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- [00:00]
Ashley Kerr
What would you do if your spouse couldn't work, you had a toddler and another baby on the way, and you were losing money every month?
- [00:08]
Tony J. Robinson
Today's guest went from that exact moment to flipping a house that changed her family's future. And she did it while pregnant with baby number not one, not two, but number three.
- [00:17]
Ashley Kerr
Elizabeth Esplin is a mom of four, a former W2 worker, and a total rookie who used handwritten letters and a wild probate deal to get her first big win.
- [00:28]
Tony J. Robinson
And trust us, she learned the hard way. This is a story about mindset, about survival, and one seriously stressful first.
- [00:40]
Ashley Kerr
This is real estate rookie, and I'm Ashley Kerr.
- [00:43]
Tony J. Robinson
And I'm Tony J. Robinson. And let's give a big, warm welcome to Elizabeth. Elizabeth, thanks for joining us today on the rookie podcast.
- [00:49]
Elizabeth Esplin
Yeah, absolutely. I'm so happy to be here and honored.
- [00:51]
Ashley Kerr
So let's rewind to the beginning. What did life look like before real estate really became a big part of your world?
- [00:59]
Elizabeth Esplin
So my husband and I were W2 workers, just barely making ends meet, you know, hopping sometimes between jobs, just trying to make it work. We live in a place where it's definitely kind of lower income, but high cost of living. So we were never really, like, making it. We're like, we've got to figure something out. But we didn't ever really know what that would look like or what to do. And we just kind of were trudging along in the jobs that we had until my husband got really sick in 2020. So he's had chronic migraines for 10 plus years, and we'd done treatments, but in 2020, they changed and he started losing his vision and his consciousness, and he would just pass out randomly, make holes in the wall, cut his hands open. Just different things would happen to him. And we're like. And he obviously went from, like, working full time to completely unable to drive and work and, like, even watch our child at the time. And so it. It declined pretty quickly where we realized that we were not going to be able to make money the same way that other people make money. Like, it kind of changed everything for us where we realized that W2World was not going to be the way that we could survive as a family.
- [02:12]
Ashley Kerr
What was like, the first time that you discovered real estate investing? What was that moment like?
- [02:18]
Elizabeth Esplin
So I actually had a friend tell me about bigger pockets. I remember she was an old friend from high school, and she had stopped by and she's like, you should listen to this podcast. And I listened to, like, the Regular show. And I was like, I think it might have been about syndications or something. And I was just like, this is over my head. I was like, I don't have this kind of money. Like, I don't even understand what they're saying. And then what happened is I had someone months later tell me about rich dad, poor dad. And I listened to that book, and everything connected. And then I went back to Bigger Pockets, and I was like, I get it now. Like, it all just, like, I had to have that bridge to connect things, to be able to see how I could play a part in Bigger Pockets and how it could work for me. Because before, it was just like, no, like, that's not the world I live in. But mindset shift. And then also finding the rookie show, I was like, okay, this is much more my speed. And then once I got confident enough, I was like, okay, I can understand the terminology, and started listening, listening to the other shows and started reading all of the books I could get my hands on through Bigger Pockets Kids. So that was my first introduction to it.
- [03:22]
Ashley Kerr
And what year was this?
- [03:23]
Elizabeth Esplin
Then I started listening. I think it was end of 2020. And, like, that was another thing that, like, hooked me is I was like, my husband can't work. And I was, at the time working part time because I had to. I was taking care of my husband and taking him to so many medical appointments, trying to get him diagnosed, figure out what was wrong. And it took us four months to find a specialist and then start a treatment plan. That was like a year and a half, two years of recovery. And so, yeah, that was like 2020 around there that we started listening. And then 2021 is when we kind of started taking action on it.
- [03:58]
Tony J. Robinson
Elizabeth, what. What a story. I mean, you know, the whole world is dealing with with COVID which is in and of itself, like a, you know, a challenge for a lot of folks. But then you guys had this even more serious medical situation going on, and you said that that's one of maybe the. The darkest times in your life, which I can totally understand. But what did that season of life teach you about pressure and about perseverance?
- [04:23]
Elizabeth Esplin
That's the thing a lot of people, friends, were wondering, like, I don't know how you do it. And I was like, you don't have a choice when you get in those situations. It's not like I chose or my husband chose or anyone chose for this to happen. And I was really depressed and really struggling, you know, through that pregnancy, and just. But at the end of the day I was like, what are my choices? Like, lay down and just die in my bed. Like, I don't have that choice. Like, so I was like, I have to keep going. I have people depending on me. And, you know, I. I had to figure out, you know, for my husband treatment that I was like, there's no options here. That, like, I. I can't give up. And so it was, you know, for everything that I was like, I just, I'm going to keep fighting for it because the other option is, again, you can't just lay down on your floor and die and give up. So I was like, the. You have to keep going. There's too much depending on you. And I was only one functional. And, you know, we made it through. So I. I don't know if I have a great answer, but really, I think everyone doesn't know what they're capable of until it comes down to the wire, until you're put in those situations that just suck.
