← Real Estate Rookie
Loading summary
Transcript98 lines
- [00:00]
Ashley Kerr
Our guest today started out living in a small apartment, separated, baroque, and convinced that real estate was only for people like her landlord. But one listing changed everything. A single family home that was secretly a duplex. And that surprise became her first house hack.
- [00:16]
Tony J. Robinson
Today's guest, Alana Lippman, went from saving every dollar she made, bartending, even flipping a camper to fund a down payment, to building a portfolio of short term rentals, long term rentals, maintenance, midterm rentals, a flip and a mixed use building that cash flow like.
- [00:36]
Ashley Kerr
This is the real Estate Rookie podcast. I'm Ashley Kerr.
- [00:39]
Tony J. Robinson
And I'm Tony J. Robinson. And with that, let's give a big warm welcome to Alana. Alana, thanks for joining us today.
- [00:44]
Alana Lippman
Yeah, thank you so much for having me.
- [00:46]
Ashley Kerr
Alana, your story really starts out with a moment a lot of rookies can probably relate to. Sitting in an apartment, being feeling stuck, and suddenly realizing your landlord might be onto something. So can you take us back to where you had that light bulb moment?
- [01:02]
Alana Lippman
Yeah, absolutely. So I just remember sitting in my apartment, I was separated at this time from my now ex husband, but we were separated for like a year and a half, almost two years at this point. And I had moved to a new town, was renting for so almost two years at this point. And my whole life up until then, and I was like 20, 28 at the time, had been renting. And I literally do remember the moment, Ashley. I was sitting in my apartment and I was writing out my rent check to Mark, who's my landlord at the time. And I lived in a fourplex. And I just literally had that light bulb moment of Mark has one mortgage and he's getting four rents for probably all, at least 850. And I was like, oh, oh, my gosh. Yeah, like you said, like maybe he's onto something. And so I, I can actually pinpoint that exact moment that I had that thought that maybe I could do that.
- [01:56]
Ashley Kerr
Too, before that realization kind of turned into any kind of action. Describe for us what your life looked like for you during that time.
- [02:07]
Alana Lippman
Yeah, so that was close to the end of my separation. I ended up moving back to the town I had been from. Um, partially. Me and my ex husband were going to try to make it work, but I also wanted to adopt my little through big brother, big sister. So I'm in Minnesota, big brother, big sister. It is a national organization, but there's a really big presence of it where I'm from. And we had been matched at that time since she was 7 at this point, she was like, 15. And so I was trying to get custody of her as she's in, like, a really rough situation. And I thought, well, I can't be living in this small apartment separated from my husband. That just won't look great to a judge. It doesn't look like stability for her. And so I decided to start looking at houses. And at that point, my little. She had known my husband for like eight years or whatever at that point. So she loved him, she knew him. And so I found this house that looked really beautiful on the MLS and went to look at it. And, yeah, it changed my life. It changed the whole trajectory of my life.
- [03:12]
Tony J. Robinson
What a. What a strong motivating factor, Alana, to, you know, have someone in your life that you want to take care of. You know, I've shared on the podcast before that I had my son when I was 16 years old. And I think just like that motivation of wanting to provide a better life for your kids effectively can. Can be a strong motivating factor. So this kind of, you know, the. The combination of being annoyed writing this rent check, you know, wanting to adopt your little.
- [03:41]
Alana Lippman
Through the.
- [03:41]
Tony J. Robinson
The big sister, Big brothers, big sisters program, that gives you the motivation to jump in and get started. So you said you. You just like, jump on the MLS and start looking. Did you know what you were looking for? Like, did you have a sense of like a buy box, like, or were you just kind of like, open it up and just like, window shop and.
- [03:57]
Alana Lippman
See what was there? Like, in my head, when I was. Had my light bulb moment, I thought, man, someday it'd be really nice to have like a 4 Plex or a duplex or something. But then at this point, my whole motivation was just to find a nice house that was big enough for me, my husband, and my little. And so, yeah, when I showed up, it was. It was a duplex. They had listed it as a single family. And my wheels, I remember standing in that driveway and I'm like, this is it. I am not letting this house go. And that was in 2021, when the market was a little more competitive. So I was like, a little bit worried, like, I need this house. It's everything I want and more.
- [04:37]
Tony J. Robinson
So can we just talk about that agent for a second? Because, like, to be in 2021 and to like, misrepresent a duplex as a single family home, that had to be like, one of, you know, and, you know, I don't want to disparage anybody, but that's got to be like, One of the biggest fumbles from, from an agent that I've heard of in quite some time, like everything was selling like hotcakes in 2021. So it's crazy that they will let.
- [04:58]
Alana Lippman
Yeah, yeah, my, so my realtor on my end was my former brother in law and so he called right in front of me, he called the selling agent that he knew pretty well and he's like, come on, this is a single like or this is a duplex and you know it. And yeah, they had marketed as a single family with a mother in law suite, but it had separate entrances like it was a duplex. I believe they just did that because single families are, you know, worth more. Like the average person doesn't want to live in a duplex. They don't want to and think that they don't think they can really invest in real estate like that. Um, so I'm, I'm thinking that was why. But it, it did work in our favor to be like, come on, this is a duplex. So yeah, it worked out really well for me.
- [05:40]
Ashley Kerr
Incidentally, I think that's really market dependent too. Like especially at that time whether you know, a small multifamily would be better or a single family. And I think it depends really on the neighborhood too. Like if it is primarily homeowners in a neighborhood, then yeah, I could definitely see why they would list it as the single family with the in law suite compared to if it's more investors in a neighborhood that it's more beneficial to actually list it as a duplex in that area. So I kind of see what they're, they're trying to pull there for sure. So after you walk this property, I assuming you're thinking I'm going to house hack that and what did you end up doing to that other side of the property? Did you list it as a long term rental? Short term rental?
