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Real Estate Rookie
She Quit Her W2 to Stay Home, Now This Mom of 3 Makes $6K/Month from 1 Rental
00:56:41
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- [00:00]
A
Our guest today was navigating life as a full time caregiver to her daughter battling leukemia. But when a Zillow listing popped up during a medical trip to New Orleans, she found a $60,000 house and a whole new future.
- [00:14]
B
And today's guest, Jane Ng went from an accidental $8,000 wholesale to building luxury short term rentals and now cash flows over six grand per month. And she did it all while raising not one, not two, but three kids and never stepping foot inside of.
- [00:35]
A
This is the Real Estate Rookie Podcast. I'm Ashley Kerr.
- [00:38]
B
And I'm Tony J. Robinson. And with that, let's give a big warm welcome to Jane. Jane, thank you so much for joining us on the Ricky podcast today.
- [00:44]
C
Thank you for having me.
- [00:46]
A
Jane, your real estate story really starts out with something heartbreaking. Your daughter was diagnosed with leukemia. Can you take us through that moment of when you got that news and how did that news shift everything for your family and for you personally?
- [01:01]
C
Yeah. It's a moment that as a parent, you could never prepare for, especially as a mother. It was the first time in my life I felt completely helpless. And I knew that in that moment there's nothing I can do to change our reality. And there's no amount of money or education or knowledge or connections that we had that that would change what we just heard. Right. She has leukemia. It is what it is. And yeah, I, I honestly, I've never felt so helpless in my life.
- [01:39]
B
Jane, first, thank you for sharing that with us because I'm sure it was a difficult time. I'm sure it just kind of like makes you reassess everything when you get that kind of news. I guess before that diagnosis, what did life kind of look like for you and what changes did you have to make afterwards as you guys navigated this new reality?
- [01:58]
C
So my husband and I were both working pretty demanding W2 jobs at that time. We just had two kids. So Ashley, my daughter who was diagnosed, she was three and a half. My younger daughter was two. Our son wasn't born at that time and they were because my husband and I were so busy. Our girls were in daycare from 7am to 6pm and in hindsight, I can't imagine them now that they're all much older. I can't imagine them being out of the house for 11 hours a day. But that was our reality. We were both so busy, both climbing the corporate ladder. And to be honest, we both enjoyed our, our W2 jobs. And I know most people get into real estate because they want to leave their W2. But we really enjoyed what. What we were doing. So I have a background in hospitality and in business. And so after grad school, I worked for different. One of them was Caesars Entertainment, where I learned. It was actually really fun because we learned everything about the hotel side, the gaming side, restaurants, spas, golf. Like, you learn everything, and it's super, super exciting. And I worked for smaller boutique hotels, but right before my daughter was diagnosed, I was actually working for Uber, and my team was in charge of launching Uber Eats in different cities. And so we were working with the general managers of each different city and figuring out which restaurants we wanted to target and the operations of all of that work. So it was really fun. So dynamic. But I had to give it up all in. In, like, a matter of seconds.
- [03:28]
B
So, Jane, as you're. As you're climbing the corporate ladder and, you know, obviously, it seems like you and your husband are both doing well, and this news comes in and kind of shifts everything for you. Obviously, the first priority is just, like, you know, focusing on your daughter's health. And I guess. Give us an update, Jane. Like, how are things today before we even talk about the real estate further.
- [03:47]
C
Yeah. So it's been 10 years since the diagnosis, and she. Thankfully, she is alive. She's doing relatively well, but she. She suffered a lot of complications during treatment. And this is one of those things where all the doctors we had, they're like, oh, you know, this stuff. It's not even in the medical books, like, the stuff that she's going through. And when your child's diagnosed, they give you. They give you different sheets of paper that say, like, here are some of the potential side effects of the chemo that she's getting. Right. Most likely she might have, you know, fevers and rashes, and they have. So they categorize it by most likely likely. And here is like, a, you know, less than 1% chance she's gonna have these symptoms. She had symptoms that were not on the paper, and a lot of what. So it. Without going into all the details of her story, she had leukemia, but she had a very specific type that was resistant to chemo. So did she have to go through, like, three times the amount of chemo most leukemia patients would go through? But that wasn't enough. They said chemo wouldn't kill the cancer, so she needed a bone marrow transplant. And thankfully, that put her in remission. And I was actually her donor because we couldn't find a perfect match. And so ucsf, the hospital we were at, they Were doing clinical trials that allowed a parent to be a donor because by definition, you are like, half mom and half dad. So we're both. My husband and I were both, like, a 50% match, and it put her in remission, but she was left without an immune system for maybe six months. And during that time, she caught a virus. And, you know, most of us are able to, you know, you have a little cold or runny nose. Her body just couldn't fight it, and that virus went straight to her brain, and it just started causing all these issues. And we didn't know because there's no way of knowing that there's any brain damage other than, oh, this. This kid is acting a little weird. So she was sleeping 20 hours a day, and it just didn't feel right. And so after all these tasks, we did an mri, and they saw tumors, bleeding, so much pressure. Like, the amount of pressure her brain had at that time was already past the threshold of what a person could handle. And so they immediately put her in the PICU for safety. And I. I think my husband. Like, this happened so quickly. We didn't realize what this meant. Like, why are you putting her in the picu? And they said, well, we fear for her safety. Like, well, what do you mean? Like, she's barely moving. She's not gonna. I thought they meant she's gonna, you know, fall off her bed or something like that type of safety. Like, no, we. We're not sure how many days she has left. And it was. It was a shock. We. We didn't know that's how bad it got and got there very, very quickly. So we had a couple options. We had one option to keep her comfortable with just, like, you know, a steady drip of morphine and just kind of wait till the last day comes. Or we could try, you know, a little bit of radiation to her brain and spine to see if that's going to kill the virus and at least stop everything from getting worse. And, of course, that's the path that we chose. And they're like, this is not guaranteed at all. We're really just kind of trying whatever we can. We can think of, but it worked. And so that was kind of when her recovery started. But the brain damage was so severe that even though they say, you know, kids, brains are plastic and you can relearn a lot of these things, basically the way they explained it to us was, you know, all the freeways in her brain, where information passes, like, the freeways are broken, and so information just can't pass from like, one cell to another cell. It's. It's hard to pass. And so today she has basically every disability, you know, you can think of, like physical, intellectual, social, developmental, everything. She goes to a special needs school, which is amazing. They take very, very good care of her. But my husband and I had to come to the realization that she'll never be an independent adult. And so we will always have to care for her in some form. And so that's just something that we had to realize and accept. And, you know, she's 13 now, so we'll just figure out kind of what happens, what happens next for her parents.