- [05:30]
Tony J. Robinson
I mean, Elizabeth, I think you provided a tremendous amount of value with that response, because I think the lesson is we. We can't always control what happens to us in life like that. That much is true. There are certain things that are completely out of our control. But the one thing that we can always influence, the one thing that we can always control is how we respond to those different situations that life throws at us. And you made a very conscious decision because, I mean, you could have submitted, you could have said, well, hey, this is just how things are going to be, and let me just complain about it for the rest of my life, but you chose not to. You chose to take action. And I think that's the important lesson for Ricky to take away from what you shared, is that you have a choice to act on whatever life puts in front of you. And it's that choice that makes all the difference.
- [06:17]
Ashley Kerr
Let's go into that first deal. So you went from thinking, this is only for rich people to do this to not really understanding, to consuming knowledge. What does the first deal look like?
- [06:28]
Elizabeth Esplin
So we started sending handwritten mailers. So my husband, he is from a tiny town on the other side of Zion national park, and so he knows the area really well. And we just started looking on the GIS map at properties that we thought would be good that were just land, properties that weren't farms that weren't being used and that we thought might be good locations for an Airbnb like our don't. Our dream was to build a dome and do, like a glamping experience out there. And so we just started sending handwritten mailers because it was such a small area and I knew that that would have an advantage compared to just like printing or doing something mass. Plus, I didn't have the money for it. I had time, but I didn't have money. So I just, you know, did the handwritten method and tried to make them really personable. And you know, I didn't track the numbers of like how good a return rate. But we definitely had a lot more phone calls. Even if the phone calls were just to say, hey, no, not right now, you know, and then we had one person calls, like, yeah, I'm actually looking to sell. We have this five acre parcel. And I was like, it's great. It covers like this riverbed area is going to have the perfect, like, you'll hear water, you know, it'll be like off the main like beaten path but not too far off. And like we'll still be able to get utilities. You know, it'll be, it'll be perfect. Right? And it was only $35,000. And so I'm like, yeah, like we scored. We're not going to use an attorney, we're not going to use an agent. Like we're just going to do this person to person and like we trust them. They're from a tiny town. Like, you know, they're good, they're good human. Right?
- [07:56]
Tony J. Robinson
Elizabeth, it sounds like you're teeing up what could be like the world's best deal. So is, is that how it turned out? What?
- [08:01]
Elizabeth Esplin
Well then we go and close and like we didn't know anything about buying land. And he's like, yeah, I'll bring the survey at close. And then he didn't. Not knowing that, you know, we should have, have done that in the process and all the due diligence that we should have done. We're just like, you know, kind of a handshake deal. And we go to close and we're like, hey, by the way, you didn't provide the survey. And he's like, oh, well, you know, I don't actually have one. And then we got it surveyed and like all the other properties on the GIS map were accurate except for like this lot. It was completely, it went from like a nice, like part of a fieldish area and like a nice river to like the trash area where people have been dumping junk and like a washed out gorge area that you couldn't do anything with. And best of all, it was landlocked, so there was no easement. And we'd met with an attorney, and they're like, yeah, you can push it because xyz, but you're gonna have to pay to. To get that easement and fight on it because, you know, like I said, my husband knew everyone, but no one would give us an easement. So that was also salt in the wound and double mistake there.
- [09:04]
Tony J. Robinson
Elizabeth, can you. Can you define the easement? Like, what do you mean when you say landlocked easement?
- [09:09]
Elizabeth Esplin
So easement's just like a. Right away. So if it's, you know, behind or surrounded by other lots, if you have. Have an easement, you have a road getting from the other main roads that are allowed to your property. And there was no legal, you know, road going since it was. So it wasn't even that far off, but it was just behind a couple fields. So there was no technical easement or, like, right of passage.
- [09:31]
Ashley Kerr
Yeah. So with an easement, you're able to have the other person or yourself still owns the property. You're just granting access to someone else to a lot of times, like you said, to access their own parcel that may be landlocked, that isn't Have a road frontage or a way to get it. Get to it from, like, street access. There's also, like, utility easements. So, like, if you own a piece of property, the gas line may get an easement through your property, so they can drive their trucks through to work on, you know, the pipes or whatever. Um, so there's lots of different easements, but the main kind of part of it is that someone owns the property, but they grant access to someone else. And there can be, like, stipulations on that, too, as far as, like, who specifically can. For what reason? And, like, you could put whatever you wanted into the easement.