- [06:27]
Alana Lippman
Yeah, so I did a short term rental and part of the reason for that was since I had separated, it all just kind of worked out. Since I had separated, I had went and bought all my own stuff, like my own bed, my own couch, my own dishes. I had everything already that you would need for like an Airbnb and I had nothing to do with it besides put it in Airbnb or sell it all since me and my husband were back together together. And so yeah, I put it all in the other unit so I didn't have to invest and like, you know, barely any money that way to furnish it. And so yeah, put it on Airbnb and it just filled up right away. Whether it filled up with, like, traveling nurses just on Airbnb people for the weekend or whatever, at that point, I didn't have, like, a minimum stay or anything because I just wanted it to fill up, and it was never an issue. And to this day, I've owned that property for now a little over four years, and I've never paid my own mortgage on it. So it was a win for sure.
- [07:27]
Tony J. Robinson
Yeah, it's like the perfect house hack, right? Is like everything coming in covers all of your. Your expenses, I guess. Let me. Let me ask Alana. How did you. How did you fund that deal? Like, what type of debt did you use? Just give us, like, a quick, quick snapshot of what it actually cost to acquire that first duplex.
- [07:44]
Alana Lippman
Yeah, so I got like, the 5% conventional loan. It was my first time buying a home, so that was really great. And I wanted to lessen the cash I had to bring to the table during that time because, I mean, a big reason I wanted to get into real estate is to have more cash flow to make more money. And so, yeah, I did, like the 5% down. I offered a little bit more than asking price, actually. And so then I asked the sellers to pay the closing costs, so it kind of even out just to lessen the amount of cash I would have to bring at closing day. And, yeah, so we can talk exact numbers. I think it was listed at 2:17. And so I offered like 223 and asked them to pay all the closing costs, so it really evened out.
- [08:30]
Tony J. Robinson
And we've talked about that strategy before. But for. For the Rickies that are listening, who might not be following, if. If you buy a property for, you know, just for round numbers sake, let's say you buy a property for $190,000, but it appraises for $200,000. If you actually adjust the purchase price up to $200,000, the seller can then give you that additional $10,000 back as a credit towards your closing cost. So again, for round number sake, if the purchase price is $190,000 and let's say you're doing a 20% down payment. Well, 20% of 190 is $36,000. I'm doing that math correctly. 20% of 200,000 is $40,000. So it's more, but you're getting a $10,000 discount because you're giving you that credit. So you're actually paying $30,000 down. So I know that's a lot of numbers. And maybe you're following, maybe you're not, but basically, if you can actually increase a purchase price, in some scenarios, you can get less, have less cash out of pocket to acquire the deal, which is what Alana did here. So it sounds like it, it went incredibly well for you on the short term rental side. I'm, I'm curious, before we move on to your next deal, had you ever managed a short term rental before? Like, like, what gave you the confidence to say, like, man, I, I can manage this property as well?
- [09:48]
Alana Lippman
No, I never had before. However, my best friend, and to this day, she still runs a shared space, Airbnb. But I just knew there was a need in the community for it because she was always full in a shared space. And so I thought, how much more full will I be giving them their own entrance, their own bathroom, their own everything. And so I had the confidence that there was a need for it in our community, but I had never managed anything like that before.
- [10:14]
Ashley Kerr
So you got really creative with your down payment and what was your career at this time that you were doing during this time? And was it easy to actually get funding on the property?
- [10:26]
Alana Lippman
Yeah, so I work full time, I still do for the American Heart association. And then at that point I had worked there for two years. So now I'm going on like six, six and a half. And then I also bartended. So when I had moved to this other town and separated and was kind of living that life, I needed more money. I didn't have, you know, my, my ex husband's income or anything like that at the time. And so I started bartending as something to keep me busy, keep me down there, help me meet new people in a new town. And I just made a lot of money bartending and so that was really, really helpful as well. So I had no problem securing the funding for, for my first house.
- [11:10]
Ashley Kerr
And I want to bring that up because I think one of the first steps to getting your first deal or your next deal is to figure out that funding piece. And so what did you do first, the chicken or the egg? Did you get the funding lined up? Did you get pre approved and then go find the house to kind of know your budget or did you find the house first and how did you feel like comfortable with a price range without getting a pre approval for a loan?
- [11:37]
Alana Lippman
Sure. So I really didn't know anything. And that's kind of how I do things. I really jump in like both feet and then figure it out as I go, which is what I've you know, been doing for the last four years. So I actually was on my way out of town for a work thing and I wasn't the one driving. I'm looking at Zillow just because I had this idea like I want to adopt my sister or my little, I should be looking. And I loved this house where I was like I want to turn around right now and go home before it sells. And so I went, contacted my brother in law at the time, set up a day to look at it, looked at it like same day. Went to mortgage lender and just did everything as quickly as I could. So yeah, it's very nostalgic thinking back.
- [12:20]
Tony J. Robinson
On it now, you only ended up staying there, Alana, I think six months before you got the itch and you ended up buying another house just a few doors down. What was the thought process behind that, that move?