- [08:20]
B
And, you know, I'm, like, getting choked up listening to your story because I can only imagine, you know, the emotions you guys felt as you went through that. But, you know, I mean, just. Just kudos to you guys for staying positive through. Through all of that. I think the. The question that I have for you is, and this isn't even necessarily about real estate investing, but so often we find ourselves at moments in our life where it can feel maybe a little hopeless or, you know, it's just like, why, why me? And we can kind of fall into that trap of feeding into those negative thoughts. How did you guys push past that? And this is just like a life lesson for everyone that's listening, because maybe not to. To the extent that you guys say, but we all have challenges that we end up facing in life. And I think how we respond in those moments is so indicative of what life looks like on the other side. How did the two of you just together have that dialogue to say, okay, here's how we're going to move past this?
- [09:17]
C
Yeah, it's a really good question because we've certainly met a lot of people, parents in similar situations along the way, and everyone. Everyone handles it a little bit differently. And we've kind of seen how, if it's kind of not the glasses half full, thought it could be very, very detrimental. So my. My husband and I, we're. We're both Christian, and for us, our faith was pivotal, and without it, I. I don't know where we could be today. And so as much as the situation sucked, like, we truly believe there is, there is a reason. And that's like, you know, outside of our control, obviously, but also beyond our comprehension. Like, I. I don't know why that was. Basically, I think, trusting that and knowing that, okay, this is. This is the child that God gave us, and no matter what happens to us, it's our job to be the best Parents we can be for her. And if we are sad and angry and upset and depressed and going through all these negative emotions, we cannot show up for her the way she needs us, because she. Even the days where she couldn't speak in the hospital, she can very much sense our presence and she can read the room very well. Right. If we're all having very serious conversations, her face changes a little bit. But if we're playing music and singing and dancing, and even though she can't participate, her face looks a little bit different. There's a little bit of joy in her face. And so we knew that she was so. So young. We knew that we had to show up for her in a way that. That she needed and also for our other daughter. At that time, she was 2. She has no clue what's going on. And Tony, I know your girls are really young, so I don't know exactly how old they are. Maybe they're roughly the same age, but so you can imagine, right. They're so young, they. They cannot comprehend what's happening. And so we just. We knew, like, for their sake, both of them, the one that's sick and the one that's not sick, we just have to show up for them in. In the best way that we can in.
- [11:24]
B
In incredible, I think, resilience and just, like, mindset from you and your husband. And I'm, like, literally kind of holding back tears here as I hear you kind of talk through this, because it is really a moving story. And just, you know, I hope people can listen and find solace in their own challenges, that if you approach it with the right mindset, it doesn't necessarily take away from how difficult the situation is, but it does, I think, allow you to move through it with the mindset of, like, we can figure out a way to. To get through this. So I appreciate you sharing that story with us. Now, as you went through this journey, at some point, the corporate ladder wasn't as important to climb, and you made the transition into real estate. How. How did that even come about as you guys were going down this path of caring for your daughter?
- [12:11]
C
Yeah. So I realized, you know, in. As she was going through treatment and in this season of her life, and also my life, my desires and my corporate dreams were just not important whatsoever. So that. That all went on, On. On the back burner. And all I. To be honest, all I had the emotional capacity for was my family. I just didn't have time to think about myself or anything else. It was just my daughter, my other My sick daughter, my healthy daughter, and my husband. Like, that's, that's all I had the capacity for. And I was okay with that. I accept, like, this is not going to be the rest of my life. This is a season of my life where they really need me and I will be the mother, the wife, whatever, in this situation for, for this season. And as she started getting better, right, we were no longer in this hyper, you know, scary situation where it was life or death. Like, we knew she was, she was going to survive and we were going to bring her home. And now we were just figuring out different therapies and treatments for her. In the back of my mind, I kind of thought, well, I would like to do something. I knew that I could never go back to the same type of corporate job because I would have to commute or I would have a boss. And because of all of her complications, she sees so many different doctors that I just can't ask for permission every time to take her to those appointments. And I also, like, those appointments have to come first over anything else. Like, I can't reschedule because I have to work.
- [13:41]
A
And you're not always given an option as to when your appointment can be either.
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C
For a lot of those.
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A
Yeah.