- [10:23]
Elizabeth Esplin
I guess we screwed up pretty good on that. And, you know, we thought about trying to fight our way through, but I was like, we just don't have the money to be able to sink into this if it doesn't work out. So we just listed ourselves and just put very clearly in the description, this is what's going on with it. You will need an attorney to get an easement. These are the issues with it, and just put it out there. And we were able to sell it within a couple months, like, about. For. At first, we thought maybe we'd make a little bit off of it, but we lost out for the cost of the. What's it called? Not the inspection, the. The survey. And then like a thousand dollars or so when we Sold it. So, you know, we're sunk in, you know, two grand or so.
- [11:03]
Ashley Kerr
I have to say, for what happened, I was expecting a way bigger loss.
- [11:07]
Elizabeth Esplin
I know, I know. We were really, really lucky, to be honest, like, because we went under contract a few times and then it would fall out once. People, like, realize, even though we put it up front, we're like, yeah, we. We told you you're going to need an attorney. Like, you're going to need fees. It's going to be a process. People would still, I guess, not really believe us. And then they dig into it and be like, we're out. So. And we were really lucky to get out from under that.
- [11:29]
Ashley Kerr
After that experience, how did you feel about real estate investing? And obviously you continued on because you're here to share something. So what did you go through after that? You sold that deal?
- [11:43]
Elizabeth Esplin
I think that it's never, for me, been a doubt about real estate. I have listened to biggerpockets for, you know, five years, and it has changed my life of listening to these amazing stories. It's never been, real estate's the problem. It's me. And so I think the biggest issue on any of these failures has not been, I don't believe real estate doesn't work. It's, I screwed up and not taking it too personal. I think that's been the hardest thing is, you know, you feel really garbage, Especially if money is tight and you need to make this work for your family, then it's really hard not to have that be a confidence issue of, I can do this, me, myself. And so I. I never doubted real estate. It was just me doubting myself of, well, how can I make this work? How am I going to be capable enough to do this, Really?
- [12:29]
Ashley Kerr
I mean, $2,000 is a lot of money.
- [12:32]
Elizabeth Esplin
It's a lot when you don't have a lot.
- [12:33]
Ashley Kerr
Yeah. To. To lose that amount of money. And I think that, like, one point that you're making is, like, you, Real estate investing could succeed, and basically that $2,000 was education. You probably know a lot more about due diligence and, and going forward, if that deal would have worked out and you did that deal with no due diligence, no survey, and you got by, and it ended up being a great deal. The next deal where you skipped that due diligence process again could have been way more costly than $2,000. So, like, optimistic. That was, you know, the cost of education. That could save you thousands and thousands of dollars more down the road, too.
- [13:19]
Elizabeth Esplin
And I remember you guys Saying that same thing on podcast. I was like, you know, it's just my education. I'm gonna take it and roll with it. And like, like you said, that set the groundwork. Because when I was looking at our next deal, the very first thing I did was meet with an attorney. And I was like, how do I do this? What are the steps I need to do and how can I make this happen?
- [13:37]
Ashley Kerr
And so what was the cost of the attorney?
- [13:40]
Elizabeth Esplin
I actually did a free consultation for when we. Yeah, so he. They did the free first one free. And then after that I. I didn't. Except for brief phone calls. And so they build it all into the cost of the probate. When I looked on to my next deal, but I just, yeah, found someone that would give me a free consultation, sat down with them for 20 or 30 minutes and he was like, he knew everything. And he walked me through it. He's like, here's what you need to do. Do X, Y, Z and then you'll be able to lock this house up under contract.
- [14:07]
Tony J. Robinson
One last question. What kind of attorney was that? Was it a real estate attorney? Were they a general attorney? Like, who. Who should a rookie go after in terms of attorneys to solve that kind of issue?
- [14:17]
Elizabeth Esplin
Yeah, it was a real estate attorney, but he also did probate and other things. He wasn't exclusively real estate, so I did, like, look that up. Real estate attorney, but he had several things under him. But I would imagine that, like, there's a little more separation between, like, injury and workforce ones versus, you know, death, probate, real estate, etc. So it wasn't just real estate, but he did. Yeah, a few things.
- [14:40]
Ashley Kerr
Next, Elizabeth sets her sights on a vacant house just two doors down. And what follows is a high stakes, high emotional deal that nearly doesn't happen. We'll hear how she locked it down right after a quick word from today's show sponsors.
- [14:58]
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- [15:36]
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- [16:41]
Ashley Kerr
All right, so Elizabeth has bounced back from a land deal gone wrong, but she's not playing it safe. Instead she is going to go all in on a probate house two doors away with no will, a ticking clock and almost no money in the bank. So Elizabeth, we just Talked about your $2,000 due diligence lesson here and now you're taking high risk again on this property. So what is going on with this property?