- [12:32]
Alana Lippman
Well, yeah, that house a few houses down came up for sale. And my ex husband, which we, we got divorced not too long after this. So I just kind of kept going with everything. But he didn't really like living in a house hack. He just like, didn't he, we have two dogs and he like didn't like feeling like if they were barking that we were disturbing our, our tenants downstairs and stuff like that. And so when this one came up, he asked to look at it and I thought, well, we've saved so much money. We've never paid a mortgage or utilities on this house. We have the money for it, you know, saved up. And so we went and looked at it and then I thought kind of got, went to back to the same lender, got an idea on what a mortgage would be on that house and thought this will be paid for too with the other side of the duplex. So the unit I had, we had been living in that paid the mortgage for our new house and then the Airbnb side of the duplex paid for that house. And I wanted to do, I didn't want to short term that one. I wanted to find a long term renter for, you know, just diversifying and like mitigating the risk of having at least one house paid for through like a 12 month lease instead of relying on Airbnb solely.
- [13:45]
Ashley Kerr
I mean how great is that to be able to move into another house and like, oh, I still don't have a mortgage but I get to live in my own house. So what did the numbers look like in this property? And I, I think we have to go back to that duplex too and talk about the cash flow on this thing if you're able to cover both mortgages with those rent payments.
- [14:07]
Alana Lippman
Yeah. So the next the next deal, the new house I bought or we bought was asking price was 169 or 169,900 and replayed the same thing with the closing cost strategy offered 175 if they would cover closing costs. They agreed. And so yeah, within six months we were moving into this new house and the mortgage on that one was about 1200 but we were able to rent out the the half we had been living in for 1700. So yeah, today that property is both both sides are long term rented and it cash flows really well.
- [14:47]
Ashley Kerr
I feel like that's another thing we need to get into is why did you decide to switch? Because I think a lot of people started Airbnbs around that time and some have pivoted out of that. We have to take a short break, but I want to talk about how you scrape together money for your first deals, but also what happens when you start stacking properties while working at two jobs and what happens when compassionate tenant decisions turn into big expensive mistakes. We'll get right into that after a word from today's show sponsor.
- [15:17]
Indeed Sponsor
You just realized your business needed to hire someone yesterday. How can you find amazing candidates Fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job noticed on other job sites. Indeed sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on indeed get 45% more applications than non sponsored posts. The best part? No monthly subscriptions or long term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you. 23 people just got hired through Indeed Worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of the show will get a $75 sponsored job credit. To get your jobs more visibility@inn Indeed.com rookie just go to indeed.com rookie right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com rookie terms and conditions apply. Hiring Indeed is all you need.
- [16:25]
NREG Sponsor
There are two kinds of real estate investors. Those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest vacancy, periods, rehabs, short term rentals or LLC held properties. These gaps surface only when filing Claims. That's why investors work with nreg. They specialize exclusively in real estate investors understanding portfolios, risk at scale and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing@nreg.com BPPOD that's NRE.
- [17:00]
Steadily Sponsor
Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of the smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily. They focus exclusively on landlords. Whether it's a single family rental, a Brrrr Builders risk policy, or midterm holiday guests, you get fast quotes, flexible coverage and protection for property damage, liability and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes@biggerpockets.com landlordinsurance steadily landlord insurance designed for the modern investor.
- [17:51]
Ashley Kerr
Okay, before the break, Alana showed us how creative you can get when the capital is tight. But once she started scaling, she ran into a whole new set of challenges. Juggling a full time job, bartending and growing a portfolio fast. So Alana, you work full time, as you mentioned, at the American Heart association and you're bartending. How did you manage to also grow and scale and manage your acquisitions and operations for these properties?
- [18:18]
Alana Lippman
Absolutely. So staying really close, like with that Airbnb moving a few houses down, being that close was, was easy to keep managing it and doing tenant turnovers. I also lengthened the amount of time like the minimum stay. And I also started marketing that Airbnb on furnish finder because at that time like there was still a lot of traveling nurses, especially with COVID happening and everything like that. And so I was able to, you know, book like more midterm rentals as well. And then, I mean it really helps. The bank likes to see a W2, a full time job that you've been at for, at that time, four or five, now six years. They have a lot of confidence in and lending for new properties and stuff like that. Just a very busy schedule though. Working weekends and nights at the bar, um, making a lot of cash flow. But that cash flow, I was able to keep doing it because I was saving every dollar I made from Bartending to put towards a down payment on a, on a new house. And so I had a bigger why. And if I didn't have that big why, I, I think it would have been hard to keep up with everything. I think bartending would have had to go at some point. But yeah, at one point I was able to actually saved every single dollar I made for four months. I bought a little safe, would come home from my shifts at 1am, put it in the safe, didn't ever count it really for a few months. And after four months, I had $10,000.
- [19:49]
Ashley Kerr
That sounds so exciting. How fun.
- [19:52]
Alana Lippman
It was really fun. Yeah, I'm like, that's easy money. I mean, I'm still using my, my bar paycheck and stuff, but yeah, every single dollar I made funded. Actually bought a camper first with that. So I found a camper for sale for 5,000, went and checked it out. It was like a really nice camper, but like very outdated. Flipped it in three days, like flooring, painted everything, like made it like this luxurious camper in three days. Took it on one trip to Colorado just because, you know, got to test it out, came back and I sold it for 10, 5. And I only had $1,000 in material invested into it and three days time. Yep. And so then profited even more and then that went on to a down payment of another house.
