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Real Estate Investing School Podcast
121. House Hacking to Multifamily Mastery with Lisa Moore
00:57:31
Welcome back to the Real Estate Investing School Podcast. Today we are excited to meet with Lisa Moore. Lisa shares her journey in real estate investing, starting with house hacking and eventually transitioning to larger multifamily properties. She...
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- [00:00]
A
And that's been a really helpful and a big shift for me to, to be more focused and be way more productive.
- [00:10]
B
Welcome to the Real Estate Investment School podcast. I'm your host, Joe Jensen. Our guest today is Lisa Moore. Now, Lisa, she got started in multifamily investing through house hacking. Her first home back in 2017. Together with her husband, she currently owns 19 doors across eight different properties and, and is a limited partner on a 192 unit syndication in North Carolina. She was able to quit her corporate job in 2021 and has since invested heavily in networking and education to pursue her goals in acquiring larger multifamily assets. Being the VP of her local real estate investment association has given her the opportunity to share her passion for real estate with others in person and is happy to have the opportunity to share with the digital world and all of you listening today on the podcast. So welcome Lisa. That's quite the resume for just a few years in the game.
- [01:08]
A
Yeah, it's been a busy few years, but it's been good. So.
- [01:11]
B
Yeah, that's awesome. So you've done like 11 deals in the past six years. You know, we talk about you could just do a deal a year. You know, you'd be set, you're well past that. And the deals haven't been small, it sounds like.
- [01:26]
A
Yeah, we, my first one was in 2017 and had some personal things for a couple years. We started buying again in 2020 and it was just, we just kept finding properties to buy and kept going. So we house hacked quite a few of them and anytime we could find something that worked and numbers were what we wanted, we were, we were going forward and buying it. So it was busy.
- [01:53]
B
You said you're house hacking. Quite a few of them maybe break down. Not super in depth, but maybe like what, I mean, you can go as deep as you want. Pardon me, but when you're house hacking, what are you looking for in a house hack? And how many of them have you done?
- [02:09]
A
So it depends in different stages. So the first house that I was buying when we were house hacking, the plan was to rent out a bedroom. I was single. I didn't want a big giant house, but I knew that I wanted to offset some of my expenses because I knew it was going to be more expensive, you know, owning a home than, than renting and I wanted to be able to offset some of that. So. And that one, I was just, just having a spare bedroom. I did it on Airbnb. So we'd have, I'd have the Ability, you know, my friends and family were visiting, I'd have, have a spare room and not have to deal with any guests being there. But if I didn't have somebody visiting, I was, you know, I actually had a lot of fun. I met some really cool people. House hacking that way.
- [02:48]
B
That's cool. I just want to point out, like, just because that, that's almost become like an unheard of, like, archaic way of doing Airbnb, which is the original, like, that's what it was designed around, like you go stay with somebody and they make you breakfast, you know, like an air bed and breakfast, you know?
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A
Yeah.
- [03:05]
B
You did that?
- [03:06]
A
Yeah, yeah. You don't hear of a lot of people doing that. Now. Most of it is they're buying a place strictly to do as an airbnb, where for me, like, I knew I wanted to get into owning property and I knew that that was gonna be the best way to reduce my cost and, you know, have lower, lower housing expenses. And that's something that, you know, when people are asking about getting, getting into real estate and how to do it, I, I always tell them, I said house hack. So, yeah, it's a minor, a minor inconvenience and a minor privacy to lose, in my opinion, to get into real estate. Because I knew that I was going to do that for a year, year and a half, and then move into another one. And kind of the plan was to build that way. But the other house hacking we've done is the current house we live in. We didn't want to share space with anyone. I met my husband, we got married. So at that point we're like, we don't want to share space all the time. But we still wanted that benefit of house hacking. So when we were looking for the house we live in now, we were looking for something that either had a mother in law or a property. My husband's a GC that we could add one into. So this house was perfect because we had a separate entrance to the basement. It sort of already had a kitchen and a bathroom. It had one bathroom. They advertised the kitchen, which was basically, they had some cabinets in one room, no water, no nothing. I was like, it's a bit of a stretch for kitchen, but okay.
- [04:42]
B
Yeah.
- [04:44]
A
But we could also block off the yard. So we wanted our privacy of not having to share a yard. So we were also able to put a fence up. So when they're coming and going, it's like any neighbor that's next to you, they're not. We don't share A yard, things like that. So for us, it was a great, A great find to be able to still have that house hack but not be sharing any space or yard.
- [05:07]
B
Yeah, and I love the, you know, because house hacking is such a common thing or concept nowadays. But like I said, there's so many ways to approach it from like, say you guys carefully picked a place that would allow you the least interaction and most privacy that you want it. Almost like you're in a condo or a townhome. You know what I mean? It's like, yeah, we share a wall, but that's it, you know?
- [05:28]
A
Yeah.
- [05:28]
B
Is an option all the way to when you were first doing it, where you're literally like meeting strangers. Like, hi, welcome to my home. Like, don't wake me up in the morning, you know. And you said you had some cool experience with that, actually meeting interesting people.
- [05:44]
A
Yeah, we did. When it was just the bedroom and we. I did have some. We had. I had a guy, I can't remember some, somewhere in South America. And he was here near the holidays. I can't remember if it was over the holidays, but I had some friends over and he came. He was there for like 10 days for skiing. He came back and we were just partying and he was like teaching my friends how to dance in the living room. And it was a lot of fun.
- [06:09]
B
So. Yeah, I just think it's so cool. Like, it's so customizable. And that's one thing I always talk about how I love real estate is so customizable. I mean, we're going to get to, you know, you're talking about buying, you know, syndications in multi hundred units and, you know, you know, all these different things and multifamily, which we're going to get to. But it can literally be as simple as like, you're like, dude, you could literally print your couch on Airbnb for 50 bucks and meet someone interesting and make some money. And it just like, it gets the ball rolling. Like, oh, anything's possible. Like, the barrier to entry is so simple and easy now. And you could even be renting a place and Airbnb out your couch. Like, I mean, you could check your lease, but like, whatever, you know what I mean? It's just like, it's just crazy how simple it is to get started. And once that ball gets rolling, like you, you did a house hack in 2017. Now you're 19 doors in. In. In just a few years and you had a couple year break where you sound like you guys weren't even doing that much.
