Real Estate Investing School Podcast: Episode 64

"The Power of Vision: Expanding Options in Real Estate Investing"

Release Date: June 19, 2023
Host: Joe Jensen
Guests: Kelly & Anthony Frost

Episode Overview

This episode dives into the story of Kelly and Anthony Frost, a resourceful couple from southern Utah who “accidentally” became real estate investors. They share the details of their ambitious live-in flip project—transforming a neglected three-story, eleven-bedroom house on an acre of land into a multi-door rental property. The conversation covers their journey navigating tricky family dynamics, legal hurdles (including a les pendens), challenges of acquiring and renovating a unique property, and their future vision in real estate.

Key Discussion Points & Insights

1. Accidentally Stumbling into Real Estate Investing

• The Discovery ([01:50]):
  • In 2019, seeking relief from restless kids, the Frosts found a run-down, hoarder-filled red brick house on a back road.
  • Initial motivation: curiosity and potential for a new personal residence, not investment.
  • House highlights: three stories, eleven bedrooms, three kitchens, three baths, eight exterior doors, multiple outbuildings.
  • Realization: "How could we use this?" sparked their first thoughts about investment potential.

2. Complex Acquisition: Legal Hurdles & Family Drama

• Title Issues and Les Pendens ([03:33], [06:29], [08:45]):

  • The property was entangled in a family dispute; the previous owner (a nephew) had obtained the title under suspicion, angering relatives who placed a les pendens (legal claim) on the property.
  • The Frosts did their due diligence, working without a realtor, seeking out a local title company owner for guidance.
  • Quote – Anthony:

    "The neighbor down the street...ran the title company...he was able to give us the history of the home and the whole breakdown." ([06:29])

  • They successfully negotiated $40,000 off the price in exchange for handling the legal clearance, which ended up being a simple $75 recorder’s fee.

• Patience Pays Off ([10:56]):

  • Entire process took 15 months from the initial viewing to closing, thanks to uncooperative sellers and waiting for legal clarity.
  • Anthony:

    "We pulled out...it was not quite a year had passed...he realized we were maybe his only option..." ([11:34])

3. The DIY, Live-In Flip

• The Renovation Challenge ([13:28]):

  • House and outbuildings were hoarder-packed; scope included a walk-in attic, double-wide trailer, greenhouse, three sheds, root cellar.
  • The Frosts did all renovation work themselves, learning as they went.

• Creative Use of Space & House Hacking ([14:54]):

  • Current setup:
    • Living on the main floor (second story).
    • Basement finished and operating as an Airbnb.
    • Top floor next for a midterm rental or employee housing.
    • Outbuildings upgraded (e.g., gym in the former canning kitchen).
  • Plan to subdivide lot and build a duplex—living in one side, renting the other, and eventually moving on as they expand rentals on-site.

4. Navigating Zoning & Small Town Advantages

• Learning Zoning the Hard Way ([18:22], [20:21]):
  • Regularly attending planning and zoning meetings “just to learn by asking.”
  • Key insight: setbacks, frontage, and lot size are more complex than they appear.
  • Kelly:

    "For me, it was like...they're getting paid to help me...you guys are on planning and zoning to help me." ([20:21])

  • Advice: Don’t be afraid to “look dumb”—ask questions, build relationships, and learn from local officials.

5. Making Mistakes & Leveraging Lessons

• Regret About Selling First Home ([23:21]):

  • Sold their first remodeled house, now wishing they’d kept it as a rental ("our biggest regret"), but learned valuable lessons by doing.

• Funding Acquisition Without a Loan ([23:44]):

  • Purchased the property in cash, partnering with Anthony’s parents, as condition issues made conventional loans impossible.

6. Short-Term Rental Success & Local Hospitality

• First Airbnb Experiences ([25:20]):
  • The basement Airbnb recently launched with two five-star reviews.
  • Bookings ramping up; proud of progress despite pandemic delays and family obligations.
  • Guests are drawn to proximity with Zion, Bryce Canyon, Grand Canyon, and Lake Powell.

7. Vision for the Future

• Scaling Locally, Eventually Remotely ([26:43]):
  • Considering nearby multi-unit projects and sneakily overlooked properties.
  • Goal: “Create a management company, step away and travel.”
• Leveraging Local Knowledge ([30:45], [31:22]):
  • Outsider investors often can’t compete with locals’ relationships and area insights.
  • Anthony:

    "Brandon Turner said he put $600K on a multi-unit...had to sell it...the local bought it and turned it completely around..." ([30:45])

Notable Quotes & Memorable Moments

• On Legal Hurdles:

  "You just gotta see the potential. We bought this house at 215 and the bank...gave us an ARV of $845,000."
  — Kelly ([34:11])

• On Taking Action:

  "If you can find a way to just make the step, even if it’s the wrong step...you wouldn’t have learned that if you didn’t take the first."
  — Anthony ([38:01])

• On Leveraging Community Knowledge:

  "Just find the right person and ask them."
  — Anthony ([21:54])

Timestamps for Key Segments

• Discovering the Property: [01:50]
• Understanding Les Pendens & Family Drama: [06:29], [08:45], [10:56]
• DIY Renovation & Hoarder House Woes: [13:28]
• House Hacking Setup & Future Plans: [14:54], [16:41]
• Zoning Details & Learning from Locals: [18:22], [20:21]
• Regret Over First Home Sale & Funding: [23:21], [23:44]
• First Airbnb Guests: [25:20]
• Local Knowledge Advantage: [30:45]
• Wealth Created by the Project: [34:11], [34:43]
• Advice for Beginners: [38:01]
• Final Advice ("See the potential and act"): [44:15]

Resources & Recommendations

Books/Podcasts Mentioned:

• Atomic Habits by James Clear ([42:03])
• Think and Grow Rich by Napoleon Hill
• Millionaire Success Habits by Dean Graziosi
• The Ed Mylett Show podcast and book The Power of One More ([43:05])
• Thanks for Visiting podcast (short-term rental hospitality) ([43:39])

Connect with the Frosts:

• Instagram: @FrostThisHome ([44:57])
• Instagram Rental: @FrostThisHomeRental

Closing Insights

• Vision and persistence can turn the most daunting, overlooked properties into transformative investments.
• Action and local relationships are irreplaceable ingredients for real estate success, especially in rural markets.
• Don’t be afraid to look foolish or ask ‘dumb’ questions—this is how the best investors learn and grow.
• One deal, done right (even if messy), can truly change your trajectory.

Joe Jensen’s Final Reminder:

"Just start." ([45:28])