Tony:
Wait, Jan, you said the ceiling in the kitchen-

Jan:
Was on the floor. The drywall. Yes. All the drywall was on the floor. There was water damage, there was mold. I’m like, “Oh, okay, so this is how this goes.” I had my realtor, I talked to him and he came down just to look at it because he’s done some flips, not a lot but he’s like, “I’d still do it.” And in my mind, I’m like, do I just forfeit my 10 grand that I gave them today and just walk away? And so I said, right there I go, “I think I can do this and lose less than 10 grand.” Which I jinxed myself because there’s more to that.

Ashley:
Jan, let’s talk about that 10 grand. What made you even consider losing that? Most people would say, “Oh my gosh, 10 grand. I have to do whatever I can so that I don’t lose that.” But kind of talk about that as an opportunity cost for you.

Jan:
Well, when I’m looking at it and all of the rehab and renovations that are going to now be needed, I was wondering if I could still make my numbers work, can I still make money off this? Will I lose more than 10 grand by going forward or will I make less than 10 grand? So I do a lot of the work myself. I became a mold remediator and it’s not as intimidating as a lot of people think.

Ashley:
So you got certified in that? You’re licensed in that?

Jan:
I did not. I did my research. I’m a self-proclaimed mold remediation specialist.

Ashley:
Okay. Okay.

Jan:
I just did my research, we tore out a lot of drywall, scrubbed down the studs, sealed them back up and then of course I had to pay someone to replace the drywall, but that was like four grand for them to replace the drywall and finish it. I’m thinking tens of thousands of dollars this is going to cost me. So once I sat down, got my estimates and did a lot of the work that I could myself, it’s demolition, you can’t screw up tearing out drywall and you can’t screw up cleaning those studs and painting them. So it worked out okay for the most part.

Ashley:
I had mold remediation done in a property recently and it was $1,600. I think it was, around there for the full attic to have the mold completely taken out and I honestly thought it would be a lot more. I’ve always been scared of mold-

Jan:
Dang. And next time I’m paying for it [crosstalk 00:25:47].

Ashley:
That wasn’t dry or anything, but it was just the studs and then the roof framing and then the … what’s the roof called? Not the shingles-

Jan:
The plywood?

Ashley:
Yeah. The plywood.

Jan:
Plywood. Yeah. That isn’t bad. That kind of surprises me. Now I’m kind mad at didn’t hire [inaudible 00:26:08].

Ashley:
So I think a lot of times we get into our head things are so much worse than they actually are, but if you go and get prices on things, one thing I have learned is if your insurance company is paying for something, so maybe if you’ve heard horror stories of a family friend having mold in their house because they had a pipe burst, some water leak all over, something like that and the mold bill was huge, well, I have tended to found that some companies will charge insurance companies more than they actually charge somebody else if they were doing the work seems to be very different.

Jan:
Yeah, I’ve heard of that myself.

Ashley:
It doesn’t hurt to ask or unusually it’s free or very low cost to get somebody to give you an estimate on something.

Jan:
Right. And sometimes it’s worth paying a little bit to have them come out so you can get a few estimates and know where you’re at.

Ashley:
Yeah. I think even this mold guy, I think I had to pay him 50 bucks to come out but well worth it to get the estimate.

Jan:
Exactly. And that’s something you definitely want cleaned up and done right. So for sure.

Tony:
So Jan, I think we can come back to how this moldy story ends, but I want to keep moving with the acquisition phase. So you said you’ve done five flips. I guess first question is, between flip number one and the second flip, how much time passed between those two deals?

Jan:
Let’s see, four or five months. Yeah.

Tony:
Okay. So you’re moving in a pretty healthy pace right now. So you get your first house, six months later, you get the first flip, four or five months later, you get the next flip. So for flips two, three, four and five, what was the source of deal flow for those? How many of those came from the auction and then how many came from the MLS or some other platform?

Jan:
So the first two came from auction and then that’s when COVID hit and we started looking at other options. And so then-

Tony:
At the MLS.

Jan:
Then I went to MLS. Yeah. And I also took a class in there about driving for dollars and knocking on doors and I did a little bit of that too because I’m like, “How am I going to find my next flip?” So COVID made me dive in to other options of acquiring properties that I probably wouldn’t have had things just stayed as they were. So it wasn’t a bad deal.

Tony:
Yeah. COVID definitely I think pushed a lot of investors who tried different strategies maybe they wouldn’t have otherwise. So we talked about how you found these deals, Jan, I want to talk a little bit more about the financing portion. Talk us through, for the first flip that you got at auction, where did you get those funds to actually close on that deal? Was this all just personal savings, did you go hard money, did you bring in a private money partner, how did you fund that first flip?