- [20:37]
Tony J. Robinson
Oh, and I love that you're like such a hustler with your different sources of income. And I also love the idea of having like an actual like safe. I've never thought about saving money in that way, but it's just like, I guess it works. You like if you get a lot of cash tips, right. Like you come there, you drop it in the safe. But it's just like such an easy way from like a behavioral perspective to make sure you're not touching the money that's meant for something bigger. So I love that approach. Now, you've dabbled in a few different things already, right? Like you mentioned short term, you mentioned traditional long term flipping a camper van. But what about the actual management process? Because I know that obviously you're still dealing with people. I know that you've had some issues with eviction, which is maybe like a very scary thing for a lot of new investors that are getting started. So maybe walk us through. Like, you've gotten to some trouble. What did that look like? What was maybe the lesson learned from that, that, that story?
- [21:30]
Alana Lippman
Yeah, yeah, I. So I think it's important to say Today I have 15 doors of all amazing tenants. They're all just so great. But that's because I had a couple questionable tenants that really kind of took advantage of my empathetic, compassionate nature, my willingness to listen and kind of took advantage of that. So those two tenants, so one of the gals I also marketed, I didn't really like talk about this part, but I had a passion for women in domestic abuse situations. Not that that's anything I've ever been through. However, when I had separated from my ex husband, I went to this apartment, I had nothing. I'm like, man, like, good thing I have a job and I can like, you know, buy like a bed and dishes and stuff like that. But I started thinking, like, what about women that are stuck in a bad situation and they can't leave or they feel they can't leave because they don't have their own stuff. And so that's keeping them in a bad situation. And so since I already had a furnished place through word of mouth, I had some domestic abuse survivors come and stay and I would give them, you know, really like reasonable rates and stuff like that. And I had one galaxy. And I think it's important, important to say too, she was really, really scared of her fiance when she left him and came to stay at our, at our place. But he passed away three weeks after she moved in. So like it was like no longer an issue that she was scared of her fiance and stuff like that. So it's important to say that when I say that, like, she was always paying her rent, like three to four weeks late. And thankfully at this point I had some other tenants that were like, still keeping up on the mortgage and stuff. But like, I, you know, I, I need that rent money. And so then she worked with transitional housing, which is a program we have here that will help tenants in like a bad situation. And she went through transitional housing two times to pay her rent. But they called me after the second time and they said, hey, just want to let you know, like as the landlord, like, we're not going to help her again, like, just so you know, like, this isn't going to be an option for her like a third time. And we had only signed like a six month lease and we were coming up on that six months and it was approaching winter in Minnesota, which makes it a lot more difficult to evict a tenant. And so it was like September. And so I just told her like, I don't want to continue our, our contract after this. And she had, man, I got paragraphs of text Messages for like a month about how she was going to sue me for age discrimination and just all sorts of like wild things. I mean, thankfully she had come to my door and apologizing about how she never pays rent on time and about how I probably won't you Victor. And that was all on my ring camera at my house. So I mean, I, I had that but never had to use it. She didn't actually end up trying to sue or anything like that. Thankfully her profession was a cleaning lady. So she didn't leave my place like trash or anything like that. And then the second tenant, so he came to me, he wanted to long term rent and it was perfect for him in the sense he was like 21 at the time, just wanted to like leave his parents house, but he didn't have any of his own stuff. So he's like, hey, I heard you have this furnished unit. And he had no like renting history or anything like that. But I really, you know, to this day, I like this kid as a person, but rented from me and it went well for a while and then the company he was working for shut down. And I knew that was true. And so he had, you know, I just got stories for like months about like excuses like why he was late or why he thought he couldn't pay. And I kept kind of giving into that and being, okay, I understand, but like, if this happens again, like, we're gonna have to go separate ways and stuff like that. Anyway, I finally was able to stick to it because I thought, I'm running a business here. Like it is the business of people, but like, it's also like, I'm running a business. And yeah, I. At the end of the day, long story short, he left me out $3,000, a broken window, and that place infested with fleas. After, like I had done, I had done a lot for. I had even bought him. This is, this is just bad on me. But I'd even bought him a cheap car to like get to work and back when his car was out. And so yeah, total, it was like 3,000.
- [25:55]
Tony J. Robinson
You might be like the nicest landlord that we've had on the podcast to like. But. But also there's like a, maybe like a business interest for you. Like, hey, I'm gonna give you this car so you can get to work and pay me my rent. So I like that. I like that approach as well.
- [26:07]
Alana Lippman
But it was both.
- [26:08]
Tony J. Robinson
Yeah, it was both right after those experiences because you said, now you've got nothing but amazing tenants. What did you change in your process to go from that tenant pool to where you are today?
- [26:21]
Alana Lippman
Yeah, I absolutely have systems I don't deviate from now. It's so important. So I do background checks through, I personally use and there's a lot of good resources out there. Apartments.com. they'll require a background check if you ask them to. I call previous landlords, I don't call the one they're with now because in case that landlord is like, hey yeah, get them out of my place. And they're like, they're amazing. You know, I just don't call the current landlord. I call previous ones that have no incentive to lie to me or embellish. And then I look at, you know, their income and everything like that, credit score and stuff like that. And I just bought a new place where I had to not fit applicants apply and they all also both tried to manipulate me into renting to them anyway. And I literally said back, I said I have systems I don't deviate from. And now I have. He's, he's moving in January 1st. But he's, he's a great, he's going to be a great tenant, solid job. I know people that actually personally know him just by chance that are like, he's great, like really good, respectful, hard working guy. And if I would have given into one of those other two tenants that applied for my new place, it, you know, it definitely wouldn't have gone well. So I'm glad I stuck to my systems and didn't let my empathy or compassion like get the best of me because it was kind of tearing me apart when they were asking for it for a shot. But I'm glad that I, I chose my, I chose myself compassion for myself this time.
