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How an “I Don’t Want to Invest” Couple Became Successful Long-Distance Lan...

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发表于 2021-1-13 21:50:47 | 显示全部楼层 |阅读模式

Ashley:
This is Real Estate Rookie Show, number 46.


How to Start Building Wealth With Real Estate
Our step-by-step guide to “the stack” shows how you can go from zero to real estate hero—and make your first million.

Learn more here
Annie:
I now network a lot on BiggerPockets forums. And actually, we host our own meetup, which was really out of my comfort zone since we’re just rookies, but everyone else is like a rookie, I realized.

Ashley:
My name is Ashley Kehr and I am here. It is New Year’s Eve, and I am with Tony Robinson. Hello, Tony?

Tony:
What’s up, Ashley? Happy New Year’s Eve to you. We’re on the cusp of ending one of the craziest years ever. And hopefully, 2021 is just a slightly better version of last year or this year.

Ashley:
Right. Right. You had mentioned that you have a new property under contract going into the new year already. So tell me about that.

Tony:
It’s been so crazy, Ashley. 2020 has been a crazy year in so many ways, but I feel so grateful for the growth that our real estate business has had. And we’ve been on this really rapid pace of acquiring property. We’ve got a property in Pigeon Forge, another cabin that closes and gosh, like 10 days. And then we’ve got another short-term rental in Joshua Tree that will be closing next month. And we just sold that in-person yesterday. So super excited about that one.

Ashley:
So you have two in each of those markets, right? Or do you have three in Joshua Tree?

Tony:
We have two in Joshua Tree with a third under contract, and then we have one in Pigeon Forge. Actually, we have three under contract in Pigeon Forge right now.

Ashley:
Oh my God, I didn’t know that. That is awesome.

Tony:
Yeah. We’re trying to grow fast, but the one that we have in Joshua Tree, that’s our first time doing it with another partner. So I’ve had the same partner for all of them, but we brought in a third partner on this one. So we’re testing out that model. So we’re excited about it.

Ashley:
Nice, awesome. This weekend, I think, or next week, depending on the weather, I'm going to look at 20 acres, and it has three storage sheds on it that are used for storage for farm equipment and storage for boats and RVs. It's right near a Lake. So this will be something completely different for me, except my husband's a farmer, so I know about farm equipment, store sheds, because we have sheds and storage, but we don't make any money off of it. And then some of the land is leased to a farmer to use. This property was bought by somebody, I think in 2008, they bought it as a foreclosure and they ran this boat storage out of it.
And so my partner and I really want to acquire more land, and hopefully with this 20 acres, we’ll be able to pay for the land and own this land for free down the road after we collect the storage income from it. So I’m really excited to see this property.

Tony:
That’s so cool, man. Actually, the Joshua Tree property that we’re about to close on, it’s on two and a half acres. I’m not quite at the 20 or 200 that you’re at, but I’m creeping up there, so we’ll see.

Ashley:
But that’s really good for that area, two and half.

Tony:
It is. Yeah. It’s actually pretty big. Other properties are on about half an acre, both of them, so this one’s at two and a half. And what’s really cool is that we have the ability to add a second unit on that one, so that’s the longterm play with that.

Ashley:
Yeah, it’s exciting. I love all the different way you can actually do real estate investing and the different ways to make money off real estate and property. But today, we have another great guest, actually two guests, husband and wife, Annie and Trey. They’re going to tell us about how they were accidental landlords and then they accidentally flipped their house, they had a live and flip. And so they started investing across the country, actually near Buffalo where Trey is originally from, because it didn’t make sense in their Seattle market.

Tony:
And what’s really cool is Trey talks about how he was the reluctant spouse in the group and what converted him into actually believing in real estate investing and now he’s fully bought in. So for those of you that are curious on how to get your spouse on board, definitely listen to that piece. Trey also talks about his mother-in-law, so keep an ear out for that on how she feels about his mother-in-law. But overall, it’s a really good episode, lots of good information there.

Ashley:
Annie and Trey, thank you so much for joining us today on the podcast. Do you guys want to go ahead and one of you tell us a little bit about yourself and how you got started into real estate?

Annie:
Sure. I’ll start. I’m Annie Johnson, stay-at-home mom. I have three kids. Me and Trey we got married when I was like 20, so I started out pretty young. I’ve been a stay-at-home mom since. For fun and for part-time work, I teach group fitness at a local gym and I love show running and mountain hiking. And we got into real estate investing by accidentally making money on [inaudible 00:04:31]our first home

Ashley:
And Trey, what about you? What do you do for work?

Trey:
I'm a general contractor, and I fish commercially up in Alaska in the summers, and I flip houses when Annie buys them.

Annie:
When I buy them? But you buy them?

Ashley:
And he’s also a Buffalo Bills fan.

Trey:
That’s right. Let’s go Buffalo!

Ashley:
This is a great time to mention that you’re Bills’ fan.

Trey:
That’s right. No one circles the wagons like we do on rookie.

Ashley:
Let’s talk about the first deal. You guys talked about who is actually buying these deals. What made you get started? Who was the one that brought it up first, like, “Hey, let’s do real estate investing”?