Jan:
It was personal savings from a divorce.

Tony:
Yeah. That-

Jan:
I know that’s not an option for everybody but really, you got to do what you got to do.

Ashley:
Here’s today’s advice, get divorced.

Jan:
And take the cash, leave the house. We had saved a lot through the years and I was able to purchase my condo with cash and as well as my first flip.

Tony:
But I think that it’s a good point, obviously not everyone’s going to be in the same exact situation as you, but people oftentimes find themselves coming into large sums of unexpected money that they weren’t planning for and it’s about how do you deploy those funds in a way that helps support the goals that you have. So you use the proceeds from that to get the first flip done, but you’ve got four more that you do after that so at that point, are you just kind of recycling that same money over and over again or how have you continued to fund your deals from there?

Jan:
Just recycling the money, but also I’m living off that, that’s my job. So I’m living small and comfortable and I’m fine with that. It’s not like I’m living in a cardboard box under a bridge. I have a nice condo, but I’m not like, “Oh look, I made this money now I’m going to go buy big house and a fancy car.” So I live comfortably and then I take my profits and roll them into the next one. As prices have gone up, obviously the cash doesn’t extend as far as it used to, we have done some private money and I used to be intimidated by that, I’m like, “Who’s going to give us some money?” It’s your family, it’s your friend, it’s people you know that are interested in real estate. So we’ve been fortunate on that side and I am now, this will be the first time I’m going to get hard money for our next one because all of our cash is wrapped up in this current flip.

Ashley:
Jan, I want to touch on a pet peeve of mine. So-

Jan:
That’s good.

Ashley:
You tried to justify your yourself right there about, as to like you came into money and tried to, I don’t know, but here’s my pet peeve about that, is you don’t have to explain yourself. Think about how many people do get money, inherit money, come into money or get a settlement from a divorce or however they get it and they don’t do anything with it or they blow it.

Jan:
They put it in the bank and earn 2%. Yes.

Ashley:
I, and this is fresh in my mind because I saw a comment on YouTube the other day, about how there was, for this podcast, they need to have more guests on that aren’t just having big sums of money and for people who worked really hard to get that money, they need more people that built themselves. I don’t think that matters at all, it’s how you use the money and what you do with it. There are so many people that come into money and they don’t do anything with it, that doesn’t mean that they didn’t do the same amount of research and learn what to do with their money, you should be encouraging everyone no matter where the money came from for sure.
And it might be easier but still, tons of people have that money and they’re not taking action. The action is where it’s at, it shouldn’t be about where the money actually came from. So I just wanted to applaud you on taking advantage of that. And like you said, you’re living in a condo, you didn’t go and blow it on a mansion or anything like that. You’re investing it and so-

Jan:
Right. Yes, for sure.

Ashley:
Because my partner, he had a lump-sum of money, his dad was very well-off and I had nothing, but we took advantage of his situation and we took action and good for him and good for me, I guess.

Jan:
Exactly. You get the appreciation and the cashflow. Yeah. Exactly. It’s either divorce or you find the right partner and you know it’s a breeze. I’m kidding. But I came from a financial background. I worked for Wells Fargo Advisors years ago when my kids were little and you worked your W2, you saved your money and then at retirement, then hopefully you have enough to live. And so I had to change my complete mindset because we had savings, investment, stocks, bonds, and that’s another thing I was able to borrow. I did borrow a little bit against those so if you have investments, you can borrow money from yourself basically, which is nice. So I had to change my mindset that, okay, I’m going to sink this money into real estate and I still have a lot in my investments because just to cash them all out is scary as hell to me.
So I can’t do that. But I was forced to a little bit because in March 2020 when the stock market tanked and I had borrowed against my investments, you could only borrow like 50% of the value. So I was getting these margin calls so I had to sell investments to cover my loan against those stocks and bonds. So maybe that’s getting deeper but the fact is, I had to sell them, I had no choice because I had that money borrowed and then I just left it in cash and used it. So I never, ever would have probably sold any of my investments to put into real estate if I wasn’t forced to. So as scary as it was at the time I’m like, “What is happening?” And then I never would’ve done that. So now I have that cash and I still have quite a bit of investments left too that I can borrow some against. It’s just everybody’s situation is different.