- [27:55]
Ashley Kerr
So there's a scam that actually tried to happen to me was with fake pay stubs during this, the screening process. So like, you know, their, their credit score is decent and they submit their pay stub as proof of income. But I was just like, just something felt off to me. So I'm searching, you know, the address on the pay stub and it's like a payroll company. And then I'm, you know, I'm doing all this research as to, you know, did the addresses match up. And then I asked for the contact person for the manager and then I'm googling who they say the manager is, the company name, the phone number to see if they all match up. And like none of it did but it was like a really good like Photoshop job of an actual pay stub. But it ended up that like it wasn't like the phone number was to. Must have been a friend or something like that who is going to pretend to be the manager to verify their income. But yeah, having those fear unlocked in place. Yeah, yeah. So I want to like pivot a little bit. Besides just your residential tenants, you actually scaled into a mixed use building which had residential and commercial. And one of the commercial units was a chiropractor's office and then it had two apartments. So how did that deal happen and why did you decide to pivot into a mixed use building?
- [29:18]
Alana Lippman
Yeah, I. It's probably my best, my best deal to date. So I always just had interest in doing at least one of everything in my portfolio and gaining experience if it made sense, if the, if the money made sense. I was really interested in that. I had some reservations because like so many more people work from home now and stuff like that for going into a commercial space. But I had heard that this chiropractor, longtime chiropractor in our town, was retiring. And so I thought, wonder if I should go knock on his door and see if he would be interested in selling or what his plan is with this place at least. And so I went there and there was some stuff I didn't know. It worked out really, really well. But so it's 1700 square feet of office space that he used. He used every room for his business, like X ray room, physical therapy room, like all different stuff. And then him and his wife lived upstairs in the upstairs apartment and his daughter lived in the basement apartment. And so when they were like vacating, like the whole building was being vacated. So there was going to be like no current tenants in there if I were to buy this place. But I knocked on the door, asked to see it, said I'm an investor and I'm just interested in seeing it. He gave me about an hour tour and told me the history of everything because he had been there for like 42 years and he said he wanted to list it for about 425 on the MLS. And he had already talked to a realtor. He was already like getting ready to list it. And I looked at it, I kind of thought in my head, you know, how much work it would need. Mostly cosmetic, but it would need like a total, total upgrade if I wanted anyone modern to want to rent and offered him 300 and gave him flexible closing dates because they were like in their 80s and they had lived there for 40 years. Like they had a lot of Lot of stuff in both the apartments and in the commercial space. And I offered 300,000, so we can be flexible on closing whenever you want to in the next six months. And they really just appreciated the flexibility of that and accepted the offer the same day. And so, yeah, today that cash flows. So the mortgage on it is 2,000amonth, and the upstairs tenants pay 2,000amonth. And so the mortgage is completely covered through them. And so then all the office spaces are 500amonth. So I cash flow 2,500 in the office spaces and the basement apartment I rent out for 1200amonth.
- [31:46]
Tony J. Robinson
Wow. What an incredible deal. So, Alana, like, you kind of glossed over, I think, like, the. The really brave part of your story because the building was not listed, right?
- [31:58]
Alana Lippman
Correct.
- [31:59]
Tony J. Robinson
And did you have any relationship to this owner prior?
- [32:02]
Alana Lippman
No, I had never met him before.
- [32:04]
Tony J. Robinson
So you just walked in and said, hey, I know this isn't for sale. I know I don't know you at all, but I think I want to buy this place. That takes a lot of courage. Like, were you. Were you nervous at all walking into that building? And what did you actually say to open up that conversation? Like, do you remember what your first word to him was and how you kind of broke the ice? Because a lot of folks, even if they. Even if they hear that opportunity, they're maybe just a little bit too fearful to actually drive over, open the door, and say hello. So how did you navigate that?
- [32:37]
Alana Lippman
Yeah, I was nervous. I just kind of like, I think my, like, drive for, like, owning my time and, like, having financial freedom is so much stronger than those nerves. And I was like, I didn't even realize at the time how good of a deal it would be. But I had thought, like, I knew there was a lot of rooms in this chiropractic office, and I'm like, a multi tenant facility would be so, so cool, like, renting out to all different businesses. And so, yeah, I think my first words were just like, hey, I heard you might be retiring. Not sure if you're thinking of selling this, but, like, I would just love to take a look at it. And he was so open to that. Like I said, he was like, in his 80s, and he just loved telling me about every. Every single room, the history of everything. And I think just building that relationship. And I also asked him why he's retiring. Like, I made it, like, not just about me, but also about him. And he actually had a massive heart attack. And so me working for the American Heart association, we just kind of, like, you know, that's what I fight for every day through my. Through my normal job is, you know, heart research and funding and stuff like that. And so I just think we formed a really good connection that's maybe hard to duplicate, but it. Yeah, it worked out really well. And I've been sending him pictures. He texts. He's. He's older, but he texts. And so as I was renovating, I was showing him pictures so he could see, like, where the place he built his life for 42 years, like, what it looked like now and stuff like that.
- [34:02]
Ashley Kerr
So, yeah, that had to be a little bittersweet.
- [34:04]
Alana Lippman
Yeah. I was like, does he want to see this? I'm like, I think he would. I think he would want to see it. He was definitely, like, ready to move. But I could. It was just very overwhelming. I mean, it's. I've. I've moved like, seven times in the past couple years, just like, hopping from, like, living in a property that I'm working on to, like, it's stressful to move. I can't imagine being somewhere for 40 years and then moving. So. Yeah. Very cool guy.