- [13:48]
C
Yes, exactly. And so I knew I had to be my own boss and have some kind of a job where I dictated all the terms. Like I could work how much, you know, or as little as I want to. And my daughter and I were in New Orleans for a two month medical treatment. And, you know, this is one of those things where obviously, in hindsight, had we, had she not gotten sick, we would not have been in New Orleans and none of this would have happened. But it all happened. So we were there for two months. The treatment made her super tired. And so during the day, I would drive around, she'd take a nap in the car, I would just pull over wherever I was. I happened to pull over in like a decent neighborhood and right in front of a for sale sign. I looked it up on Zillow because I had nothing else to do. And it was, It's a decent three bed, two bath house for $200,000. And coming from the Bay Area, I, to be honest, I just didn't know that those price points existed. I know people living in most other parts of America are like, no, it's pretty common. It's, you know, $200,000 is actually like, not that cheap. But for the Bay Area, I mean, right now even a fixer upper is probably a million dollars. And so it was the first time I thought, oh hey, we could afford real estate, like we could afford an investment property in the Bay Area. We just couldn't. And so I went down this rabb of learning as much information as I possibly could, and it was all through bigger pockets. I mean, this was back in 2020. So podcasts, I don't even, I don't think the rookie podcast existed at that time. But you know, the, the main podcast, books, blogs, I just absorbed myself in, in as much information as possible. And that's kind of how our, our journey started. But it wasn't, I didn't plan to get into real estate. It was just kind of an accident.
- [15:47]
A
So was that the property you ended up buying or was that just the one that led you to your.
- [15:52]
C
No, no, it because after I started doing my research, I realized, wait, $200,000 is expensive. Not a good deal.
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A
So Jane, you ended up taking on a rental in a new market. But what happens when this new market has some bad weather, bad tenants, and burnout all before your first short term rental? We'll dive into it right after this break.
- [16:19]
D
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- [17:24]
E
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- [18:01]
A
So we're back from our short break. Thank you guys so much for taking the time to check out our show. So sponsors. So Jane, what did you do next after seeing that listing? What made it feel like it was time to pursue, pursue your first deal?
- [18:17]
C
So I, I just became obsessed. And I was on Zillow all the time. And since I knew I was, you know, physically in New Orleans for the next two months, I wanted the opportunity to actually see some of these homes if I could. So my first deal was an unexpected wholesale deal. I saw a property on Zillow for $120,000. And everything I learned from Biggerpockets told me if it has been off and on the market multiple times or if it's been sitting on the market for a really long time, then you can negotiate. Then the, the seller's desperate. So I, you know, I didn't know anything about construction or renovating or anything. And I offered 60,000 and they accepted. And I was blown away. My realtor was blown away. But what happened next was I tried to get a loan because it was going to be a, I had to, I was going to burr it, it was going to be a pretty big construction project and I was trying to get a loan and none of the local lenders would lend to me for two reasons. One, I was out of state and they just went through Katrina. And so they were a little bit traumatized and burned by what happened with Katrina. And so they were very, very cautious working with new out of state investors. And so I was a new out of state investor and I had no track record. So those two went against me like pretty, pretty hard. And I couldn't get a loan. So I talked to my realtor and I, you know, I was in a position where I either had to move forward or get out of contract. But I knew it was such a good deal, I just couldn't let it go. So my realtor and I found another investor who was interested for $68,000. So we did a same day double close, which I didn't even know existed until that moment where I bought it from the seller for 60 and the investor bought it from me for 68. And then a few days later I got a check in the mail for a little under $8,000.
- [20:13]
B
That is amazing that your very first deal was an 8K accidental wholesale transaction. And you know, honestly, like shout out to your agent for helping you find a buyer on the back end because there, there are a lot of agents who are like, you know, they, they kind of look down on wholesaling almost. So the fact that she was or that he or she was open to that and educated you on how to actually do that, I think was great. Let me ask you, and this is like more, more of a technical question. Was it one closing where you just got like an assignment fee or did you actually have to somehow fund that initial 60k purchase and then, you know, literally an hour later fund the second transaction for 68k? Because in the first scenario, like you literally don't need any cash because you're just like a line item on the closing statement. But in that, that second scenario, you've actually got to have the 60K to close in that first deal to then turn around and resell it for 68. So which, which of those two was it?
- [21:11]
C
It was the first scenario, so I didn't have to bring anything to the closing table.
- [21:15]
B
That is fantastic, man, what a great first deal. So I think a lot of people maybe would have stopped there. They're like, you know, I jumped in, couldn't figure this out. But you didn't. So what, what happens after this AK wholesale deal?
- [21:28]
C
So I was even more fired up to get a property because this was not planned and I just made $8,000 from something I didn't really plan on doing. And so I was like, hey, there's a lot of things I can just figure out as I do it. Like I have bigger pockets, has given me enough background and education and knowledge. Maybe like 80% and the 20%. I just have to learn from doing it right as I do it. And different roadblocks happen. I just need to figure it out. So now I knew what wholesaling was because I just did it. So that same realtor introduced me to a local wholesaler whom I haven't, I never met. But she sent me a deal for $50,000 in a little suburb outside of New Orleans. And we. That was because it was wholesale, had to be all cash, but it didn't need. It could have been fixed up, but it didn't have to be. So we chose not to. We did a cash out refi because I think it was worth like 75,000. So we got all of our money back. I had a tenant in for 800. Six months later she stopped paying rent, so I had to evict her. And at that point we did the renovation.
- [22:32]
A
And how much did you have to spend on the renovation?