Ashley:
Yeah. And that’s like with my first business partner with his lump-sum of cash, his family was pressuring him to invest it with their financial advisor and instead he invested it with me and it has worked out great for both of us. And it’s so funny because his dad was in real estate too, but it was just always, “Put it, the cash you have, just put it into the financial advisor.” And-

Jan:
Oh yeah. Yep. “And set it there and don’t touch it.” It’s like, well, I want to live while I’m here. I don’t know if I’m going to be around when I’m 65. Who knows? So …

Ashley:
Tony, we have to do a whole episode on financial planners and financial advisors. I got some pet peeves there too.

Jan:
Oh my God. You guys, it’s a whole different mindset. It took me a while. I was reading Rich Dad, Poor Dad, I’m like, “What’s he saying? I don’t even get it.” I had to really think about it. I’m like, “Oh, okay. You’re making your money work for you.” I’m like, “Well, it is. It’s sitting in the stock market. Yeah. I’m making 8% a year.”

Tony:
Yeah. Slightly different mindset, but we’re glad you came over to this side to hang out with us Jan. So it seems to be working out well-

Jan:
I’m still little on the other side, but I’m getting there.

Tony:
Yeah. There you go. We all got to start somewhere. So I want to get into one of your deals specifically, Jan. So this is our rookie deal review. Do you have a potential deal in mind that we can chat through?

Jan:
How about the one we’re working on right now?

Ashley:
Yeah.

Tony:
That would be perfect. So we’ll start with just kind of some rapid fire questions just to set the table for the listeners and then we’ll kind of open it up to kind of go deep into it. So first is, what market is this deal in?

Jan:
It’s in Phoenix, South Phoenix, it’s actually five minutes from where I live. So I love it.

Tony:
Beautiful. And what kind of property type, single family duplex, condo?

Jan:
Single family.

Tony:
Got you. And what was the purchase price?

Jan:
It was 405.

Tony:
Got you. And is it three bedrooms, two bedrooms, what’s the-

Jan:
Three bedrooms, two and a half bath. That’s a two story, 1,750 square feet.

Tony:
Okay. That’s a pretty decent sized house.

Jan:
Yeah, it is. It has some high ceilings on.

Tony:
Okay. So we got a single-family in Phoenix, 405 grand, with two and a half baths, 1700 square feet. So let’s kind of get into the nitty gritty here. So for this specific property, where did you find this deal?

Jan:
This was on the MLS.

Tony:
So let’s talk a little bit more about that. So was this a property that you got your Zillow alerts on and as soon as it came up, you were the first person to get an offer in, had it been languishing on Zillow for so long that you just happened to get lucky? Walk us through how you found this property.

Jan:
Well, my realtor has me set up on the MLS portal and I’d look at that every night because I want to not because everybody has to do that. I just don’t want to miss anything. But a lot of times I’ll do a search of properties that have been on the market for over 30 days and right now with the way properties are selling, if they’re on the market for 30 days, you kind of start wondering why. So this particular one had been … I had touched on that earlier, it had been on the market since April and then I saw that hit, it had been under contract and dropped out I don’t know why.
So I thought, we might as well look at it and see where it’s at. It was listed at 450 and then initially, and then it had dropped down to 430 and then we went and looked at it and made the offer of 405 and they accepted. So it had been a rental recently and I feel like she knew more than we did obviously when we bought it, it wasn’t terrible but as we dug in [inaudible 00:38:04] than what we initially thought, but it’s not that terrible.

Tony:
So I just want to make one comment here because what you just described, Jan, is the exact point that I was trying to make earlier. This property had been stuck on the MLS and when things get stuck for a while, there’s a stigma that starts to build around the listing that something must be wrong with it when really it could just be that the original price was asking too much money. Maybe there is nothing wrong with the property they just asked for too much. But you saw that it had been listed since April, went under contract once before then fell out, there was at least one price reduction, that is a seller who is kind of beat up.

Jan:
Right [crosstalk 00:38:44]-

Tony:
They’re seeing all these other houses in the market that are flying off the shelves and going for over asking and multiple offers and they’re stuck with this property and they’re dropping the price and it still not moving. That’s an opportunity that as a real estate investor, you have to identify and hopefully be courageous enough to capitalize on. Like if somebody came to me for my house in Shreveport that’s been on the market literally all year and made me probably something a little bit less than what we’re asking for, I’ll probably take it because I’m paying the mortgage every month so at least let me just sell it even if I have to lose a little bit of money on the sales price, it’s worth just losing that headache.
So my point, Jan, is that you’ve explained or you’ve displayed what happens when you use the MLS in a smart and kind of strategic way. So I’m glad we’re able to share that with the listeners. So you get this off the MLS, you get under contract of 405, what happens from there? Do you work it by yourself? Do you take your contractor with you? Just kind of walk us through how you put this scope of work together and figure out what that rehab budget is.

