← Real Estate Rookie
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- [00:00]
A
Have you thought about financial freedom, but you don't know where to start? Well, today's guest is going to show you the path that she took to build the lifestyle she wanted. Starting off with listing her property as a short term rental and then getting a multifamily to house hack.
- [00:16]
B
And throughout this episode, you'll learn what it means to sacrifice for your goals. You'll learn the mistakes that rookies typically make. But more important, I think you'll walk away with an action plan and the inspiration to do it in your own.
- [00:32]
A
This is the Real Estate Rookie podcast and I'm Ashley Kerr.
- [00:35]
B
And I'm Tony J. Robinson. And let's give a big warm welcome to today's guest, Ashley Perry.
- [00:40]
C
Thanks for having me. I'm excited to be here.
- [00:43]
A
What was the moment in time when you decided that you wanted to pursue financial freedom?
- [00:48]
C
I think it was something that I've kind of always been striving for. Most of my life, I just didn't have a name for it and didn't know exactly what it looked like. But throughout my career, I was always looking for the next cool job that could kind of give me that freedom. And being a product designer, I, in working in tech, being able to work remotely, has definitely started that journey towards financial freedom and what that might feel like. And especially around Covid, when everywhere kind of went remote and I was able to move from San Francisco back to Denver, where I'm from, I started really getting that jonesing for my, my flavor of financial freedom, which basically means being able to work wherever I want to, work on whatever I want to and explore all the different creative projects that, and ideas that come up for me at any given moment.
- [01:50]
A
Would you say that financial freedom is more of a number to you? Do you have a number goal you want to reach or is more of a lifestyle goal?
- [01:59]
C
I think it's more of a lifestyle goal. I really like. I, I grew, you know, I grew up in Colorado. I really like being outdoors and going on adventures and there's a lot of places that I haven't gotten to see yet. And I would like to be able to go to those places, but also be able to make money at the same time and not have to stop making money to go do those things. And so I've just been trying to explore what that means. I would say numbers obviously come into play when I make a certain amount of money at my job and it allows me to do things like real estate investing and have adventures. And that is a specific number every year, every month, and it's more so like, how can I start supplementing some of that, that income that I get with my W2 job? So to kind of start balancing it out of when is that point that I can kind of switch over. But I don't necessarily want to make all of my money from real estate. I want to have lots of different ventures.
- [03:05]
B
And I think that's what's cool about pursuing financial freedom, is that it does have a different definition to different people. Right. For some people it's just, hey, financial freedom means I have this much in my brokerage account and then I'll feel financially free to other people. It's, you know, my business produces X amount in profits and that makes me feel free. And for others like you, it's, it's, hey, it's more so on the lifestyle and how it feels and what that experience is. So for all the Rickies that are listening, just know that your definition of financial freedom doesn't have to match mine or Ashley's or. Or Ashley's.
- [03:35]
D
Right?
- [03:35]
B
It can be your own definition. But now if we, we talk about you actually transitioning into investing, your first experience as an investor came from listing your own home on Airbnb. What were the pros and cons of doing this?
- [03:50]
C
It was definitely a journey. The first con, I guess you could say, is just preparing my house. I, it's something that I was thinking about doing for a very long time, but when I fully decided to go all in, I was between jobs and wanted to extend that time between jobs as long as I could. And to me, that meant putting my house up for short term rentals to maximize the amount of money. But that also meant that I had to get my house ready, go through literally every drawer, closet, et cetera, to make sure that it felt like an Airbnb home. But it's also my primary home, so I couldn't hide everything. But I did my best. And also one of the hardest parts was having obviously to leave every time somebody was going to come stay. And so I had to start being strategic about when I made my home available. I didn't just make it available whenever I was leaving, I decided to make it available and decided to leave at the same time. So going to stay with my parents who live only like 15 minutes away from that place, or my best friends who live almost the same amount of distance, but having to move all of my pets at the same time as well was just a lot. And it was definitely something that wanted me to or prompted me to explore different Investing opportunities.
- [05:25]
B
Ashley, that's so interesting because a lot of times when we hear about folks renting out their home, it's usually like, additional space. You know, we've interviewed folks that are renting out their spare bedrooms or maybe they've got a basement, uh, maybe an ADU in the back. But you were taking the actual space that you were living in that, that you lived in, and you rented that out and then you left yourself, which I think is a, is a unique approach. How if, if you had to, like, ballpark, how often, you know, like across an average year were you having to leave your place? Was it like every weekend, you know, multiple times a month? Or was it maybe once every couple of months?