- [34:29]
Tony J. Robinson
So, Alana, this sounds like another home run deal, and I feel like you might be, like, fighting for the title of, like, best cash flow per deal from all of our guests so far. But even with all of this, you've been wrestling with the question of growth versus freedom. Like you mentioned, you have 15 units right now, and obviously the portfolio has scaled. But you specifically talked about a moment at bpcon when you heard Chad Carson, a friend of the real estate rookie podcast, that kind of changed your way of thinking. What was that moment and what exactly was it that kind of clicked for you?
- [35:01]
Alana Lippman
Yeah. So during bpcon, I went to the fire panel, and Chad Carson was on that. So the financial independence retire early panel. And he talked a bit about this. And then afterwards, I also went to the BPCON bookstore and bought the book and read it in there as well. But that moment was him talking about being the small and mighty investor. That's what the book is called, that I read. And being like, okay, why did you get into real estate? And like, for me, like, I got into real estate to own my time. Like, that is the number one most important thing to me. I want to be able to travel. If I ever have a family, I want to be able to spend as much time with them as I want to. But the book talks about if you're like, keep just growing and growing and growing, you're not going to own your time or you're going to be paying someone a lot more to manage those assets for you. And so it just really kind of made me start to reevaluate, like, my goals and like, why I'm doing this. And like, so, yeah, I'm like, kind of just in a place of. Yeah. Like rethinking my goals because I've just been having so much fun growing and growing and growing like that. This was my, the, the house I closed on a couple weeks ago is my 10th deal. And but like, okay, so what is it gonna take for me? Like, what number does it take for me to be financially, financially free and to own my time? And like, do I really wanna grow that much past that and just kind of think, thinking about that because at the end of the day, yeah, my, my, still my number one goal is to not have to work if I don't, you know, if I don't have to. I want to be able to just own my time and live a life. I wish I would have started when I was 21 instead of 28. And so that's why I've aggressively been trying to grow so much. But now that I'm at that 15 doors and I'm, I'm cash flowing pretty good, I'm just starting to rethink. Like, do I want to slow down and just keep the portfolio I have or do I want to keep growing or what does that look like? So that was a very pivoting moment for me in my thought process.
- [37:07]
Tony J. Robinson
And I think we see that a lot. Right. Like a lot of folks, when they first start, the focus is on scale. But as you start to build a portfolio of a decent size, the goals do start to shift and kind of evolve with you as a real estate investor. So I love hearing that. So Alondra, you've done short term rentals, midterm rentals, flips, mixed use, flipping campers. But we want to know which strategies you would actually repeat and which ones are maybe just the one and dones. And we'll cover that right after a word from today's show sponsors.
- [37:35]
Indeed Sponsor
You just realized your business needed to hire someone yesterday. How can you find amazing candidates? Fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed. Sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on indeed get 45% more applications than non sponsored post. The best part, no monthly subscriptions or long term contracts. You only pay for results. And speaking of results in the minute, I've been talking to you. 23 people just got hired through Indeed Worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of the show will get a $75 sponsored job credit to get your jobs more visibility@ Indeed.com so just go to Indeed.com Rookie right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com rookie terms and conditions apply. Hiring Indeed is all you need There.
- [38:43]
NREG Sponsor
Are two kinds of real estate investors. Those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest vacancy periods, rehabs, short term rentals or LLC held properties. These gaps surface only when filing claims. That's why investors work with nreg. They specialize exclusively in real estate and investors understanding portfolios, risk at scale and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing@nreg.com bppod that's N-R-E-I g.com.
- [39:17]
Steadily Sponsor
Bppod Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of the smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily they focus exclusively on landlords. Whether it's a single family rental, a BRRR Builders risk policy, or midterm holiday guests, you get fast quotes, flexible coverage and protection for property damage, liability and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes@biggerpockets.com landlord insurance steadily landlord insurance designed for the modern investor passive income sounds amazing until it involves 17 apps and active maintenance. That's where the Gemini credit card comes in. It earns you Bitcoin back on everyday purchases, automatically use it like a normal credit card for launcher gas or groceries, and every time you swipe, you earn up to 4% back instantly in Bitcoin or one of over 50 other cryptos sent straight to your Gemini account. No points to track no categories to activate, no waiting to redeem rewards. It just shows up. And there's no annual fee, which is great because paying money to earn rewards has really never made much sense. So if you've been curious about building your Bitcoin stack without constantly thinking about it, this is one of the simplest ways to start. Go to gemini.com card to learn more. Terms apply. See the link in the description for more information regarding rates and fees issued by WeBank.
- [40:59]
NREG Sponsor
Some exclusions to instant rewards apply. This is not investment advice and trading. Crypto involves risk. Check Gemini's website for more details on rates and fees.
- [41:04]
Ashley Kerr
When I started my business, I had to figure everything out alone. Scripts, setups, schedules, logos. The to do list kept growing. Finding the right tool changes everything. And for millions of businesses, that's Shopify.
- [41:16]
Indeed Sponsor
Shopify Power powers 10% of all US.
- [41:19]
Ashley Kerr
E commerce with templates to match your brand, AI tools for product descriptions, easy email and social campaigns, plus 24. 7Support Start your business with Shopify. Sign up for your $1 per month trial today at shopify.com Rookie Go to shopify.com Rookie that's shopify.com Rookie.
- [41:40]
Tony J. Robinson
So Alana's tried almost every real estate strategy available to rookies, but now that she's heading again towards scaling the portfolio, she's got a better sense of what actually works and maybe what she doesn't want to do anymore. So Alana, let's go. Maybe strategy by strategy, starting with short term rentals. Would you do more short term renting?