Trey:
I actually was completely not on board. I grew up in a small town. I just wanted a place to live, everybody leave me alone, live there forever, kind of thing. So I was not on board with real estate investing or even having a mother-in-law or anything like that. Annie was like… I think she had a friend that actually mentioned something to her about house hacking. I was like, "No, no, no, no." We totally ditched that idea and went and bought actually a manufactured home, a pretty new one, 2011, I think it was, on like six acres."

Annie:
2015, sorry.

Trey:
'15. Okay. So super new. And it was on six acres, just outside of town. Nice cozy setting. Had a little shop, and up on a hill with a view. So I'm thinking, "All right, we're good." So I was totally not into the whole investment thing. So what happened was, we ended up not really… Things didn't work out and that location, it was away from friends and family. So we end up thinking, "Shoot, we don't want to live here anymore." I did do a lot of work to the property, but we decided, "Let's sell this thing." And when we went to sell it, we were like, "We can't really get what we want for it." Our real estate agent said, "This is what you could probably get," and we're like, "Eh, what's the other options?"
I think she maybe threw out the idea of renting it. We took her advice and we rented it out and found some good renters. But that’s when we came across BiggerPockets actually, which I think… Annie, you could probably take it from there.

Tony:
Well, sorry, one comment I want to make, I was laughing here-

Ashley:
Me too. I know what you’re going to say.

Tony:
… because you said that you didn’t want a mother-in-law. And I was like, “Annie, we can get married, but I’m not taking your mom. Your mom got to stay.” Then it clicked, you meant like mother-in-law suite. That makes a ton of sense. So you guys were accidental investors to begin with. What was it that finally made you, Trey, say, “Okay. I’m okay with renting this out to someone”? Was it just because you couldn’t get what you wanted, or did you start seeing the vision at that point?

Trey:
I think really we saw the market, how it was going around here and the appreciation people were getting. We had a neighbor sell their home, get pretty good appreciation. But we could see it up ticking. So I think for me, it was more about what we could get for the home in a year or two, that vision and not so much about the renting part.

Ashley:
Trey, what market are you guys in?

Trey:
We’re in the Pacific Northwest, basically the Seattle market. Not into renting at first, just saw the value of keeping it for another couple of years.

Tony:
Annie, it sounds like you were the one that was driving initially the push to become an investor. What was it about investing, culturally initially? And what made you feel that you and Trey would be good fits to do that?

Annie:
I think it was just building over the last five years. When we did rent out our house in Poulsbo, it was cash flowing and we’re like, “Oh wow, this is awesome.” And then when we went to sell it, it was even more awesome. We’re like, “Wow, we didn’t really try this.” We weren’t trying to make a bunch of money, but we did, and we’re like, “If we actually put our minds to it, we could probably make this a career.”

Trey:
And it was, to go a little deeper in that, I don’t know if you guys want to hear it, but, when we bought the house, it was in the woods. The first thing we did was knocked down all these trees, and they actually paid us, to give ourselves a view of the water and the mountains.

Annie:
The loggers. Yeah.

Ashley:
Oh, so you had the loggers come in and log the property and take the timber, and then you guys got the nice view?

Trey:
Yeah.

Ashley:
Wow. Awesome. Trey, you probably know about this growing up in the country with me, but land value, there’s so many different ways. You had those six acres on there where you can sell the timber, you can have honey bees on there, you can tap into the maple syrup. There’s so many different things you can do with raw land too that I think sometimes people don’t think that. They think more of like, “Whoa, six acres? That’s a lot of lawn mowing I have to pay for.” But sometimes you can definitely get the value out of it with different things.

Trey:
Yeah. And when we bought the house, actually, part of the deal was, it’s on six acres, but now there’s a rule there where you can only have five acre parcels. But before they put that rule in, this guy split his property into two three-acre parcels, and we actually got both of those. And the caveat was, it went right through the shop for some reason, and so we had to find a creative way to move that property line so he could sell both properties separately. It worked out great.

Ashley:
And how did you guys do that? What did you do creatively? I mean, to move that property line, to get it, did you have to have a surveyor come out and get a new survey done?

Trey:
It was actually super simple because we own both lots and the line was in between both my properties. So all I had to do is call the surveyor. They didn’t have to use their lasers or anything, they just came and measured, I think it was 30 feet, and just literally just moved the line on paper. And at that point we had all the proper distance from the property line so people could build on there if they wanted to. And that parcel was right on top of this ridge with a mountain view that the timber guys had cleared, so it was a great lot and, it was super desirable. Yeah. It was actually pretty easy.

Ashley:
What did the numbers look like on this deal? What did you purchase it for? And then what did you cashflow? And then what did you end up selling it for?

Trey:
Annie, you want to talk about that?

Annie:
We bought it for, I think 235. It was on the market for 260, and it was on the market a long time because I think it was a manufactured home and a lot of people weren’t interested in it, but we wanted the land and we wanted the view. And so we’re like, “Let’s just put in a low-ball offer.” And then we got it right away with a love letter and one offer for 235. And then we lived there for two and a half years, we decided that we wanted to move on to something else. And so that’s when our realtor suggested renting it. I think she suggested 250 maybe, listing it. And we were like, “Oh, I think we could get more. I don’t know. ”

Trey:
No.