- [06:00]
A
I.
- [06:00]
C
So I basically decided 2024 was going to be the year to try this Airbnb. And, and so I started in January. I kind of just made it available and, like, made every day available just to see if anyone was even interested in it. And I got a booking for a weekend, like a long weekend, and I just left for that amount of time. And then slowly after that, people started booking pretty quickly because I had it open, and they definitely started booking in the summer. So. So I had to start blocking off days and deciding like, oh, I want to be in my home for this period of time and I don't want to leave. So at first I had no strategy. And as the year progressed into summer, I would say that I was leaving my home at least half of the month. And sometimes it was a little chaotic. And by the later in the year, I was being a little bit more strategic of only blocking off, like, two weeks or a weekend here and there and deciding to do that. But over the course of 2024, I basically was out of my house for half of the year.
- [07:15]
A
So let's look at the numbers on this when that very first booking. First of all, how exciting was it to get that notification that you got a booking for your very first one? But what did the numbers look like? So, like, that first month, what was your mortgage payment and how much did you bring in from renting out your property?
- [07:34]
C
So my mortgage was roughly 2500. It's been roughly that since maybe the first year after the first year of my mortgage, which I got in 2020, so I have a really great interest rate. And then that first booking, I think it was three or four nights. I can't remember exactly, but I made $866 from just that one booking that weekend. Yeah, I have a nice house and decent amount of bedrooms and they were definitely coming to go skiing, even though I'm not anywhere near the mountains, but they made it work.
- [08:15]
A
So you were probably more affordable than actually staying right at the mountains.
- [08:20]
C
Correct. And it was probably difficult to even get close to the mountains at that point.
- [08:25]
A
That's really cool. Okay, so now that it's been, you know, a year and a half later, are you still renting out that property?
- [08:34]
C
So I rented out that property for all of 2024. I decided for 2025 that I didn't want to leave my house and wanted to start looking for other types of ways to make income from real estate. And I actually had one random booking happen in, like, June of this year that somebody was able to do. It was like an Airbnb blip. And honestly, it was really hard for me to get my house ready for literally, just, like, four days. But last year, doing it half of the year, I made almost $24,000 just in one year, which felt really amazing. And obviously, I would have loved to continue doing that, but this year, I didn't and then decided to look for something else. And as of this month, I am renting out my house for long term because of a second property that I purchased, but that I'm renting it out for 3,500 now. So with my 2,500 mortgage, I'm making $1,000 a month starting this month.
- [09:43]
B
Ashley, I just want to commend you, and I think that a lot of our rookie listeners will hear two parts of your story. They'll hear the $24,000 you made and say, wow, that's a lot of money. They'll hear you were not living in your own home for half the month and say, that's not something that I could ever do. Right. I think those are the two takeaways. So I just want. I want to really stress to everyone that's listening, the. The sacrifice that you made was a sacrifice that was unique to your situation. Right? Like, not everyone's going to be able to sacrifice in that same way. But what we all can do is identify what sacrifices can I make in my life to get me to the point where if I just buckle down for the next 12 months, I can then completely change the trajectory of my financial and my personal life based off of this one decision. So if you're thinking and you're hearing Ashley's story, like, well, I. You know, I've got six kids. I can't leave. You know, I can't pack us all up and leave for half the year. Totally fine. But ask yourself, what are the other sacrifices you can make to put yourself in the same position?
- [10:45]
C
Exactly. I've definitely had to make a lot of sacrifices with all of these different decisions, but it's definitely about deciding which ones you can live with. And sometimes you have to try it and see if you can live with it and decide that you can't.