- [22:34]
C
I think 35. So we were all in about 85. And after the renovation I rented it for 100 or not $1100. And a year and a half later we sold it for 110. Wow, that's a pretty good.
- [22:53]
A
Yeah. And you were cash flowing, I assume?
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C
Yes, we were cash flowing, yes. And we also bought the two homes right next to it from the same wholesaler and it was roughly the same numbers. Yeah. So our first handful of deals did pretty well.
- [23:09]
A
Were you self managing those properties or did you hire a property manager in the area?
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C
I had a property manager because I didn't know about the self managing thing. I just didn't know that was even possible. In hindsight I would have probably self managed, but the property manager, their office was maybe three minutes from the house and so it was just so convenient to hire them. And they were great.
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A
Yeah. You know, that's interesting that you say that, that you didn't know that was an option. And I think sometimes we forget about those things because, like I didn't know when I bought my first property that you could get a loan. I thought you either had to pay cash or like borrow money from like a friend or someone. Like, I did not think that you could go to the bank and get a loan unless you were living in the property. So, Tony, maybe we need to like do an episode on some of these things that like, you may not know. And that's a great point of like, you may not know that you can actually self manage and there's rental property management software out there that helps you do a lot of it.
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C
So. Yeah.
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A
So now with these, with these rentals, did you sell just one of them or did you end up selling all three of them? And why did you decide to sell?
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C
I did sell all three of them. So I owned them for about a year and a half. And in that year and a half we went through two hurricanes and that was two hurricanes too many. And the second hurricane, I don't remember what it's called, but it literally went through my street and thankfully it missed our homes by like 20ft. But it was just, it was too scary. And so I, I just Wasn't interested because I knew these weren't going to be the last hurricanes. Right. It's Louisiana hurricanes are going to happen. So we decided to sell them. We did ten 31s into two, two different assets. So we did, we invested in long term rentals in Little Rock, Arkansas. So we still have three homes there. And then we also decided to buy our first short term rental in California.
- [25:10]
B
Jan, I just want to ask a few follow up questions first. Can you define for folks that don't know what a 1031 exchange is and why it's beneficial for real estate investors?
- [25:19]
C
Yeah, so a 1031 exchange is basically when you sell an investment property and you have a gain. Instead of paying taxes on the capital gain, you would basically roll it over into a like kind property. And there's, you know, some nuances there that you have to follow, but that allows you to defer the capital gains taxes from that first property until you kind of sell the second property. But the goal is to continue 1031 in. Until, I guess. Yeah, so.
- [25:57]
B
So you guys were able to unlock some of that equity that you built up through these renovations and the burrs to, to then go buy some other properties and then, you know, it sounds like the other part of the reason that you guys sold was maybe more the, the emotional component. Like you mentioned the hurricanes. Was there anything else aside from the, the weather that was kind of like gnawing at you from holding that portfolio? Was it really just like the risk of, you know, are these properties going to stand the, the next hurricane?
- [26:23]
C
Yeah, I think hurricanes was probably 80, 90% of it. The other 10 or 20% was maybe the, the neighborhood. So it was, I initially thought it was maybe B minus class, it was more C class. And I knew with my first tenant who stopped paying in six months and she was doing things in the house she wasn't supposed to be doing and I just didn't want to deal with those tenants and just, you know, what, what come. There's, there's certain risks that come with that and I wasn't interested in, in that. So.
- [26:58]
A
So now you've pivoted to short term rentals and you said you bought one in California. Walk us through this deal. How did you find it? How much was it?
- [27:08]
C
Yeah, so this is, it's interesting because if I were to buy a short term rental today, I would not follow the same process. But this was 2021 and all the podcasts I was listening to, everyone talked about strs. I think no one even called it strs. Back then it was just Airbnbs, right? Everyone was buying an Airbnb. It was cash flowing so much. And the more podcasts I listened to about it, I realized, oh, this is like running a hotel. And no one was talking about it that way. But because I have a background in hospitality and in business, for me I was like, oh, I'd just be a general manager, manager of this, this one room hotel. Even though it's like four bedrooms or five bedrooms, like this is, this is my one room hotel. And the way we decided on this market and we found this place, you know, we're in the Bay Area, my brother and his wife were in la and for my kids, spring break in April, we wanted to meet in the middle. And this was, it was 2021, so people are still a little bit weary of travel after Covid and so we didn't want to get on a plane anywhere. We wanted to drive. And so we were looking at places that's kind of in the middle. So three and a half hour drive for both of us is central California. It's near Paso Robles, San Luis Obispo, Pismo beach, that area. And I was looking for Airbnbs and they were all really ugly. Like, not like, not just the design in the home, but the photos were really bad. It's almost like they purposely closed the curtains before taking pictures. The listing description was bad. The price was like 200 every night, 365 days of the week. And so just by looking at what was available, I knew most operators were not treating it like a business. Most operators were not doing this professionally. And so if I were to enter this market, I would do better than almost anybody else. Not because I have so much experience, because I had none, but I would just take it more seriously. You can tell these people were not taking it seriously seriously. Things have changed a lot since then. But this was back in 2021. And so the next thing I did was try to understand the licensing requirements in all the cities in that county. And I picked, I think two cities where licensing was, you know, relatively easy, easy to get, or the, the STR permit. And I reached and you know, air DNA. I don't even know if it exists. Actually, I think it did exist, but I found a realtor by reaching out to other hosts on Airbnb. So I reached out to three people just to be like, hey, I'm interested in buying in this market. And you guys know, because you guys have Airbnbs as well, when you get this inquiry, it looks like someone's booking your place, right? So you get really excited, but then they're asking a question that's like, hey, I want to be your competition. Can you help me out? Although I asked it in a really nice way. And so of the three people I messaged, two never wrote back to me. And then the third person happened to be a realtor. And so she was like, hey, yeah, I'll help you. And so she just told me her name. She said, google my name. So I did, and I got her phone number and I talked to her, and within a week, we were under contract.