- [17:09]
Elizabeth Esplin
We had had these neighbors and it was a mother and daughter who had both passed away within a few months from each other. They were both older and in poor health and I didn't really know them personally, but our next door neighbor in between us did. And I was starting to get more back into real estate and I had seen that it was on the pre foreclosure list. And so I was like, well that's kind of strange. I imagine someone would want this house, you know. And so that's when I met with an attorney and also my next door neighbor. She knew everything about these neighbors, the nosy neighbors.
- [17:41]
Ashley Kerr
They know everything.
- [17:42]
Elizabeth Esplin
Yeah, that's how she was like, you know, she's like, there's no will. She's like, no one wants a house. She's like the sister came out like cleaned out the house and then like made sure the funeral was taken care of, but, like, very strained familial relationship there. And so that's when I met with the attorney, and he said, if you want to be able to buy this house, because I was like, if I can get to this house before everyone else does, then I have an advantage. I don't have an advantage on most things, but if I can figure this out, then this can change my life. And so he said, if you can find the last living relative of who would take precedence to be able to claim the house or probate, then you can buy the house from them. And so it went on kind of a wild goose chase of, you know, finding a daughter, but then she had been adopted by someone else. And then, you know, XYZ this relative. But then they were. There was no one else still alive. And so I finally got back down to the sister was the only one left. And I was just my. Luckily my next door neighbor had a phone number for her, and I tried calling her and she wouldn't take my calls. And I just kept trying, calling and leaving voicemails. And then eventually she answered, and she was very short with me, and she was like, no, my sister didn't own that house. She wasn't on. She wasn't on that. Her name wasn't on there. And I was like, I promise you it is. I met with an attorney, and her name was on the house because she thought her sister's husband had only been. Been the only name on the house. And so she didn't think that there was anyone who could claim it. And she had no interest in the house. It was a mess. It was a hoarder house. And she had strained relationship with her sister and her mother, and she didn't want anything to do with the home at all. And so I kept trying, and I was like, I'll give you $5000. I'll give you $10,000. I'll give you $15,000 if you let me pay for the probate and buy this home from you. And eventually she agreed to that, and we started the probate process.
- [19:30]
Tony J. Robinson
What an example of just like, hustling to make a deal happen. And I think the first question that comes to mind, because I've actually never tried to trace down heirs to a property before, like, how. How do you do that? Are you just, like, sleuthing on the Internet? Do you hire a private investigator? Like, how do you. How do you connect those dots?
- [19:48]
Elizabeth Esplin
Yeah, I was looping on the Internet trying to find numbers, and then I. My next Door neighbor really was the key for all of it. And I think I can't remember if she had a phone number or if the, the sister had had a phone number for the, the daughter who had been adopted out by grandparents, all of that. So, so it was all like, honestly, I was lucky in that. But I've looked for ways to replicate that because I realized I was like the, the sister eventually had me getting the mail for the house. And while I didn't opening the mail, there was a lot of postcards coming through from people wanting to get this house because it was in pre foreclosure. And so you, you just glance and see. And I'm like, you know, these people have no idea that this lady's dead. They're just wasting their time on this house. And I was like, if you could know. I was like, what, what's a repeatable way that you could know that someone had passed away and that, you know, there's no one taking this house and that's just going to go to a. That you could replicate this because oftentimes there's a lot of equity in that that you could take advantage of for homes that other people don't want to deal with because it's a mess, you know. And so you can actually find that like on the. On prop stream. I would look for pre foreclosures and I've tried this a few times and found a few of them. I haven't been able to get a hold of the relatives in time before auction. But the, the homes you look for pre foreclosure and you look especially if you can find a, this is a key, a Medicaid or state lien on it, then that's often times means that the person has passed away, that they were older, they might not have had like a lot of cash and you know, they, that house might not be wanted. And so there's some opportunities there possibly for people to. And I've tried to explore but just if you can find ways to, to see that you need to get a hold of someone else for that house.
- [21:29]
Tony J. Robinson
You know, and Elizabeth, I just want to make sure I'm tracking. You said that you, you paid the sister who was like the heir basically $15,000. Was that the total purchase price or was that just in addition to purchasing the property?
- [21:42]
Elizabeth Esplin
In addition. So I offered whatever was out on the house because we didn't know the balance. And then any liens because I could see that there were liens on the property through propstream. She had three liens totaling about $25,000 and then an additional 15,000. So all in, once we finally finished probate, we were able to get the note of what was owed to be able to close on it. And so all in, we were closing at 130,000 on that home.
- [22:08]
Ashley Kerr
How crazy is that that you had to pay someone to buy something from them to give them money that they didn't want anything to do with?
- [22:18]
Tony J. Robinson
So, Elizabeth, your. Your husband. Your husband is still dealing with his health issues. You're pregnant again. Yeah. You guys flipped this whole house yourselves. What was, like, the. The hardest day of that project?
