June 19, 2024 • 42 mins
Join Becky Emmons, owner of Holstein Homes, as she shares valuable insights and practical tips on managing rental properties.
Here are a few things she will cover:
- Screening tenants
- Maintenance requests
- Finding the right lenders
With a blend of personal experiences and advice from connections in the industry, Becky guides you through the complexities of being a successful landlord. Whether you're a novice or a seasoned pro, tune in to learn from Becky’s journey.
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Transcript
Episode Transcript
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SPEAKER_00 (00:02):
What's up, everybody, and welcome back to
another episode of Loop It In,the Door Loop podcast, where we
pick the brains of experts inproperty management, real
estate, and investing.
Tech, we cover it.
Marketing, that too.
So whether you want actionabletips or the insider scoop from
top performers in theirindustries, this is one show you
(00:23):
won't want to miss.
Be sure to subscribe so youwon't miss out on any future
episode.
Hi, everyone, and welcome backto another episode of the Loop
It In podcast.
Today, I'm joined with BeckyEmmons.
Now, she and her husband startedin real estate in 2019, and they
have a successful business rightnow, highly diversified, and I
(00:46):
can't wait to learn more fromher today.
So without further ado, welcome,Becky.
SPEAKER_01 (00:49):
Welcome.
Yes, very exciting.
Thank you for having me.
I'm looking forward to chattingtoday.
SPEAKER_00 (00:55):
Awesome.
So I know I gave a little bit ofan introduction there, but I
think that doesn't do it justiceat all.
We'd love to know more about howhow you got started.
And what interests you in realestate in the first place?
SPEAKER_01 (01:07):
Thank you.
We like to say we think we'rebig, but we're really not.
We're pretty small potatoes, butwe're learning and we're growing
each day.
So my husband and I are from thesame town in Chardon, born and
raised in the same area inChardon, Ohio.
And we went to high schooltogether and known each other
(01:29):
for a long time.
He is a dairy farmer by trade.
So that's his back story.
So a little different than realestate, I would say.
He has a degree in dairy scienceand I am in was in health care
business with a local hospitalhere in town.
And we we're just really justkind of trying to diversify and
(01:53):
see what's, what we could do.
And really in the, in theagricultural field, he was
getting a bit burned out.
I just got my, um, finished myMBA, um, in 2019, actually,
right before we started thebusiness, I had my, um, I thank
you.
I finished my MBA and he wasgetting a little burnt out and
he said, what if we, we startedlistening to a couple of
(02:14):
different podcasts, actually,um, things for financial
independence, um, Bigger Pocketsis a big one.
A lot of people utilize in thespace and just trying to figure
out what our next step was.
We were married, no children atthe time.
So we were able to be a littlebit flexible.
(02:34):
We sold our forever home andwe're actually living in the
upstairs of a barn at the time.
And it was a legit apartment.
And we just decided, let's jumpin and buy our first duplex.
So we bought our first duplex in2019 in a local town, one county
(02:55):
over.
And we house hacked, if you'veheard that term, is you live
next to your tenant and kind ofstarted the business.
He left his job in 2019 to startit.
And I was still working fulltime at that time.
And we just kind of jumped inand started, really just started
(03:17):
looking to see what kind ofopportunity were to come up.
2019 was a little bit easier.
We could still buy someproperties on the MLS.
And so that summer we scaled andbought three small condos
locally after that.
So 2019, we bought fourproperties that we kept as
rentals and a little bit of workon them, not a ton, and all the
(03:41):
time kind of living in a duplexnext to our tenants.
So that's how we started.
And we've tried to scale sincethen.
SPEAKER_00 (03:48):
That's a pretty impressive scale.
story.
I mean, seeing as how you guysdidn't necessarily have any real
estate background, did you haveany family that were in the
business or any friends thatcould help you out along the
way?
Because that's pretty scary toget started out in.
SPEAKER_01 (04:01):
Absolutely.
I mean, to this day, there's nota person that we don't
encounter, friend, family,acquaintance that comes up to us
and says that they haven'tconsidered or wanted to start,
at least have one or two rentalproperties in their portfolio,
in their investment portfolio.
And everyone Everyone alwayssays it's a great business to
get started and it's not theeasiest.
(04:24):
It's not that it's difficult byany means.
We do have great tenants andwe're really happy with the ones
that we do have.
it's you have to be able to beflexible and you have to be able
to work every single day andconstantly talk about the
business and reinvest into thebusiness.
And so that's what we've beentrying to do.
(04:46):
And so, I mean, we knew onefamily friend who was a previous
landlord years and years andyears ago, and we sat down with
them early on.
And they're more of like anacquaintance than they are that
close.
And
SPEAKER_00 (05:02):
this was before you got started, before you got the
first property.
SPEAKER_01 (05:05):
No, no, not at all.
Not at all.
We actually acquired.
No.
Yeah.
We actually acquired our tenant.
That was the first property weever had.
They were there before us.
So they lived there longer thanwe did.
And they just stayed and we justadopted their, their lease and,
and, and we just kept them onand they're still there.
(05:27):
And great, great family.
But yeah, so we met, you know,we knew a couple that had done
it years and years ago and theyhad a lease packet and they
walked through us what kind ofinformation they've learned
along the way.
And we kind of adapted andlooked at what was in their
(05:48):
lease packet and what makessense to today.
I mean, of course, what they didback then was a lot of paper and
a lot of cash and checks.
And so kind of bringing a littlebit to today's times, we've
adopted a little bit more.
SPEAKER_00 (06:05):
Could you tell me a little bit more about that, how
you adapted to modernize thebusiness a little bit?
SPEAKER_01 (06:10):
Yeah,
SPEAKER_00 (06:10):
yeah.
Why was that necessary?
Why not just keep doing thingsthe way that they were?
SPEAKER_01 (06:14):
The first few properties that we bought, there
were, I would say, two of thefour properties.
We had tenants that were alreadythere, and we bought the
properties with them.
And one of them, they were doingchecks.
Actually, both of them weresending checks.
And the other was, and then weasked them, can you start doing
(06:35):
that Just to like do somethingdifferent a little bit to make
it a little bit easier for them.
And one of them was just like,check seems to be simple, but
the problem is, is that they hadto mail it out in time before
the first of the month.
And then if the post office wasdelayed, then that was an issue
or we'd have to go pick it up.
(06:56):
Or, I mean, there was justalways something that came up,
not that they weren't paying,but it was just, it was a
complexity of trying to receivethe cash.
and how to set that up.
And even when we first started,I mean, I think I was accepting
Venmo into like my personalVenmo.
Cause like, I didn't know,should we create a separate
business one, you know?
(07:18):
And so we're just receiving thisincome, not really knowing how
the whole process.
And so we, you know, try tofigure out, okay, what is the
next thing do we do?
We create a business Venmo.
Okay, we create a tax ID.
We have to create, I mean, wehave to get registered with the
state.
I mean, there was, we did thiskind of all after the fact
because we didn't really knowhow big we were going to scale
at that time or what our nextstep was going to be.
SPEAKER_00 (07:40):
Yeah, I do wonder, like, if you knew how much was
going to go into it and howcomplicated it was going to be,
would you have still gone forit?
Or do you think that not knowingenough about it would, like,
that kind of helped?
SPEAKER_01 (07:52):
Oh yeah.
Well, we're entrepreneurs bylike nature.
Like we've always been like, howcan we, like when my husband was
a farmer, we bought like, webrought farm implements like
tractors and sprayers and stuffto like, if you know that world
to like, okay, so if we buy thisand then the farm paid us for
(08:13):
this, could we like partner withthem in the future?
You know?
And then when I got my MBA, thewhole preface was, what is our
next step with that?
Can we create another businessventure that we can do alongside
our W-2 incomes?
And so we're always just tryingto think of a thing.
When I said we lived in a barn,we sold what was our forever
(08:36):
home and we lived in theupstairs of a barn because we
said, Let's try to buy a farmand it didn't work out.
And that's where we landed foranother year.
And we were able to diversifyand able to be a little bit easy
because it was just the two ofus at the time.
And so, you know, what is thenext thing for us to do?
But yeah, we're definitelyalways business mindset.
(08:58):
And so for us, I think we stillwould have for sure tried it.
At least, I mean, the worstthing is it doesn't work and you
go back to working a nine tofive.
SPEAKER_00 (09:09):
Wow.
You know, I hear you keepbringing up you and your husband
and the partnership that youhave together.
How important is that?
And because for some people,maybe working with, you know, a
relative, a family member, aclose friend, it can have like
its ups and downs.
But you guys seem to have donevery well with that.
SPEAKER_01 (09:27):
Yeah, thank you.
Yeah, I mean, well, we've beenwe've known each other since
high school.
And I think we were married forover 10 years before we started
the business.
And so we really knew kind ofwhat our mindset was going into
it.
Um, like I said, we just reallyare business minded.
(09:48):
And so, you He's where I'm likethe business behind it, trying
to, you know, make sure all theI's are done and the T's are
crossed.
He's like he's the dreamer bynature.
I mean, he constantly isthinking like, what's the next
thing?