- [07:04]
A
Yeah, it, it really, to me, like when people talk about getting into real estate and so many people are like, yeah, I want to get into real estate, like, I'm going to start wholesaling. And I'm like, I mean, if you want to, but that's to me, wholesaling. The, that's not a quick, easy entry into real estate. And it can be, but if you're looking to build a machine, stuff like that can take time. Where, you know, when I was buying my first property, I had a W2. So I, yes, I did have some extra time, but I didn't have, you know, all the, like now we do this full time. So I have all the time in the world where if we wanted to start building something. But to me, the house hacking, like you need a place to live and you know, I'm here in Salt Lake City where your rents are expensive. I mean some of our tenants pay more than any of our mortgages. And to be able to own a property and have your housing costs either equal if you were renting, but now you own that property or drastically reduce. I mean our tenants pay 93% of all of our housing expenses at this property. So to me, like, you need a place to live, why not get into a place? And when there's so many options with first time home buyers and small down payments, 5%, some even have as low as like 3 and a half percent down payments. There's just so many options that if you want to get into a property, if you're willing to make those sacrifices, you really can get into a property house hack and get that ball rolling to be able to own some real estate.
- [08:35]
B
Yeah. Something I've done in the past and I've started doing toying with doing again is, is I'll rent out my place when I travel, right. So I'll have it on Airbnb, but it's only list available when I'm going to be out of town anyway. And, and then I get paid to go on my trips, you know what I mean? And, and yeah, it's like, it's just kind of, there's so many ways to do it and still hold your boundaries. Like if you don't want to see people or if you don't want to share what you can choose where the boundaries set and then get into it. So, so you started getting into it, you started doing house hacking. Was this kind of like an unintentional, like, hey, we can make a few extra dollars or is this like A, I want to get into real estate. I see real estate as an investment opportunity and this powerful tool, but I don't know where to start. So this is my beginner or like, what was your approach into it, getting into real estate as an investment?
- [09:25]
A
So I knew that real estate, like just having researched and things like that and knowing the power of real estate and owning properties. So I knew that I wanted to get into it and I moved here in 2016 and I knew, you know, I wanted to take a year to figure out where I wanted to be, but I knew that I wanted to get into real estate and start buying real estate. And I also knew that I wanted to house hack, which that wasn't even a term back then, I don't think. Like, I didn't know of bigger pockets or real estate investors associations or any of these groups when I first started. So I was just, I knew that if I could rent out my room on Airbnb, it would reduce my costs. And I knew that that would be able to get me, get me started. And I knew that I could stay in that property. You know, you stay in for a year, you move into another one, you can get another primary resident mortgage. So that was another way that we really were able to, to buy properties quickly because we were willing, willing to move and willing to house hack.
- [10:26]
B
So I love that. And people who listen have heard me, you know, say that the power of the primary. We talk about house hacking where it's like, oh, I can hack and getting extra income with the house I'm living in, right? You know, renting out a room or doing a duplex or mother in law, whatever. You know, you're renting it out as you're making additional income than you normally would have made, which is really what most people think of as hack. Oh, I'm making, I'm making money off of my current, my primary home. But the real power I see is the power of the primary, what I call the pop, right? The power of the primary, where you can go get, like you said, five and a half percent down or 5% down, three and a half percent, even zero. If you go to like this USDA, like agricultural areas and stuff, like you can get zero percent down. You know, there's programs I just saw thing on Rocket Mortgage doing something for 1% down on primaries. It's like when you can get all the home in your name and put none of the money in. Like that's crazy powerful. You know what I mean? That's really. What else can you do where you put nothing into it and own, truly own a multi hundred thousand or million dollar asset. It's crazy.
- [11:32]
A
Yeah. And the better financing, the interest rates as well, on top of the better down payments, the interest rates as well. I mean the interest rates that we get as, as for our primary residence are significantly better than anything we buy as an investment. So I mean, up until quitting my W2 a couple years ago, I mean, I think we've got six mortgages that are all primary residence. So they're all like you 3, 3, 4% interest rate. Because we were willing to move and we were willing to, to make that sacrifice, but to us it wasn't, it didn't feel like a sacrifice to get us to where we are. So.
- [12:11]
B
Yeah. And for anybody listening to this, oh, I'm not willing to do that sacrifice. It's like, well, what you're gonna sacrifice something like, what are you willing to sacrifice nine to five, eight hours a day for 40 more years? Like what you're gonna sacrifice? Like just, just you get maybe think a little more holistically about what you're sacrificing as opposed to like, oh, I don't want to have someone in my basement because they might cook salmon and I don't want to smell it or whatever the issue is, you know.
- [12:38]
A
Well, and that's what always gets me to. I've had people say like, oh yeah, I never want to rent out my basement. And I'm just going, you live in an apartment complex with people above you, below you, and on both sides of you that you don't have any control over.
- [12:51]
B
That is.
- [12:52]
A
So that's what it gets me when people say they don't want a house hacker. I can understand maybe not wanting like a bedroom within the same space, especially if you have kids.
- [12:59]
B
Sure, yeah, yeah.
- [13:00]
A
But you know, I have single friends or they don't have kids and like, I never want to rent a basement. And that I'm just going like, but you already share a wall with, with multiple people, in some cases 4 above, below, on both sides. And you have no control over who those people are. Where me, I'm like, I'll take my house hack and I can choose who's in the basement. So we can make sure that somebody down there is somebody that we, we like and is going to fit with us. And you know, if they're like, yeah, we love to party on Saturday nights and have a ton of people over, it's like, you're probably not gonna fit. So we can choose who's there to make sure that it is. You know, we've had amazing tenants in our basement that we invite up when we're having barbecues because they're, you know, we, we are able to chose them.
- [13:45]
B
Right. You gotta pick them out, which is great.
- [13:47]
A
Yeah. In an apartment complex, you don't get to choose who your neighbor is. So it's. You hope that they're quiet and you hope that they're good neighbors. But yeah, it always amazed me, that mindset, it's just like. But you don't get to choose. Your neighbors are in your apartment complex and you're sharing walls with them. So why aren't you willing to share a wall in a house that you own with a tenant that you get to choose?