- [22:33]
Elizabeth Esplin
It was. It was a long process because, like I said, it was a hoarder home. And there was a lot of. And the utilities were shut off, so there were some issues. It was. It was pretty nasty when we closed on it, but probably the. The top pick. It was New Year's Day. And this just shows where our mindset was in, like, not a great way. But it was New Year's Day. It was our wettest year that we ever had. And it had just been flooding, rains. We'd had leaks. We'd had flooding. What we didn't realize at the time is that. Well, we did realize pretty, pretty shortly in the concrete pad. It had a RV pad and then a back patio, and it was all facing, grading in towards the house.
- [23:15]
Ashley Kerr
Oh, so did, like, water just kind of slope all towards the house every time?
- [23:20]
Elizabeth Esplin
Yeah. And so we wanted to save the pad. So the very, like, first thing we did after we closed on the house is we got a concrete lift company, and they came and put holes in, drilled it, and pumped in underneath to be able to bring most of the pad away from the house. And then they cut along the home, like a small, probably 6 to 8 inches around the home that we would need to break out and then report at a slant away from the house to then meet with the rest of the pad. And. And so we had had that cut. We thought we were good. And then just. It just kept raining and raining and raining. And even though most of the pad was away from the house, since we didn't finish that last part, my husband had just finished the. He had ripped out all the drywall. We got in all the mold. There was tons of mold issues. And he had put new drywall in. And then we go over on New Year's Day, and it's just flooded on the concrete and all that new drywall. And so I had events that day with family and that he was supposed to go with me. And, like, I gotta stay. And I don't know why we did it this way, but he just got a sledgehammer and just sledgehammered it out the entire New Year's Day. Freezing cold. Went in, fell asleep on a metal chair for like an hour, and then went out and kept busting it until it was all, like, out so that the house wouldn't have any more damage. And I'm like, why didn't we just go buy a jackhammer? Why didn't, like, we do anything different or, like, call, like. We just were such a mindset of, like, we have to do this ourselves in the hardest, cheapest way possible.
- [24:47]
Ashley Kerr
Jasmine, I've been there. There's been even very recent times where I've been like, why did I do this before this? Like, I should have waited to do this one thing.
- [24:57]
Elizabeth Esplin
It was. It was hard. It was hard with, you know, a new baby that was born during that rehab time and two little kids, and my husband just. He. He was mostly recovered. And so really he just pushed through. And he was just doing 60 hours a week, really. He was there all day during the day, working till the early morning, coming home and going to sleep, and then going up early the next day every day while I was on my maternity leave to watch the kids, because I was like, we got to take advantage of this maternity leave. You've got to work as much as you can while I have this. And. And so it was just, you know, there was a lot of adventures within. I was like, I just hope that he makes it through, because there were some times he's like, yeah, I heard some arcing in the attic. So I went and was. Was climbing on the beams. And he's like, yeah, I got electrocuted a few times, but I'm okay. I'm like, you died up there. I was like, I'd have no way to get you down. And he just started laughing at that. And I was like, can you imagine my brother's trying to get me out? And I was like, that's not funny.
- [25:50]
Ashley Kerr
Elizabeth. How were you able to finance this deal? And you guys were about 130 for the purchase? How did you fund that? How did you pay for the rehab?
- [25:59]
Elizabeth Esplin
That was a whole difficulty in and of its own. Since it was our first time purchase, no one wanted to lend to me. And then because it was so low, I was almost being punished, really, because the price was so low and the current value was so high, and even the ARV was even higher. 1. No one believed me because they Thought that I was just stupid and I didn't know my numbers. And two, it was my first deal, so they didn't want to lend to me. And three, they're like, it's too close to a hundred thousand. We don't want to lend on it. It's too small of an amount. And then I finally found a local hard money lender and she had a home down here. So when she was down here, she came, walked the house with me and she was like, this is amazing. She's like, I'll lend 100% on this. She's like, do you want to wholesale it to me? And I was like. And once I found someone that understood and knew the area and like, saw what I was doing, they're like 100%. So she funded 100% of the purchase price and she was willing to fund, I think 75 or 80% of the rehab. But I was like, oh, we have our heloc. We'll use that. But I wish I had taken the funds at the time just to relieve the stress because I was like, we have to get it done. We're so, we're paying $1,000 a month in hard money. And I was like, oh, that's so much. Because my cheap mindset, I'm like, no. I'm like, I was so stupid. We could have taken a little more breathing space because we about killed ourselves trying to get it done in that time.
- [27:17]
Tony J. Robinson
Elizabeth, but how did you meet that person? Because, you know, everyone would love to meet a lender who's going to say, yeah, hey, we'll fund 100% of the purchase and the majority of your rehab. But they're, they're not just like walking around on the street saying, hey, let me, let me fund your deal. So how did you connect with that person?