Annie:
So we rented it out, and that's actually, when I first heard about BiggerPockets. I went on the Facebook group and I asked, "Hey, what does it mean to be a landlord?" And someone had thrown out the name BiggerPockets, and I didn't really understand what it was. It sounds like people who are trying to make money, where I'm like, "I'm just trying to rent my house out." I don't know if you get it. Like, "Oh, people make money doing this?" I don't know. I've known a few landlords, and they're not really rich or anything.

Tony:
I don’t want to make money, I just want to rent my house out.

Annie:
Right. That was just what my thinking was then. Anyways. So we rented it out at for, I think it was $200 cashflow for us. Right, Trey? Does that sound right?

Trey:
Yeah. It was before we really knew about capital expenses. So let’s just say 200. Our mortgage is like 15-something, and we rented it for, what? 1,850? Yeah.

Tony:
Okay. So you had a little room there. Sorry, you mentioned, Annie, that you wrote a love letter. What is that? Elaborate on that for me?

Annie:
I think they’re pretty popular in the Seattle area. If someone’s looking at some offers on a home, sometimes they’ll pick someone with a love letter that they want to sell their home to.

Tony:
So what do you say in the love letter?

Annie:
We said, “This is our dream home. We’ve been wanting a home with property. We want to have a farm and raise our kids here.” It’s basically what we said, I think. And they were selling actually the home for their dad that passed away that lived in it, and I think they read it and were just like, “It’s yours.”

Tony:
It stuck with them. That’s awesome. That’s a unique strategy. You also said this is a manufactured home. And for folks that don’t know how those differ from traditional home, walk us through what those differences are. And then in your mind, what are some of the pros and cons with going with a manufactured home?

Annie:
This manufactured home was pretty new. I know older manufactured homes, there’s some red flags. I think this one was only like four years old. And for me, when we were living in it, I was like, “Oh, it’s a manufactured home. This is kind of lame,” to be honest. And I felt like we couldn’t really add a whole lot of value to the house to flip it. My husband’s a carpenter and he can be handy and fix stuff, but it was still a manufactured home, and I think that’s why a lot of people don’t look at it as a good investment, but for us it was.

Tony:
So really for you, the cons were more so just the aesthetics that didn’t feel like a normal home for you?

Annie:
Yeah.

Tony:
I mean, it was still a great investment. And at the end of the day, that’s all we’re looking for, right?

Annie:
Exactly. Exactly.

Trey:
There’s a stigma with manufactured homes because 25 years ago, they were kind of crappy. But now, they actually held them to a higher standard than regular homes. They’re actually really good homes, and you can get good insurance, all that good stuff, and you can’t really add too much to them, but if you have a good lot and it’s well taken care of, they can appreciate. I guess that’s the only thing I say.

Tony:
Yeah. And at the end of the day, it’s really about the numbers. And as long as the numbers make sense, when you’re investing, manufactured home, it doesn’t matter. If the numbers make sense, let’s do it. Now, you guys have continued to grow your portfolio since then. I guess, walk us through your journey since that first investment.

Annie:
I don’t know if we went over the numbers, but we ended up selling it a year after we rented it. We sold it for 330.

Ashley:
Wow.

Tony:
That’s awesome.

Annie:
Yeah. We were really excited, and we were like, “This is awesome.” But then, the most exciting part was, we listed the second lot that it was on, because we divided it, and so we sold that for 115,000.

Tony:
Wow.

Annie:
That was free.

Trey:
It wasn’t free.

Tony:
And this was in one year?

Annie:
This is our first home we bought and then sold it three years after we bought it.

Tony:
Three years?

Annie:
Yeah.

Tony:
Wow.

Annie:
And then I think that’s when we were like, “we’ve been landlords.” That’s when we actually delve into BiggerPockets and decided to look more into this.

Tony:
That’s awesome. Everyone’s going to go buy a manufactured homes now, you guys started a trend, now it’s happening. What happens after that first deal? Where do you guys go from there?

Annie:
Well, I told Trey about BiggerPockets, but never looked into it, but he had a friend who’s just really good with his money and told Trey to look into BiggerPockets. And I’ll let Trey take it from here on how he found our duplex.

Trey:
Well, first before the duplex, we bought a house in Snohomish, another area in Washington, just a single family home. And I can’t remember if we were thinking that was going to be our forever home or what we were doing, but we just wanted to be in that area closer to family. We didn’t want to rent. Around here, rent is insane. So it was like, we might as well just buy a house because you’re going to pay less to buy a house than rent, and at least you’ll get some appreciation. So we bought another house. And while we’re at that house, I actually started listening to BiggerPockets Podcast pretty regularly. I mean, like almost everyday if I was working in the yard or something, I’d have my headphones in.
And so we started looking. We didn’t want to go too crazy. We had some money from the deal that we did before, but we still wanted to be a little conservative. We looked in the Seattle area, but the risk was really high, low reward, it seemed like. Not that it can’t be done, just for us. It was a little bit too risky for us. And we didn’t see really good numbers. And we weren’t ready to go into syndication yet, we weren’t really there yet. I still was trying to figure out what a syndication was. Anyways, I was like, “Well, why don’t we look back home because I can buy a house for like nothing.”
So then I’ve got a bunch of contractor friends there, I knew people, and I felt comfortable being on distance and having a quality product, not just getting some random guy to fix my house. I knew that I could find people that would do a good job, charge a fair rate, and I could trust. So we looked. And I knew a good area in the Chautauqua region.