What's the next avenue we cantake?
And I'm like, OK, hold on.
Let's make sure we're set up forthat before we do it.
(10:11):
OK, do we have the right
SPEAKER_02 (10:12):
account?
SPEAKER_01 (10:13):
Do we have the account for it?
can I make this work before wedive into the next project?
And so, I mean, we're stilldoing that today.
It's only, like I said, it'sonly been 2019, so it's not been
many years, but we're constantlythinking, okay, what's the next
avenue we can take with thebusiness?
We know how to be landlords.
(10:35):
We started flipping housesrecently.
Okay, why don't we look intoshort-term rentals?
How do we partner with otherpeople?
What's our long-term goal?
And I mean, it changes day toAnd I think that's the whole,
that's the beauty of thisbusiness is that you have the
ability to think outside the boxand come up with new ideas and
(11:00):
structure it differently and beable to be okay with the change.
SPEAKER_00 (11:04):
Yeah, I mean, that's one thing I like about the
approach that you guys have aswell.
You know, you're willing to trydifferent things and experiment
and go into other avenues of thebusiness, find other ways of
making money.
Yeah.
Whereas a lot of other people,they might find something that
works or that they're good atand they'll double down on that.
So where do you think that comesfrom?
The desire to try other avenues,like you said, residential,
(11:25):
being a landlord, flippinghouses.
Now you want to try short term.
Could you speak a little bitabout that?
SPEAKER_01 (11:30):
Right.
No, absolutely.
I think that wasn't ourintention really going into it.
We really thought we would staywith the rental business and
just keep adding properties toour portfolio.
And along the way, I mean,obviously, as we know, the
interest rates startedincreasing and we were kind of
going with that.
(11:51):
If you've heard of the BRRRRmethod, that's what we were
doing, buying and then rehabbingand refinancing and renting.
Well, Little hard to do therefinancing aspect of it when
your appraisals aren't comingback and the interest rates are
high.
And so we really had todiversify a little bit at that
(12:12):
time and think, okay, not ourfirst idea was to sell
properties, any of them, becausewe just love the idea of adding
new.
I mean, they're like our littlebabies.
Like at this point, I mean,maybe someday down the road, we
won't know them so personally.
But right now they are.
And so it was hard for us tokind of release some of them out
(12:32):
of our portfolio.
But in order to kind of remainflexible and stay with the
times, we had to.
And so we sold a property in 21.
We sold a property in 22.
And this year, all of ourproperties we've been selling.
I hate to say that we'relandlords and flippers sometimes
(12:56):
because they have such anegative connotation whenever I
go to like whenever I go to likebusiness meetings or chamber
events there I'm always likeyeah we're landlords and
flippers in town but we're notlike you're standard landlord
and flipper, you know, causeI'm, you
SPEAKER_00 (13:11):
have to qualify it.
SPEAKER_01 (13:13):
Yeah.
Like get to know us, know thatwe're really, we, we want to
stay local and reinvest into thecommunity that we grew up in.
It's really important to us.
And we are only covering twocounties at this time.
The kind that we live in and theCounty right next door.
And we haven't added on fromthat at this point, haven't
needed to maybe down the road,but we're just really proud of
(13:37):
being local and staying localand so being flexible and being
adaptable and being okay withchanging your model.
And so now I think to going backto changing the model, it's
okay, now that we know how tolandlord and we know how to
update and rehab homes.
why don't we look into thisshort-term rental business?
(13:58):
Why don't we consider any sortof additional partnerships with
other businesses locally?
And so that's what we're tryingto do to just kind of diversify
our portfolio even more.
SPEAKER_00 (14:09):
Amazing.
Let's see, you spoke a littlebit about needing to find
reliable tenants and how likethe tenants that you took on in
the beginning,
SPEAKER_01 (14:22):
Right.
SPEAKER_00 (14:22):
They were already in the property.
I think it was two of theproperties, right?
Already had tenants.
Yeah.
SPEAKER_01 (14:26):
There actually have a couple, but yes.
SPEAKER_00 (14:28):
Okay.
Okay.
So how do you go about findinggood tenants?
Because I remember when we spokeearlier before this podcast, you
know, our introduction call, youtold me that for the most part,
you've had very low turnover,right?
Right.
So how do you go about securingthat?
Because I know a lot of tenants,they'll deal with a difficult or
a lot of landlords will dealwith a difficult tenant.
UNKNOWN (14:49):
Right.
SPEAKER_00 (14:49):
They'll come in, it'll be hard to get them out.
Maybe they're not paying rent,not taking care of the property.
SPEAKER_01 (14:54):
So what steps do you have in place to make sure that
that doesn't happen?
So, so a few of our properties,we still have the original
tenants that we bought theproperty with, which is, which
is fantastic.
And we appreciate it.
With the turnover that we've hador the new properties we've
added, just really beingupfront.
A lot of, I think locally, Imean, there's such a shortage of
(15:19):
rentals, I think around herelocally so that when you find a
good one at a decent price I Imean, we get multiple
applications.
There's actually times when Idon't even actually have to list
them because I already havesomeone who knows somebody
that's looking and they qualify,which is fabulous.
And we love that because itgives us the opportunity to put
someone in that knows somebody.
And that's already one line ofkind of, yeah, like screening
(15:44):
them at that point.
But we...
We're really upfront when welist, let's say we do an open
house or whatever for a newproperty that's coming
available.
We're upfront that this is ourfamily business and that we're
local to the area.
And if it's not me, I'm the onethat's gonna answer the phone
(16:05):
and take your call if there's anissue.
And it's my husband that's gonnashow up and fix whatever the
issue is.
And if he can't fix it, he'sreally a jack of all trades, so
he usually can.
But if he can't, then, you know,he will call somebody to have
come in and fix it.
And so I think our tenantsreally appreciate that, that
(16:25):
we're very upfront with them andthat it's not a, you know, an
out of state investor or someonethat can't, or a property
management company.
You know, we property manage ourown properties.
We take, you know, and we justtake a lot of pride in being,
you know, responsive and havinga nice quality home.
I mean, really at the end of theday, you know, just having
(16:47):
something that they can raisetheir family in, and then they
want to stay.
And then the other thing is,when we keep when we start their
tenancy with us, we always askfor a one year lease upfront.
But we tell them upfront, if aslong as you guys are paying rent
for a year, and all's goingwell, and the house is looking
good, and, and you're happy witheverything, you know, we'll put
(17:10):
you on a month to month after ayear, some of them want to do
that.
And some of them want to, youknow, secure another full year.
SPEAKER_00 (17:20):
Going off that, I'd like to know what are the
biggest red flags that you wouldlook for that would make you
turn away a potential tenant?
SPEAKER_01 (17:30):
One of the things we adopted, and I will have to plug
DoorLoop here.
One of the things we adopted isthat we started all of our
applications when we addedDoorLoop into our process.
We really wanted to startsystematizing how we were
receiving rent, how were webilling out utilities if we
(17:54):
were, how we were acceptingapplications and most recently
using the eSign platform, whichhas been really great for lease
renewals.
But we really wanted a placewhere the tenants could apply,
have their security deposit putin pay their rent and it was
like a one-stop shop and what wefind too when i am showing a new
(18:19):
property um if i let one of ourten uh prospective tenant know
that the application is onlineand it's there's a fee to
process it because it runs thebackground check and credit
report if they text you or emailyou and ask for the application
and then fill it out in a timelyfashion.
That's your first screening thatyou know that you have like a
(18:42):
quality tenant to review theirapplication.
And then we're upfront, reviewour qualifications on the front
end.
And then we always take thefirst qualified applicant.
I mean, we tell them upfront,that that's what we're going to
do and it's it's worked out justfine for us but really it's that
application process if you knowthat they are if they ask for
(19:07):
the application which is andthis is through door loop and
it's online and they fill it outin a timely fashion you know
that they're someone um that youwant to consider even further
SPEAKER_00 (19:18):
yeah i think little Little indicators like that are
so powerful.
Like, I remember my brother wasworking in a company where he
had to hire people.
And in the application, he put alittle math problem.
And it was, like, somethingsuper simple anyone could solve.
And, like, a lot of peopleignored it, wouldn't even read
it.
And that's how we knew thosepeople weren't really paying
(19:40):
attention.
They're not detail-oriented.
And they didn't necessarilyreally want to work in the
company.
So that was another, like,qualifier that...
You know, it's a littleunconventional, but it works.
SPEAKER_01 (19:49):
Yeah, no, I totally agree.
And even furthermore, when we'reshowing the properties, I'm the
one that's showing them.
So I'm meeting them.
So really, I mean, theapplication obviously is great
because it gets the informationthat you need.
But really, all that informationis from me having a conversation
with the prospective tenantwhile I'm showing it.
And you learn a lot about them.
(20:10):
And so that's a whole otherscreening process.
It's just by getting to knowthem.
You know, are they...
Are they showing up on time totheir appointments?
Are they talking about theproperty?
Are they looking at theproperty?
Are they asking questions?
Those are all screening again toget a qualified tenant.
SPEAKER_00 (20:35):
Amazing.