- [14:08]
B
Yeah, no, I love it. And even if it's like you're in single family, you know, where it's like, oh, they're like, oh, well, I don't live in an apartment. It's like, yeah, so do this, what you did for a few years and hop around and have the headache. But then now you own seven, six, you know, of these, these assets with amazing loan terms on them. And it's like, that's going to set you up to not have to even have a job, which you were able to quit your W2 in 2021. You know, it's like, would someone rather work 20 years on a job they'd prefer not to work or hop around houses for five years? It's like that, that's what. Yeah, but they're both a sacrifice, but like, pick your poison, you know? Yeah, I love that. So, so how did you jump from that though? So we're, you know, we're talking about these little house hacks stuff, but you, you, you've got, you know, 19 doors and, you know, eight different properties. So how were these multifamily house hacks or did you jump into bigger stuff or what was kind of the move?
- [15:02]
A
After the house hacks, we actually house hacked a triplex. That was the final one. In 2021. We decided that I wanted to. To quit my job. The company that I was working for, which, you know, I didn't join, my background is financial analysis. They. We were working remote with COVID like most companies, and they had said, you know, we're going to do some sort of hybrid when everyone comes back in the office, we don't know what. But then they sent out a letter in June saying, everyone back in the office full time, no exceptions. Here's the dates based on your, your position And I said to my husband, I'm like, all right. I was like, I'm done. I said, I'm not. There's. And I also supported a team globally. So I had to drive into the office to sit on a zoom with people all over the world. I'm like, I can't even meet with people in the office. So it was. It just. And they weren't willing to be any flexible at all. It was full time, no exceptions. So that was when I was like, all right, we're done. So being a finance background and doing budgeting and things like that, I, you know, I really scrubbed our budget and looked at what do we need and how much more money do we need not to replace cash flow or not to replace my W2 income? Like, that's something that a lot of people always say is like, well, I. I need to replace my W2 income. And I always challenge them.
- [16:26]
B
Yeah, I love this thought, going with this. I'm like, I know what you're talking about. I'm like, I'm so stoked on it.
- [16:31]
A
I'm always like, do you really need to replace all. All of your income? Like, do you spend every single penny of your income towards necessities, or are you driving a really expensive car that for a few years, hey, trade that in and get something that doesn't have a payment? Are you living in a really expensive location that you could cut back or house hack? Are you going out to the bars three, four days a week and spending hundreds of dollars a week on that stuff? Like, a lot of people think they need to replace their income, but if they actually really dig into their budget and see what they spend. And I was also willing to forego putting money into a 401k and things like that for a few years. You know, most of our money now we still have some investments in the stock market, but most of it goes into real estate. But we were willing to sacrifice that knowing, okay, like, yes, we will be taking a step back. I won't have that, you know, free money to. Not free money, but just money to spend as freely, and we'll lose that easy financing. But when I really dug into our budget, it's like, I don't need to replace all of my W2. Like, we only need X amount more to sustain us and, you know, live comfortably. But, you know, we're not at the point where we were with a W2. But we knew that having that freedom and having that time to spend everything in real estate, we would get back to where we are where we were and far surpass what I ever would have made in a W2 income. I mean, the, the ability to make money in real estate is endless. There's no, there's no cap to how much you can make in a W2.
- [18:09]
B
The potential. Right. It's just like, yeah, like the W2, you're. You know what, they're gonna have some sort of salary cap.
- [18:17]
A
Yeah. I mean, even, I mean, short of you becoming Google CEO and you're making an absurd amount of money, but for the average person, and I was, you know, making six figures and doing very well, but there's still. You still have a cap. Real estate, as much as you want to work and as much as you want to put into it, as much as you want to buy, your income can just keep going up and up and up. So when people say they need to replace their income, I always tell them, like, sit down and really look at your budget. Really look at what your expenses are. What can you cut back? What can you maybe not have for a few years to be able to quit if you want to do this full time and be able to build up your real estate? Because most people, if they really dig into their budget, probably don't need to replace all of their income.
- [19:00]
B
I love that.
- [19:01]
A
To be able to survive and do this full time for a few years.
- [19:06]
B
Yeah. And I think that's really powerful. And it's funny because it's like once you have a taste of freedom, your priorities change. Right? And we go back to your working remotely from home. You got this, you know, a lot of people did in over Covid, like, hey, here's this, this taste of freedom. You can wear your pajamas. You can like, wake up on when you want to. You don't have to rush through rush hour and traffic. It just gave everybody this taste of like, I'm in control of my life. And then when they try to take you back, it's like, never mind. Like, I quit. Like, I'm out. Like, you get. I tasted freedom. And same thing with the income. You're like, okay, I'm used to making, let's say a hundred thousand a year. Like, well, what if you cut that down to 60,000 a year, but you weren't having to work anymore? Like you're saying, like, what if you, you don't have to replace the. A hundred thousand, cut it in half maybe, but have freedom. And you'll realize like, wow, I would rather have freedom than an extra 50 grand because then I can do whatever I want. And If I want, I can spend that time building even more wealth and then I can have the money and the time, but I'm doing it on my time, on my watch, on my call. I love the definition of freedom. I heard, I think it was Mariangelo or somebody. And it was. It's not freedom from obligation, it's freedom to choose your obligations. And it's like, yeah, you're still working, you're still doing stuff, you're still doing what is important to you, but not on someone else's time scale, you know.
- [20:26]
A
Yeah, that freedom of time to spend our days doing whatever you want. Like, you know, if we, if we don't want to work and we don't want to buy any more properties, then we know that our income will, you know, it'll slowly increase with, you know, increasing rents over the years and stuff. But we also know that if we want to bust ass and buy more and put our time into it, we can do that. And we know that that's going to increase our income. So having that direct correlation of how hard we work directly impacts what we get out of it, to me, is a very empowering thing and it's a very motivating thing. You know, I, as I said, I didn't join my W2 and the company I worked for was, was a great company and stuff like that. But as hard as I worked, yeah, I'd get a raise. But most places, like you have a cap each year, like, you might get 3, 5%, but they're not going to be giving you 15, 20, 30% raises year over year. So as hard as you work, you might get recognition, but you're not going to get necessarily those big raises where now with real estate, the harder I work, I see a direct correlation of more properties, more money in our pocket, and it's. It makes us want to work more. I mean, we're definitely like semi obsessed with, with real estate, and we're always talking about it and it doesn't feel like work because it's something that we enjoy doing and we see a direct, a direct benefit in our life the more we do and the more we are involved with real estate and things like that. So we love.