Ashley:
So this is South of Buffalo for everyone, so they know.

Trey:
Yeah. And there’s a lot of tough places around there that really renting… There’s a lot of slums, and people just are longing for a good place to rent. And there’s some cute, beautiful little neighborhoods with beautiful houses, and I just got a real heart for those. So we went and found one in a little town right next to the Lake. I got it for 42,000 and we flipped it, and now we’re running the top and the bottom out.

Ashley:
So when you purchased this property, did you go and look at it? How many times did you actually travel to see the property once you bought it?

Trey:
So that one, I think I went there twice. The first time I went, I actually met up with a couple of realtors, one in the Jamestown area, and then another one actually up in the Buffalo area and looked around a little bit up there. And the Buffalo area’s got crazy. I got a long story about that, but save that for another podcast, but some shady stuff going on. Anyways. So yeah, I went twice. I found that one on the first trip. And then when we went to actually buy it, I went back before we closed and checked it out.

Ashley:
So not even during the rehab or once it was finished?

Trey:
Yeah.

Ashley:
You had everything taken care of for that?

Trey:
Once we bought it, we actually closed December 28th, it took a little while. In New York, it’s slow, as you know. That was the winter of 2018.

Annie:
2018

Trey:
’18, ’19 or whatever. It’s around there.

Annie:
2018, we closed. Yeah.

Trey:
Yeah. So 2019 January, it was super cold. You probably don’t remember because it’s always cold, but it was like negative every day. And so I went back to New York, and I’m changing out windows and doors in this house in the middle of the winter time, all by myself trying to get this done. So I went back for three weeks and worked like 16-hour days trying to flip this house.

Ashley:
Wow.

Trey:
Yeah. It was a lot of work. But I got it to a point where I handed it over to my contractor buddy and he finished it off for me. And then I had another guy do the siding and fix some of the roofing. That was my buddy, Eli. Eli the Amish guy.

Ashley:
Hey, same one for the MVP. And the Amish guy’s out of the bus for siding and roofing around here. I will definitely say that they just did one of my properties too. They’re in and out in a day and there’s two 30 packs in the dumpster when they’re gone.

Trey:
Did yours have to get a ride or did they drive themselves?

Ashley:
They have a ride. The guy that I would call him, because he carries the cell phone, call him, schedule it and then they get their ride, and the guy sits in the van waits for them to be done. Yeah.

Tony:
Wow.

Ashley:
Sounds right.

Tony:
I just learned something new today. I did not read that that was the thing in Buffalo. I got to go to Buffalo. You guys got a good football team, there’s some strong labor force with the Amish folks there.

Trey:
Yeah. Heck yeah.

Ashley:
Yeah, they do. They’ve really the best quality work.

Annie:
It made me laugh that Trey was like, “I’m expecting Eli to go to his neighbor’s house to call me later today at 2.00.”

Ashley:
Just a little side note. We had most of our furniture in our house built by the Amish, and they would send us a postcard when it was ready to be picked up. So we’d wait for the postcard, then we’d drive out and go get it.

Tony:
That’s so cool.

Trey:
That’s awesome. That’s awesome.

Tony:
That’s so cool.

Ashley:
After you’re done… Well, first of all, did you use the money from the manufactured home property to purchase this? Let’s go into the numbers a little bit. And then did you refinance? Was it a BRRR? How did that all work?

Trey:
Yeah, we took some of the money from the property we sold, and then we actually loaded up… I wouldn’t necessarily recommend this, but we got a ton of miles and points using credit cards and we just paid them off. But yeah, we basically used that money to do it. It’s a conglomeration for us because we’re not overly between the lines financially. I just go to work and we spend money, so it might’ve been a little bit of fishing money and a little bit of the home sale money. But basically, that was the plan. So I’m not sure exactly if it worked out that way, but yeah.

Ashley:
So you paid cash though for it, you didn’t take hard money or private money or anything like that? You used your own funds for it. And then once you’re done, did you refinance the property?

Trey:
So we did get a mortgage originally, and then I used all my own money to flip it. Right now, it’s still under that mortgage and we’re just starting the process of refinancing it now.

Ashley:
And do you have tenants in place?

Trey:
Yeah, renting it’s been a breeze. We literally put it on and we get like hundreds. It’s crazy. So yeah, great tenants, because it’s a higher end… It’s not high end, but it’s a higher end for that area rental and it really attracts some really good renters and a lot of interest. So yeah, we’ve been rented out since the day we decided to rent it.

Tony:
You were scared early on, Trey, about being a landlord. So how has that experience been for you now that you’ve got this property with tenants in it?