And then another question Iwanted to ask, you don't have to
share this if you don't want to,but have you had a very
difficult tenant or a situationthat was really hard to solve?
Maybe you had to evict someone?
What's your horror story with atenant?
SPEAKER_01 (20:54):
Okay, so we have had one eviction, in all honesty.
And we gave this person everyopportunity in the world to kind
of make right on the rent.
And I think that goes again tothe qualifying the applicant at
(21:17):
the beginning, because at thispoint right now, we have, I
don't know, just under 20tenants that everyone is
staying.
Everyone's happy to stay,continuing to stay.
And so we really don't havehorror stories.
The one eviction was...
Again, we gave him everyopportunity and it was kind of
(21:39):
like the last straw and itworked out fine.
And the property he left in agreat situation, which is
exactly what you want.
It's not, it doesn't happen allthe time.
I mean, certainly with aneviction, you run the risk of,
you know, what's the propertygoing to look like when they
leave.
SPEAKER_02 (21:54):
Yeah.
SPEAKER_01 (21:55):
We've had some properties where tenants have
moved out and we've had to likekind of deep clean.
I guess it doesn't happen to us,but the stories of like the
toilet bursting in the middle ofthe night.
Now, first of all, who's toiletbursts, but like that kind of
stuff that doesn't happen.
Like it didn't, it has nothappened for us.
We've had where a toilet,overflowed and we've gone in,
(22:17):
but it was like at 9 PM and wehandled it.
And because we're local, it'sright around, all of our
properties are within like 30minutes of us.
So we're the ones that are goingto respond and take a look at it
and then see what's next to bedone.
SPEAKER_00 (22:31):
Interesting.
Yeah.
I mean, we did host a podcastepisode here where we talked
about some horror stories andsome of these are almost too
ridiculous to believe.
SPEAKER_01 (22:41):
Yeah.
We lived in two of ourproperties in duplexes near our
tenants.
So We like them.
I mean, if you can live next toa tenant, I mean, then that
means that you actuallyappreciate them and like them.
So I think we don't live next toa tenant now.
We do live in one of ourrentals.
(23:02):
So we aren't in the forever homeyet.
But again, we're still growingand we're still new to the
business.
And our accountant just saidrecently that he thinks that we
might be out of that startupphase, which is really exciting
for us.
Congratulations.
Which means I think we're kindof going over that hump a little
bit about what's next.
(23:24):
But, you know, we're stilllearning and growing, and I
think you need to be, like Isaid from the beginning, you've
got to be adaptable, and you'vegot to find what's the next
avenue to take.
SPEAKER_00 (23:34):
Yeah.
I mean, over 20 doors withinjust a couple years, it's really
impressive.
And even just the timing of whenyou guys started, you know, like
in 2019– Pandemic is just aroundthe corner.
What was that like for you guys?
SPEAKER_01 (23:48):
Yeah, it wasn't actually bad.
But what happened is I was stillworking full time at the
beginning of the pandemic.
And And at the end of, so thatwas really like 2020, we were
living, we were still, we werestarting to scale.
We kept our tenants.
There wasn't a single tenantthat paid late because of it.
(24:10):
We just kept, we were up frontwith them and said, let us know
if something goes on and we'llstart, we'll try to figure it
out together.
And everyone just appreciatedthat from the beginning.
And then I think we actuallyenjoyed it.
We actually enjoyed the factthat we like could go work on
these properties.
We could get out of the houseand we were going to work at
(24:32):
another house and we weren'tlike exposing ourselves to
anyone or anything, but we wereworking on properties, um, in
the middle of it and, andgrowing our portfolio.
Um, and, and so it worked out,it worked out fine for us.
Um, but at the end of 21, Idecided to leave my W2 job full
time.
So now we're both full time inthe business.
(24:54):
I'm not sure if we mentionedthat at this point, but.
We're both full-time in thebusiness, have been for almost
two years now.
And, you know, again, it's noteasy, especially not easy when
you go for like a financing oryou have to be creative because
not many banks like the non-W2person come into them.
(25:18):
And so we're, you know, and evencommercial lenders, you know,
we're not, we're not old enoughor seasoned enough to be able to
dabble into some of thoseopportunities at this point.
So we're just kind of learningas we go and hence why we're
(25:39):
changing our model constantly.
SPEAKER_00 (25:42):
So how did you go about receiving your lending
opportunities with thechallenges that you face?
SPEAKER_01 (25:47):
Yeah, when we first started, of course, I was
working full time.
So we were able to like ourfirst few properties, they were
just like like residentialinvestment properties, you know,
different, different, little bithigher interest rates or down
payments, but they were juststandard investment loans.
(26:09):
And then once we both kind ofleft the world, we just kind of,
learned or met other peoplewithin the business and got
hooked up with differentcommercial lenders that take
really the the value of theproperty into consideration.
Sure, you're guaranteeing theproperty at the end of the day,
your businesses.
But what they're doing isthey're looking at the just the
(26:32):
after repair value and theinitial investments as the
collateral for the loan.
But one thing that kind of hitus and I mentioned that when we
decided to sell One of ourproperties last summer was when
we really didn't want to wasbecause we weren't getting our
appraisals for those refinances.
And so so after much discussionand even discussion of like
(26:57):
who's going back to work fulltime and, you know, this the
scariness of, oh, maybe thiswasn't a good idea for both of
us to quit at this point.
I mean, we had some longdiscussions about that.
We decided, okay, who do we knowthat does, who does creative
financing and private lending?
(27:20):
And so we started reaching outto different private lenders
that we knew locally and kind ofasked what their models are and
tried to adopt a structure thatwould make sense for us.
And we were able to secure oneof those almost a year ago.
And it's been great because nowwe can really position ourselves
(27:41):
even more marketable when goingto make offers on properties
because we have the cash behindit to buy the property.
So not at all.
how we thought we would do itfrom the beginning.
And we had to learn that.
We had no idea how that processworked.
I mean, and so like, it wasscary.
It was scary up front.
Like, okay, how do you go to atitle company and say you have a
(28:03):
private lender backing yourloan?
Like, where's my appraisal?
Where's my, you know?
So like, it was just a verydifferent process for us to do,
but it's worked out.
And after that property, we hadto sell thinking who's going
back to work.
We were able to buy three moreproperties right after that and
add them to our portfolio.
(28:27):
One day you're thinking...
who's going back to work fulltime and how are we going to
make the credit card payment andbuy groceries for the house.
And then next day you're going,should we, we can probably add
another property, right?
We can probably buy another one.
So, I
SPEAKER_00 (28:43):
mean, cause it's a lot less predictable than, than
just having a stable income.
SPEAKER_01 (28:47):
Yeah.
SPEAKER_00 (28:48):
Oh, down one day.
Like you have no idea.
SPEAKER_01 (28:50):
Yeah.
Oh, for sure.
And then even like things like,you know, even when you're going
to like file your taxes, likeI'm, I have no idea how that
works.
And with like, with justbusiness income, I mean, gosh,
how do we, how do you positionyour, your business income to,
to a lender to say, oh yeah, welike, you know, there's
(29:11):
deductions and stuff and we put,we reinvest back into the
business and oh yeah, it lookslike we make nothing, you know,
like, and, I'm still learning.
I still don't even know how toread those.
And so we've actually had tohave a few different accountants
and some worked and some didn't.
And now we've had one for almosttwo years now.
And so It's really just tryingto find what's the avenue that
(29:33):
makes the most sense.
And again, we're happy to learn.
We're happy to try somethingdifferent.
We're excited to try somethingdifferent because you never know
what the next opportunity isgoing to come up if you just
kind of put yourself out there alittle bit more.
SPEAKER_00 (29:52):
Right.
And I think that humility is soimportant.
You know, be willing to learn,be willing to say that you don't
know how something works.
But trying it anyways.
Also, I really like how youshared the difficult time that
you guys went through whereyou're trying to decide if
someone has to go back to work.
I think that vulnerability isimportant, especially to show
people that if they'restruggling, so are other people.
(30:14):
It's not as easy as it looksfrom the outside.
You hear about all thesuccesses, but not necessarily
the parts where things couldhave gone wrong.
Would you say that was probablythe hardest time that you guys
faced in starting this business?
SPEAKER_01 (30:27):
Yeah.
Oh, absolutely.
I mean, there's been differentroadblocks along the way and
things that have come up.
But for us, I mean, that was onethat we said, wait a second.
Maybe just keeping the adproperties in our portfolio
isn't...
isn't the way we need to go.
Okay.
(30:47):
So now what do we do?
Do we just break even on a houseand just get our initial
investment out of it and then,and just break even, like that's
what we have to do.
And I remember sitting on thefloor of the, of our office a
year ago last summer.
And what was that in 22 andgoing, okay, so if I have to go
(31:11):
back to work, How is that goingto work?
And let me remind you, or Ididn't even say this at the time
I was pregnant also with oursecond kid.
So, um, I was like, okay, so ifI go back to work even
part-time, how am I going to beable to go back out on maternity
leave?
Like a couple months later.