- [21:58]
B
And when you think about lifestyle trajectory, I think that's something people don't think about a lot. Like, let's say the 9 to 5 job. Right? You know, you do more, you do more, you get a bigger rage, you get more responsibility, you get a bigger rage, you get more responsibility. It's like the trajectory you're going to is is less and less freedom, more and more obligation. That's why you're getting the higher pay. And now you're responsible for the whole team. You know, you're the CEO of Google. You mentioned they don't have the freedom to like, peace for two weeks, for two months. Like, there's so much obligation for them to show up and do what's needed that it's like, you know, and all the roles up there, it's like, what trajectory are you building if you go down this road? Are you building the lifestyle trajectory? Want maybe the money trajectory is on point, but is the lifestyle trajectory, and that's what's exciting about real estate. You might be going ham like you are right now, where you're like, I don't care. We have the time. We like, let's just go hard. And you're like, I'm working more than ever, but my lifestyle trajectory is leading me to more freedom and more of the lifestyle I want. Even whether it's happening slowly or it's happening fast, it's about, I don't know. I just think people don't always think about lifestyle trajectory. It's like, what ladder are you climbing? And when you get to the top, you're like, oh, shoot, I got to the top. But was this the ladder I even meant to climb?
- [23:13]
A
Yeah, I think a lot of people, they, you know, they just like, well, if I, you know, work that W2, and then I'll get to 60, 65, and then I can retire and I'll have all this money and stuff like that. But one, not everyone makes it to retirement and then are you still going to have the same, like, you know, we spent almost six months this year traveling and, you know, we love to backpack and snowmobile and ski and dirt bike and do these physical things. And it's, you know, a lot of times we're traveling places to do these and I'm thinking, yeah, you wait till you're 65. Like, are you still going to be able to do those things that you love now? Like, I think, you know, by the time I get to that age, I may not probably won't have the energy and the ability to do all the things that we do now. So we want to take advantage. You know, it's finding that balance. We want to take advantage of being able to travel and do the things we love while still building our real estate and having that freedom. Like, we can work as hard as we can and 80 hours a week if we wanted to, and then Take time off and things like that. So just that, that freedom of time and freedom of lifestyle and building what we want is, is definitely our, our driving force and what we, what we love about it.
- [24:27]
B
So, yeah, it's like, is the success I'm, I'm working towards gonna give me more money and more time, or is it just gonna give me more money and less time? Think about that, you know, and, and I've been in positions, I thought, man, the more I work, the more I'm gonna lose myself if I win. If I win, I'm losing. It's like, wait a second, I gotta think about this more multifaceted, you know. Let's talk about one cool thing, though. With your financial background, the job you were doing, though, you said you, you're budgeting and understanding finances. How did that carry over to. To real estate and analyzing numbers? You know, it's just so much of real estate, it's like, run the numbers, run the numbers, you know, to talk about that carryover.
- [25:13]
A
So, yeah, I mean, I had never, as I said, I didn't know anything about real estate when I was getting into it. I didn't know of the resources that I have now with local RIAs and bigger pockets and all these podcasts and things like that. And I had never read a book on underwriting deals. But just having the background that I had with financial analysis and budgeting, things like that, you know, I just was fortunate that my brain just works that way. So, you know, when I was looking at properties and analyzing properties, I just kind of intuitively, from my background knew how I wanted to look at those numbers. And I actually read Real Estate by the Numbers by. I think it's Jay Scott and Dave Myers, which. Anyone who wants to learn how to run numbers, that's a really good book. But I was reading through that and I just kind of built my own underwriting model in Excel because I didn't have anything else. And it's, it has been interesting seeing, you know, some things that I just kind of built myself and it's like, oh, sweet. I did that the right way. Like, that's how they also suggest doing it. Like, there's things that I've had to adjust and other metrics and things that I've never thought of to, to look at. But it definitely, it definitely was a huge help having that finance background and knowing how to look at numbers and how to analyze things, making sure that we're buying properties that were going to cash flow and factoring in savings for things and maintenance and vacancies and things like that. So definitely helped big time. But for those that don't have that, like, I said that Real Estate by the Numbers book is a really, really good book that goes into detail on. On numbers and underwriting and stuff.
- [26:55]
B
So, yeah, I love that book. And I love the way Dave Myers approaches real estate in general. Like, we've had him on the show here, and. But just, like, he's very. I mean, very analytical. He's a numbers guy, but I just love the way he approaches it so much. He has a new book coming out about, like, just kind of your goals and the kind of the lifestyle trajectory we're talking about as well, which I think people should implement. But I love that you said how you. You built out your own Excel sheet of just, like, how to run these numbers. And I'm a. I'm a total nerd with that. Like, I. I say I, you know, some people collect, you know, teacups or magnets or cars or whatever. And like, I collect. I collect deal calculators. Like, I'm like, let me see your deal calculator. And. And I. And then I piece it all into mine. Like, so I developed my own as well, because I was like, I don't know how to do this. I. I know I don't want to get burned here and here. And so I just started piecing it all together, and I created what I personally claim is the world's best asset analyzer. You know, humble, humble opinion there. But. But all I did was piece together multiple pieces. After I got mine, I was like, oh, well, what do they have? What do they have? And then, you know, and so anyway, I encourage people to do that. And the cool thing about creating your own is you understand it. Like, you understand it really well. Like, you know, why each number is where it's at. And, you know, sometimes when you just get somebody else's, you're looking, you're like, I don't understand being on this. And. But when you develop it from scratch, you're like, I intricately, intimately know why each formula is the way it is, and it's more powerful. I think it.