Trey:
Yeah, it’s been great because we were accidental investors in the beginning. I wouldn’t say everything’s an accident, but we’ve had a lot of good pieces fall in place that I don’t know if it was anything we did or just worked out, but we’ve got a really good guy who manages our property and he’s just a great guy. He doesn’t do a ton of properties or anything like that, he’s a buddy of mine, who’s a contractor, and he’s done a good job of keeping rent for us. If there’s an issue plumbing or something, he’ll get a plumber out there. We just had him come cut some trees and stuff.
So he keeps the ball rolling there. He’s been a huge asset for us. I wouldn’t mind running it if we’re in town, it wouldn’t bother me to do that, but just having him there and trusting him and be able to work with him and having a good relationship has really made it so much easier than I think it could have been.

Tony:
And that’s a good point to make, is that a lot of folks know that whatever market they live in might not be the ideal market for them to invest in, they need to go out of state. And what you’ve shown so far is that putting the right team in place is critical. You have the right team to help you rehab the property. Now you’ve got the right person in place to help you manage it. And not everyone’s going to have the same, I think, contacts that you have in terms of you knew a lot of folks out there already, but for those of you that are listening, you can still build those relationships by going into those markets and getting to know people. So I love the approach that you guys took.
Give us the overview of where you guys are today. So you had this first property that you built. Do you guys have anything else? Or what’s in the pipeline for you guys now?

Annie:
We put in a cash offer on a duplex maybe five months after Trey started renting out the duplex, and it was in Jamestown. And then COVID hit and we got scared, because we were like, "Ooh, this is a lot of cash. What if we need this cash?" We just got scared, and it wasn't even closing anyways. So I think like six months later, we were like, "Okay, we're not doing it." I don't know if I regret it, but I'm like, "Well, it looks like it probably would have been okay." But we got scared. And then a deal popped up on MLS last summer, and it was a single family home in the area that we look in. And it was on 10 lots, and so that made us really attracted to it. We actually are still closing on that. That went pending August 24th.

Tony:
Got it.

Ashley:
I know, it takes so long here to close.

Annie:
It’s so bad.

Ashley:
Especially now with COVID.

Annie:
Yeah.

Trey:
Yeah. It’s still a long story though. There’s like three brothers involved who own the property, so everybody’s having to sign. It’s taking forever.

Ashley:
And what are your plans for this property then? You said 10 lots. Are you going to sell some of those off?

Annie:
We’re just entertaining different thoughts, like building duplexes if the numbers work and then selling the single family home. I think we could sell the single family home pretty easy because there was multiple offers, but we had a cash offer so they picked us.

Trey:
Yeah. And there's room for improvement on that house. It's really what attracted us to it, was location. I couldn't go look at it, so I wanted something where I knew the location was solid and the house itself, I had my property manager actually go and look at it for me. And the house itself is in great condition. There's room to add to it. But the numbers worked as is, and the lots were pretty attractive, and it's a really good area. There's an empty canvas on this one, so we'll see what happens.

Tony:
How far is that property from the other one that you guys have?

Trey:
Maybe half a mile.

Tony:
They’re all relatively close. Okay. So you guys plan to keep expanding in that same general area?

Trey:
If we can, yes.

Annie:
Maybe.

Trey:
It’s a great area.

Annie:
It takes a lot to close, so I’m like, “I’m going to research how to do this without knowing a bunch of people.”

Trey:
Yeah, for real. Well, yeah.

Tony:
Yeah. You guys also have a really cool dynamic, because it sounds like you guys are each holding different responsibilities within your real estate business. Can you guys walk us through who does what and how that dynamic works?

Trey:
I was just going to say, that’s all Annie because it hasn’t been like that on purpose. A lot of times, again, kind of accidental, we just do what we’re both good at and it’s worked out, but there are times where we need to dial it in and say, “Okay, what are we actually doing?” And that’s where Annie, really taking the reins and get us headed in the right direction.

Annie:
Well, I feel like in me and Trey’s marriage, sometimes I need to give Trey a little push. After we did that duplex deal and five months went by, I’m like, “We do another one. That’s what we want to do, right?” And so that’s when I was like, well, Trey he doesn’t have the motivation and I have the motivation, so I started listening to more podcasts and reading books. And I now network a lot on BiggerPockets forums, and actually we host our own meetup, which was really out of my comfort zone since we’re just rookies, but everyone else is like a rookie, I realized.

Ashley:
Yeah. Well, let’s talk about that. How did you start the meetup? I think that’s something a lot of people want to do, but they might be like you or me and uncomfortable with actually doing that. So you want to tell us a little bit about that?

Annie:
Sure. We attended two meet ups in Seattle right before COVID hit, and then they ended that in February when stuff was starting to shut down, and then we just missed talking about real estate. I think you mentioned, Ashley, going and having adrenaline or like a high after talking real estate, and we were just missing that. And so I just put on the BiggerPockets Events and we just met at a brewery, social distance, I’ve masked or whatever. And it was really fun. It’s not that scary, most people hadn’t even done a first deal yet that came to the meetup.

Ashley:
Yeah, it is so fun. And that adrenaline rush that high after talking, and once you get there and just talking to one person, when you get there, after that, it’s so easy and you become comfortable because you’re with like-minded people.

Annie:
For sure. And it’s crazy.

Trey:
I think a lot of people think, “Oh, I haven’t done my first deal, I’m lame.” But everybody’s there or has been there and really appreciates that person and wants to help them because they know how hard it is just to get that first deal done. And then they know after that, it’s not so scary.