SPEAKER_00 (31:32):
So, um,
SPEAKER_01 (31:33):
And so, I
SPEAKER_00 (31:34):
mean, it
SPEAKER_01 (31:36):
was a whole nother challenge.
But at the same time, it mademore, it would have made more
sense for me to go back becauseif it's not him working on the
property every single day, andhe is actually doing the manual
labor on these properties, likejust, yeah.
He's insane.
I mean, the things that he cando, I'm not going to do that.
(31:58):
I don't know the differentMakita tools that he has.
I don't know what those thingsare.
I mean, he tells me what theyare all the time, but I don't
use them.
So it would have to have been methat went back to work.
And so I think just being ableto be vulnerable and go, okay,
so if we just like extendourselves a little bit more on
our credit for this month, whichis a very tough thing to say,
(32:22):
And then we start talking tosome other people in the area
that know about creativefinancing options.
Let's see if we can think of anew way to structure these.
Because obviously justrefinancing isn't going to be
the way that we're going to doit.
And let's just take our licksand like sell the house.
(32:43):
And we did.
And it worked out.
And it worked out just fine.
And then we said, oh, wait,selling houses isn't that bad.
Let's add this opportunity.
Let's add this into the mix ofthings that we do.
So let's not just be landlords.
Let's sell a few.
So yeah.
SPEAKER_00 (33:04):
Amazing.
Yeah, I mean, and the successthat you guys have, I feel like
it keeps coming back to the,that you guys are part of the
community.
You're upfront, you're honest.
You try to build trust.
You know, you get to know thetenants on a personal level,
which I think is amazing.
know for some landlords they maybe apprehensive about doing that
(33:24):
like i've heard cases where andi'm sure it's pretty common
where the landlord uh they mightpretend that they're not really
the owner whenever they go visitthe property they pretend that
there's like you know they wantto add like a little bit of a
buffer in place um but you guyshaven't done that at all and it
seems like it's worked out wellfor you
SPEAKER_01 (33:42):
yeah we haven't and and And I hear that, so I go to
a lot of like real estatemeetings or chamber events and
certainly know other peoplewithin the field now.
We've grown a good relationshipand network with other
investors.
And I mean, everyone does it alittle bit differently.
(34:03):
And I think we have opportunityto learn from each other.
I really think that we should beworking together as opposed to
being competition because we allneed to learn what this business
is, especially the people thatare trying to invest into the,
you know, really invest into thecommunity.
But I think it's just...
we've learned and I've hearddon't, you know, don't get so
(34:26):
close to your tenants.
And I wouldn't say like, we'renot best friends.
Like we're not hanging out withthem on the weekends or anything
like that.
SPEAKER_00 (34:31):
There's some boundaries in place.
SPEAKER_01 (34:33):
There is some boundaries.
There are definitely
SPEAKER_00 (34:35):
boundaries,
SPEAKER_01 (34:36):
but like, you know, some of our tenants, like, no,
we have children and we'll askhow they are.
Some of them don't, you know, itjust kind of depends, um, you
know, on, on the situation and,and, uh, but I think just the
fact that they want Whenever Isay show a new property and I
(34:56):
say we are the owners.
Yes, that might create adifferent level of complexity
of, oh, OK, so you own theproperty and you're the
landlord.
But I think I think really it'sbeen the other way where they
go, oh, thank God.
I mean, like they justappreciate the fact that they
have a face to the name.
(35:18):
Though, you know, our businessis Holstein Homes and people
call us Mr.
and Mrs.
Holstein all the time.
That's not our last name.
And so we have a buffer therebecause our last name isn't in
our business
SPEAKER_00 (35:33):
name.
So that was intentional.
That was
SPEAKER_01 (35:36):
intentional.
That's intentional.
SPEAKER_00 (35:40):
Oh, wow.
I love it.
Okay.
So, you know, I think we'velearned a lot here, but I wanna
ask you if there's any advicethat you'd give someone who's
maybe just starting out, maybethey've got a few rental
properties, they've beenstruggling to grow, and that
could be for a lot of reasons,right?
It's hard to find the time tolook for opportunities or
(36:03):
whatever the struggle is.
What advice would you give them?
You know, you've grown prettyfast in a very short amount of
time.
SPEAKER_01 (36:09):
So, I mean, we want to learn from you as well.
So what do you know?
So teach me if you're new to thegame and you have some ideas I
want to know.
So feel free to reach out to me.
But really, I think.
trying to systematize yourprocess the best you can makes
the most sense.
(36:29):
So when we started going back toour lease packet, have a
standard lease.
Obviously, it changes a littlebit based on the property, but
know who pays the utilities foreach of them, have it set up the
right way, and know that packetreally, really well because
(36:49):
they're going to hold you tothat should something go awry.
So know that very well.
Systematize, if you can, the waythat you collect rent.
We've been very fortunateutilizing door loop for us.
It's made sense.
Our tenants all appreciate itjust because it's just like a
one place that they can theyknow they can either set it up
(37:12):
automatically.
They can go in per month andthey feel and they're very
comfortable.
I mean, a lot of people paythings through online platforms
at this point.
So it's not like it's weird orscary for them.
But systematizing, however youchoose to do that, whether it's
Venmo, whether it's checks,whether it's a software, have
(37:32):
some sort of standard process ofhow you do it and use that
throughout all of yourproperties.
I get some sort of bookkeepingfor sure.
As you add additionalproperties, it gets complex.
So I think adding some sort ofstandard bookkeeping and a good
accountant that understands whatyou're trying to do, an
(37:54):
accountant that actuallyunderstands real estate is
really important as well.
And then learn to be adaptableand be comfortable with the
uncomfortable because you willbe very uncomfortable,
especially when you get a callthat says, hey, the, you know,
the washer's not working or canyou replace it?
(38:17):
Or, you know, I mean, The horrorstories don't usually happen all
the time.
I mean, sure there are, but Ithink they're
SPEAKER_00 (38:25):
more minimal.
There's no exploding toiletsevery week.
SPEAKER_01 (38:28):
Yeah, they're more minimal than you think, but be
comfortable with trying newideas and new things and meeting
people in the business.
It's important to gain thosecontacts and those relationships
because they're your teachers.
Tenants that are historictenants know a ton about the
(38:48):
business, probably more than youwill ever know because they've
just been tenants for a reallylong time.
So if you can learn from othersthat have done it in the past
and take their advice, you'll goa long way with it.
It's not the easiest business.
(39:08):
Sure, you can add real estate toyour portfolio of investments.
Absolutely.
It makes sense.
Real estate is a fabulousinvestment tool.
But if you're going to go fullbore and do it like we have,
Just learn to be adaptable andbe comfortable with the
uncomfortable because there'sgoing to be times you're sitting
on your office floor going,okay, who's going back to work
(39:32):
full time?
And then it turns out and itworks just fine.
So
SPEAKER_00 (39:36):
yeah, nothing to worry about.
Amazing.
I love how you summed everythingup there.
You mentioned you were pregnantat the time during the, you
know, whatever you had to makethis huge decision.
Was it a boy or a girl?
SPEAKER_01 (39:48):
Oh, okay.
So of course I love talkingabout my children.
It was a boy.
So we have two, we have twochildren.
So we have our daughter and wehave a son.
So two and almost one.
So they're very close in age.
But I mean, another thing, wegrew a family during starting a
business.
And so it can be done.
(40:09):
It can be done.
But
SPEAKER_00 (40:12):
they love-
SPEAKER_01 (40:18):
We love bringing our children around our business,
you know, and certainly they'reyoung right now and they don't
understand it, of course, atthis point.
But the fact that we can beflexible with our time, be able
to wake them up in the morningand put them in bed at night,
that on the weekends we arevisiting properties that we're
(40:39):
visiting properties that we'reworking on or ones that are in
transition.
And they know them.
I mean, our daughter mentionslike knows the names of the
properties.
properties that we're going to.
So we just build that into ourweekend and it's super fun.
SPEAKER_00 (40:54):
She'll be helping out with the accounting in no
time.
SPEAKER_01 (40:56):
Oh, she's
SPEAKER_00 (40:57):
going to be marketing.
Yeah.
SPEAKER_01 (40:59):
She'll be marketing.
I'm not sure.
He'll probably be the one likeswinging the hammer for sure.
And using all those tools that Idon't know what they are.
SPEAKER_00 (41:08):
Yeah.
Yeah, I think before we wrap uphere, do you have any final
thoughts or anything else you'dlike to share?
SPEAKER_01 (41:12):
Feel free to reach out.
We're on Facebook and Instagram.
This is a great opportunity tobe collaborative versus being
competitive.
SPEAKER_00 (41:19):
Amazing.
Well, I really appreciate youcoming on here and sharing your
story, giving us your valuabletime and telling us all the
advice that you have.
You know, I'm sure you're goingto keep learning and growing
along the way.
And now that you're out of thatstartup phase, you know, who
knows what can happen?
The sky's the limit.
SPEAKER_01 (41:35):
You never know.
SPEAKER_00 (41:37):
All right.
Well, thank you, everyone, forwatching.
Tune in next time for anotherepisode of Loop It In.