- [28:24]
A
Yeah, definitely. Like, everyone's brain works differently on how they process things and look at things. And yes, you know, since I've been introduced to all these different podcasts and books and things like that. And I. I also always try and get any deal analyzer I can just to see what other people are doing. And, yeah, I mean, there's some that, you know, people have said this is like the best deal analyzer. It's really good, blah, blah. And I'm looking at, I'm just going like, my brain does not work the same way as this person. Like, I was spending more time trying to figure out like what they were doing and why. And it's, it just wasn't, it didn't match with how my brain works and how I look at things. So I've been, been doing the same as you. As I get different deal calculators and things like that I'll incorporate into mine and tweak and things like that. Like, okay, I like this and I can incorporate into mine and use that. But yeah, and that's one thing I would say to people too. Like, if you're, if you're trying to find a deal calculator and someone tells you this is the best calculator, you got to use this one. But if you can't figure out how to use it, then it's useless.
- [29:36]
B
Yeah.
- [29:36]
A
So try different ones. Like there are quite a few free ones out there. There's some that don't cost that much, like, and some, if you buy a book, you get a deal calculator with it. So there's a lot of resources. So I would definitely say if you're trying to learn how to run numbers and you're not an Excel person and you don't want to build from scratch, but you're really stuck trying to learn this one deal calculator, test out other ones. Like, everyone's brain is different, everyone understands things differently. And there's so many different ones out there that you got to find the one that matches with, with how you think and how you process things. Otherwise you're just going to struggle. I mean, there's some that I've looked at and I just finally was like, nope, this is, this might be the best one in the world, but it is not the best one for me because it does not match with how I think and how I process things.
- [30:21]
B
I love that. I think that's huge. And the way you approach it will change over time. Right. When you're first starting, you're thinking very much this way. Maybe it's cash flow focus. And so you get a calculator, cash flow focus, you develop yours on that and then over time you may shift it and make it more, you know, total ROI focus of considering all the aspects of principal pay down appreciation and working those angles in, you know, and that's okay. Like your approach should, your strategy should change as you progress and mature in your career with investing and. And as your finances change, like, there's so many things, but, like, say if. If it doesn't go along with the way you're looking at it and what you're trying to accomplish, then, yeah, readjust it or make your own. And people are afraid to make their own because they don't understand it. I'm like, that's why you should make your own. Because until you understand it well enough to make your own, you really don't understand it.
- [31:18]
A
Yeah, if you can go and create something and really force yourself to learn, you're going to understand how the numbers work and how they correlate with each other way more. If you build something and it doesn't even have to be, you know, like, some of These are for 300 unit syndications, and you've got 15 different tabs and doing stuff. Like, it doesn't have to be that. Like, if you're just getting started, like, you can learn the basics and basic cash on cash and a few, like, simple metrics. But, yeah, if you build your own and go into Excel and kind of struggle through that, it really will help you understand the numbers so much more and give you a better understanding of how they relate and how, okay, when I change this number, this one gets affected. And if I change this, like, you just really start to see how everything connects and how shifting things changes. So depending what you're looking for, what your goals are, and everyone's different in what they look for on, you know, one deal could be perfect for me, but for you, you'd be like, ooh, that doesn't fit what I need. So you can see how it changes your cash on cash and ROI and different things and really see, okay, does this match with what my goals are? And having a better understanding of what levers you can pull when you're putting deals together and making offers and know, okay, if I change this, then I know that this number will change. And it just gives you such a better understanding of the numbers and how you can put deals together.
- [32:47]
B
I love that. No, and it's like my. My asset analyzer is on version 7.1, and it's like, you know, so there was like a 1.1, 1.4, 1 point, you know, 2.7. Like, there's. I kept adding and adding and adding, so, you know, years into it. It's funny because if you go back to the very, very first version, it literally was just cash flow or cash and cash return. You know, it's like, okay, what's My money in. You know, what's my annual profit divided by the money in. And that was like the only formula on the sheet. And then it's just expanded and grown. You know, I have all these like other metrics on there and cash flow margins and these and total ROIs. And I like just read so much stuff I don't even use on it. But it's just funny how far it's grown. But it's like, say, start with what you know and start really basic and then add to it there. And you know, and it's funny that I don't know. I'm kind of excited as we're chatting about this just because it's something I haven't really thought, thought about and verbalize this way. It's like how everybody should create their own. I felt like I have the best one. I'm like, hey, I share it with people. But I keep seeing people like, well, how do, how does it work? How does this work and how do I do that? And I'm like, you should just start your own if you don't get it. Because I look at new ones that I don't always get. So anyway, I think there's a powerful thing. So that's the new thought. Anybody listening this? Like, there's your takeaway. Go start your own deal calculator. Even if you have mine, even if you have Lisa's, even If you have 20 other people's, like, just see how much you could do from scratch as a test to see like how much you truly understand the numbers. Yeah, so that, that's awesome. So. So let's talk about you making the jump, right? So a lot of people talk about the dream, right? And a lot of people say the dream's dead, but you know, of quitting your W2 and living off of real estate. And people say, oh, that's not realistic. You know, I mean, I hear what David Green, you know, is kind of like, it's funny in the bigger pockets. Like it used to be like that was it, you know, cash flow. Build your freedom. Build your freedom. Live off of it, you know, fire all the, you know, you know, and now it's kind of like, well, that's not very realistic. Go get a good job, you know, build some true appreciation of wealth over time. And. And it's kind of been a different story. And obviously it's a lot harder to find cash flowing property right now. So there's a reason people are saying that, but you did it. So let's talk a little bit about that you quit your job. You talked somewhat about, you're like, oh, maybe I don't need to replace the entire amount as long as I cover what I actually need. But can we dive into that big move for you?