Ashley:
Yeah. Whether you’re talking to experience investors, you’re going to get a lot of knowledge, but even if you’re talking to rookie investors, you’re going to get a lot of knowledge because they’re the ones out there researching and you can team up with them to find the answer to a question you both want to know. So I don’t think it really matters who shows up at the meetup because you’re going to find great value just talking about real estate, even if you leave just at the end of the day, being inspired and motivated to keep going, it’s definitely worth attending one or even starting your own for sure.

Annie:
For sure. I’ve had people text me that are in our meetups regularly and are like, “Have you closed on your deal yet?” Checking in on us and we check in on them. It’s cool.

Ashley:
Keeping each other accountable and motivated to keep going. What are you guys’ goals for 2021? What’s your portfolio going to look at the end of 2021?

Annie:
Well, I think we have moved around, it’s too much this last 10 years. And we’re renting right now and we really want to just have our home that we’re going to live in for the next 15, 20 years and raise our children in. And so that was hard for us to decide what market we want to live in and raise our family. We love Edmonds, but we don’t want to be here forever. And so we decided to move to a small town in Alaska, which sounds really random, but we’re both have family in Alaska and Trey’s a commercial fishermen up there and I go there every summer.
So our goals for 2021 are building our home in Alaska and then adding an ADU to Airbnb.

Ashley:
Oh, cool.

Annie:
Yeah. So it’s just going to be a one door, even though our big goals are 20 doors in four years, but that’s our goal this year.

Tony:
You mentioned ADU, so for guests that aren’t familiar with that term, what does that mean?

Annie:
An accessory dwelling unit that you can either rent out or be a short-term rental.

Tony:
Got it. And you guys are looking to turn that into a short term rental for yourselves?

Annie:
Yeah. We go up to Alaska every year and there’s a small tourist town. My parents actually have a condo there and it’s just a really good market to Airbnb.

Tony:
Got it. Now, a lot of people who have done the long-term renting, they're maybe a little hesitant to go into the short term rentals because there's a lot more interaction and communication and just the workload is more increased. Are you worried about that or what's your mindset on why it makes sense for you guys to take that leap?

Annie:
They say house hacking, which we haven’t really done, house hacking is the best way to save money towards your living expenses. And we’re trying to think of what we want to do and we both agreed that Airbnb or a short term rental would be really good investment for us and something that I’m willing to take on for work.

Ashley:
And once your property’s paid off, you can turn that, what is it? ADU, ADA?

Tony:
ADU.

Annie:
ADU.

Ashley:
ADU. A mother-in-law suite for your mother-in-law.

Annie:
Yeah. We actually right next door to my parents. So he’s like, “Let’s go to Alaska.”

Tony:
My initial assumption was right about the mother-in-law then, right?

Annie:
Yeah.

Trey:
She might be listening.

Annie:
She knows we love her.

Trey:
There you go.

Ashley:
What goes into the planning process of building in a different state, especially Alaska. How are you guys preparing to do that? And are you starting to research? What are the Airbnb laws there? What are some resources for maybe someone else that wants to do this or go into a completely new market, they want to build new construction and they want to have a short-term rental there?

Annie:
I had this thought in my mind maybe two summers ago when we were thinking about moving up there, and it was just a dream of mine and I didn’t think it was possible, and I still can’t believe it could happen, but basically we found a lot and a builder and contacted him. We got pre-approved even though we were like, I don’t know, this is too good to be true kind of feeling. But we just put in the work and tried to do it and we got pre-approved. We contacted the builder, sent him our plans for the home we want to build.
And he told us what we could do with our budget. And I just feel it’s happening, just putting in the work. Did I answer all the questions, I don’t know?

Trey:
Well, also, one thing that was super helpful, especially since we’re out of state for where we’re building is just contacting the city, making sure all the codes and regulations are going to work for that property because the builder, he didn’t necessarily know all that stuff because eight years are a unique thing, but contacting the city is huge.

Annie:
Yeah. The city planner, that’s what we did.

Trey:
Yeah. Talking to people there too and the real estate agents there and stuff. So there’s a lot of resources, you just got to go searching a little bit for it.

Tony:
Now, you guys have, I think, a unique journey in real estate. You guys are partners, you’re investing out of state, you’re doing flips out of state or rehabbing out of state. I’m sure you’ve learned some things along the way that you didn’t know or you wish you had known when you first started. So for all the rookies that are listening right now, what are some of the challenges that you guys have faced that have made you better investors today that you’d like to share with the listeners?

Annie:
I’ll let Trey take this one, but I would say one thing, plan to go over budget like 20,000 maybe.

Trey:
Well, I think one thing is, you guys probably talk about it at BiggerPockets all the time, I don’t know, but don’t plan for the perfect scenario. Make sure that you leave a buffer for things that don’t necessarily go wrong, but you didn’t plan for, especially that first time. I don’t know, when I went into it, I was just like, “Oh, I’ll just go in and fix this house myself, blah, blah, blah. I can do it all.” But I found that having people to help you makes it not only more enjoyable and more doable, it’s just a better experience, and you get a better product because you’re not rushing through trying to get this thing done.
And also, if you do the work to find those people and you budget for it, it’s just a more streamlined process and it’s definitely worth paying somebody to help you out. I think that’s one thing I really learned, because I feel I can do it all, but I don’t have to do it all.