- [30:20]
B
Wow, that's incredibly fast. So, Jane, let me, let me ask a couple of questions here, right? Because I think a lot of folks, now granted you already had some experience in the long term rental space, but a lot of folks I think are hesitant to pull the trigger and, you know, get second analysis paralysis. Like, how did you move so quickly? Like, what allowed you within seven days to be under contract on your first short term rental?
- [30:43]
C
So a couple things, I felt like we were not the only ones with this mindset of, hey, I want to see friends and family, but I don't want to get on an airplane and I don't want to stay in a hotel. Like, I want to be, I want to drive there. And so where are some popular driving destinations from the Bay Area and from Southern California? Where people can meet in Central California was just so easy. There's beaches nearby, there's so many things to do. I also know it gets super hot there. And this property had a really large pool. And so even though the house itself was kind of ugly and we had to do some renovations, the pool and it also had an, it has a really big in ground hot tub. And you normally don't see in ground hot tubs, you see like the above ground hot tubs. But this in ground hot tub can very comfortably have 12 people in there. Like, it's like a mini pool. And so those two things, if I were to put in myself, would cost hundreds of thousands of dollars. And it was already there. And so that was the biggest thing. But this wasn't a market where other airbnb investors were looking because it's a city that most people haven't heard of. And to be honest, it didn't look very nice. Like I bought it from two people who had lived there for 40 years. So it kind of looks like they had been living there for 40 years. They were like three different colors of carpet. So yeah, I, I, I felt like the pool and Just the, the demand at that time of people really wanting a drive market would make it successful.
- [32:18]
B
What, in what city did you say it was in, Jane?
- [32:20]
C
This is Atascadero.
- [32:21]
B
Atascadero, but you said it's near San Luis Obispo.
- [32:23]
C
Yeah, so it's right in between Slo and Paso Robles. It's like 20 minutes from each.
- [32:28]
B
Got it. So I, I just looked at that city on Airbnb while you were talking here, and I, I'd never. I know San Luis Obispo, but I've never heard of Atascadero. And even still to this day, a lot of the. I'm looking for, like, larger properties, and a lot of them still kind of suck, you know, so maybe, maybe, maybe there's an opportunity there for a lot of people that are looking for, you know, kind of a coastal town to, to go buy near San Luis Obispo. So the, the property itself, what was the purchase price on it?
- [32:57]
C
The purchase price was 722,722.
- [33:00]
B
That's a big swing for your first one.
- [33:02]
C
Yeah, yeah.
- [33:04]
B
And what kind of debt did you use on that one? Did you use a second down or second home loan to percent down or what was the debt?
- [33:10]
C
Yeah, we did a 10% second home loan in 2021.
- [33:14]
B
I mean, rates were starting to creep up. So what was your rate at that point?
- [33:17]
C
3%.
- [33:18]
B
Okay. So you got, you got a, you got a sweetheart deal. All right, there you go. That one worked out well. So now you've got this background, Jane, in hospitality. You worked for boutique hotels, some of the biggest hotel chains, literally probably on the planet with Caesars. How did that shape how you approached this short term rental versus someone who maybe didn't have that experience?
- [33:41]
C
Yeah, so, you know, I, I thought of what I learned in, in grad school. So at Cornell, the, the hotel program they have, there's a hotel there, it's called the Statler Hotel. And it's mostly for undergrad students to do all the grunt work. They do housekeeping, they do, like, operations. They do everything. As a grad student, we weren't able to do that, but I was able to talk to a lot of the undergrad students who did that and kind of pick their brains on, like, hey, you know, why did you sign up to do this? And, like, what did you learn? And things like that. And I realized, like, you have to do all the work of a hotel to be a really good general manager. Well, you don't have to, but that experience is super, super helpful. And important in understanding what your team eventually does. And so when we bought this property, I had the mindset of, okay, I, I'm the general manager of this hotel and hotels have housekeeping, they have operations, you know, revenue management and marketing. So I was thinking of all the different aspects of running a hotel. And this home is three and a half hours from my house. So I, I couldn't go for every check in and neither, I didn't want to go for every check in. But I wanted to know, like when I was getting quotes from cleaners, I wanted to know why they were quoting me a certain price. Like it's going to be three people and it's going to take three to four hours to clean. I'm like, why, why is it taking nine to 12 hours to clean a four bedroom house? Like that doesn't make sense to me. But what I wasn't incorporating was I have seven beds there and to do the laundry for seven beds and all the towels and the bath mats and we have separate pool towels. That takes a lot of time and oftentimes if we have a same day turnover, they need to take it off site to do it. And so one of the things I did early on is I did the laundry myself because I was like, I want to know how long this really takes. And not only does it take a lot of time, it's, it's exhausting and I don't do it very well. Like it takes so long to make the beds. I fold towels a certain way in my own house because no one cares whether or not it's pretty, it just needs to be folded. But I was trying to figure out how do I fold these towels in my Airbnb, so I had to YouTube it and then I had to pick the type of folding that I liked best and then I had to learn how to do it and how to set it up. And I was like, okay, now I know why I pay my cleaner as a premium. Like I understand the job of a cleaner, but I wouldn't have understood that if I didn't do the work myself. And so that the first property was a lot of like diy, not necessarily to save money, but just so I understood what my team was doing and to make sure that I'm also properly compensating them for, for their work.
