Real Estate Investing School Podcast – Episode 184

REAL DEAL: Winning Big in Las Vegas Real Estate with Jen Dutson

Release Date: August 15, 2024

Episode Overview

In this episode, Jen Dutson joins the Real Estate Investing School podcast to break down a recent real estate deal in Las Vegas. Jen shares her journey of moving beyond her home market in southern Utah, creatively transforming a single-family home into a profitable multi-bedroom rental, and using her network and real estate strategies to maximize cash flow. This episode is a practical, step-by-step look at finding, funding, and “forcing” a real estate deal to work, including actionable insights and lessons learned.

Key Discussion Points & Insights

1. How the Deal Was Found

• Jen's Market Expansion:
  Jen typically invests in southern Utah, but this opportunity arose in Las Vegas via her brother, whose mother-in-law needed to sell her house as she entered assisted living.
  “This opportunity came up in Las Vegas. My brother lives there and his mother in law was going into assisted living... I said, hey, I'll buy it.” [02:17 – Jen]

• Networking & Sharing:
  Jen emphasizes how sharing her investments and projects broadly (especially on social media) led to others thinking of her when opportunities arose.
  “I’ve noticed so much the correlation between sharing more and then people asking questions... people thinking of me when they have a house for sale.” [05:54 – Jen]

2. Making the Numbers Work: The “Force the Deal” Strategy

• Initial Plan and Adaptation:
  The house was a 3 bed/2 bath, but it had spaces that could be converted into extra bedrooms. Jen and her husband turned it into 5 bedrooms, increasing its income potential.
  “It was a three bedroom, two bath and we created five bedrooms and two baths. So it had a few things that just kind of made sense.” [08:27 – Jen]

• Renting by the Room:
  Instead of renting to one family, the house is rented by individual rooms to 25- to 30-year-old adults—a demographic looking for affordable options.
  “We've just rented it...to 25 to 30 year old, just kind of young adults that can't really afford a place.” [02:17 – Jen]
  “All the people in there are 25 to 30 year old, just kind of young adults that can't really afford a place.” [02:17 – Jen]

3. Funding the Deal

• Financing Model:
  The property was purchased using conventional financing.

• Use of HELOC:
  Jen used a Home Equity Line of Credit (HELOC) on her primary residence to fund the down payment and rehab.
  “We got a HELOC on our primary residence...we just have a home equity line of credit on this home so that we can use that here and there where we need to.” [16:06 – Jen]

• HELOC Advantages:
  “I don't have to get permission from anyone to borrow. I can pay it back whenever I want. I can withdraw it again. I love it.” [16:33 – Jen]

4. Rehab and Rental Numbers

• Purchase Price & Rehab:

  • Bought for $350,000
  • Planned rehab was $20,000; actual spent was about $35,000 due to unforeseen contractor issues.
  • Rehab included converting living spaces and a backyard workshop into bedrooms, installing a mini split, and freshening up interiors.

• Rental Income & Expenses:

  • Bedrooms rent between $775 and $1,100 (master).
  • Monthly expenses: mortgage ~$2,400, total rents brought in ~$4,500.
  • Cash flow: ~$1,500/month after utilities and expenses, with a buffer for utilities.
    “We cash flow about 1500 a month on it.” [13:15 – Jen]

• Creativity in Property Use:
  Jen reflects on how getting creative transformed a mediocre deal into a great one.
  “It's crazy. You take a average deal to a really, really above average deal just because you can think outside the box.” [14:25 – Host]

5. Lessons Learned & Advice

• Lessons from the Process:

  • Contractor Challenges: Vet contractors more thoroughly, especially when investing out of state. Don’t rely solely on referrals from friends.
    “I should have done more up front to properly vet and get like real prices up front because, you know, I ended up almost doubling by the time we were through.” [19:16 – Jen]

  • Roommate Logistics & Management: Jen deals with familiar roommate conflicts, implementing written expectations, and minimal oversight.
    “I have in there that they're willing to share responsibilities with other people. I put, like, a little checklist on the fridge...just a way for them to be like, hey, this week someone does garbage.” [22:25 – Jen]

• Advice to Aspiring Investors:

  • Look for properties with flexible layouts or extra spaces that can be converted.
  • Don’t limit yourself by your own preferences—think about what renters want.
  • Research local rental demand online (e.g., Facebook Marketplace).
  • Be open to adapting your strategy to market needs. “I used to be really hung up too on, like, I'm, like, I wouldn't live with a bunch of people I don't know. So why am I trying? I was trying to put myself as the renter, and then I...had to take a step back and say, this is a great option for a lot of people out there.” [21:02 – Jen]

• Handling Roommate Issues:

  • Minor disputes are left to tenants to resolve, with guidelines set in the lease.
    “...you guys, you're adults. You can figure it out. And then for more, like, if we need to come down to, like, big scenarios...we can deal with that when we get there. But so far, I haven't had any of that.” [24:55 – Jen]

Notable Quotes & Memorable Moments

• On Sharing Your Journey:
  “There's so much power that just comes from sharing what you're doing. It's actually even harder to reach, like, large, large audiences. It's usually the people that are closest to you...” [06:30 – Host]

• On Leverage and Real Estate:
  “It's real life Monopoly is what it is.” [19:01 – Host]

• On Creativity and Returns:
  “You have to know what to look for and know how to go get creative and go hustle. And that's what I've seen you guys do.” [14:25 – Host]

• On Apprehension and Market Shifts:
  “Times are changing, and it's just a better option for a lot of people.” [21:02 – Jen]

Timestamps for Key Segments

• Jen Introduces the Deal & Her Backstory [02:17]
• Importance of Networking & Sharing Your Projects [05:54]
• Identifying and Evaluating the Property [08:27]
• Decision to Rent by the Room [09:24]
• Rehab, Conversions & Rental Numbers [11:39]
• Use of HELOC & Creative Financing [16:06]
• Lessons from Working with Contractors [19:16]
• Advice for New Investors [21:02]
• Managing Roommate Dynamics [22:25]

Conclusion

Jen Dutson’s experience illustrates how creative problem-solving, strategic use of funds (including HELOCs), and a willingness to adapt can turn a run-of-the-mill real estate deal into a high-cash-flow investment. Her insights stress the importance of sharing your journey, vetting contractors, and seeking properties with untapped potential—lessons highly valuable for both new and experienced investors.