Jan:
Well, through our inspections, we knew the roof had a lot of … well, the inspector found a lot of broken tiles on the roof of course, they’re like, “Well, we can’t lift up the tiles and see what’s underneath of it.” So we were able to in our inspection period get some estimates on the roof and they said, “You’re better off replacing it, it’s original.” And I believed that, based on the age of it, it was the original roof. So that was going to need to be replaced, the landscaping out back, it’s kind of built on a foothill, kind of like the overpasses with the slant going up, that’s what our backyard’s like. So that’s going to be kind of fun too. I’d look at that every day and then I just look away and figure, I’ll deal with that when I get to it.
But it had been cleaned, I think. So it was a rental. I think they went in and cleaned. She had just replaced the carpet and painted the whole thing, a fresh color, it was not pretty. But anyway, she tried to fix it up I think to get more out of it, the cabinets were really bad, we had been able to paint our cabinets in the past and they’d turn out great, but these, the quality was bad so there was a little extra there too. But we ended up getting five grand from the cellar towards the roof which helped and the roof ended up being 8,500. So that helped there for sure.

Tony:
So when you typically work a property, how do you put together your scope of work, your projected rehab budget? Do you just kind of let your TC go through and say, “Hey, this is the number.” Or are you walking through with the subs and kind of putting it together yourself? What does that process look like?

Jan:
Well, we pretty much do it ourselves. I struggle with that a little bit sometimes because there’s not … like we’re going to replace all the light fixtures unless they’re brand new and look really nice which generally you’re not going to find that. The faucets, the doorknobs we’re painting all the doors, we’re replacing the baseboards with the thicker baseboard because here they’re like two inches and they just don’t look as nice. So there’s some things that are non-negotiable when it comes down to the budget, it’s like, “Oh, okay, we’re out of money. Let’s just not replace these gold doorknobs.” That’s not an option. So we kind of use a price per square foot on the basic stuff to give us an idea, but then if it’s the roof or the AC unit needs to be replaced, obviously we add that in there. So we do a lot of the same things in every property and we don’t do a lot of electrical or plumbing.
There’s always those things that like, “Oh, that’d be neat if we moved this here and did that.” And we don’t, we try to stick with where things are and make it look as good as we can. We haven’t got to the point we’re taking out walls or doing anything like that. So even just to have small electrical done, that stuff adds up so fast. So we replace our own fixtures. I actually moved an outlet the other day, I was so proud of myself like, “I can do this.” I used to do books for an electrician back in Nebraska so I texted him asking him, I was like, “Well, to kind of buy a bathtub. Is that a problem?” And I said, “I better just call the professionals.” He’s like, “No, do this, do this. You got it.” So I did it. I’m like, “Yeah.”

Ashley:
That’s awesome. When you keep saying we, do you have a team built out that you’re referring to or are you partnering on this deal?

Jan:
My daughter works with me.

Ashley:
Oh, awesome.

Jan:
Yeah. So she came down here to ASU and that’s what made me move here so in-state tuition and I was ready to get out of Nebraska. So she goes for a semester and calls me crying every day, I’m like, “She’s going to jump out her dorm room window. I don’t know. This is not good.” Hates it. She did really good but she hated it. She’s like, “I don’t know what I want to do with my life, it’s a waste of time, waste of money.”

Ashley:
Well, good for her for figuring that out first semester before she wasted four years.

Jan:
Well, that’s what I thought too. And I’m like, “In this condition, she’s not going to make it very long without like losing it.” So she went a semester and then came and worked with me and now, mind you, she’s done none of this and she’s like, “I’ll do whatever. I just don’t care. I need a break.” And that’s fine. So she has been a rockstar. She amazes me. We get to the house the first day and she’s like, “Okay, what do you want me to do?” I’m like, “Well, start painting.” And she’s painted before but she’s very meticulous. And then I go, “Well, you want to put that faucet in.” And she goes, “How do I do that?” I say, “Well, you need to read the instructions.” And so-

Ashley:
And she hits the video?

Jan:
Yeah. I’m like, “How do you think I figured it out? Yeah. YouTube University instructions. I don’t know. Go do it now.” But she just did it, I’m like, “Oh, you got that in already?” She’s like, “Well, yeah.” She really does a good job and it’s so nice having two of us because we do our own tiling and painting and baseboards and all that. We do hire to have the showers, tile, just some of it’s time, if we took time to do it all, we’d do one a year. But for the most part we try to do as much as we can and what we’re good at too and so, yeah. So she’s my partner.