We'll see you soon.
Thanks for listening all the wayto the end.
Don't forget to give us a goodrating on whatever platform
you're tuning in from.
And we'll be back soon withanother new episode.
We hope to see you there.
And until next time, this hasbeen Poop It In.
What's up, everybody, and welcome back to
another episode of Loop It In,the Door Loop podcast, where we
pick the brains of experts inproperty management, real
estate, and investing.
Tech, we cover it.
Marketing, that too.
So whether you want actionabletips or the insider scoop from
top performers in theirindustries, this is one show you
(00:23):
won't want to miss.
Be sure to subscribe so youwon't miss out on any future
episode.
Hi, everyone, and welcome backto another episode of the Loop
It In podcast.
Today, I'm joined with BeckyEmmons.
Now, she and her husband startedin real estate in 2019, and they
have a successful business rightnow, highly diversified, and I
(00:46):
can't wait to learn more fromher today.
So without further ado, welcome,Becky.
SPEAKER_01 (00:49):
Welcome.
Yes, very exciting.
Thank you for having me.
I'm looking forward to chattingtoday.
SPEAKER_00 (00:55):
Awesome.
So I know I gave a little bit ofan introduction there, but I
think that doesn't do it justiceat all.
We'd love to know more about howhow you got started.
And what interests you in realestate in the first place?
SPEAKER_01 (01:07):
Thank you.
We like to say we think we'rebig, but we're really not.
We're pretty small potatoes, butwe're learning and we're growing
each day.
So my husband and I are from thesame town in Chardon, born and
raised in the same area inChardon, Ohio.
And we went to high schooltogether and known each other
(01:29):
for a long time.
He is a dairy farmer by trade.
So that's his back story.
So a little different than realestate, I would say.
He has a degree in dairy scienceand I am in was in health care
business with a local hospitalhere in town.
And we we're just really justkind of trying to diversify and
(01:53):
see what's, what we could do.
And really in the, in theagricultural field, he was
getting a bit burned out.
I just got my, um, finished myMBA, um, in 2019, actually,
right before we started thebusiness, I had my, um, I thank
you.
I finished my MBA and he wasgetting a little burnt out and
he said, what if we, we startedlistening to a couple of
(02:14):
different podcasts, actually,um, things for financial
independence, um, Bigger Pocketsis a big one.
A lot of people utilize in thespace and just trying to figure
out what our next step was.
We were married, no children atthe time.
So we were able to be a littlebit flexible.
(02:34):
We sold our forever home andwe're actually living in the
upstairs of a barn at the time.
And it was a legit apartment.
And we just decided, let's jumpin and buy our first duplex.
So we bought our first duplex in2019 in a local town, one county
(02:55):
over.
And we house hacked, if you'veheard that term, is you live
next to your tenant and kind ofstarted the business.
He left his job in 2019 to startit.
And I was still working fulltime at that time.
And we just kind of jumped inand started, really just started
(03:17):
looking to see what kind ofopportunity were to come up.
2019 was a little bit easier.
We could still buy someproperties on the MLS.
And so that summer we scaled andbought three small condos
locally after that.
So 2019, we bought fourproperties that we kept as
rentals and a little bit of workon them, not a ton, and all the
(03:41):
time kind of living in a duplexnext to our tenants.
So that's how we started.
And we've tried to scale sincethen.
SPEAKER_00 (03:48):
That's a pretty impressive scale.
story.
I mean, seeing as how you guysdidn't necessarily have any real
estate background, did you haveany family that were in the
business or any friends thatcould help you out along the
way?
Because that's pretty scary toget started out in.
SPEAKER_01 (04:01):
Absolutely.
I mean, to this day, there's nota person that we don't
encounter, friend, family,acquaintance that comes up to us
and says that they haven'tconsidered or wanted to start,
at least have one or two rentalproperties in their portfolio,
in their investment portfolio.
And everyone Everyone alwayssays it's a great business to
get started and it's not theeasiest.
(04:24):
It's not that it's difficult byany means.
We do have great tenants andwe're really happy with the ones
that we do have.
it's you have to be able to beflexible and you have to be able
to work every single day andconstantly talk about the
business and reinvest into thebusiness.
And so that's what we've beentrying to do.
(04:46):
And so, I mean, we knew onefamily friend who was a previous
landlord years and years andyears ago, and we sat down with
them early on.
And they're more of like anacquaintance than they are that
close.
And
SPEAKER_00 (05:02):
this was before you got started, before you got the
first property.
SPEAKER_01 (05:05):
No, no, not at all.
Not at all.
We actually acquired.
No.
Yeah.
We actually acquired our tenant.
That was the first property weever had.
They were there before us.
So they lived there longer thanwe did.
And they just stayed and we justadopted their, their lease and,
and, and we just kept them onand they're still there.
(05:27):
And great, great family.
But yeah, so we met, you know,we knew a couple that had done
it years and years ago and theyhad a lease packet and they
walked through us what kind ofinformation they've learned
along the way.
And we kind of adapted andlooked at what was in their
(05:48):
lease packet and what makessense to today.
I mean, of course, what they didback then was a lot of paper and
a lot of cash and checks.
And so kind of bringing a littlebit to today's times, we've
adopted a little bit more.
SPEAKER_00 (06:05):
Could you tell me a little bit more about that, how
you adapted to modernize thebusiness a little bit?
SPEAKER_01 (06:10):
Yeah,
SPEAKER_00 (06:10):
yeah.
Why was that necessary?
Why not just keep doing thingsthe way that they were?
SPEAKER_01 (06:14):
The first few properties that we bought, there
were, I would say, two of thefour properties.
We had tenants that were alreadythere, and we bought the
properties with them.
And one of them, they were doingchecks.
Actually, both of them weresending checks.
And the other was, and then weasked them, can you start doing
(06:35):
that Just to like do somethingdifferent a little bit to make
it a little bit easier for them.
And one of them was just like,check seems to be simple, but
the problem is, is that they hadto mail it out in time before
the first of the month.
And then if the post office wasdelayed, then that was an issue
or we'd have to go pick it up.
(06:56):
Or, I mean, there was justalways something that came up,
not that they weren't paying,but it was just, it was a
complexity of trying to receivethe cash.
and how to set that up.
And even when we first started,I mean, I think I was accepting
Venmo into like my personalVenmo.
Cause like, I didn't know,should we create a separate
business one, you know?
(07:18):
And so we're just receiving thisincome, not really knowing how
the whole process.
And so we, you know, try tofigure out, okay, what is the
next thing do we do?
We create a business Venmo.
Okay, we create a tax ID.
We have to create, I mean, wehave to get registered with the
state.
I mean, there was, we did thiskind of all after the fact
because we didn't really knowhow big we were going to scale
at that time or what our nextstep was going to be.
SPEAKER_00 (07:40):
Yeah, I do wonder, like, if you knew how much was
going to go into it and howcomplicated it was going to be,
would you have still gone forit?
Or do you think that not knowingenough about it would, like,
that kind of helped?
SPEAKER_01 (07:52):
Oh yeah.
Well, we're entrepreneurs bylike nature.
Like we've always been like, howcan we, like when my husband was
a farmer, we bought like, webrought farm implements like
tractors and sprayers and stuffto like, if you know that world
to like, okay, so if we buy thisand then the farm paid us for
(08:13):
this, could we like partner withthem in the future?
You know?
And then when I got my MBA, thewhole preface was, what is our
next step with that?
Can we create another businessventure that we can do alongside
our W-2 incomes?
And so we're always just tryingto think of a thing.
When I said we lived in a barn,we sold what was our forever
(08:36):
home and we lived in theupstairs of a barn because we
said, Let's try to buy a farmand it didn't work out.
And that's where we landed foranother year.
And we were able to diversifyand able to be a little bit easy
because it was just the two ofus at the time.
And so, you know, what is thenext thing for us to do?
But yeah, we're definitelyalways business mindset.
(08:58):
And so for us, I think we stillwould have for sure tried it.
At least, I mean, the worstthing is it doesn't work and you
go back to working a nine tofive.
SPEAKER_00 (09:09):
Wow.
You know, I hear you keepbringing up you and your husband
and the partnership that youhave together.
How important is that?
And because for some people,maybe working with, you know, a
relative, a family member, aclose friend, it can have like
its ups and downs.
But you guys seem to have donevery well with that.
SPEAKER_01 (09:27):
Yeah, thank you.
Yeah, I mean, well, we've beenwe've known each other since
high school.
And I think we were married forover 10 years before we started
the business.
And so we really knew kind ofwhat our mindset was going into
it.
Um, like I said, we just reallyare business minded.
(09:48):
And so, you He's where I'm likethe business behind it, trying
to, you know, make sure all theI's are done and the T's are
crossed.
He's like he's the dreamer bynature.
I mean, he constantly isthinking like, what's the next
thing?
What's the next avenue we cantake?
And I'm like, OK, hold on.
Let's make sure we're set up forthat before we do it.
(10:11):
OK, do we have the right
SPEAKER_02 (10:12):
account?