Ashley:
You’re giving that time for money.

Trey:
Yeah, exactly.

Ashley:
Or vice versa, you’re giving up money now to have more of your time. One thing I want to say is that how you said before you went into that just said, people have already probably said this a lot, but I want to say it again. I think it is so important, whatever you believe in or whichever you think is going to help someone be successful, say it as much as you want even if 50 other people are saying it because there’s someone out there that has not heard that before. And sometimes it also takes the right person for you to hear that from.
I could tell you something and then a week later, Tony could be telling you his story and then him say it, and then that’s when it could really hit home. So don’t be afraid to ever keep saying stuff. And that goes to everybody. Whatever you think is so important in real estate and can really help rookies, repeat it, repeat it, repeat it no matter if other people are saying it, because even if it helps one person out there get started or get their next deal, it’s worth you saying that. So thanks for sharing that with us.
I want to jump into one of our first segments. This is where we learn about someone who is a valuable player on your real estate team and has really helped you grow your real estate business. This is called the MVP.

Audience:
>MVP! MVP! MVP!

Ashley:
Who has been someone besides each other that has really helped you grow your real estate business? Anne, do you want to go first?

Annie:
Well, I wanted to choose the Amish just because they saved us so much money on our siding, but I think Trey could explain someone we really appreciate and why we appreciate him.

Trey:
Yeah. I’d say our property manager, for sure. He’s just been so helpful. From the beginning, he was super excited to help us out and he’s reasonable and he does the work even though he’s not making a bunch of money, but he’s there to help us out. And he’s also excited about real estate, he’s trying to build his own real estate portfolio. I’d say by far, he’s been the most help, just having him boots on the ground, someone I can text anytime I need to, he’ll go walk properties for me, he’ll tell me about issues and take of them. So for sure, my property manager.

Ashley:
And one thing that he’s definitely doing that I think is valuable is that he wants to learn and grow as a real estate investor, so he’s getting paid by you to get that experience. I feel that is a win-win for both of you, he is learning to help grow his portfolio and you’re paying him, and you also have that comfort, ease of mind that you have someone that’s motivated that you can trust, that’s loyal and that’s going to do a good job because they want to do this for themselves too. So that’s awesome. And most important question, how does everybody else find someone like him?

Trey:
I don’t know. I would say, that’s like drafting a quarterback. They’ll come around all the time. But no, I think it was funny, everyone’s story is probably different, but for me, everything I do from commercial fishing to my construction business, to real estate, it’s all about relationships, it’s all about referrals. There is so many people in your line of people you know, somebody will be able to find somebody who you can trust and that you just got to keep walking that path until you find them.

Tony:
And real estate is a relationship business all the way, and what you find is typically the most successful real estate investors are the most connected, and they’ve built the most relationships. And it’s not even always about going in it with some specific intention, but just, “Hey, you like real estate, I like real estate, let’s talk, let’s get to know each other.” And you start building bonds with people. Some of the people that I talk to the most are real estate investors, it just turns out to be that way because we love talking about it. So I love that advice, Trey, because you got to focus on the relationships if you want to be successful.
I want to take us to our next segment here, which is our Wiki Requests in line. You guys have some great insights and I want to give the listeners a chance to get their questions answered. So for those of you that are listening, if you want your question featured on the show, give us a call at 888-5-ROOKIE. You can leave us a voicemail, and if we like it, we’ll put it on the show. Today’s question-

Paul Livernois:
Hi, my name is Paul Livernois, calling from Novi, Michigan. I am a rookie real estate investor, I’m a contractor by trade, I do not have a W2 job. I want to start buying rentals. My concern is, the BRRR process, where should I go for financing the refinancing portion of the BRRR? I hope that make sense. I hope that came across all right. I sound like such a rookie. Thank you guys for doing what you do. Certainly appreciate. You guys rock.

Trey:
It sounds like me talking. That’s exactly where even we are now. We’re just getting into the BRRR part of this and trying to figure it out, especially out of state, it’s been a little bit tricky. A lot of local credit unions and stuff were willing to help me if I was living there, but because I couldn’t be a member and didn’t live, worship or work in the state, they wouldn’t lend to me. But we have found a couple of banks that we’re working through, applying for those refinances. But honestly, I don’t have a lot of insight on that because I’ve been struggling with that same thing.
And maybe, Ashley, she’s started investing out of state, maybe she has some better insight, but honestly, it is a challenge, but we’re getting there, you just got to keep calling banks.

Tony:
I guess one thing to add, with the credit union piece, I struggle with that, with my out of state investing as well, but I was able to show that I had family in that city and that was enough of a connection for that credit union to lend to me. So if you’ve got family in some of those markets, they might be willing to do that.