Tony:
Jan, can we pause on that just really quickly because I know questions come up a lot of times about partnering with other people, but specifically family. So how have you and your daughter structured this partnership? Is she an equity partner in each flip that you guys do or is she just like an employee that you’ve put on payroll? How have you guys decided to structure this working relationship?

Jan:
We formed an LLC and actually she’s 25%, I’m 75. That was kind of based on what funds we had available. She is able to use some of her college funds and her dad agreed to that. He’s been really good. So it’s her whole different spin on, everybody else is going to college and [Reagan’s 00:45:43] using her money to invest in real estate. And if she decides to go back to college, she still has it. She lives with me so she’s not spending a lot of it. But so we did the first one, we did 75/25 based on the cash we had in, I’m like, “That’s not really fair.” Because she’s there every day working right alongside me. So now we still, our investment is 75/25, but we pay ourself an hourly wage and then at the end we take that off the profit and split the remainder 75/25. So I feel like that’s more fair.

Ashley:
That is so important and I love when people structure it that way because if all of a sudden, maybe like you said, you’re tiling the shower and maybe you would tile the shower and then all of a sudden you decide you’re going to outsource it, “Well, wait, mom, that’s not fair. You’re doing less work than me now.” But this way, if you’re getting paid that hourly wage, even if you outsource something it’s not becoming fair or unfair.

Jan:
Right. Exactly. And we work well.

Tony:
Can we drill down on that? So in terms of tracking the time spent, how are you guys doing that? Are you using some kind of time tracking app, are you just kind of like ball parking on a weekly basis how much time each of you is putting in? It’s a really, I think a unique way and effective way to do it, but I just want to dig into the logistics of it a little bit.

Jan:
Yeah. We downloaded a time clock app. So we clock in and clock out and at lunch we clock in and clock out and there’s different things, I have an appointment, she has an appointment, it’s impossible to keep track of it in your head, you’ll never write it down, so we just make it a habit. Usually at the end of the day, it’s like, “Oh, what time did you clock in this morning? I forgot to clock in.” But between the two of us, we keep it legit.

Ashley:
Do you know what the name of that app is offhand? I know I’ve used one called HoursTracker before, but again I already see everybody interested and asking what it is.

Jan:
Right. It’s just called Time Clock.

Ashley:
There you go.

Jan:
It’s very simple and very basic but it’s really handy to have.

Tony:
Yeah. Just one additional comment on that. My CPA recommended that we use, QuickBooks actually has an app and it’s called Time, it’s like a little green icon in the App Store but it automatically connects to QuickBooks. So if you have all of your properties listed in QuickBooks, you can automatically select which property you’re using.

Jan:
Oh, that’d be nice. Because I use QuickBooks. I probably should use that one.

Tony:
Yeah.

Jan:
That’s good to know.

Tony:
Well Jan, thanks for sharing that. I know so many people are interested in the partnership structure and what makes sense and how to do that the right way. So when you mentioned that you and your daughter are doing it, I just want to drill down on that a little bit. So hey, we’re actually in the middle of the rookie deal review so we got to get back to how this-

Jan:
Sorry about that [crosstalk 00:48:19] someone to keep us on track.

Tony:
So you guys, you and your daughter go in, you guys kind of figure out the scope of work, you’re in the middle of the job. So you bought this for 405, what is your projected rehab cost on this property?

Jan:
We’re probably going to have 40-ish in it, although they gave us five grand towards the roof, it still was other money out of our pocket, the cabinets and the vanities all needed to be replaced they were just crap-like cardboard. And one benefit to that that I’m glad we decided to take them out is there was a prior cockroach infestation and when we took the cabinets out, there was larva and feces and dead cockroaches everywhere. So if I would’ve painted those, I never would’ve known what was behind them but like I said, I’m glad that all came them out because it was very disgusting. But right now we’re finishing up painting. We are working on an accent wall. We do the one by twos diagonal and that just kind of adds to our properties, switching out light fixtures yet, baseboards, we need to tile. So it’ll be 40-ish. Oh and the backyard. Yeah. We’re definitely hiring someone to put rock on the hill. I’m not doing it. I don’t know how they’re going to do it. Maybe they’ll helicopter it in and drop it or something. I don’t know.

Ashley:
You could put a little ADU into the hill, a little-

Jan:
Yes. That’s a good idea. Build a big tree house back there.

Ashley:
Yeah.

Tony:
So what’s your projected ARV on this property?