- [36:19]
A
I also did the laundry when I first started my short term rental and it was a Airbnb arbitrage and it was in an apartment complex, so they had laundry rooms. So we would go and take over One of the laundry rooms fill up like three washers and then we'd have to wait around to switch it over to the dryer and. Yeah, it was, it was awful. And making the beds, we had bunk beds, doing the, you know, the top bunk and. Oh, God, yeah, it was, it was awful. And we'd always have to make sure we had quarters too, because they were coin operated too. And you forgot your quarters, you're back out to your car, digging through the cup holder.
- [36:58]
B
I unfortunately have never done laundry in my short term rental. So shout out, shout out to my cleaner for holding it down that way. Jane, how fast did you get the property up and running? So I know it took you seven days to find it. Another 30 days or so for closing. How long after closing did you actually get. Get it up and running and welcome in that first guess.
- [37:14]
C
Yeah, so I, in hindsight, I did it pretty quickly. So we had to do a big renovation. We redid all the flooring paint, redid the kitchen, redid some landscaping and my contract. I mean, he's incredible. Not only did he finish on budget, but also on time. I think he was off by a couple days. And he. So we closed on May 10 and the property was done by early July.
- [37:45]
A
Let me, let me ask you something about that real quick with the contractor and like the timeline and lining it up so your contractor was able to start right when you closed. How did you get your prop, your contractor into the property to actually get you all the estimates and to understand. Did you do that during your due diligence period? Did you ask to have permission for him to come through?
- [38:06]
C
Yeah. So during our one month period where we were under contract, I think as soon as we were okay with inspections, I asked the seller if I could just have a day at the house to interview contractors and just to figure out what I needed to do. And they were very gracious and allowed me, you know, like, I don't know, 8 to 5 or something. And my realtor had to sit with me the entire time because I couldn't be there by myself. And we had maybe five contractors come through, gardeners come through. I interviewed pool guys. They did all that stuff in, in that day. And that's. They, you know, they gave me a scope of work and then I, I chose my guy from there. So he literally started the day after we closed.
- [38:52]
A
Think about how efficient that is. And all you did was ask and.
- [38:56]
C
They said yes, like, yes, absolutely.
- [38:59]
B
How. How did you find the potential contractors to interview? Like, was it just Yelp? Were you in Facebook groups, was it your agent who, how did you get those folks to even line up to come give you the potential scopes?
- [39:09]
C
Yeah, I, I used to, I used Yelp and Google and I've learned that in some markets more people use Yelp and in some markets more people use Google. And you don't really know until you start searching in both, but that's how we found every night. I did ask my agent for referrals, but those referrals ended up not, not panning out.
- [39:30]
A
So now that you've got the renovation done, what were some of the things that you did during the setup process that maybe would stand out compared to other short term rental hosts when setting up the property?
- [39:40]
C
Yeah, so I also, So I knew with Airbnbs, especially because now we're in summer, right? I knew time was money and even getting it ready one day sooner would probably make me an extra five hundred or a thousand dollars. So I was in a race for time to get this property ready as soon as possible. And we were actually, now I think about it, Fourth of July weekend, we were in New York visiting family. And that's not something that we could have changed. And so I was gone for a week, which drove me crazy, but we were gone for that time. So towards the end of construction, I started having things sent to the house. The furniture we were going to do, like, you know, the, the linens, all that stuff. I had it sent to the house because there were people there and they would just put it in the shed until I got there. A few things that I did at the wood. Now it's a little more common back then, not so much. I like to label everything. And I know this doesn't seem like a big deal, but maybe a third of our five star reviews mentioned the labels. And this is also because it's a process that I go through after a home is ready. I close the front door from the outside and I literally walk in, I close my eyes, I open them, I'm like, okay, if I'm, if I'm a guest coming in here for the first time, where do I go? What do I look at first? Where's the light switch? And if I turn that light switch on, what does it actually turn on? And a lot of that stuff is pretty confusing. And sometimes you see a, you know, light switchboard where there's four or five light switches together and you just kind of turn all of them on. And so every light switch in the house is labeled. All the kitchen cabinets and drawers are labeled and this is also because I've had an experience where I went to a pretty large Airbnb and I was literally looking for a couple cup. I just wanted a cup of water. And I think I opened 12 cabinets before I found the cup. And this is not the host's fault at all, but after that 12th cabinet, I was a little bit annoyed. Like, why do I have to open 12 cabinets to find my cup? Again, nobody's fault. And I don't want my guests to just even feel annoyed for any reason. Right. If I can control that. So that's something I do at all of my properties that I think stand out. And it's a little bit more guest focused. But going back to, you know, setting up this first property. So once the furniture got there, my husband and I spent, you know, various amounts of times getting it set up. We listed it end of July, so we closed May 10th. We listed end of July because I remember I had a full month of revenue in August. And that first month we grossed $14,000. Guys.
- [42:20]
A
And what's your mortgage payment on this property?
- [42:22]
C
3,000. That's PITI. It includes taxes and insurance. $3,000?
- [42:27]
B
Yeah, those 3% interest rates, if we go back to those days. So, Jane, I mean, obviously you guys crushed it with this first one, and I know you continue to kind of scale up from there, and I know that your next deal did significantly more revenue than this first one. So I want to get into that deal after a quick word from today's show sponsors.