- [27:31]
Elizabeth Esplin
I just googled for some hard money lenders in the, in some of the bigger metro cities up north from me. And then here I found one other person that might have re lent on it, but that was local as well that I found just from Googling. But honestly, if I had had. Now that we have a local RIA meetup group, there's so many lenders in that group that would lend or they would like, if you don't have all of the capital, they would split and you know, have you split that profit with them if you're looking like for a bridge loan or, excuse me, gap for filling that gap on there, if you don't have 100 of the money for funding a deal. And so honestly, Google, but your local Facebook group for real estate. And if you can go to your local meetup, there's. We have several lenders and they're always looking for opportunities to. They want to make money too.
- [28:23]
Tony J. Robinson
And then I guess my last question on the, on the flip, Elizabeth, is the actual work. You said that your husband was pulling 60 hour work weeks. Did he already have a background in renovation and DIY, or was it YouTube university that kind of pushed you guys through this project?
- [28:39]
Elizabeth Esplin
Yeah, so my husband actually grew up working with his dad. He refused to go to a couple years of school, which is funny because his mother's a school teacher. But he refused to go because he wanted to go work with his dad. And he learned building things from the ground up. And he's like, I never regret not going to school. He's like, I hated it. And he's like, I. Everything that has served me and made me money are the skills that I've learned from my dad. And so a hundred percent it was his talent and his childhood upbringing. He knew how to do things, but he's gotten much better at it. And some of it was YouTube University. But I think the biggest strength that my husband has is he is so good at problem solving. He, he's never like, oh, I can't, I can't do that. We need to hire it out. He's like, like, I don't know how to do that. And he might screw up the first time, but he's gonna figure it out and he, he's able to do anything. So he handled so much of the, you know, electrician work, the plumbing, the drywall, you know, and there was a few things at the end that we hired out just because we were tired. And so we got some help with the lvp. But you know, really, he's, he did the majority of it and the, and the really nasty parts of it, of the hauling out the, the mold and the very tainted mattresses that. Lots of stains on them.
- [30:01]
Ashley Kerr
So anyways, Elizabeth, how did this deal end up? Was it a flip or a flop?
- [30:08]
Elizabeth Esplin
It was, it was definitely a flip. So we finished and I thought that it appraised at 3:60, maybe we'd hit 370. We got it appraised so that we could get out and do a DSCR loan. And it appraised at 409 at the time. And I was shocked.
- [30:23]
Ashley Kerr
And how much into it with the rehab were you?
- [30:26]
Elizabeth Esplin
So we were about 50, 000 for the rehab. And then with our hard money, our closing fees all of that, we were just about 200000 all in.
- [30:33]
Tony J. Robinson
Wow.
- [30:34]
Ashley Kerr
So 200k more.
- [30:36]
Elizabeth Esplin
Yeah, yeah. So that was like, that was an unreal high. I could not believe that. And it felt so good.
- [30:42]
Ashley Kerr
Especially I bet your wholesale fee wouldn't have been that if you would have wholesaled it to your lender.
- [30:48]
Elizabeth Esplin
No, that like I'm not taking wholesale. So yeah. And then we, we kept it. We did rent by the room for two years, thinking we'd keep it forever. Really. It's in a good area, the appreciation, etc. But because we'd already pulled out the majority of our cash, it wasn't cash flowing. And you know, we had a few things come along with tenants that I was like, you know, I, I want something different and I want something that's going to cash flow to weather, especially recently. I was like, to weather any economic storms. I was like, cash flow can be your saving grace. And so I kind of ran the numbers side by side of what I was looking at for an investment of cash flow versus the appreciation at a 2 year, 5 year and 10 year mark and compared it and I was like, I think we should do a pad split. And so we put it up for sale and we ended up getting a full price cash offer. And then we took it down a little bit when it had inspection, took some off and we closed at 393 on it.
- [31:42]
Tony J. Robinson
Elizabeth, what a phenomenal end to this story. And I think it just ties back to what we were saying at the beginning of the show of perseverance and like sticking things through. And you, you guys could have given up after that land deal that went sideways and you could have said real estate investing is a lie. You know, Tony and Ashley don't know what they're talking about, you know, but, but you guys stuck with it and just with a little bit more hard, I say a little bit, but with a lot more hard work, you guys are able to have this phenomenal deal. So kudos to you because I think it's, it's that perseverance that makes all the difference.
- [32:12]
Ashley Kerr
Elizabeth, how long did it take you guys start to finish for this house?
- [32:15]
Elizabeth Esplin
Let's see. So we closed in September and we were done about in like March, beginning of April. So it was like five or six months. And we took off a month in that time for our baby. And we were doing our, we have a laser engraving business, so we took off a month during Christmas to fulfill orders and.