Ashley:
Well, I haven’t started investing out of state, I’m still lagging on that goal there, but for disclosure, I’m looking. But I have used online banks, and one I used was Bank of Axos. So they lend all over the country and I did it just for a rental near me in Buffalo, but they lend all over the country. And then Jacqueline Smith, who was on episode 43, I think, she talked about a lender and that’s probably in the show notes for her episode that did really nice financing for BRRR specifically, and for flips, that worked in multiple states.
So I think just going online and searching for banks that work nationwide, but you had mentioned that they said, if you work there, I don't know if this would work, but what you could do is have your LLC that owns the property and then you have your contractor LLC, have the LLC for that property pay you for your contracting services because then you are technically working, you received income from New York State by working on a property in New York State. So I don't know if that would actually work, but that was the first thing that came to mind.

Tony:
Yeah. Or partners. Ashley and I talk about this all the time. So if you don’t have the W2 income, go find someone that does, and you guys work out some partnership agreement where you use their income and your expertise and time.

Ashley:
Okay. Let’s go on to our random questions. I’ll ask one to Annie, if you want to ask one to Trey, Tony. Do you want to do that?

Tony:
Yeah.

Ashley:
Okay. Annie, you talked about the books you read, the podcast, besides obviously the BiggerPockets Podcast, what’s another podcast and a book that you highly recommend for a rookie investor?

Annie:
I just started reading the book on Rental Property Investing by Brandon Turner, which I feel like, “Well, we already have our investment, I don’t need to read that, but I’m actually learning a lot and it would be really good for a rookie podcasts.” I listen to BiggerPockets and Crime Junkie. So I can’t recommend another podcast. Well, and I listen to the news. Did that answer your questions?

Ashley:
Well, we’ll take the BiggerPockets Podcast.

Trey:
There you go.

Tony:
Trey, for you as the reluctant spouse, what advice do you have for maybe other people who are listening, a husband and wife duo where one person isn’t as ready? What advice do you have for that spouse that might be holding back on jumping into real estate investing?

Trey:
I think mostly, and I struggled with this, so I’m not saying this is perfect, but I think a lot of it is respecting your spouse’s or whoever, respecting what they’re really excited about and starting to at least look into it, whether it’s listening to podcasts or reading, and try to understand a little bit why they’re so excited and try to help them build that desire and to make it into reality. I think there’s something about respecting people’s heart desires and going after… For me, if it was just me, I never would have done this, but I was like, “Annie is really into this, I need to at least look into it. I need to see what I can do to help her build her dream.”
And then once you get into it, it’s fun. And you start doing something together. And although we haven’t always been on the same page, but when we are, it’s super fun and it’s worth it.

Tony:
Yeah. One piece of advice, if you’re listening right now and you’re trying to get your spouse on board, I feel like this question comes up a lot, you have to show, like Trey said, you have to show that excitement. You have to have the podcasts on when you guys are cooking breakfast together. You have to go to the meetups and invite your spouse along. You have to be reading the books and letting your spouse know what you’re learning, and joining the Facebook groups and tagging them and stuff. And you have to show them how serious and how excited you are and let them know that this isn’t something that you’re just dabbling in, but something that you’re committing to.
And I know that’s what helped me is showing my wife that, “Hey, this is something that I truly believe has the power to change our financial future.” So I love that advice, Trey.

Trey:
I think just to add to that, I think the why, like you guys talk about, is really important., because if it’s just like, “Oh, let’s go make some money, blah, blah, blah,” that’s not exciting to me, I can make money doing other things. It’s the why, and the vision, and the long-term, doing this together, and why are we doing this together is super important.

Tony:
Beautiful, man.

Ashley:
I like that. I like especially the why are we doing it together too. I think that’s important for any partnership, not even husband and wife, but making sure that you and your business partner goals are aligned and that you guys are on the same track. And one of you might be you don’t want to get to a fork in the road and all of a sudden you’ve built this portfolio and you both want to end up in different directions, and then where do you go from there? So I like that a lot. Well, thank you guys so much for joining us on the show today. We loved to hear your story and the advice that you guys gave.

Annie:
Thank you guys for having us.

Trey:
Yeah. Thank you so much. It was fun.

Ashley:
Where can everyone find out some more information about you guys?

Annie:
I’m on BiggerPockets page a lot, so you can find me, Annie Johnson, I think. You can just search and you’ll see me and Trey’s picture. And I have an Instagram, @AnnieHatchJohnson, H-A-T-C-H. But I don’t really put investing stuff on there, it’s mostly just me and my family, but Trey’s Instagram, he puts his work on.

Trey:
Yeah. I need to update it, but it’s TruConstructionProjects.

Ashley:
Awesome. Well, we’ll put those in the show notes, BiggerPockets.com/Rookie46. And everybody, don’t forget to join our Facebook group. Annie and Trey, are you guys in the Facebook group?

Trey:
I think so. Yeah.

Annie:
Yeah, we’re on it.

Ashley:
That’s a yes. It’s a yes.

Trey:
Yeah. We’re on it. We love it. We love that group.

Ashley:
You got to be on there by the time your show airs, you’re going to have lots of people want to ask you guys questions, but just search Real Estate Rookie on Facebook and you’ll see it pop up and make sure you hit the, I Agree to the rules or else the moderators will not let you into the group. Thank you everyone for joining us. I’m Ashley Kehr @WealthFromRentals, and he’s Tony Robinson @TonyJRobinson. And we will see you guys next wee
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