SPEAKER_01 (10:13):
Do we have the account for it?
can I make this work before wedive into the next project?
And so, I mean, we're stilldoing that today.
It's only, like I said, it'sonly been 2019, so it's not been
many years, but we're constantlythinking, okay, what's the next
avenue we can take with thebusiness?
We know how to be landlords.
(10:35):
We started flipping housesrecently.
Okay, why don't we look intoshort-term rentals?
How do we partner with otherpeople?
What's our long-term goal?
And I mean, it changes day toAnd I think that's the whole,
that's the beauty of thisbusiness is that you have the
ability to think outside the boxand come up with new ideas and
(11:00):
structure it differently and beable to be okay with the change.
SPEAKER_00 (11:04):
Yeah, I mean, that's one thing I like about the
approach that you guys have aswell.
You know, you're willing to trydifferent things and experiment
and go into other avenues of thebusiness, find other ways of
making money.
Yeah.
Whereas a lot of other people,they might find something that
works or that they're good atand they'll double down on that.
So where do you think that comesfrom?
The desire to try other avenues,like you said, residential,
(11:25):
being a landlord, flippinghouses.
Now you want to try short term.
Could you speak a little bitabout that?
SPEAKER_01 (11:30):
Right.
No, absolutely.
I think that wasn't ourintention really going into it.
We really thought we would staywith the rental business and
just keep adding properties toour portfolio.
And along the way, I mean,obviously, as we know, the
interest rates startedincreasing and we were kind of
going with that.
(11:51):
If you've heard of the BRRRRmethod, that's what we were
doing, buying and then rehabbingand refinancing and renting.
Well, Little hard to do therefinancing aspect of it when
your appraisals aren't comingback and the interest rates are
high.
And so we really had todiversify a little bit at that
(12:12):
time and think, okay, not ourfirst idea was to sell
properties, any of them, becausewe just love the idea of adding
new.
I mean, they're like our littlebabies.
Like at this point, I mean,maybe someday down the road, we
won't know them so personally.
But right now they are.
And so it was hard for us tokind of release some of them out
(12:32):
of our portfolio.
But in order to kind of remainflexible and stay with the
times, we had to.
And so we sold a property in 21.
We sold a property in 22.
And this year, all of ourproperties we've been selling.
I hate to say that we'relandlords and flippers sometimes
(12:56):
because they have such anegative connotation whenever I
go to like whenever I go to likebusiness meetings or chamber
events there I'm always likeyeah we're landlords and
flippers in town but we're notlike you're standard landlord
and flipper, you know, causeI'm, you
SPEAKER_00 (13:11):
have to qualify it.
SPEAKER_01 (13:13):
Yeah.
Like get to know us, know thatwe're really, we, we want to
stay local and reinvest into thecommunity that we grew up in.
It's really important to us.
And we are only covering twocounties at this time.
The kind that we live in and theCounty right next door.
And we haven't added on fromthat at this point, haven't
needed to maybe down the road,but we're just really proud of
(13:37):
being local and staying localand so being flexible and being
adaptable and being okay withchanging your model.
And so now I think to going backto changing the model, it's
okay, now that we know how tolandlord and we know how to
update and rehab homes.
why don't we look into thisshort-term rental business?
(13:58):
Why don't we consider any sortof additional partnerships with
other businesses locally?
And so that's what we're tryingto do to just kind of diversify
our portfolio even more.
SPEAKER_00 (14:09):
Amazing.
Let's see, you spoke a littlebit about needing to find
reliable tenants and how likethe tenants that you took on in
the beginning,
SPEAKER_01 (14:22):
Right.
SPEAKER_00 (14:22):
They were already in the property.
I think it was two of theproperties, right?
Already had tenants.
Yeah.
SPEAKER_01 (14:26):
There actually have a couple, but yes.
SPEAKER_00 (14:28):
Okay.
Okay.
So how do you go about findinggood tenants?
Because I remember when we spokeearlier before this podcast, you
know, our introduction call, youtold me that for the most part,
you've had very low turnover,right?
Right.
So how do you go about securingthat?
Because I know a lot of tenants,they'll deal with a difficult or
a lot of landlords will dealwith a difficult tenant.
UNKNOWN (14:49):
Right.
SPEAKER_00 (14:49):
They'll come in, it'll be hard to get them out.
Maybe they're not paying rent,not taking care of the property.
SPEAKER_01 (14:54):
So what steps do you have in place to make sure that
that doesn't happen?
So, so a few of our properties,we still have the original
tenants that we bought theproperty with, which is, which
is fantastic.
And we appreciate it.
With the turnover that we've hador the new properties we've
added, just really beingupfront.
A lot of, I think locally, Imean, there's such a shortage of
(15:19):
rentals, I think around herelocally so that when you find a
good one at a decent price I Imean, we get multiple
applications.
There's actually times when Idon't even actually have to list
them because I already havesomeone who knows somebody
that's looking and they qualify,which is fabulous.
And we love that because itgives us the opportunity to put
someone in that knows somebody.
And that's already one line ofkind of, yeah, like screening
(15:44):
them at that point.
But we...
We're really upfront when welist, let's say we do an open
house or whatever for a newproperty that's coming
available.
We're upfront that this is ourfamily business and that we're
local to the area.
And if it's not me, I'm the onethat's gonna answer the phone
(16:05):
and take your call if there's anissue.
And it's my husband that's gonnashow up and fix whatever the
issue is.
And if he can't fix it, he'sreally a jack of all trades, so
he usually can.
But if he can't, then, you know,he will call somebody to have
come in and fix it.
And so I think our tenantsreally appreciate that, that
(16:25):
we're very upfront with them andthat it's not a, you know, an
out of state investor or someonethat can't, or a property
management company.
You know, we property manage ourown properties.
We take, you know, and we justtake a lot of pride in being,
you know, responsive and havinga nice quality home.
I mean, really at the end of theday, you know, just having
(16:47):
something that they can raisetheir family in, and then they
want to stay.
And then the other thing is,when we keep when we start their
tenancy with us, we always askfor a one year lease upfront.
But we tell them upfront, if aslong as you guys are paying rent
for a year, and all's goingwell, and the house is looking
good, and, and you're happy witheverything, you know, we'll put
(17:10):
you on a month to month after ayear, some of them want to do
that.
And some of them want to, youknow, secure another full year.
SPEAKER_00 (17:20):
Going off that, I'd like to know what are the
biggest red flags that you wouldlook for that would make you
turn away a potential tenant?
SPEAKER_01 (17:30):
One of the things we adopted, and I will have to plug
DoorLoop here.
One of the things we adopted isthat we started all of our
applications when we addedDoorLoop into our process.
We really wanted to startsystematizing how we were
receiving rent, how were webilling out utilities if we
(17:54):
were, how we were acceptingapplications and most recently
using the eSign platform, whichhas been really great for lease
renewals.
But we really wanted a placewhere the tenants could apply,
have their security deposit putin pay their rent and it was
like a one-stop shop and what wefind too when i am showing a new
(18:19):
property um if i let one of ourten uh prospective tenant know
that the application is onlineand it's there's a fee to
process it because it runs thebackground check and credit
report if they text you or emailyou and ask for the application
and then fill it out in a timelyfashion.
That's your first screening thatyou know that you have like a
(18:42):
quality tenant to review theirapplication.
And then we're upfront, reviewour qualifications on the front
end.
And then we always take thefirst qualified applicant.
I mean, we tell them upfront,that that's what we're going to
do and it's it's worked out justfine for us but really it's that
application process if you knowthat they are if they ask for
(19:07):
the application which is andthis is through door loop and
it's online and they fill it outin a timely fashion you know
that they're someone um that youwant to consider even further
SPEAKER_00 (19:18):
yeah i think little Little indicators like that are
so powerful.
Like, I remember my brother wasworking in a company where he
had to hire people.
And in the application, he put alittle math problem.
And it was, like, somethingsuper simple anyone could solve.
And, like, a lot of peopleignored it, wouldn't even read
it.
And that's how we knew thosepeople weren't really paying
(19:40):
attention.
They're not detail-oriented.
And they didn't necessarilyreally want to work in the
company.
So that was another, like,qualifier that...
You know, it's a littleunconventional, but it works.
SPEAKER_01 (19:49):
Yeah, no, I totally agree.
And even furthermore, when we'reshowing the properties, I'm the
one that's showing them.
So I'm meeting them.
So really, I mean, theapplication obviously is great
because it gets the informationthat you need.
But really, all that informationis from me having a conversation
with the prospective tenantwhile I'm showing it.
And you learn a lot about them.
(20:10):
And so that's a whole otherscreening process.
It's just by getting to knowthem.
You know, are they...
Are they showing up on time totheir appointments?
Are they talking about theproperty?
Are they looking at theproperty?
Are they asking questions?
Those are all screening again toget a qualified tenant.
SPEAKER_00 (20:35):
Amazing.
And then another question Iwanted to ask, you don't have to
share this if you don't want to,but have you had a very
difficult tenant or a situationthat was really hard to solve?
Maybe you had to evict someone?
What's your horror story with atenant?