- [32:31]
Ashley Kerr
Okay, so you worked full time on this flip for about four months. Would you say? Yeah, so $200,000, what other career path can you just choose? Or you're making 200k in four. So that, that's just like the point I wanted to make is like, because I feel like there's gonna be people listening that will say, well, they did all the work themselves. Like, I can't do that. Either you have a W2 or you don't have the skill set or whatever. But that is such a huge margin that even if you hired it out and you did none of the work and you made a hundred K half of that, that still is a great return for, you know, having no money into the deal, having it 100% funded. So, yeah, I just wanted to, like, prove that point as to, like, if you want to work in your flips, like, you can make more money and it can be a great return where you're making more than you would working any other job.
- [33:25]
Elizabeth Esplin
Exactly. And that's, that's why I knew, I knew that it could work. We just had to figure it out. And so having that proof of, like, when we got that appraisal back, that was like our ticket, my golden ticket. Like, we did it, we figured it out and it is possible, even for us. And so I knew if everybody else on these podcasts can do, I was like, you know, we're lucky because, you know, you're wanting a million with the type of migraines that you have, you can be one in a million for this. And my hard money lender, she was like, you're. This is a unicorn. She's like, you're never going to find one of these in Utah again.
- [33:55]
Tony J. Robinson
All right, guys. Coming up, Elizabeth trades stability for risk, moving her family across the country for a flip that goes sideways. But out of that failure comes some clarity. A new business and a long distance play that could transform everything. All that right after a quick word from today's show sponsors.
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- [37:19]
Tony J. Robinson
Right, guys, so we're back. So the flip is a success. Elizabeth's family has a little bit more breathing room, but instead of coasting, you guys take another leap. And I want to get into what that leap was. But before we do, I'm just curious. The flip that, that you guys had, the, the neighbor's house, it didn't just change your bank account, I guess. What did it change like for you personally, like inside of you?
- [37:39]
Elizabeth Esplin
I think just the confidence that I was lacking because like I said with that first, it was never a question of real estate. It's a question of yourself and your, your self worth really. And it's really hard not to take failure personally. And so not that you should always link your success to that self confidence, but it did help help. And so it's hard because you don't want to take the failures to heart because you want to be able to move past them. But it changed that, that confidence that I had of hey, I did this and, and not only did we find the deal, negotiate it, do all of these things, but we were successful in, in doing the rehab and, and saving money on all of the, the rehab along the way. And also it gave us the confidence really too for my husband because in that time we hired a crappy handyman at the end to help us with a few things things. And we realized, we realized the need in the market and that gave us not only confidence for ourself in real estate, but confidence for himself to, to Then one, he recovered enough and two, that he had the capability and skill to do his own handyman business and to provide that service for others. And that was something we again never thought about. But that house opened up so many more opportunities for us to progress and move out of the W2 world world.
- [38:55]
Ashley Kerr
So along with your husband building that business, you built out a network of other investors through a meetup. So tell us about that meetup and maybe how a rookie could replicate that in their own market.
- [39:07]
Elizabeth Esplin
Yeah, so I had known that there was a meetup a while ago, but I couldn't find any of the, the people I'd had a wholesaler that gotten in touch with and he had since left and I think he had said that they were stopped doing meetups and so I had no idea who was, was even a part of it. And then we had signed up through bigger pockets for Pace Mor, like rookie class or something. And I connected with another gal who was local on there and a couple months after the class we messaged each other and we're like, we should get together. And then we found more people that were, that had been in Pace's group and then we just started looking for more people through other Facebook groups, whether they are paces or bigger pockets of. Anytime someone commented that they were looking in St. George, we would add. We created, created like a Facebook messenger and just started finding people and said hey, we should do lunch this day. And had our first meetup in December. I think it would have been 2023. And then we're able to connect with the, with the old leader of the, the group that had run it previously and really it just took off and her name is Tiffany and she, she and the, the previous group leader, they've really taken it off and made something amazing with it with these group meetups once a month for an educational night and then once a month for a lunch to just come and connect with other like minded people.
- [40:25]
Tony J. Robinson
Yeah, I think there's so much power in rookies attending, starting participating in their local meetup because you as a new investor typically don't really have a lot of people in your phone who you can call, contact, text, whatever, as you have questions, as you get stuck, as you need advice. And it's totally within your power to go out and expand that network yourself. And I think a meetup is the best, easiest way for rookie investors to do just that. Now Elizabeth, you, you have this big financial windfall from the, the flip or one of the best flips I think we've heard of on, on this, on this podcast, but use all that money to go pursue something else. So what pulled you toward a pad split in Houston?