- [35:15]
A
Yeah. So, yeah, like I had said earlier, we really just dug into our budget of what do we really need to live on? And we were willing to give up going, you know, my, one of my things I love is traveling. And I said, okay, well, I'm willing to give up being able to do the big expensive vacations every year for a few years. And you know, we, we both drive older cars. I have a 2010 4Runner. My husband has like a 2012 Ford F150. Like, would we like a new vehicle? Yeah. But right now it's anytime, anytime we think of buying something or spending money on something, we're like, ah, but this could be like a remodel in this unit or this could be a new kitchen here. So we're at the point where we like, we almost don't want to spend money on other things. It's always. But this could go towards real estate and we just want to be putting everything back in that we can. But like I said, like figuring out your budget and really breaking that down, but also knowing that when I was doing it was, okay, this is my plan, like, I'm going to quit going to do real estate full time. And a lot of people, you know, get, you know, worst case scenarios. Like, okay, well what, what is your worst case scenario? So my worst case scenario was we, I quit and we aren't able to buy any more properties or we're not able to build up any more cash flow or something drastic happens and we have to sell all of our properties and now we have no income from real estate. Okay, what's my worst case scenario? Like, I go back and get a.
- [37:00]
B
Job, like, which is where I'm at now.
- [37:03]
A
It's like, yeah, it's like scenario exactly. It's like my worst case is I end up back where I am right now. And like, to me that was a risk that it. The bigger risk to me was not taking that chance.
- [37:19]
B
It's like that way, it's like it's become pretty clear. Why would you not.
- [37:26]
A
Yeah, I'm like, okay, my worst case is I'm literally back in the same position in 1, 2, 3, 5 years. Like, okay, well now I feel like I just have to do it because the, the only like everything else is a benefit. If my worst case is being back where I am. Everything else that happens is a benefit. Like, yeah, it is working out, we are buying more properties, things like that. So it was, it was something that when you really look at it and like what is your worst case? You know, short of you being in some extremely rare position where for you to get another job is so difficult because there's, you know, almost no jobs in that field, I can't even think of a situation where there's a job so rare that you couldn't go and get another job. Like, sure, some might be a little more difficult, but most people will be able to go and get another job. And if you, even if you couldn't find something in the same exact feel like there's always a job out there. So like your worst case is like, okay, because our other worst case was, all right, well maybe I don't need to get a full time job but maybe we need to supplement a little bit and I go and work at Home Depot or Lowe's. Then we also get a discount, anything we have to buy there. So it's like the, just running through all the scenarios was also helpful because it really made us realize like our worst case really isn't that bad. Like our worst case is being back where I am. Yeah.
- [38:49]
B
And then you look at the upside, you're like, but the best case isn't, oh, I just, you know, I'm living more frugally but I have more freedom. That's the base level.
- [38:58]
A
Yeah.
- [38:59]
B
Up best case though is, you know, that like you said, the, literally the sky's the limit. I mean, yeah, these systems and they own hundreds and thousands of properties. You know what I mean? I look at like Ken McElroy and you know, Kiyosaki and some of these guys have been doing this forever and it's like, I mean that's the upper limit. Like there's not one.
- [39:18]
A
Exactly. So yeah, I mean for, for us, you know, we're, we're living the, the most frugal life right now that in our opinion we ever will. Because I, I, we're not going to fail at what we want to do. Like I know that we'll get to where we want to go and we'll keep growing and buying. So it's, if this is, and we even say this, it's like if something was to happen, we could never buy anything again. It's like we're still living a really good life and even if we were like we're never going to buy anything for whatever reason if something happened, it's like, even if we had to stay where we are, like we're, I'll still choose this Life over a 9 to 5 any day.
- [40:00]
B
Yeah. So let's talk about one thing. You leverage your 9 to 5 because this is a key thing when choosing when to exit your nine to five. Right. One thing, obviously the capital, you know there's income. Right. And we're bringing in money that helps. The other thing is the credit worthiness to be able to qualify for these house hacks. And you guys really took advantage. I mean, you did what six, you said you have like six of these loans, maybe even had more at one point overall. But that's really cool. Like you were able to secure a lot of property and a lot of assets using that qualification because you had the steady income. So the banks looked at you like, oh yeah, she qualifies, will lend to her. You didn't just have one and walk away and go look blindly back, oh no, I can't qualify for anything. You qualified for a ton and then you consciously knew that was going to adjust how you, your lending would go in the future. I don't know if you want to share anything on that. I just think that's a very key point that you guys did very consciously. I saw you mentioned a couple times already.
- [41:01]
A
Yeah, no, we, a hundred percent, we maxed out my debt to income. So on top of buying the properties and having the, the mortgages in my name of the primary residence, we also had equity in properties because we had done large value ads and my husband had some properties that had equity in them. So we also were doing cash out refinances. We did a HELOC against my like the very first property that I bought in 2017.
- [41:34]
B
Right.
- [41:35]
A
He locked out against it. We did cash out refinances against property. So leading up to me quitting, we were doing everything we could to max out my debt to income. Like I didn't want to leave until I knew that I had used every little ounce of my W2 income. And obviously, yes, if I had stayed over the years making more money and our, you know, appreciation, things like that. But we didn't, we didn't want to do that. So we made sure that when I quit, like I was on the phone with my mortgage guy and we're doing, we were selling a property, buying a property, doing a HELOC and doing a cash out refinance. And he's like, all right. He's like, this one, he's like, this will max you out. He goes, you Won't be able to until you pay down some mortgage and get a raise like this will max out your, your debt to income because you won't be able to do anything else. And I say, okay, all right, now is the time.
- [42:26]
B
Farewell.
- [42:28]
A
And the mortgage companies, they always, they may ask if you have a job, but they don't ask do you intend on keeping your job?
- [42:36]
B
Which is so funny.
- [42:38]
A
Yeah. So on the, the last one, so we, we had done the heloc, we did a cash out, property was sold, so we're waiting to close on our triplex and things were like getting delayed just with some due diligence and things like that. And when we finally were like ready to close and it was like the day we had signed everything and they can call and confirm that you still have a job up to funding. So I could sign papers today, but if the mortgage doesn't fund until tomorrow, they can call up until they fund to find out, do you still have a job? Is it still at the same, like, they can still verify everything. So even though you've signed everything and you think that it's said and done, if it hasn't funded, they can still call and check and make sure that everything checks out.