Jan:
We’re hoping for 490. So every deal I’ve done as we’re going through, it’s like, “Oh gosh, are we going to get it? Are we not?” I feel like I sell myself short sometimes. It’s like you took this home, completely renovated it, that is worth a lot. People are going to come in and have a home that they can move into and not do work to for years that is worth money right there. I tend to just look at what’s on the market and the exact same house, whether it’s updated or not. I got to give us more credit that it’s going to be worth more than the ones that are right around it too. So …

Tony:
Got it. I love that. And again, just proof that you can go onto the MLS, find a good deal and so turn a decent profit at the end of the day. Well, I’m excited to hear how this one turns out for you guys, Jan. It seems like you got a good thing going for you and your daughter both. So let’s move on to our mindset segment and then just kind of get into Jan’s psych. And we talked about this a little bit, but if we go back to Jan before Phoenix, Jan in Nebraska, and we think about some of the assumptions or misconceptions that Jan had about real estate investing, what were some of those things that you thought were true about real estate investing that you were wrong about, either good or bad?

Jan:
Right. Well, first of all, it took me a while to convince myself that this is a real job. People would be like, “What are you going to do down there?” I’m like, “Oh I’m going to flip houses.” It took me a while to go, “Yeah, I’m a real estate investor. This is what I do.” Because I’ve done finance and accounting, bookkeeping my entire life, been behind the desk, which I could have come down here and got a job doing that, I just have my freedom, I can motivate myself, I’m more motivated for myself and my own accomplishments, I can go back and have the flexibility to go home and see my family when I want and that is wonderful too. But it took me some time to get out of the, “You have to work a W2 job and save your money so you can retire someday.” To, “I can make a living doing this.” And then too, as I get into the rentals, I’ll create more cashflow and things like that too and forever, it’ll appreciate and I’ll have cashflow and that’s something I can leave for my kids too.

Ashley:
That right there I think is a lot of motivation and inspiration for everyone listening, is that you made that happen through real estate investing. And congratulations on that, I know what a good feeling that is to be able to live life on your own terms, I guess, per se.

Jan:
Yes. And that’s huge. That is really huge for me. I remember years ago, now, I worked with great people and had a good job and everybody, that’s what you did. But I remember dropping my kids off at daycare and walking in to the office on a Monday morning, my heart’s just pounding, I’m like, “Ah, five more days until I’m free again.” I felt that for so many years but never knew that there was anything I could do about it. I’m just like, “Well this is life. This is how it is and you just have to accept it.” So it feels really good.

Ashley:
I have an acquisition’s manager that’s coming on with me full-time. He is finishing up his job. He’s got a couple weeks left and hates it and he’ll text me every day like, “I’m sitting in my truck, I don’t want to get out and go to work.” And I’m bringing him on as a partner for some of the properties and I’m just so excited to watch his life change as mine has, and I’m like, “Just two more weeks you can think and just hold out.” But you’re right, once you taste that difference in life, it’s really hard to ever go back to.

Jan:
For sure. And to think he probably has done it for how many years and just getting through these last two weeks is torture.

Ashley:
I know.

Jan:
Just get him out. Yeah.

Ashley:
And there I am laying on my couch with my blankets, my computer on my lap eating nachos, I’m like, “Oh yeah, stay in there. Be strong.”

Jan:
Yeah, “You can do it. I have your back.”

Ashley:
Yeah.

Tony:
I love that you added the eating nachos part. That’s-

Jan:
Yes. Hey, I’m with you on that.

Ashley:
That’s what I ate yesterday for lunch and today for lunch. So …

Jan:
That’s me too. I’m right there with you.

Tony:
Just one last thought on that, the 9:00 to 5:00 grind, we’ve been so conditioned as Americans, as working people that that is what you have to do. And that is the only time where a rational, logical person would trade two for five, you go to work five days a week, some people more and you get two days back in return. And there is no other situation where I would say, “Jan, I’m going to give you $2 for every five that you give me.” You’re going to go broke so fast.

Jan:
And you’re going to agree to that.

Tony:
And you’re going to agree to that but for so many reasons. We’ve all been conditioned to think that from a time perspective, giving up five of your days in exchange for two is acceptable and something that we should all just be okay with. So I’m super impressed, Jan, by your courageousness and your willingness to move into this new town, start this new business, bring in your daughter, have the courage as a parent to let her kind of explore her own path as well and you guys are crushing it. So I’m super pumped for both of you.

Jan:
Thank you. Thank you.