- [10:58]
D
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- [12:48]
A
Is sponsored by baseline. They say real estate investing is passive, but let's get real. Chasing rents, drowning in receipts and getting buried in spreadsheets and feels anything but passive. If you're tired of losing valuable hours on financial busy work, I've found a solution that will transform your business. It's Baselane, a trusted BP Pro partner. Baselane is an all in one platform that can help you automate the day to day. It automates your rent collection and uses AI powered bookkeeping to auto tag transactions for instant cash flow visibility and reporting. Plus they have tons of other features like recurring payments, multi user access and free wires to save you more time and money. Spend less managing your money and more time growing your portfolio. Ready to automate the busy work and get back to investing? Baselane is giving Biggerpockets listeners an exclusive $100 bonus when you sign up at baselane.com biggerpockets so Ashley, how did you even decide it was time to buy a second property? Were there certain metrics or goals maybe that you set up for yourself? As to when I reach this savings amount for a down payment, I'm going to buy the next. What did that process look like?
- [13:59]
C
Honestly, it was a little spontaneous. This year, obviously I've been interested in real estate investing and have learned about lots of different ways that you could finance your neck, your rental properties and your next properties. But this year around the summertime, I was just deciding that I wanted to buy a second property. It felt like a big audacious goal that honestly I wasn't even sure that I could accomplish. I didn't really know my numbers. I have a HELOC on my last home that I knew that I had that amount of money I could use. I also have savings from other investments that I could use, but I really had no idea what that translated into of like what I could actually buy and afford. I decided that I was going to wait until this winter to really dive into it. But of course I mentioned to my friend that's a real estate agent that I was going to be doing that and she was like, well what? What are you looking for specifically? And I was like well I'd really like to have a rental property that's two to four units so that I could owner occupy. And she was like do you know how much you can afford? And I said I have no idea. So she of course connected me with a lender and I figured out what I could afford. And honestly in Denver I had no idea what that even meant. Like that number, the top number that I was given was 7:50.750,000. And I was like, it's Denver, you know, how much could you really afford with 750? And will I even be able to find a 2 plus unit property for that amount? And so of course, I started looking immediately just to see what was in that price range. And I found something that was literally down the street from my parents. And it seemed to have a lot of land, which was something that I was looking for. And the possibilities started. Started blooming in my mind. And of course me and my mom went to go look at it because I always need to have support when making these types of decisions with my real estate agent. And soon after we're like, maybe I should really like look into doing this. Seems like the numbers could work. So started that process pretty quickly.
- [16:21]
A
So when you're looking at this property you had mentioned your criteria was more than two units you wanted to purchase. What other things did you have in your buy box that made you want to look at this property?
- [16:37]
C
Like I said, two plus units. This was a duplex. It also had. It was a fairly small duplex. So the actual units were pretty small. And the land was around half an acre. Also looking at zoning. So that's a big part of my process is looking, what are you able to build on this land? What could it become? Things like ADUs, even commercial property. Commercial property. Having a storefront at some point or even building more units. So those are all things that I'm looking to do at some point. And looking at the zoning and seeing if it's even possible was something that I was interested in. And then, of course, could I live in one of them was something that really, that's, you know, one of my biggest criteria.
- [17:30]
A
So let's talk about the numbers of this deal as you're, you know, you put in your offer. Walk us through that moment. What's your offer would you get it for? Was there already tenants in place? What were the rents? And how did this deal end up?
- [17:44]
C
So first off, that first deal, I did go under contract with it, but a bunch of things kept coming up and I honestly fell through on that deal. I decided to fall through on that deal. And then I soon found a second property in a different area of town still in the Denver metro area that I became extremely interested in. It's also a duplex. It's also on five or a half an acre. Sorry, it's also on a half an acre. The duplexes are much larger. They also had tenants in place when I, when I toured it, there was tenants in both units. And there's also a three car garage and a couple of storage sheds on this land. And then it's zoned for up to 13 units, depending on how big the property is. Right now it only has two, and the size of the property allows for seven. So that was exciting for me. And then, so numbers wise, I believe they had it listed for 725. And I gave an offer for 710 with also 17,000 seller concessions for a 2:1 buy down. And after a little bit of back and forth, they actually accepted it at that number. And I was elated, obviously, and started moving forward with that process.
- [19:19]
B
Congratulations, Ashley, on getting that deal secure. But two things you mentioned that if you would mind explaining for our audience. You mentioned seller concessions and 2:1 buy down. Can you just quickly define both of those things for Rickies who may not be familiar with those phrases?