- [42:00]
Alana Lippman
Short term rentals? It's possible. That's possible in my future. I don't think it's the number one for the. I think it's very profitable. But the time it takes if I want to own my time, I don't think like short term is the best for my goals. However, I do have like a specific house that was an Airbnb for about a year. Right now I'm living in it because my little, that same little that I was getting trying to get custody of, she turned 18. So on her 18th birthday she needed somewhere to go. And so I stopped Airbnb, the house we live in now and we live together now.
- [42:39]
Ashley Kerr
Oh, cool.
- [42:41]
Alana Lippman
Yeah. So the story kind of comes full circle. If we were to move out of this house at some point, this is probably the only one I might still Airbnb. But other than that I don't. It's not really a strategy that I want to seek out now.
- [42:52]
Ashley Kerr
What about midterm rentals? Is that kind of in the same Boat for you as more of an active investment kind of in the same boat.
- [43:00]
Alana Lippman
I know that what I do like about midterm is I could charge more per month because it was, you know, the people that want just like a four month, a three month or four month or five month rental or even six can be midterm. They really need it and so they're willing to pay that little more, little bit more. However, still not like the number one strategy I'm going to seek out. That'll be more like word of mouth. If it kind of falls into my lap. I would definitely do a midterm rental but not really in my buy box right now for what I want to, what I want to focus on.
- [43:35]
Tony J. Robinson
And what about long term?
- [43:36]
Alana Lippman
Long term I think is where it's at for me. I just like all my properties right now. I did all the math on it. You know, a few weeks ago. I redid all the math after I bought my, my newest one and prop. I should be cash flowing 48,700 a year if nothing goes wrong. So that includes like insurance, property taxes, all that stuff. Four structures, 15 doors, 48,700 a year is you know, pretty good. And it's, it's really comfortable for having like those long term leases just knowing that that income is coming in, especially with good tenants. And so long term is the strategy I really want to stick with. Again, like you mentioned, we mentioned briefly, like I've done a full house flip, not against doing a full house flip. Again, it's a great way to raise quick capital. Probably not something I'm seeking out though, unless a wholesaler comes knocking on my door and, and presents a good deal. But I think long term for me is just definitely the way to go. And again for everyone it really just depends on your goals. But for me that's the strategy I'm going to stick with. I think it's the best for being able to own your time and be financially free at the same time.
- [44:49]
Ashley Kerr
And does that include like another commercial building, the mixed use building too?
- [44:53]
Alana Lippman
Possibly, yeah. I think it, that's hard to, can be hard to like find the right location and to make work. It works really well for me because I was able to do market research on like what office spaces were renting for in the area and I just rented out a little bit below that because to me it was all cash flow. So the, the other like less least expensive I found in town was like 600amonth. So I went to 500amonth to be able to Fill it up, get the word out there. And that's just all cash flow to me. But I think it takes a certain type of commercial building. So if I did that again, I would want it to be like another mixed use, maybe not straight commercial unless the numbers just really worked out.
- [45:33]
Ashley Kerr
I have the same. I have two mixed used buildings in my portfolio too, and I really do like them for that diversification of two different, you know, asset classes in them, the commercial and the residential.
- [45:46]
Alana Lippman
There's also the opportunity for like a tenant, an office tenant, to also want to rent the apartment downstairs. So then you're getting the same amount of rent and dealing with like one less tenant. So I like it for that reason too. That's not the case yet, but I've had expressed interest in that from some of my tenants if one of the apartments opens up.
- [46:04]
Tony J. Robinson
Now, Alana, you've also mentioned that you, you just closed on another property and this is a triplex in another town. How does this last or latest purchase fit into your overall kind of strategy that you've talked about, about hopefully getting back more time freedom? I mean, you mentioned the, you know, $48,000 a year in cash flow, which is phenomenal, but how does this triplex kind of fit into that overall plan?
- [46:27]
Alana Lippman
Yeah, so this was just. I actually told myself I'd never buy in this town because I wanted to keep everything really local. This is about 45 minutes for me. But the cash flow, I just can't ignore the numbers. So again, I did a. They listed it for 199. I offered 200, just knowing that two in front of it looked a lot better. Ask them to pay closing costs. They said no. I said, then I said no. And so then they said, okay, we will. So that was awesome. My mortgage on that house is 1340amonth. And just one of the units pays 1,400. And so then the other units pay 400. One of them pays only 400, but he's an older guy. He's been there for 14 years. He's on Social Security. I'm not going to raise his rent on him. And then another unit is 850. And so like, that tenant was found during the transition. My offer had been accepted, but we hadn't, like, I hadn't closed on it yet. And so the current sellers were like, hey, do you want us to try to find a tenant for you? And I said, I mean, that's great, but they were only renting that for 600amonth. And I was like, but I'm not going to take less than 850. And they're like, you'll never do that in this town. No one's going to pay that. And in two days, they had it rented for me for 850 or 850.
- [47:42]
Indeed Sponsor
Wow.
- [47:43]
Alana Lippman
Yep. The unit that is going to be. He moves in January 1st, but it'll be 1400. That covers my whole, you know, mortgage and then some. They were renting that for 900amonth. And so then I was like, I'll find a tenant for this one. Because I didn't think that they would try very hard to try to sell it at 1400. And I found this tenant within less than two weeks. So it's definitely going to help me own my time.
- [48:07]
Tony J. Robinson
Alana, where did you find the actual deal?