- [42:50]
D
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- [43:54]
E
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- [45:05]
B
All right, we're back here with Jane. So Jane, you Talked about the 14k you made in your first month with that first short term rental, but the next one, even bigger. So tell us about this deal you bought a luxury short term rental for, I believe it was $1.1 million. Right. So even a bigger step up in purchase price. What made you decide to go so big with this one?
- [45:27]
C
So with this property, it's located about an hour and a half east of San Francisco, maybe almost two hours, I think. And I was really looking for something that, something that was different. So I feel like in some markets, Airbnbs are getting a little bit saturated. You can't kind of have the same cookie cutter, you know, four bedroom home with fancy designs. Like there has to be something that you have to have something that most people don't have. And so this property had two things. One, it, it's, it's big, it's 4,000 square feet and you can comfortably sleep 16. And not a lot of homes can comfortably. They don't have beds for 16 people. And it had four acres and only about half of that was being used, maybe less than half of that. And so we had space to put in a pickleball court, bocce ball, fire pit, barbecue, all that stuff. But at that time, there were not a lot of properties, if any, around the Bay Area that had a private pickleball court. And this is when pickleball was there. Going crazy, right. A couple years ago. So those two. So the three things, one, proximity to where a lot of people live who have the capital to spend on a nice vacation. Right. So within a one or two hour drive, two, it could sleep a large. Comfortably sleep a large number of people. And three, there's amenities that a lot of other Airbnbs don't have.
- [46:53]
B
Jim, we can touch on the amenities here in a moment, but I think just from a strategic business decision perspective, you know, once you get above like a million bucks, you can also start buying like smaller boutique hotels. And given the experience that you already had in your W2 life of living and, and being a part of those boutique hotels, what, what made you decide to go for luxury single family versus maybe just buying like a smaller boutique hotel somewhere else?
- [47:23]
C
I think, because I'm already familiar with short term rentals, this was an easier way to try luxury Airbnb because I haven't tried it before. I think eventually I will buy some sort of a hotel. But. And you know, even though I do have a background in it and experience, as you know, Tony, underwriting is still very different. Right? The process of buying a hotel is very, very different. And so I wasn't ready for it at that moment.
- [47:56]
A
And I think that's what's made you successful, is that you're not getting shiny object syndrome because of what a lot of other investors are doing or seeing that. That you're sticking to what you know and you're building that solid foundation and sticking to your strategy even though a hotel would be a shiny object. And you know, something new to learn about and exciting is you're sticking to what you know and building that foundation before you actually make that pivot into doing a hotel. I mean, Tony, how many short term rentals did you do before you built that solid foundation to pivot to doing a hotel? A lot, right?
- [48:35]
B
Yeah, absolutely. And yeah, I think for us, because we were at that similar point where our hotel that we bought was a million bucks and I was personally going back and forth between, okay, do we just buy a luxury single family short term rental or do, do we go with the hotel? And we opted for the hotel. But I do think that there's, there's benefits to, to both. Right. And just trying to weigh, weigh what makes the most sense, I think is what, what I was trying to get at from you. But go going back to the amenities piece because you touched on that, you added a lot, right? You said bocce ball, pickle ball before was even cool. How did you, how did you decide which ones to add? And I think more important, how do you make sure that you don't over amenitize? I mean, you could add everything, but at a certain point, it doesn't necessarily add additional money to the return that you're getting. So how did you make that determination of how much to add and which ones to add?
- [49:25]
C
That's a good question. And to be honest, I don't know if I have the best answer for that. I think it's the thought around pickleball is because everybody was talking about it like it was almost overwhelming. Too many people were talking about pickleballs. And one day my husband and I were like, oh my gosh, what if an Airbnb had a pickleball? Like, it just kind of, the thought just popped up out of nowhere. And when we saw this house, there's like a perfect rectangle for the pickleball court. And so it was just a matter of roi, right? Like, is this actually good? And obviously you can't. There isn't a, a precise way to figure out like dollar for dollar, how much more am I going to make with the pickleball? All you know is that there were very close to San Francisco. There's a lot of people with money. A lot of people play pickleball. Would they pay a slight premium for a private pickleball court? I think everybody would have said yes. And this is a property we're planning on holding for a very long time. And so we were confident that the ROI was there. And we've had people do pickleball tournaments. There's only one court and it's nothing fancy. It is an official size pickleball court, but it's really nothing fancy. But people, they're like, there's not. Because there just isn't enough space in the Bay Area to have a pickleball court where it doesn't feel like it's cramped in somebody's backyard.
- [50:49]
A
Now with this property, did you get the same 3% interest rate or was this different? And how did the numbers turn out on this? What are you. Cash flowing.
- [50:57]
C
Flowing, yeah. So this was not only our most expensive purchase price, but it was by far the highest interest rate we've ever had. So our interest rate is 7.75%. And so this is, you know, for everyone listening, don't be worried about the interest rate because there's still opportunity. This property, on average, we cash flow about $6,000 a month.
- [51:20]
A
We just recorded a rookie reply where that was like one of the questions, should we wait until interest rates lower? And here's like a perfect example of like, you can make a deal still work even with a high interest rate. Cash flowing. $6,000 a month.
- [51:33]
B
Six grand a month. Right. So we're talking about 72 grand a year in. In cash flow. What. What did you guys actually spend to acquire the property? And what do you think you invested in total to actually get it set up? You know, design furniture, amenities and so on?