SPEAKER_01 (20:54):
Okay, so we have had one eviction, in all honesty.
And we gave this person everyopportunity in the world to kind
of make right on the rent.
And I think that goes again tothe qualifying the applicant at
(21:17):
the beginning, because at thispoint right now, we have, I
don't know, just under 20tenants that everyone is
staying.
Everyone's happy to stay,continuing to stay.
And so we really don't havehorror stories.
The one eviction was...
Again, we gave him everyopportunity and it was kind of
(21:39):
like the last straw and itworked out fine.
And the property he left in agreat situation, which is
exactly what you want.
It's not, it doesn't happen allthe time.
I mean, certainly with aneviction, you run the risk of,
you know, what's the propertygoing to look like when they
leave.
SPEAKER_02 (21:54):
Yeah.
SPEAKER_01 (21:55):
We've had some properties where tenants have
moved out and we've had to likekind of deep clean.
I guess it doesn't happen to us,but the stories of like the
toilet bursting in the middle ofthe night.
Now, first of all, who's toiletbursts, but like that kind of
stuff that doesn't happen.
Like it didn't, it has nothappened for us.
We've had where a toilet,overflowed and we've gone in,
(22:17):
but it was like at 9 PM and wehandled it.
And because we're local, it'sright around, all of our
properties are within like 30minutes of us.
So we're the ones that are goingto respond and take a look at it
and then see what's next to bedone.
SPEAKER_00 (22:31):
Interesting.
Yeah.
I mean, we did host a podcastepisode here where we talked
about some horror stories andsome of these are almost too
ridiculous to believe.
SPEAKER_01 (22:41):
Yeah.
We lived in two of ourproperties in duplexes near our
tenants.
So We like them.
I mean, if you can live next toa tenant, I mean, then that
means that you actuallyappreciate them and like them.
So I think we don't live next toa tenant now.
We do live in one of ourrentals.
(23:02):
So we aren't in the forever homeyet.
But again, we're still growingand we're still new to the
business.
And our accountant just saidrecently that he thinks that we
might be out of that startupphase, which is really exciting
for us.
Congratulations.
Which means I think we're kindof going over that hump a little
bit about what's next.
(23:24):
But, you know, we're stilllearning and growing, and I
think you need to be, like Isaid from the beginning, you've
got to be adaptable, and you'vegot to find what's the next
avenue to take.
SPEAKER_00 (23:34):
Yeah.
I mean, over 20 doors withinjust a couple years, it's really
impressive.
And even just the timing of whenyou guys started, you know, like
in 2019– Pandemic is just aroundthe corner.
What was that like for you guys?
SPEAKER_01 (23:48):
Yeah, it wasn't actually bad.
But what happened is I was stillworking full time at the
beginning of the pandemic.
And And at the end of, so thatwas really like 2020, we were
living, we were still, we werestarting to scale.
We kept our tenants.
There wasn't a single tenantthat paid late because of it.
(24:10):
We just kept, we were up frontwith them and said, let us know
if something goes on and we'llstart, we'll try to figure it
out together.
And everyone just appreciatedthat from the beginning.
And then I think we actuallyenjoyed it.
We actually enjoyed the factthat we like could go work on
these properties.
We could get out of the houseand we were going to work at
(24:32):
another house and we weren'tlike exposing ourselves to
anyone or anything, but we wereworking on properties, um, in
the middle of it and, andgrowing our portfolio.
Um, and, and so it worked out,it worked out fine for us.
Um, but at the end of 21, Idecided to leave my W2 job full
time.
So now we're both full time inthe business.
(24:54):
I'm not sure if we mentionedthat at this point, but.
We're both full-time in thebusiness, have been for almost
two years now.
And, you know, again, it's noteasy, especially not easy when
you go for like a financing oryou have to be creative because
not many banks like the non-W2person come into them.
(25:18):
And so we're, you know, and evencommercial lenders, you know,
we're not, we're not old enoughor seasoned enough to be able to
dabble into some of thoseopportunities at this point.
So we're just kind of learningas we go and hence why we're
(25:39):
changing our model constantly.
SPEAKER_00 (25:42):
So how did you go about receiving your lending
opportunities with thechallenges that you face?
SPEAKER_01 (25:47):
Yeah, when we first started, of course, I was
working full time.
So we were able to like ourfirst few properties, they were
just like like residentialinvestment properties, you know,
different, different, little bithigher interest rates or down
payments, but they were juststandard investment loans.
(26:09):
And then once we both kind ofleft the world, we just kind of,
learned or met other peoplewithin the business and got
hooked up with differentcommercial lenders that take
really the the value of theproperty into consideration.
Sure, you're guaranteeing theproperty at the end of the day,
your businesses.
But what they're doing isthey're looking at the just the
(26:32):
after repair value and theinitial investments as the
collateral for the loan.
But one thing that kind of hitus and I mentioned that when we
decided to sell One of ourproperties last summer was when
we really didn't want to wasbecause we weren't getting our
appraisals for those refinances.
And so so after much discussionand even discussion of like
(26:57):
who's going back to work fulltime and, you know, this the
scariness of, oh, maybe thiswasn't a good idea for both of
us to quit at this point.
I mean, we had some longdiscussions about that.
We decided, okay, who do we knowthat does, who does creative
financing and private lending?
(27:20):
And so we started reaching outto different private lenders
that we knew locally and kind ofasked what their models are and
tried to adopt a structure thatwould make sense for us.
And we were able to secure oneof those almost a year ago.
And it's been great because nowwe can really position ourselves
(27:41):
even more marketable when goingto make offers on properties
because we have the cash behindit to buy the property.
So not at all.
how we thought we would do itfrom the beginning.
And we had to learn that.
We had no idea how that processworked.
I mean, and so like, it wasscary.
It was scary up front.
Like, okay, how do you go to atitle company and say you have a
(28:03):
private lender backing yourloan?
Like, where's my appraisal?
Where's my, you know?
So like, it was just a verydifferent process for us to do,
but it's worked out.
And after that property, we hadto sell thinking who's going
back to work.
We were able to buy three moreproperties right after that and
add them to our portfolio.
(28:27):
One day you're thinking...
who's going back to work fulltime and how are we going to
make the credit card payment andbuy groceries for the house.
And then next day you're going,should we, we can probably add
another property, right?
We can probably buy another one.
So, I
SPEAKER_00 (28:43):
mean, cause it's a lot less predictable than, than
just having a stable income.
SPEAKER_01 (28:47):
Yeah.
SPEAKER_00 (28:48):
Oh, down one day.
Like you have no idea.
SPEAKER_01 (28:50):
Yeah.
Oh, for sure.
And then even like things like,you know, even when you're going
to like file your taxes, likeI'm, I have no idea how that
works.
And with like, with justbusiness income, I mean, gosh,
how do we, how do you positionyour, your business income to,
to a lender to say, oh yeah, welike, you know, there's
(29:11):
deductions and stuff and we put,we reinvest back into the
business and oh yeah, it lookslike we make nothing, you know,
like, and, I'm still learning.
I still don't even know how toread those.
And so we've actually had tohave a few different accountants
and some worked and some didn't.
And now we've had one for almosttwo years now.
And so It's really just tryingto find what's the avenue that
(29:33):
makes the most sense.
And again, we're happy to learn.
We're happy to try somethingdifferent.
We're excited to try somethingdifferent because you never know
what the next opportunity isgoing to come up if you just
kind of put yourself out there alittle bit more.
SPEAKER_00 (29:52):
Right.
And I think that humility is soimportant.
You know, be willing to learn,be willing to say that you don't
know how something works.
But trying it anyways.
Also, I really like how youshared the difficult time that
you guys went through whereyou're trying to decide if
someone has to go back to work.
I think that vulnerability isimportant, especially to show
people that if they'restruggling, so are other people.
(30:14):
It's not as easy as it looksfrom the outside.
You hear about all thesuccesses, but not necessarily
the parts where things couldhave gone wrong.
Would you say that was probablythe hardest time that you guys
faced in starting this business?
SPEAKER_01 (30:27):
Yeah.
Oh, absolutely.
I mean, there's been differentroadblocks along the way and
things that have come up.
But for us, I mean, that was onethat we said, wait a second.
Maybe just keeping the adproperties in our portfolio
isn't...
isn't the way we need to go.
Okay.
(30:47):
So now what do we do?
Do we just break even on a houseand just get our initial
investment out of it and then,and just break even, like that's
what we have to do.
And I remember sitting on thefloor of the, of our office a
year ago last summer.
And what was that in 22 andgoing, okay, so if I have to go
(31:11):
back to work, How is that goingto work?
And let me remind you, or Ididn't even say this at the time
I was pregnant also with oursecond kid.
So, um, I was like, okay, so ifI go back to work even
part-time, how am I going to beable to go back out on maternity
leave?
Like a couple months later.
SPEAKER_00 (31:32):
So, um,
SPEAKER_01 (31:33):
And so, I
SPEAKER_00 (31:34):
mean, it
SPEAKER_01 (31:36):
was a whole nother challenge.