- [43:23]
B
I'm pretty sure happened to me my very first deal. Like, I mean there's like a decade ago and I'm like, I'm almost positive I lost a job while in escrow. And I was like, I hope they don't check. I hope they don't check. I hope they don't check. And they ended up not checking. I got through, but they totally can. I was very nervous about it because it barely. Anyway, I was this young 20 year old, you know, 24, and I was just like, never made money. Had this like barely stable income. And then I lost it mid escrow. I'm like, oh, no. But yeah, that's a really good point.
- [43:57]
A
Yeah. So I was waiting. I'm like texting my mortgage guy. I'm like, has it funded yet? It's like, not yet. I'm like, has it funded yet? Like, I was waiting for him. He's like, yes, it is funded. Everything is official. And as soon as he said that.
- [44:07]
B
I was like, boss, I love that rule of thumb. If anybody's wondering, well, when can I quit my job? You know, it's like, not only, you know, you run the numbers on your income, make sure you have enough. Like I said, not necessarily a full replacement, but enough. And then, and then, yeah, have I, have I taken advantage of my, my Loans the leverage I can use with my job. And when you have and you or at least most of it, I think that's a great rule of thumb or something to shoot for. If nothing else, it'll help you buy more real estate because you're like your goal is to over, not over leverage, but leverage yourself. Leverage as much as your debt will let you. And again, if for anybody listening and I have these whole safe debt guidelines I go into like you're doing this wisely, you're making sure this is all debt that's covered, it's all self sufficient. You have reserves set aside so you know as vacant for three or four months, you're okay. You know, like, like these are common practices. So it's not over leveraged. You're not risky in any of this. It's very safe, it's very secure. But you're borrowing as much as you can from these banks and that's why you feel comfortable doing it is because it is all mitigated and self sufficient.
- [45:13]
A
Yeah, you definitely want to make sure you've got some savings and reserves. You know, we had business savings, we had personal savings and things like that. So yeah, I definitely wouldn't quit. If you have no money and no reserves and you know, especially if you have a W2 and you haven't utilized everything like I definitely would say take as much advantage of buying properties as you can and, and that could even be like, you know, if you can't find properties on your own, people are looking for credit partners. So you know, you start networking with people in your area and if you're able to find, you know, properties to buy, but you meet somebody that doesn't have a job and has properties they want to buy, well partner with them. Like hey, I have a W2, I can, I can sign on the loan and I can get us the financing for part of the deal and, and start getting involved that way. That's another way that you can get involved if you have a W2 income and either you don't have the time or whatever the reasons be, but find people that are looking to buy that need that credit and need those, you know, those KPs to sign on their, their deals to get them that financing that they may not be able to get or may not be able to get as good of financing as you can get with your W2 income.
- [46:33]
B
I love it. I love it. Lisa. Well, sweet, well there obviously we could chat about this stuff forever and only touch, you know, some things I do want to dive into some of our final four questions for those that want to be able to reach out to you or get a copy of your deal calculator you've built. And after this call, we're definitely gonna have to swap calculators. Be nerds about that. But what's a good way for people to reach out or follow you?
- [46:57]
A
Yeah, on Instagram. My Instagram is More doors with Lisa. That's with two O's. M O M O O R E More Doors with Lisa. And then Facebook you can find me Lisa Field more. And then if you want to email me, my email is inforlifecapital.com and what.
- [47:19]
B
Are you looking for? If there was something that you're like, man, I could use help on this, you know, like finding a deal or you know, funding a dealer. Like what would you love to hear? Like you get three or four people reaching out about something specific. Like what would they be that thing.
- [47:32]
A
That you're like, yes, right now it's, it is finding deals. We really want to find off market deals. We're, we're focusing in Utah and we're focusing on the seller finance sub to those off market deals where you've got a landlord that's either been managing for a long time or just somebody that's willing to sell or finance their, their property. It's, it's such a benefit to both sides. Especially now with interest rates higher. It, we can still find good deals. You know we have a fourplex at 8.35 interest. That's cash flowing very well. But those are fewer and far between to find right now. So to be able to find the seller finance deals, you know, we can, we can pay them what they're asking for because they're willing to give us the financing that we need. So anyone that is doing deals in Utah, definitely we're looking for up to 50 unit properties in Utah right now.
- [48:26]
B
Yeah, I was going to ask what your buy box is right now. So you're looking for you know, bigger mid, bigger multi units.
- [48:33]
A
Yeah, right now we're focusing up to 50 units. We really want to focus on finding those, those tired landlords right now and the people willing to. The more mom and pops that you ask for financials and they send you like a picture of one utility bill and they're like here we go.
- [48:50]
B
Like financials. Bobby left some cash in the box the other day. What do you mean?
- [48:56]
A
I know we still own it and we're paying our bills.
- [48:59]
B
Yeah, we own it. We're good tenants. Pay when they pay. Yeah, I Love it. Well, that's great, Lisa. We'll dive into our final four questions here and let you get back to taking over the world. All right, so first question. What is your dream deal or a deal you just love to tackle eventually?
- [49:20]
A
I mean, that's probably right now, like, if we could find a, you know, 30, 40, 50 unit that's a. A killer seller finance deal in. In Utah, that right now, that. That would be. Be awesome. So love it.
- [49:34]
B
Awesome. I love how it's like, you already know. Like, you're like, that's what I'm focused on. That's where my mind is. This is exactly what I'm trying to do. This is what we're doing. What's been one of the most pivotal books you've ever read?
- [49:49]
A
Man, there's. So I'm. I'm a huge reader. I mean, I've already read, like, 20 something books this year, so I'm very, very big. But the one that recently has done the most. So there was. There's two that I read at a similar time. So there's a Miracle Morning by Hal Elrod. And that, to me was just a really. I don't necessarily follow, like, the exact Miracle morning.
- [50:16]
B
Yeah, the way he spelled it out, like, abbreviation thing.