- [48:09]
Alana Lippman
That was on the mls, So I found that one on Zillow, and I just was searching multifamily homes. I had tried to buy one in the town. I live in a duplex, actually, while I was at bpcon. So I looked at this house back in this duplex back in July. I said they were asking, like, 250. I was like, no, it just needed so much work. It just wasn't worth 250. And they're like, well, what would you pay? And I'm like, well, you're not probably going to say yes. And they're like, well, what would you pay? I'm like, maybe 200. And they're like, yeah, no. And I'm like, okay. So when I'm at bpcon, I'm sitting in, like, I paid. Or I did, like, one of the Sunday sessions before, like, it all started. I think it was Chris Lopez. I'm in Chris Lopez's class, and I get a text from that realtor from back in July that says, hey, they're wondering if you'll do 210. And I was like, wow, I need to look at this again. I look at a lot of houses. And so I said, well, I'm in Las Vegas right now at bpcon. I can look at it, like, when I get back Saturday. And he's like, okay, so set up a time for Saturday. Monday was like, indigenous peoples or Columbus Day or, you know, whatever, Monday. So all the banks were closed. And so I set an appointment with my lender for 9am on Tuesday, like, the earliest I literally can do it. And then got approved for, like, the 210. I said, put the offer in. And then they said, you took too long. Never mind. I'm like, okay, you're just trying to Sell this based on emotion, you know what I mean? Like, it's really important to take emotion out of like any of the deals I do. But yeah. And so then I was. That's what got me, like back in the market to be like, well, now I really want another multi family. So I was just on the mls, just looking, looking. And I see this, this triplex in the town about 45 minutes away. And I'm like, I can't ignore the numbers for how good this could be. And it was just really good shape. They really took care of the property. So a very good find for me.
- [49:57]
Tony J. Robinson
And Alana, what, what specific market are you in?
- [49:59]
Alana Lippman
Southern Minnesota. So I'm about an hour south of Minneapolis St. Paul.
- [50:04]
Tony J. Robinson
Got it. What's the name of the city I'm in?
- [50:07]
Alana Lippman
So I live in Faribault. I have one here in Faribault, 2. Like my commercial mixed use spaces in Oatana, a duplex in Otana, and then in Austin is this new triplex.
- [50:18]
Tony J. Robinson
Because these are all like, amazing deals. Like everything that you've mentioned, like, and just the back, it's just like on the mls, I need to go to, I need to go to, to Minnesota now and add that to my list of places to go.
- [50:29]
Ashley Kerr
I. I do love the Minneapolis airport. That is super nice.
- [50:33]
Alana Lippman
It's a good airport. I. Until I started traveling a lot, I didn't think so, but we have a good airport.
- [50:38]
Tony J. Robinson
So my, my last question for you, Alana. What would you say to the rookies that are listening who feel that they either don't have the money or the confidence to get started?
- [50:48]
Alana Lippman
There's always a way to get the financing. Like, if there's one thing I can say, like, there's always, there's always a way. I had someone respond to, like, I had an Instagram story yesterday about. Actually, it was from Brandon Turner. He like, said, people don't want to buy real estate now because it's expensive, but in five years they'll be wishing they bought now. And I shared that. And I had a couple people be like, dude, I'm broke. Like, I can't. And I'm like, there's always a way to get the financing. And also, um, I literally jumped in with both feet, like, not really knowing anything. I had read Rich Dad, Poor Dad. After I had my light bulb moment, I read Rich Dad, Poor Dad. I was like, I really need to find a house. And then I just so happen, you know, I told the story at the beginning and looked and I'm like, yep, I Guess this is. I'm doing it. This is. This might be my 1 best shot to get started. And everything I've done, I have just bought and then figured it out later. And so I would just say, like, have that confidence in yourself. Like, there's nothing different from me than from anyone listening or from you guys. From anyone listening or mark that first landlord that gave me the light bulb moment. There's nothing different. Besides, we just jumped in and. And decided that we wanted our future to look different, so.
- [51:58]
Ashley Kerr
Well, Alana, congratulations on all your success and thank you so much for sharing your experience and giving advice to. To the rookie listeners to get started. I think that last little piece that you gave is going to be very inspirational and motivational to the rookies listening that are, you know, waiting to take that first step. And I think you've laid a great blueprint of how you just took action and got started. So where can people reach out to you and find out more about you?
- [52:29]
Alana Lippman
Sure. The best way to get a hold of me is probably my Instagram. It is Aspiring Slumlord. So best way to get a hold of me, my. I'm also, I'm writing a book right now called Aspiring Slum Lord that details every deal and how I walked through that. And then me and my. Actually a girl I met at bpcon, we. So we started a podcast called Homies and Houses. And so in the future, once we gave some thanks, we went to at Caesars, we went down to like one of the bars and had dinner and stuff and just kind of came up with the name and we were. We're actually doing it. We're recording weekly. So there'll be new ways to reach out to us once that, you know, gains any traction at all. But. But yeah, thank you so much for having me. This was really fun.
- [53:12]
Ashley Kerr
Yeah. And congratulations. I can't wait to check out your book and to listen to the podcast.
- [53:17]
Alana Lippman
Thank you.
- [53:18]
Ashley Kerr
Well, if you've loved this episode of Real Estate Rookie, make sure you subscribe to Real estate rookie on YouTube and make sure you're following us on your favorite podcast platform. I'm Ashley, he's Tony, and we'll see you guys on the next episode.
- [53:30]
Tony J. Robinson
Hey, Rickies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie podcast. Now, look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.
- [53:49]
Ashley Kerr
As a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first deal.
- [54:01]
Tony J. Robinson
So head over to biggerpockets.com guest if you want to be a part of our show again, that's biggerpockets.com guest and we'd love to have you on.