20 Rental Units with a Full-Time Job & 7 Kids: She Did It in 5 Years!

Ashley:
Angela grew up with housing insecurity firsthand. Her family relied on public assistance, moved through HUD housing and a trailer park, and sometimes lived in rentals where essential repairs were ignored. She built a stable career in accounting and tech sales, partly to make sure her own family would never face that same instability. So when her husband proposed turning their old townhouse into a rental, Angela’s first reaction was not excitement. It

Tony:
Was fear. That reluctant first step completely changed what Angela believed was possible. And five years later, while still working full-time and raising seven kids, she owns 20 doors across four states. And today we’re breaking down how she learned to invest from a distance, built teams and markets she had never visited, and created a repeatable way to fund new purchases. And we’ll also hear why one tenant placement brought her journey full circle.

Ashley:
This is the Real Estate Rookie Podcast. I’m Ashley Kehr. And

Tony:
I’m Tony J. Robinson. With that, let’s give a big warm welcome to Angela. Angela, thanks for joining us on the real estate rookie podcast

Angela:
Today. Yeah, thanks for having me.

Ashley:
I’m excited. Now, Angela, take us back to the beginning. What did housing and money look like for your family when you were just growing up?

Angela:
Yeah, so my mom was an amazing woman who, from me being four years old actually was still. Okay, let’s start over there. So from a young age, my mom was a single mom and she was raising me and my younger sister. And she worked very hard. She stocked shelves at a big box store for years, but because we lived in Washington at the time, it’s a very expensive state. And so single mom income is very hard to make ends meet. And so we lived in a number of different places. When I was younger, we actually lived in a HUD housing development where they would come in every quarter. They had their checklists that they’re checking and they can write you up and everything. So it was very nerve-wracking, great enough place, but we lived in that kind of household. And then from there, we moved to a place that was a slumlord situation.
So they didn’t fix anything. My mom was very handy and would try to fix things on our own. But even then, because she just had high school education, she didn’t understand her rights even with having a lease. And so there’s always this instability of they would say, “Oh, we’re going to try to sell it or maybe why don’t you to move?” And she just thought she was beholden to the whims of that. And then again, she was always trying to keep a roof over our heads, but our lowest point I would have to say was actually at one point we shared a room, me and my mom and my younger sister, and we’re sharing a bunk bed in a rented bedroom in a double-wide trailer of my mom’s makeup representative’s house in a trailer park. So that was for just shy of a year. So it was very hard growing up knowing we didn’t have much money.
My mom’s side of the family, there was a number of people that were high school dropouts. They worked hard, but I just saw poverty all around. And that’s something that I hated that feeling for myself. And so I decided that as I was growing up, that I really wanted to change that. And so ultimately I knew that I needed to get a good job. I needed to figure out this idea of college. So I became a first generation college student, which there was a lot of figuring out on my own of how that works. And so I moved out to Utah. I got my bachelor’s degree and master’s degree in accounting, and then became an accountant for a public accounting firm or an auditor, sorry. I became an auditor for a public accounting firm out here and then found my way into tech and tech sales.

Tony:
Angela, I love your backstory. And I think my first question is that so many people find themselves growing up in different circumstances. Some that help them in their future and get them a head start and some that kind of put them behind the starting line. And for folks that maybe feel victim of circumstance, what is your advice to them to be able to move out of that circumstance and kind of build the life that they hope to have?

Angela:
I really love that question because that is something that in talking to others who did not grow up in my circumstance, feel that I’m very passionate that you can change your circumstance. And it’s because having lived it, it genuinely is a choice. I decided to move to a place that was better circumstances than where we were living in Florida. At this point when I was graduating high school, we lived in Florida at that point where I applied for Pell Grant. So that helped me a little bit. I had to get loans. But because I did the research, especially now, especially in 2026, I mean, there’s so much research more than when I was graduating in 2007 with Dial Up Internet at that point in our small town. It’s so much easier to find information how to change your circumstances. So I picked a field that was going to give me the potential to, even though I knew I was taking out student loans, for example, I knew that I could pay those off and I was going to be able to pave a really good and successful career path for that.
And obviously at the time I wasn’t thinking about real estate or anything, but I just knew. I mean, I remember when I got my first job out of college crying because the highest my mom had ever got paid, I basically was making double that just by going to college. And it was a very touching moment. And obviously from there, just growing my career. And so it’s something that if you want to change your path personally, and then as you have children, their lives as well, that is something that you absolutely can do. And there’s so many people around you and programs that can help you accomplish that. Now,

Ashley:
Angela, when you got that first job, what were you doing with that money? It had been the most money you’ve ever made, more than your mom had made. Did you go and blow it on a Mercedes, the first paycheck, or did you institute a strong financial foundation right away? So