- [50:19]
A
But I do very similar to that. But I loved the, you know, at night, you know, I have a book I write down, okay, here's the three things I accomplished that day. It just puts, like, you in such a positive mindset. Going to bed, and you're like, yeah, like, okay, I got this done today. And just that kind of positive reinforcement of accomplishing things throughout the day and then writing down. Here's three things that I want to accomplish tomorrow. Because you already kind of go to bed with. All right, I already know kind of what I want to work on tomorrow. So, like, ending your day with those positive things and knowing already what your day is going to look like the next day. Like, I get up and it's not. I'm not spending part of my morning trying to figure out what do I have to do, where do I have to go? Like, what's going on? It's. It's already pretty much spelled out like, all right, these are things I got to get done today. And that's been a really helpful and a big shift for me to. To be more focused and be way more productive.
- [51:13]
B
I love that. That's a good one. That's great. Like I said, there's so many books to choose from. That's a powerful one, though. If anybody's ever not read it, or if you have read it again, you know, like, I forgot, as you mentioned, like, the night routine, the pre. The stuff before is really what makes the morning. I'm like, oh, yeah, that was in that book. So good. All right, third question. Lisa, what is one of the most expensive or interesting mistakes you've made in real estate investing?
- [51:40]
A
That would be. We purchased a duplex last year, and when you get into, like, the 2 to 4, even up to like, 8, 10 units, your financing is sort of between the residential and commercial. Like, technically, five units and more is commercial. But you can find lenders that'll do the dscr where it's kind of that hybrid. So we bought a duplex and ended up being over budget. There was things in the rehab that came up that we did not foresee, and we ended up having to sell it, and we priced it and based it on somebody buying it with the way that we were financing it, which was the income approach. So looking at our rents, what's the value of this property?
- [52:23]
B
So we.
- [52:24]
A
We priced it based on that, not even thinking, oh, there's a good chance at being a duplex, that somebody's going to buy it more conventionally and they'd use sales comparables. So we had a $60,000 hit to. Which was the difference of making 45,000, losing 15,000. Because we based it on, okay, this. This duplex, it'll be income approach, and it's worth this. And awesome. Perfect.
- [52:55]
B
But then you just weren't able to move it at that price.
- [52:59]
A
They were. Yeah, we were under contract, and they were happy with that price. And the lender that they used was like, we will not use the income approach. Really. We only do comparable. It doesn't matter. That's the way they're doing it. And as much as we fought and at that point, there'd been a whole bunch of other backstory things with it, but we were just like, whatever that.
- [53:16]
B
You weren't gonna like, because you could have backed out because that's based on their financing. You could have not sold it to them. But you're like, we don't want it back and have to find a new buyer and all that. Is that right?
- [53:25]
A
Yeah, that. That's one of those properties. Like, there's some properties, you get that it doesn't matter the situ. You just want to be done with it. Yeah, that became this property. And I was like, I don't care. I just want to sell it. I want to be done with it. Just. Just take it Please.
- [53:41]
B
Yes. I have a couple of those right now.
- [53:43]
A
Yeah.
- [53:44]
B
Sometimes I will say, though, and sometimes you do just need to get rid of those properties, but sometimes you just need to power through, and then it'll stabilize, and eventually you'll be like, okay, I'm glad I didn't. Because I feel like there's a temptation sometimes when it's like, I wanted to sell my entire portfolio.
- [53:58]
A
Yeah.
- [53:59]
B
And be done with all of this. Why do I do this? He was like, no, no, no, no. Like, just get through this season. It'll be okay. But something you got to get rid of.
- [54:08]
A
Yeah. And that when we analyzed and looked at every which way and, yeah. It was just. For us, in the way the debt was structured, it just didn't make sense to keep losing money.
- [54:20]
B
And it's just like, hard money. Loan on it. Yeah. Because you're doing, like, you got to.
- [54:24]
A
Pay back private money lenders and stuff. So for us, for the buyers, it's a great property. They're cash flowing. It was fully remodeled. It's. I mean, they're. They just. And then they got it for $60,000.
- [54:34]
B
They were not going to pay. Yeah.
- [54:36]
A
So for them, they're probably sitting pretty on that right now.
- [54:39]
B
Yeah. That's funny. And that's how it goes. And, you know, we couldn't even talk about rehabs and ARVs and. And flips, and, you know, that's a whole different ball game, which we. If we go back to the very beginning of our conversation, we talked about how renting out on Airbnb can be a soft way to get into real estate. And it's not just getting into real estate. It's getting into residual income. It's getting into making money when you don't even really have to show up or do anything, which is very different than. Than wholesaling or flipping, because that. That. That is a. That's a sales job. That's a construction job. That is not real estate investing. That is not residual income. It's just a. It's using real estate to make money, but it's very, very different. And that's why I like the idea of the renting out something soft. Because, yeah, it's the softest way in, but it's also got your mind thinking, residual income. You know, money being made when I'm on a trip and someone else stayed in my place that week. And it didn't even do anything. I. I even hired a maid. I didn't even have to clean for it. Like, whoa. You kind of get a taste of that freedom and that power, which just the taste of it is going to mean a lot more than the 50 bucks you made or the a hundred bucks. You know, it's like. But getting that taste can set you on fire. So, anyway, all right, last question and then we'll let you go. This is a simple one, as always. What's the purpose of life, Lisa?
- [55:57]
A
Ah, man, to me it's just, it's finding your true happiness, not paying attention to the life others live and what other people want and what drives everyone else. But really what drives you? What happiness? What do you find happiness in? What do you want to do? Because to me, like, you find your happiness and it just makes you want to help other people find their happiness and give back and help others. And it just becomes this perpetual cycle of you finding your happiness and giving back and then them giving back. And it just, it just creates to me just a much more fulfilling life and a much more gift giving life where everyone you're surrounding yourself with is trying to better themselves, but also try and better you because they focus on, they focus on themselves and their happiness and that just reflects outward onto everyone around you.
- [56:53]
B
I love that. I think that was great. Anybody listening, just tap that rewind button for 30 seconds. Hear that one more time and take it to heart. That was great. All right, Lisa, well, thank you so much for being on the show. We really appreciate your time and sharing. You know what, what you've shared with us and, and I look forward to following your journey as you guys are not stopping anytime soon.
- [57:12]
A
We are not. And yes, thank you, Joe. Appreciate being on your podcast.
- [57:16]
B
Absolutely. This is Joe Jensen signing off for the Real Estate Investing School podcast, reminding you to focus on your lifestyle trajectory and act accordingly.