Ashley:
Yeah. And Tony, that’s a great point too, is having the courage to get into real estate investing because like you said, a lot of people are drilled into that mindset that you need to work a 9:00 to 5:00 and that’s what your life is and that’s the American dream behind the white picket fence but really it takes a lot of courage to make that shift and to jump into something new especially when it’s not what people consider a stable 9:00 to 5:00. And that’s the same thing I’m telling the new guy that’s trying to work with me and like, “I’m really proud of you that you are doing this.” Because he is, I think 40 or 41 and for him, this is a big change, but you know what? I’m going to start calling it as midlife crisis from now on.

Jan:
That’s kind of what mine was. That’s totally mine.

Ashley:
That’s so much better than buying a sports car to go into real … quit your job and go into real estate-

Jan:
Right. I know. I’m like, if it doesn’t work out, I think they have a pretty big city mission here, there’s a-

Ashley:
Yeah, that’s the thing. Worst case scenario, you go back to work. That’s kind of what it is for a lot of people.

Jan:
And that’s a thing, you do have to think about that because fear holds a lot of us back. It’s like, “What if it doesn’t work out? Does that mean I can never get a job anywhere else ever again?” Yes you can. So what have you got to lose? It’s not like no one’s going to hire you because, “Oh you tried real estate investing? You cannot work in the W2 job anymore.”

Tony:
So Nick Cooley, I can’t recall what episode he was on, but he’s a previous guest for the show and we were with him at, I think in Denver at one point. And he brought up the same-

Ashley:
And [Asha Palooza 00:57:04]. How could you forget?

Tony:
But Nick brought up this point. He was like, “People who try and put you down for chasing your dream of becoming a real estate investor, the thing that you should say to them is, the worst case scenario for me is that I try, I fail and then I live the life that you’re living.”

Jan:
Yep, exactly.

Tony:
And when he said that, I was like, “Whoa.” I was like, “That is so true.” Because the worst case scenario is that you go and you do what everybody else is already doing. The best case scenario is you build this life that you’re absolutely in love with, that you love waking up every day. The last thing and then we can keep moving because I know I’m now going to wind up but I was walking through the store with my wife yesterday, we were at Target and we had dropped our son off at school, we went to the gym and then we were just shopping at Target and I’m looking around and I was like, “It’s Monday at 11 o’clock and just look how relaxed and how happy we are.” I was like, “We are so grateful.” We were so grateful to be able to enjoy a Monday morning when 90% of America is dreading getting up in the morning at that same time. So it’s a huge mindset shift and what a weight off your shoulders when you can make it happen.

Jan:
For sure. Plus then you can celebrate your son being the president’s student council, right? I listened to that podcast the other day. I’m like, “Oh that’s cool.”

Ashley:
If you guys don’t know what they’re talking about, you have to check out, I think it was … Tony, was it on your Instagram or Sara’s?

Tony:
Yeah. On both-

Ashley:
On both of their Instagram. So at Tony J. Robinson on Instagram and Sara’s is, saraaraad, S-A-R-A-A, R-A-A-D.

Tony:
R-A-A-D.

Ashley:
They posted about … you’ll have to go see that, their son winning a student council president.

Jan:
That was cute.

Ashley:
Yeah. Okay. Let’s move on to our Rookie Request Line. If you guys would like to ask us a question, we may play it on the show for our guests. You can leave us a voicemail at 1-888-5-ROOKIE and today’s question.

Wendy:
Hey guys, my name is Wendy. I’m 25 and a pharmacist in the west suburbs of Chicago. I make a little over 100K annually. However, as a new grad, I owe about two and a half times my income. With loans being on hold due to COVID, I’ve been able to save about $15,000 cash. My brother is actually a contractor and he recently renovated my parents’ basement which is where I currently live and I don’t plan on moving since it is rent free. My goal would be to invest in a flat or a long-term rental. I have great credit and my main expenses are my daily living costs and car. So my question is, do I pursue my real estate dreams in hopes of getting out of the rat race for my career that I am not fulfilled with or should I dump that lump-sum of cash into my loans which average at about a 6% interest rate? Your advice is greatly appreciated. Thanks so much.

Jan:
That’s tough. It would probably make sense, I would probably do a rental personally and continue to chunk away at the student loans. That way you’re getting, with your investment, you’re getting your appreciation, you’re going to little bit of cashflow, maybe you can take the cashflow from the rental and put that towards your student loans as well. I feel like the appreciation and the benefits of the rental are higher than … I mean the interest rate on your loans isn’t going to go up. I feel like you’d make more investing it and having that money to pay off the loans.