- [19:32]
C
Definitely. So seller concessions is generally something that the seller will pay to the buyer for things like a 2:1 buy down, which I'll explain in a second, or possibly putting money towards fixing up certain things on the property, et cetera. So it's just another leverage point when you're making an offer of what you could ask. And especially I believe in the market that we're in today, especially in Denver, asking the seller for more could potentially be fruitful for you. And a 2:1 buy down is money that the seller gives to essentially drop your interest rate for the first two years. And so for the first year, it drops by 2 percentage points. So I got my interest rate at 6.99. So the first year it'll drop to 4.99 and then for the second year it drops 1%, which is 5.99.
- [20:36]
B
Yeah. And it's a. It's an incredible tool and resource for buyers right now to still make deals. Cash flow in the short term, I think still for everyone that's listening, like, don't think like, oh, great, cool. I'm gonna get this deal at 4.99 because it does go back up to whatever rate you locked in at. So make sure that the deal still works there, but it gives you some additional cash flow in the short term. And then on the seller concession side. And Ash, I'm curious what your take is on this as well. When you're negotiating as a buyer on a piece of real estate and you know, say you, you get your inspection report, there's things that come back, whatever it may be, but you're negotiating during your due Diligence phase. You can ask for a reduction in price or you can ask for a credit back. Right where to Ashley's point, you're getting, I think you said $17,000 as a credit at closing. I almost always prefer to get the credit because it limits or reduces the amount of cash you have to bring to the table. And we've interviewed folks in this podcast who, because of the credits they've received, have actually gotten paid at some points to buy a piece of property. Which is crazy. I think the only way that like actually decreasing the purchase price will be helpful is like if you're, if you're paying in cash, maybe if you're super worried about property taxes, you know, I don't know, whatever it may be. But Ashley, for, for you, would you prefer credits or reduction in price?
- [21:53]
A
It depended if I was the buyer or the seller. So as the seller of the property, I would prefer a reduction in price if I'm selling an investment property. So I would rather it be at a lower price for an investment property I'm selling. And then if I am the buyer of the property and I'm using a loan, I would rather the seller credits because then I'm still getting a loan for the amount of the property.
- [22:24]
B
Why would you, as the investor selling, why would you want the reduction in price versus the credit?
- [22:29]
A
Because I want the. Well, I guess it wouldn't matter. I was going to say because then it's reported that the sale is lower, but I guess you would write off as the credits anyways. It's not like I would pay tax on the seller credits. See, I was thinking like, okay, say the property is 100,000 and they want 10 grand. So my. I'm really only selling it for 90. But it's reported, reported that I'm selling it for a hundred. But I would assume probably when you get the closing statement there would be some way to write off that 10,000 credit.
- [23:07]
C
But maybe not.
- [23:08]
A
But that's actually a good question. Who knows the answer? Please put in the YouTube comments.
- [23:13]
B
I don't know the answer to that either.
- [23:14]
A
Yeah, yeah, because that's what I was thinking is like, okay, the, the price is. The price being reported is 100,000. But I am giving them a credit. But what would I, how would I report that on my tax return is do I then give them a 1099 that I gave them a 10,000. $10,000. Right.
- [23:32]
B
Like, we'll have to, we'll have to bring Amanda han and Matt McFarland back on to give us the insight to that. And I think as a seller too, especially like say, say if you're a flipper, even as a flipper, you definitely in my mind would want to give the credit as opposed to reduction in price. Because if you're reducing the price on a property that you're selling, well, that's only going to negatively impact your, your, your ARV on the next property that you try and sell.
- [23:55]
A
Yeah, yeah, exactly right.
- [23:58]
B
Like you'd be pulling down your own comps value. And you see the bigger builders do this all the time, right. Where they'll never go from phase one to phase two and decrease the price, but they'll give you a massive credit at phase two to make sure that when they go to sell phase three, they still have prices they can increase. So anyway, lots of lots to think about there. So appreciate getting your, your insights there. But you also mentioned that you inherited tenants with this property. And I think for a lot of rickies that can also be somewhat of a scary thing to step into, especially as maybe like a first time landlord. So how did you interact with those tenants and how did you go about introducing yourselves and managing that relationship?