But at the same time, it mademore, it would have made more
sense for me to go back becauseif it's not him working on the
property every single day, andhe is actually doing the manual
labor on these properties, likejust, yeah.
He's insane.
I mean, the things that he cando, I'm not going to do that.
(31:58):
I don't know the differentMakita tools that he has.
I don't know what those thingsare.
I mean, he tells me what theyare all the time, but I don't
use them.
So it would have to have been methat went back to work.
And so I think just being ableto be vulnerable and go, okay,
so if we just like extendourselves a little bit more on
our credit for this month, whichis a very tough thing to say,
(32:22):
And then we start talking tosome other people in the area
that know about creativefinancing options.
Let's see if we can think of anew way to structure these.
Because obviously justrefinancing isn't going to be
the way that we're going to doit.
And let's just take our licksand like sell the house.
(32:43):
And we did.
And it worked out.
And it worked out just fine.
And then we said, oh, wait,selling houses isn't that bad.
Let's add this opportunity.
Let's add this into the mix ofthings that we do.
So let's not just be landlords.
Let's sell a few.
So yeah.
SPEAKER_00 (33:04):
Amazing.
Yeah, I mean, and the successthat you guys have, I feel like
it keeps coming back to the,that you guys are part of the
community.
You're upfront, you're honest.
You try to build trust.
You know, you get to know thetenants on a personal level,
which I think is amazing.
know for some landlords they maybe apprehensive about doing that
(33:24):
like i've heard cases where andi'm sure it's pretty common
where the landlord uh they mightpretend that they're not really
the owner whenever they go visitthe property they pretend that
there's like you know they wantto add like a little bit of a
buffer in place um but you guyshaven't done that at all and it
seems like it's worked out wellfor you
SPEAKER_01 (33:42):
yeah we haven't and and And I hear that, so I go to
a lot of like real estatemeetings or chamber events and
certainly know other peoplewithin the field now.
We've grown a good relationshipand network with other
investors.
And I mean, everyone does it alittle bit differently.
(34:03):
And I think we have opportunityto learn from each other.
I really think that we should beworking together as opposed to
being competition because we allneed to learn what this business
is, especially the people thatare trying to invest into the,
you know, really invest into thecommunity.
But I think it's just...
we've learned and I've hearddon't, you know, don't get so
(34:26):
close to your tenants.
And I wouldn't say like, we'renot best friends.
Like we're not hanging out withthem on the weekends or anything
like that.
SPEAKER_00 (34:31):
There's some boundaries in place.
SPEAKER_01 (34:33):
There is some boundaries.
There are definitely
SPEAKER_00 (34:35):
boundaries,
SPEAKER_01 (34:36):
but like, you know, some of our tenants, like, no,
we have children and we'll askhow they are.
Some of them don't, you know, itjust kind of depends, um, you
know, on, on the situation and,and, uh, but I think just the
fact that they want Whenever Isay show a new property and I
(34:56):
say we are the owners.
Yes, that might create adifferent level of complexity
of, oh, OK, so you own theproperty and you're the
landlord.
But I think I think really it'sbeen the other way where they
go, oh, thank God.
I mean, like they justappreciate the fact that they
have a face to the name.
(35:18):
Though, you know, our businessis Holstein Homes and people
call us Mr.
and Mrs.
Holstein all the time.
That's not our last name.
And so we have a buffer therebecause our last name isn't in
our business
SPEAKER_00 (35:33):
name.
So that was intentional.
That was
SPEAKER_01 (35:36):
intentional.
That's intentional.
SPEAKER_00 (35:40):
Oh, wow.
I love it.
Okay.
So, you know, I think we'velearned a lot here, but I wanna
ask you if there's any advicethat you'd give someone who's
maybe just starting out, maybethey've got a few rental
properties, they've beenstruggling to grow, and that
could be for a lot of reasons,right?
It's hard to find the time tolook for opportunities or
(36:03):
whatever the struggle is.
What advice would you give them?
You know, you've grown prettyfast in a very short amount of
time.
SPEAKER_01 (36:09):
So, I mean, we want to learn from you as well.
So what do you know?
So teach me if you're new to thegame and you have some ideas I
want to know.
So feel free to reach out to me.
But really, I think.
trying to systematize yourprocess the best you can makes
the most sense.
(36:29):
So when we started going back toour lease packet, have a
standard lease.
Obviously, it changes a littlebit based on the property, but
know who pays the utilities foreach of them, have it set up the
right way, and know that packetreally, really well because
(36:49):
they're going to hold you tothat should something go awry.
So know that very well.
Systematize, if you can, the waythat you collect rent.
We've been very fortunateutilizing door loop for us.
It's made sense.
Our tenants all appreciate itjust because it's just like a
one place that they can theyknow they can either set it up
(37:12):
automatically.
They can go in per month andthey feel and they're very
comfortable.
I mean, a lot of people paythings through online platforms
at this point.
So it's not like it's weird orscary for them.
But systematizing, however youchoose to do that, whether it's
Venmo, whether it's checks,whether it's a software, have
(37:32):
some sort of standard process ofhow you do it and use that
throughout all of yourproperties.
I get some sort of bookkeepingfor sure.
As you add additionalproperties, it gets complex.
So I think adding some sort ofstandard bookkeeping and a good
accountant that understands whatyou're trying to do, an
(37:54):
accountant that actuallyunderstands real estate is
really important as well.
And then learn to be adaptableand be comfortable with the
uncomfortable because you willbe very uncomfortable,
especially when you get a callthat says, hey, the, you know,
the washer's not working or canyou replace it?
(38:17):
Or, you know, I mean, The horrorstories don't usually happen all
the time.
I mean, sure there are, but Ithink they're
SPEAKER_00 (38:25):
more minimal.
There's no exploding toiletsevery week.
SPEAKER_01 (38:28):
Yeah, they're more minimal than you think, but be
comfortable with trying newideas and new things and meeting
people in the business.
It's important to gain thosecontacts and those relationships
because they're your teachers.
Tenants that are historictenants know a ton about the
(38:48):
business, probably more than youwill ever know because they've
just been tenants for a reallylong time.
So if you can learn from othersthat have done it in the past
and take their advice, you'll goa long way with it.
It's not the easiest business.
(39:08):
Sure, you can add real estate toyour portfolio of investments.
Absolutely.
It makes sense.
Real estate is a fabulousinvestment tool.
But if you're going to go fullbore and do it like we have,
Just learn to be adaptable andbe comfortable with the
uncomfortable because there'sgoing to be times you're sitting
on your office floor going,okay, who's going back to work
(39:32):
full time?
And then it turns out and itworks just fine.
So
SPEAKER_00 (39:36):
yeah, nothing to worry about.
Amazing.
I love how you summed everythingup there.
You mentioned you were pregnantat the time during the, you
know, whatever you had to makethis huge decision.
Was it a boy or a girl?
SPEAKER_01 (39:48):
Oh, okay.
So of course I love talkingabout my children.
It was a boy.
So we have two, we have twochildren.
So we have our daughter and wehave a son.
So two and almost one.
So they're very close in age.
But I mean, another thing, wegrew a family during starting a
business.
And so it can be done.
(40:09):
It can be done.
But
SPEAKER_00 (40:12):
they love-
SPEAKER_01 (40:18):
We love bringing our children around our business,
you know, and certainly they'reyoung right now and they don't
understand it, of course, atthis point.
But the fact that we can beflexible with our time, be able
to wake them up in the morningand put them in bed at night,
that on the weekends we arevisiting properties that we're
(40:39):
visiting properties that we'reworking on or ones that are in
transition.
And they know them.
I mean, our daughter mentionslike knows the names of the
properties.
properties that we're going to.
So we just build that into ourweekend and it's super fun.
SPEAKER_00 (40:54):
She'll be helping out with the accounting in no
time.
SPEAKER_01 (40:56):
Oh, she's
SPEAKER_00 (40:57):
going to be marketing.
Yeah.
SPEAKER_01 (40:59):
She'll be marketing.
I'm not sure.
He'll probably be the one likeswinging the hammer for sure.
And using all those tools that Idon't know what they are.
SPEAKER_00 (41:08):
Yeah.
Yeah, I think before we wrap uphere, do you have any final
thoughts or anything else you'dlike to share?
SPEAKER_01 (41:12):
Feel free to reach out.
We're on Facebook and Instagram.
This is a great opportunity tobe collaborative versus being
competitive.
SPEAKER_00 (41:19):
Amazing.
Well, I really appreciate youcoming on here and sharing your
story, giving us your valuabletime and telling us all the
advice that you have.
You know, I'm sure you're goingto keep learning and growing
along the way.
And now that you're out of thatstartup phase, you know, who
knows what can happen?
The sky's the limit.
SPEAKER_01 (41:35):
You never know.
SPEAKER_00 (41:37):
All right.
Well, thank you, everyone, forwatching.
Tune in next time for anotherepisode of Loop It In.
We'll see you soon.
Thanks for listening all the wayto the end.
Don't forget to give us a goodrating on whatever platform
you're tuning in from.
And we'll be back soon withanother new episode.
We hope to see you there.
And until next time, this hasbeen Poop It In.
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