Angela:
That’s a great question. So in my case, so for perspective, I was making just shy of 60K at that point. So to be clear for all the listeners, not even anything crazy, but again, giving my upbringing, I though that was fantastic and amazing. And that’s something that at the time, especially because out in Utah, it’s kind of more expensive. This is something that I had just met my current husband at the time. And so we were starting to blend families were about to get married at that time, but that was something that was just going to be helping pay the normal bills and all that, thinking I started trying to put to a 401k because I’d taken a financial planning class in college and my goodness did I learn a lot from that. And so that’s where I learned about even more so about the compounding interest and the compounding effects of investing and all of that.
So I, like many people, thought that was the way to go. Now

Tony:
You mentioned that you were about to get married, your families were blending. And before that though, Angela, you weren’t necessarily thinking about real estate as the vehicle. It wasn’t your original plan. So what was it about the family coming together that made you think about actually investing in real estate?

Angela:
In our case, I had been married before, so had my husband. And so I had three kids from my prior marriage and my husband had four. So combined, we had seven kids, five boys, two girls. So at the time I was living in a home that I was going to have to sell off to split assets. And then my now husband was living in a townhouse, which worked fine for him and four little kids. But when we blended our families, we realized very quickly that a townhouse wasn’t exactly the way to go for having a family of nine. So we only lived there for maybe six months till we realized this isn’t going to work. We’re going to have to move. And so we started looking for another home. And now mind you, this is something that’s critical for viewers to understand this, that my whole investing journey started during Rona, during the coronavirus.
So this is something where this is not. I had assets prior to 2018 or anything. This is very applicable as to how to invest in a crazy market. So we ultimately bought our primary home. Basically it was the spring of 2021. And my husband springs it on me that he goes, “Oh, this is fantastic. We’ll just move into the new home and we’ll rent out the townhouse.” I was mortified because growing up, my mom had always said, “Oh, landlords, they’re crooked and they’re just out to get people. They always just raise rents.” And when you’re young and you live in that kind of circumstance, you do think it’s just a selfish matter because my mom didn’t. We mostly rented for my whole life. It was just towards the last final few years of my high school years that she owned a home. And so it’s something that you don’t understand.
Taxes go up, insurance goes up. And so people are trying to protect that. So I was under the impression that, oh, landlords are terrible people. And I’d heard a few people of my friends in this other city I lived in had tried to rent out their house before selling it or they had something they had to do and it didn’t go well. And they had terrible tenants. And so I was nervous as all get out because my background’s in accounting. I’m a very risk averse person. So I told them, “Absolutely not. We cannot do this. We don’t even know what do you do about leases? I don’t even know how we’d find a tenant.” And however, my husband, his family, his dad had owned a few rentals as he was growing up. And he was actually, as an adult, helped property manage them, kind of fix things, do some new flooring.
And so he’d seen how it worked and he felt very comfortable with it. And he said, “Well, I always figured if I got remarried, I’d turn it into a rental. So that’s the plan. We should just do that.” And so after more talks, he’s like, “Well, you got to just feel comfortable. You got this.” And so from when we signed on the new house and when we’d move in was two months. And so I crash coursed in everything real estate and doing some cursory Googling, found BiggerPockets. And I’m talking on drives, taking the kids to school, grocery shopping, showers. Everywhere I was listening, cooking. I was listening to BiggerPockets podcasts, the rookie podcast, the normal BiggerPockets podcast, trying to learn everything, reading everything in the forums. And from that, I really realized that there was a lot of people that I felt like were like me.
They were just working at W2 and they were doing it, even if it’s one rental or two rentals. And they were saying the prompts that they had and a lot of people had recommendations. And it made me feel very comfortable that from hearing people’s stories on the podcast, reading it in the forums, I felt that I had found a community that if I ever had something crazy come up, I could put in the forums, for example, and get live feedback because everybody’s so supportive. And so from that, I told my husband, “Okay, we should be good to go, but can you promise me that if it goes awry, we will go ahead and sell the property?” And that felt more comfortable to me because worst case, we were going to sell it anyway right then. So what’s it to learn for a year if that works?
And so that’s kind of how we started into the process.

Ashley:
Now, once you actually rented the townhouse, what did the day-to-day operation of that actually look like? And was it what you expected?