- [24:38]
C
Honestly, it's very scary. I first, I mean I met them both when I did the walkthrough the first time and obviously I didn't have. I wasn't sure if I was going to be putting an offer in or anything like that. One of the tenants was super knowledgeable on the property and her unit and was also willing to. It was almost like she was selling the property herself. And that I thought was hilarious. But she was really great and it was a lot of really useful information from her. And then the other tenants, they weren't, they kind of just, you know, left us alone, weren't as social. And it's also really difficult because you get to go through and see how they are keeping the property. And it is hard because it feels like an invasion of privacy obviously. But I had a lot of insight into how each of them kept the property and what might, you know, be an issue when taking it on and having to renovate it. And so when I ended up actually, well, first off, during the negotiations I definitely took into account what might go wrong. And so thinking about both of these tenants, their leases were up at the end of August, so last month. But in Colorado there are tenant laws that depending on when you're told when your lease won't be renewed, you still get up to 91 days to stay in the property. So I had to take that into account. And also if, say, I would have to evict at some point, that was a big concern. And we ended up negotiating money going into escrow from the seller side just in case I have to evict at some point. But if I don't end up having to do that, that money just goes back to them. So hopefully I don't have to. I really don't want to, obviously. And so before I got the property, which I got about a week ago at this point, one of the other tenants moved out. The one that was very social and selling the property, she moved out and the other tenants are still there. And so I basically had to learn a lot about how tenant laws, obviously in Colorado, they do. They lean a lot towards the tenants, rightfully so. And had to learn a lot about what that meant and what I could do and what I needed to do, because I actually want to live in that unit when they move out of it. And they also have access to the garages and the sheds. So, like right now in this unit, I just have a carport and I have. I do a lot of diy and I'm going to be renovating this property. And so I, like, have nowhere to put all of my stuff. It's like, very interesting, but I had to do my due diligence and introduce myself. I tried to make sure. I'm trying to make sure that everything is documented as much as possible. So, like, emails and text messages. And also if I have to, like, put a paper on their door, making sure that I take a picture or it's recorded and noting when I have conversations with them. It sounds to me it's hard because it feels very cold, but. And I'm not a cold person. I'm very kind and understanding and I want to be helpful in whatever way I can be. But having to do all of this documentation is to protect both of us, honestly. And so the first day, I basically had to give them a notice to quit, which feels very scary. But it's essentially me saying, I'm not renewing your lease, so you have 91 days essentially to stay here. I also decided to give them a cash for keys offer, which is what I offered was if they leave by the end of September, I will forgive their security deposit and also give them $1,500 back. If they decide to leave at the end of October, I will just forgive the security deposit and then after that, no forgiveness on the security deposit. And blatantly, I will say their unit has been run pretty rough and security deposit would likely be used up very quickly. So honestly I think it's a really great deal and it's not that I want to kick them out. It's more I have plans for this property and them being in that unit is really difficult to see those plans through.
- [29:23]
A
Have they let you know what they decided?
- [29:25]
C
They have not, no. It's been very difficult even getting like getting rent. So I took over the property on September 2nd, which obviously you're supposed to pay rent on the 1st. They didn't pay their property the previous property manager. And so I had part of my introduction was this is how you pay me. This is what it's going to be like going forward. You're not working with that property manager anymore. And it took a while for them to actually pay me, which they did. But. And there wasn't a lot of communication. I gave them my email, I had a phone number. I actually set up a different phone number than my own just to keep business and personal separate. But they had ways to contact me and communication has been very lackluster. It's also a little awkward because I'm obviously like living next to them now.
- [30:23]
A
My sister, she just bought a new house, but she was living in a duplex that she owned and her. She recently on her like for you page her tenants tick tock came up that lens alone. She just. It was a very awkward tick tock to see that was, you know, the knowing that that was a person and seeing with some of the things she's doing down there, I guess. But it was really funny. But she, her house was kind of a similar circumstance when she purchased it. She wanted to live in one of the units and someone ended up moving out right away. And then she waited for the other people to move out so she could go and live in the other unit and kind of switch. So she worked on one unit and then once the other people moved out, she ended up kind of working on that one. But I want to commend you on like knowing to do the documentation because I think sometimes that gets overlooked as to oh well, I live here, I see them. I can just tell them, you know, oh, this is happening or whatever. But I recently went through my very first lawsuit with a tenant where they actually sued me for their security deposit. They owed me $4,000 in back rent. And we ended up going through this for over seven months through small claims court. Just like things kept happening. We had a total of four court dates but never actually got in front of a judge to actually state our cases. And when we finally got in front of a judge, my attorney had presented so much documentation with the case ahead of time, as in all of my notes that were logged into our property management software, all of the email communication, the text communication printed out because we use Google Voice as like a separate thing. So all of it was logged on there and just all the back and forth, all of that. And the judge didn't even see the case. She dismissed it right away. After my $10,000, my attorney bill finally was But I have to say that is like what saved me in this case. Like, I knew I was doing nothing wrong, but nobody else will believe me unless you have that documentation. So that really is no no matter if you're kicking someone out, no matter what you're doing it, don't ever feel guilty about documenting or feeling cold about it because it really is worth the extra work and it's worth its weight in gold.