- [41:07]
Elizabeth Esplin
So actually it was really all thanks to our local RIA group. That group has taught me and saved me so much. There was a guy who came to one of the meetings and he was looking for, for more money partners to be able to buy more pad splits. And he was sharing about his returns because at the beginning of each meeting people can share any wants or needs that they have. And so he shared this, he's like, I'm looking for money partners. I've done this many xyz. And he's like, if anyone wants more information, this is the kind of return I'm getting. And so a bunch of us locked to him after the meeting and we said let's get together. So we all sat down for lunch for like two hours and he, he showed us his portfolio. The numbers, explained what pad split was and how it was working for him and his goal for financial freedom. And that's I was like, you know, there's something to this. I was really excited about it. So I got the connections from him. And then over the course of the next couple months, I met with Pad split and Blake over there at Pad Split. And then I met with, kind of delving into the market, I met with two other people, one in Atlanta and then one in Houston. Houston kind of trying to decide what I was most interested in as far as what the homes look like, what the returns look like, what the down payment look like, etc. And so really I, I met with someone that first off, the biggest thing is that their numbers were accurate because I feel like every wholesaler and every just, I feel like it's very common to have things overinflated on numbers and I don't believe anyone on their numbers. So if I can trust their numbers, then they already have a point in my book. And so he sent me his numbers and I was like, these actually check out for like the first time ever. And so he wanted, you know, I was like, there's one point for trust. And then the return was really good. And I, I was like, you know, 30 return, you're looking on that. I was like, it's, it's good numbers and I like the model. And I had already had some familiar, excuse me. I was already familiar with renting by the room since that's what we had done with our rental. That it gave me some experience and some confidence in that business model and just helping with the affordability crisis. It was all things that, one, it was profitable and good and two, it was also good on the tenant side of helping solve a problem.
- [43:24]
Tony J. Robinson
And so did you end up actually purchasing a deal in that market?
- [43:27]
Elizabeth Esplin
Yes, we just closed yesterday on our lot for a new build. I looked at, you know, we looked at renovating that you can renovate older homes and take, you know, three or four, five bedroom to a seven, eight, nine or 10 bedroom. But I liked this model of a new build. You have tenants in there. I don't want old systems failing. And so we're doing a 10 bed, 10 bath in Houston with a partner that we went in both together on the money and then we're splitting 50, 50 on the return and just giving it a go. So I'm really excited about it because I did enough, enough background work on it and it's something that I was thinking about for a long time that I was like, this is what I want to do. It makes good cash flow and I really like the business model of it. So that's where we're at. So we should be done in December or sooner with that new build.
- [44:17]
Tony J. Robinson
Yeah. Well, congratulations, Elizabeth. And way to just keep, keep trucking along and, and experimenting with new things. And I guess on that note, right, I mean, you've tried flips, you know, probates, you're doing the, the pad split. But your biggest lesson came down to one thing. Can you share that with our listeners?
- [44:32]
Elizabeth Esplin
I think the biggest thing that you can take away is being able to make decisions for yourself. And it's really hard. I would listen to bigger pockets all day, every day that I could. And there's so much information overload that it's really hard not to get shiny object syndrome because my husband I are both adhd. And it's, it's really hard not to get excited about all the different options out there. But, and especially when you hear so many successful stories, it's so hard to nail down what you want to do. But I think the biggest thing is being able to take time, take your space in a quiet place and actually think. Because I, I really think in this day and age, we're always listening to something, we're always listening to someone else in their opinion. And that's not a bad thing all the time. But you rarely, at least for myself and especially being surrounded by four little kids, do I have quiet time to be able to turn my brain on and actually critically think for myself and not just rely on chat, GBT or on other people's experience. But they, okay, I've obtained all of this knowledge and all this information. What is the best path for me and my family? What are my goals? What, you know, do I want my lifestyle to look like? Not just now, but when and if I have kids, you know, how is that going to need to change? And so being able to make a plan for yourself based off all the information, because nobody else can do that for you. They can give you recommendations and you can get on biggerpockets, Facebook and get a lot of great responses from people. But ultimately it comes down to no one knows your goals and your personal financial situation and your family situation better than you. And so you have to be able to critically think, think through everything that you've learned to be able to create a map and a plan for you.
- [46:18]
Ashley Kerr
Elizabeth, what a great ending to wrap up this podcast episode. I, I couldn't agree more with you. Thank you so much for joining us today. Can you tell everyone where they can reach out to you and find out more information about what you're doing.
- [46:33]
Elizabeth Esplin
I'm on Instagram. I don't post a ton, but you can find me. It's FS at the number 2 fi. So FS to fi for back when things were really bad and we were on food stamps and our path to finding financial independence and getting there.
- [46:47]
Ashley Kerr
Well, congratulations on all you've achieved with your progress and your real estate journey. And thank you so much for taking the time to share that journey and the different lessons that you learned and the success that you have had. We really appreciate it. I'm Ashley. He's Tony. And this has been another episode of real Estate to rookie. And we'll see you guys week next. Next time.