Angela:
So it is funny. I feel like the universe was helping me in this because when I listed it, we had a ton of inquiries. I’m talking within the first week, I think we had something like 50 people asking to rent it. And so then my husband was like, “You thought you did your market research?” Again, with my conservative nature. I was like, “Oh, this seems like a fair number to put.” And so he’s like, “You should have asked for more.” I’m like, “I don’t know. This all new to me.” I’m trying to make sure that it’s something that was going to move quick because again, my worry is like, “Oh my gosh, we have a mortgage payment that we don’t have a renter in.” So we got about to be new of a couple, middle-aged couple that super sweet. They moved in. Fantastic tenants. If I could have tenants like them all the time, they always would pay rent on time.
They just had a few questions here or there. They made little improvements. So it was actually fantastic. And getting at least the meeting the people, doing the paperwork was all fine. And honestly, month to month, I did my own bookkeeping. So I maybe had an hour a month of actual work that I had to do. And once I saw the paycheck come through of the difference, I was renting it for $2,000 a month and then our total all-in expenses was about 1,350. So seeing that difference there coming through month to month, I was pretty into that. I was like, “Oh my gosh, we own the asset. They’re paying down our mortgage. Our entire market’s going up. Plus then we’re getting this cashflow each month.” And from then on, I was hooked. Angela,

Tony:
I just want to go back because you mentioned something about the thought process you went through to give yourself the confidence to move forward. And you said, “Well, hey, if this doesn’t work, then let’s just sell it.That’s the worst case scenario is that this whole landlording thing doesn’t work out and then we just sell the property,” which is what we were going to do anyway. And I just love that thought exercise because I think that’s. If more people did that when they though about real estate investing, if they thought about the worst case scenario and they just said, “Okay, if this doesn’t work out, then here’s what I’ll do.” And as long as they’re fine with that plan B or that plan C, then why not take the risk of trying to invest in real estate and seeing this whole thing works? Because to your point, maybe it does work.
And then you see that first check rolling in and it completely changes the entire trajectory of your life. So for the people who are listening, Angela, who are maybe fearful about getting started in real estate and they’re worried about the downside, what would your advice be to them to actually break out of that fear and take that first step?

Angela:
So a couple of thoughts. So I think a lot of us that are looking to start investing kind of fall in one of two camps. Either you live in an area or you bought at a time, say for example, a house, that you are fortunate enough that if you move out and you rent it, it could cash flow. So that is scenario one, like my scenario was. And so that’s something that feels a lot more safe because it’s something that, hey, I was going to sell anyway. So that’s an option for people. Now, had I bought during Corona and then tried to do that now, the numbers likely wouldn’t make sense from a renting perspective. And so that’s where I think option two is where we’re, as we’re continuing our conversation and my story, we’re going to touch on where you can buy in more affordable markets to really try that out and buy well.
So there’s times where even myself, even now, when going through and investing, we have 20 doors over nine different properties across four different states. And so even now, I sometimes look in some markets, I’m like, “Oh gosh, that is such a cute house.” And you get a little bit emotionally attached. And it’s like, I’m never going to probably even step foot in that house at this distant market. So buy smart, not just because it’s cute. If the numbers make sense, then you can buy a house that’s more affordable. For example, in my market, in my particular area, to buy a townhouse, you’re at a minimum about 430K to buy versus my cheapest home that I’ve bought is 57,000 in Indiana. So something that’s so manageable that you can cut a little bit of risk to be able to still test it out. And again, to your point, Tony, if it doesn’t work out, you can sell it.
Or also if you buy it at the right price where at least covers itself, obviously people talk about, well, you could be underwater because you have to pay realtor fees. That’s something, if it makes sense right now, even money-wise, okay, you can hold it a few years, appreciate some, and then you can sell that. So definitely reduces the risk and helps you get more comfortable thinking to invest. Coming

Ashley:
Up, Angela explains how she bought a duplex with a tenant already behind on rent and also how she contacts property managers before real estate agents and how a badly written MLS listing turned into a 23% cash on cash return. That’s right after this. We’ll be back. Welcome back. We are here with Angela who proved that she could be a landlord with her first rental. The next purchase required her to entrust a team hundreds of miles away and take on some tenant problems from day one. So Angela, what was it like having to build a team for this property that you were buying in Ohio?