- [33:00]
B
So Ashley, I want to hear a little bit more about some of the lessons you've learned. Especially I hear that there's a difference between modular and manufactured homes that we should share with our audience. And we're going to cover that right after a quick word from today's show sponsors.
- [33:14]
D
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- [35:39]
C
When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans, send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message message privately with everyone. Learn more@WhatsApp.com all right Ashley, we're back.
- [36:07]
B
Now, there were several hurdles you had to overcome and I'm sure plenty of lessons that you learned along the way. The first one being that there is a difference between modular homes and a manufactured home. So how did you like walk us through how you even came to this realization? What happened?
- [36:23]
C
So when visiting this first or the second property, the one I actually purchased, it's very clear that these homes aren't traditionally like frame wood built homes and essentially they kind of look like trailer homes or mobile homes, but they are Foundationed into the ground. They don't have wheels. They aren't. They aren't above the ground often, like trailer homes are. And that was a concern when putting in my offer, because traditionally manufactured homes. So manufactured homes are the ones that are built in a warehouse elsewhere, and they're built fully, but maybe like in two different parts. Like you see on the highway when you see half of a house driving down, that is a manufactured home that was built elsewhere and it's being transported to its location. And then it's kind of just like put together, put on the property in the location. Modular homes are pieces and parts are built in a warehouse, and those pieces and parts are transferred to the property and then built on the property. So you get contractors and plumbers, and they're doing all of that work on the property. And so those are. That's the difference of the two. And you can get modular homes financed with traditional financing. And so it was a concern that this house was going to appraise as a manufactured home, and therefore my financing would fall through because I did do a conventional loan at 5%. But some things that they look for when they're determining if it's a manufactured home, there's one, how it's done in the count, like, how does the county actually classify it? And then another, there's something called a HUD tag on the property, like on the actual building that they look for that says what number it is and that it is a manufactured home. And so with this property, it was labeled in the county as a modular home, and they could not find the HUD tag. The appraiser actually did say that it was a manufactured home at first, but my lender went to them with, hey, these are all the evidence that we have that this is not a manufactured home. And he actually changed the appraisal. So that was pretty cool.
- [39:01]
B
I think a lot of times rookie investors get discouraged when there are issues with appraisals. And I feel like we've talked about appraisals quite a bit on the rookie podcast. But just like any other profession, there's a lot of ambiguity in what appraisal, like appraisers do to come up with their appraised values. And you could send two different appraisers to the exact same property and come back with two different opinions of value. And that's literally why it's called opinion of value in the appraisal, because it's their opinion. So kudos for you and your lender for being able to go back and show proof of, hey, we think you may have missed the mark on this because sometimes people hit that roadblock and they just give up. So I love that you guys are able to find a solution to it.
- [39:41]
C
It was definitely discouraging when I got the first report, but thankfully he fixed it fairly quickly.
- [39:46]
A
Tony, have you ever had that happen where. I know, I think you've disputed them, but was there ever anything that was like, factually wrong on an appraisal before they noticed?
- [39:57]
B
There was actually. Well, kind of, but not really. So this is a new construction cabin that we had bought in the Smoky Mountains a few years ago. And there have been a lot of delays with the build. But anyway, like, we were in California, we didn't even see it while it was getting built. You know, I think we went through one time when they were like framing it out, but comes time for us to actually, like, close and finally get the permanent financing in place. And we bought a four bedroom cabin. But when the appraisal came back, it only showed three bedrooms. We're like, what the heck is going on here?
- [40:25]
C
Right.