Ashley:
Yeah. Jan, I’m with you. I started investing while I was paying off my student loan debt and it wasn’t that high but she had that amount, I was in a little bit of panic into that amount of reading Wendy’s student loan amount but I think that you can do both at the same time, because if you do the BRRRR strategy, you have the opportunity to pull all your money back out where you’re not even dumping money into real estate investing. You’re purchasing that property, you’re rehabbing it, renting it out, and then you’re pulling your money back out when you refinance it and you can use that money then to pay off your student loans and you still have that cashflow in property. And what I did was, I did that, I did BRRRRs where I was getting all of my money back and I even did cosmetic updates where it wasn’t even full-blown rehabs.
And I would use all of that cashflow to pay off my student loans for like two years, that’s all my cashflow went to, was to pay off my student loans. So I definitely think it can be done simultaneously. There’s many different ways to do it. Wendy could even get a house hack where she’s living in her own property and renting it out and you can make cashflow on a house hack, it doesn’t even have to pay your own, just your own expenses to live there. So I think there’s a lot of advantages. There’s a lot of different viewpoints as to what you should do. You should pay off the student loans but I think Jan, your point was that you can make a lot more than 6% in real estate investing than if she just stayed and paid off her loans for how many years?

Jan:
Right. And she’s still making a good wage and there’s really no shame in living with your parents until you get that-

Ashley:
Oh my gosh.

Jan:
Your student loan … my daughter lives with me. It would make no sense for her to go get her own place, she’s 20. So it’s not like she-

Ashley:
Unless she house hacks [crosstalk 01:02:40].

Jan:
But we get along fine. It’s all good. I’m like, “Just save your money. Keep putting it into our investments and someday, yes, you’re gone, but not for now.” She’s actually kind of a fun roommate when you switch from that mother-daughter to roommate, she’s like, “Hey, should we play cards? Let’s have a drink.”

Tony:
[crosstalk 01:02:59]. Well, I think both of you made really good points and I’m sure Wendy got some really, really good vibe from that. I think the only additional piece I’d add is that I will probably use that money to flip. If she’s got kind of the team around her to execute on that strategy, I feel like, how many flips would she need to do to pay off that 250 grand? And then she could be completely done with those student loans and then go into the BRRRRs and the rentals. So it all depends on kind of what her goals are. If she wants that big debt kind of gone as soon as possible, then maybe flip might get her there faster, but overall with the good stuff.

Ashley:
Yeah. I like Tony’s idea better. I’ve always had the rental mindset, but that’s a great idea, Tony. I like that.

Tony:
All right. Thank you, Ashley.

Ashley:
You’re welcome.

Tony:
All right. So let’s move on to our Rookie Rockstar. So we want to highlight some investors from our rookie community. So if you guys are not active in the Real Estate Rookie Facebook group, you’re missing out big time, there’s literally the most active, the most engaged Facebook group out there for new real estate investors and if you are not in the BiggerPockets Forums, you are missing out even more, that is quite literally the biggest repository of real estate investing information anywhere on the internet. Any question that you have has probably been asked and probably been answered 10 times over. So make sure that you’re in there as well.
So today’s Rookie Rockstar is Kevin B. And Kevin is celebrating reaching level two financial freedom only having two properties. So I just want to explain what the levels are based on Kevin’s definition. So level one is basic needs are met, like food water, et cetera. Level two is that all of his needs are met plus his mortgage is being covered by someone else other than you. So that’s through like house hacking your rentals or cash, loan, real estate, whatever it is. So he’s at the point now where he’s got his rentals covering basically all of his living expenses. So Kevin, congratulations to you, super excited to hear and can’t wait to see what’s next for you.

Ashley:
That is so cool, Kevin, congratulations and continue on that journey. Well, Jan, thank you so much for coming on with us today and sharing your story with us and giving tons of advice on flipping and just getting started. Can you tell everyone where they can find out some more information about you and reach out to you?

Jan:
Well, I am on the Real Estate Rookie Facebook page, and then also through Biggerpockets, Jan Trisler. I don’t have Instagram and all that. I [inaudible 01:05:35] too much time of my day, I should … or maybe I’m just not with the times, but yeah.

Ashley:
No, I think it’s great that you just already know that you would waste time on it [inaudible 01:05:48].

Jan:
Exactly. Exactly.

Ashley:
Well, thank you so much. We really enjoyed having you on the show today. I’m Ashley @wealthfromrentals and he’s Tony @tonyjrobinson on Instagram. Make sure you guys check out the Real Estate Rookie Facebook page and you can meet and connect with Jan on there. And we’ll see you guys on Saturday for a Rookie Reply.