- [51:47]
C
Yeah. So this one, because it was a jumbo loan, we had to do. I think we had to do 20%. I don't remember it was 20 or 25 down payment. So this one, we had to, you know, have a little bit more cash up front. We did do some renovations. We added two bathrooms and did paint and just some light fixtures. The. The bigger renovation was adding the two bathrooms, and then we turned the garage into a game room. And so that was about a hundred thousand dollars. But we, we actually didn't have the cash, but we knew we had to do the renovation. And so we opened a few 0% APR credit cards and we put all the renovation on the credit cards. And so two of them had. Two of them was zero percent interest for a whole year, and one of them was zero percent for nine months. But in that time period, we cash flowed enough where we can pay that off. And so essentially we were. It wasn't for free, but we didn't have to have the capital upfront. We let the cash flow from the property pay for those credit cards and the renovation.
- [52:55]
B
So you guys are all in for, you know, 200k, give or take on the. The down payment. Maybe tack on like another, I don't know, call like maybe 250. Right. Closing costs and whatever else maybe went into it. Another 100k, so 350 all in. So we're still looking at, Even with the 7.75% interest rate, about 20% cash on cash return. That is phenomenal. Absolutely phenomenal. With an interest rate of almost 8%.
- [53:20]
C
Thank you.
- [53:23]
A
Now Gene, before we wrap up here, I just want to ask like, how has real estate changed your life? How have you been able to be there for your daughter, to make every appointment to, you know, do everything you need to do with your family and everything and be present in your life and enjoy it, but also be able to fulfill that career? Almost as you said, you had loved your job, but you did what a lot of mothers would want to do and be able to leave that job, leave their career whenever their child needed them. And you did that. But there had to be some part of you that missed that creative outlet, that missed that dream, that goal, that desire that you had, you know, all through your career to reach. So tell us how real estate was able to make that happen for you where you could still be there for your daughter and you could still live some part of the life that, that you wanted.
- [54:19]
C
It was, I mean it's really been a dream. And I don't just, I know a lot of people say that, but the flexibility that comes from managing short term rentals and I know it's not passive income, but you know, as you guys know, you can have systems and autom in place where you can do everything from your phone. So if I'm waiting at for a doctor's appointment with my daughter or I'm waiting in car line to pick up my kids or in between sports practices and I have to respond to something, I don't need to be in front of my computer. And the cash flow is more than what we could have imagined. Like I initially started it kind of as like a little side hustle, hobby and it's really, it replaces most people's full time income and so much more, right? It's become such a powerful cash flow tool and wealth building tool for our family and I think especially for moms, whether you work full time, part time, stay at home and you want more time, right? Whether it's time with your family or maybe just time for yourself, right? Time to go to the gym during the day without being interrupted, time to meet a friend for coffee. Moms always are craving more time, right? This is such a perfect way to have more time and also support your family. And with short term rentals, there's also co hosting. There's so many different things you can do within short term rentals that are super, super powerful and also just really fit the mom's schedule really well.
- [55:51]
A
When my kids switched to a different school like during COVID they went to the school because it was still in person. And we switched, switched them to that. And I remember saying to a friend, oh, but I have to drive them to school every day. And that person said to me, that's awesome. You get to drive your kids to school every day. Not everybody has that choice. Not everybody gets that time with their kids in the car. And I always think about that, how real estate has allowed me to be able to get to drive my kids to the millions of places they need to be. And like that's just like something I've learned to appreciate over time is like that's, that's an opportunity. That's something I should be so grateful and thankful for. That real estate has provided for me is the things I get to do with my kids as much as I'd rather do other things. Like that is, you know, time that I, I won't get back. So I, I think real estate really as much as you said, everyone says it's a dream and it doesn't seem real. Like it really can do these powerful things for you with money and with time and just with your family in general too. Well, Jane, thank you so much for coming on to share your story to tell us all about your real estate investing journey and congratulations on your success as an investor.
- [57:12]
C
Thank you so much.
- [57:13]
A
Where can people reach out to you and find out more information about your investing journey?
- [57:17]
C
So I'm primarily on Instagram. You can find me at the InvestingMom and just send me a note, we can connect.
- [57:25]
A
Great handle to have.
- [57:26]
C
Oh, thank you.
- [57:28]
A
I'm Ashley, he's Toni. And thanks so much for listening to this episode of Real Estate. Ricky, if you like this episode and you like others, make sure you're subscribed to our YouTube channel, ealestaterikki. Thank you guys so much for listening. We'll see you next time.
- [57:42]
D
Okay, we're going to shift gears for a minute to cover something important, especially for new landlords. The shows often talk about getting stuck doing everything ourselves and the cost of sweat equity. The key question is simple. Is my time better spent elsewhere? I use a tool that cuts down on a lot of landlord hassles. And the wild part is it's just $12 a month. It handles rental screenings, rent collection, maintenance requests and accounting all in one platform via a mobile app or desktop. It saves me time and tenant communication and keeps me organized for tax season. It's called Rent Ready and you can sign up for a six month plan for just $1 with promo code BP2025PRO. Users get it for free because we believe in it. Just sign in through your pro account to get started. Rent Ready helps ensure on time rent with auto reminders, keeps communication professional, and lets you post listings to multiple sites. Check it out at rentready.com biggerpockets that's rent R E D I.com/biggerpockets hey rookies.
- [58:37]
B
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.
- [58:55]
A
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.
- [59:07]
B
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.