- [40:26]
B
So it turns out that they gave us a loft instead of that fourth bedroom, like the builder did. Like the builder messed up on the build. So luckily the appraisal caught that and we were able to go back to the builder and say, hey, like, you guys gotta give us a full bedroom here. So that's the only time I've gotten something that was like, incorrect, but it actually wasn't the appraiser's fault, it was the builder's fault. Yeah. What about you, Ash? Have you seen that before?
- [40:47]
A
No, never a mistake on it. I've disputed them because I don't think it's fair what they're saying, but I've never, yeah. Caught a mistake on them. Okay. So I guess the next thing that I learned that you learned about was mineral rights for your property. Now what deal was this on?
- [41:06]
C
So the first property that I went under contract on, the one. It had a lot of land and the. The actual duplexes were fairly small. And so the idea was to build more units on that land. And that was really the long term goal for this property. And so one thing that we found through the title process was that at some point, one of previous owners, I think it was the owner before the current one, they had actually sold the mineral. Mineral rights. So your land, you have the land rights, like what's above the ground, and then you also have what's below the ground, which is the mineral rights. So if there's Gas, oil, any other kind of precious resource on that land that they actually sold it to a, like a gas company. So it's very likely that at some point these, these people who now own the mineral rights could come in and start digging on that property. Especially with all the different, you know, bills coming through that. Although traditionally the city that it was in didn't have. Doesn't have any digging or gas, you know, pumps on the. On in the land. But it's very likely that in the next, you know, 10, 20 years that that could happen. And if that were to happen, they could. There's lots of different things that they could do. Obviously we could go through the courts and try to dispute it, but that could cost a lot of money. They could also try to pay me for the land if they wanted to, but essentially they could start putting a big, you know, one of those gas pump things. I don't even. I don't know what they're called, right next to the property. And so everyone living on that property would. Could wake up to this like, machine going up and down every morning on their land or also even having to move my property.
- [43:16]
A
I actually have two properties that have. The gas company has rights to, and one is on 300 acres. It's like way back off the road, like it's a gas well they put on there and, you know, it doesn't disturb you at all. And on that property, it's free gas to the houses. So there's two houses or three houses on that property and it's just free gas is what they give you another property, it's 30 acres and they've never done anything there ever, yet they just own the rights to a section of it. Well, that one they actually pay. And I get a check every year for $6 leasing the land for the rights. So. Pretty lucrative, I'll say.
- [44:09]
C
I would say on a property that's that large, it sounds, it doesn't sound as terrible as a point, you know, 0.5 acre in the middle of the city. Like, that's very weird.
- [44:21]
A
And they have access to it all the time. Like there's like, on the 300 acres, there's a maintenance road and they have a right to drive down through that road anytime to the back there and, and check the well and stuff, which they do pretty often.
- [44:36]
C
Yeah.
- [44:36]
B
One last thing. I just want to take it back to the. The modular versus manufactured homes. I know someone who's doing a build right now with the zip kit homes. So, like, if there's anyone who's listening that's thinking about doing modular homes. Zip Kit is just one company that I've heard of if you guys want to do a little bit more digging and research on that company. Not, not a sponsor, not anything like that, but just someone that I've heard through through the grapevine. So actually, before we let you go, just let us know what's next for you. You've taken down a few deals already. You've got some experience now. What's. What's on the horizon for you?
- [45:06]
C
Well, right now I want to get this property up and running, fix this one up, the one that I'm currently in, and eventually fix the other side as well and move into it. But I also am, like I mentioned before, considering what I can do on this property. So potentially the other unit is larger and I'm thinking about splitting it into two different units and Airbnb one side. There's also a large garage that I'm considering turning into an ADU above the garage. And then in addition to that, I want to basically do it all over again. So at some point would love to be able to refinance this place, you know, pay down my HELOC and then be able to take whatever money that I'm able to get from those things and buy another property and potentially do another owner occupancy occupy situation.
- [46:05]
A
Well, Ashley, thank you so much for taking the time to join us today and to share your story and your lessons learned. Can you tell everyone where they can reach out to you and find out more information?
- [46:15]
C
I am on Instagram as AshleyCreates and I'm also on TikTok as Ashley creates and I also have another channel called Wild Worn Threads that I'll probably be documenting all of my efforts through.
- [46:29]
A
Very awesome. Well, thank you. I'm Ashley, he's Tony and you've been listening to Real Estate Rookie. We'll see you guys next time.