Angela:
So this is where this next part of the story happens. So I had bought or we had started renting out the townhouse. And whilst I had my crash course for two months to get comfortable there, it actually took me about another year and a half of continued listening to the podcast, doing research, trying to underwrite different markets to know where I’d want to invest. Because quickly hearing about the 1% rule, the idea being, for example, if you bought a $200,000 house, you ideally would get $2,000 a month rent to try to make the mortgage payments and actually have some chance at cash flow. I quickly realized in Utah, we were at more like a 0.5% rule. And so I started realizing and talking to even some other people, I started talking to others who had invested and like, yeah, I don’t get cashflow. I’m down three to $400 a month, but it’s appreciation play.
And again, my risk of ourselves, I can’t think to do that. We have all these kids and all this. And so I ultimately turned to my husband from going from, I don’t know if we could rent the thing that’s 10 minutes down our road, to I talked to him and I was like, “I’m really into this real estate idea. And I think we need to invest out a state.” And now my husband became the one that was nervous and he’s like, “I’m able to just run over there right now if they have something wrong,” because he’d do some little repairs and everything. He’s like, “How are we going to do it from a distance?” And I said, “It’s fine. I’m running the numbers.” But yeah, so I realized quickly that when I was running the numbers, the Midwest or Ohio, Indiana, places like this actually made a lot of sense.
And so how I went about it is to find even this market that I decided to invest in was that I went and decided, okay, quickly, if I do a cursory view. Let me back up. So when I first look to find different markets, I tend to look at what is the biggest populations within the state? Because you want to make sure there’s enough demand. So I normally look at the top five or 10 cities by population in each market and just do a quick cursory view looking at what is the lower price but livable looking homes in that particular market. Obviously you have to find out what’s the safe neighborhoods and everything, but my point is to just see generally do the numbers make sense. So I’ll grab some of those, compare those against looking at what a general rent calculator would look like for that particular area.
And then from there, if it’s even somewhat close 0.8 or to 1.0 rent to price ratio type of situation, or if it’s at least a 0.8 to 1% rule, then I know there’s likely deals to be had. But if I’m looking and it’s about Utah numbers, then I’ll keep moving to the different markets. So once I find that particular market to look further into, I’ve realized that I then want to talk to a property manager because they will love you for this, by the way. When I’m looking for a property manager, I’ll go through and see of reviews which have good reviews from a tenant perspective, but as well as from a owner perspective, because you want to make sure it’s both ways. You want to make sure your tenants are happy because you don’t want to allow it to be a similar situation, and also because you want to make sure your asset’s taken care of.
But you also want to make sure it’s fair from a landlord perspective that you’re seeing that they’re saying that they’re renting quickly, they’re getting their statements on time, things like that. From there, I talk to the property managers and I talk to them and say, “Hey, I’m looking to buy in your area. I want to make sure I buy an asset that works for you just as well as it works for me. So what areas do you not manage in and which do you manage in?” And the best property managers actually have an answer for where they won’t manage because they have enough business that they don’t need to deal with the areas that are a little more sketchy where you might not want. If you’re going D-class neighborhood investing, that’s fine. But workforce housing, normally like a C-class neighborhood, is very good option for cashflow and also safety perspective.
And so that or higher, you’ll talk to them. And I’ve had many a property manager say, “You want to invest east of this street, south of this street, right behind this hospital, but not this hospital.” And so it really gives you a view. And they really appreciate that because everyone I’ve talked to says they hate when they meet a great owner and they say, “Here’s the property I want you to manage.” And they have to tell them no because it’s something that they don’t want to manage. And so from there, I went into that first market, but that one was actually slightly different. Actually it was on the BiggerPockets forums and found a investor-friendly realtor who happened to be in that market. And I did cross reference with the property manager the way that I mentioned for a property that he brought to my attention, which this is the only one I’ve bought that was not on the MLS, but every single other one has been on the MLS.
And so this was just a pocket listing that he had that they were going to be listing in his particular realty group. And it was interesting because we went from these dream tenants to these individuals, one side of this duplex. It was a nice, pretty turnkey rental, but one side we knew that was under market rents and the other side had been two months behind on rent. And so we knew it was likely an eviction. And for me, I felt decently comfortable because it was not even a $200,000 house. And because of my income and my husband’s income, I’m like, okay, we can push through this a little bit, especially because I talked to the property manager and they were like, “Hey, I think it’s like 350 bucks. That pays for the lawyer to file the paperwork. They give the notices, go to court, do the whole process for me.” And again, this is where picking markets really matters because there’s some states that make it very quick and easy to.
You hope to never have to evict somebody. But if you pick a more landlord-friendly state, it makes it a lot easier than if you pick another market. So if you’re in some markets, it might take six months. In this particular market, you can only do it within a month and a half from them not paying. So I talked to the property manager and they made me feel a lot more comfortable about it. And I talked to my husband and he’s like, “Hey, if you feel you can stabilize this, I’m down to try it.” Angela,

Tony:
What a difference from deal number one to deal number two. So just for context, you guys live in Utah and the market that you chose was Ohio for the second deal, right? Got it. So I appreciate you walking us through the process of like, “Hey, here are the data points that I looked at.” But I would assume that, again, looking at a map with the United States, there’s like 20,000 cities. There were probably hundreds, if not thousands of other cities across the country that were maybe similar to Ohio in terms of what it offered. So how did you actually come to the conclusion that Ohio was the right market out of the 20,000 potential options that are out there? Because I think that’s where most people get stuck. They understand the process of funneling the list down, but actually getting to the point where they can make a decision to say, “Okay, this is the city that I want to focus on.” That’s where they struggle.
So walk us through that step there. How did you get to the point where you felt confident enough to say, “I’m going to ignore everything else and focus on Ohio?”

Angela:
So for me, is there enough population there is huge. Secondly, is there reasons that people either stay there or stay in that area or is it growing? And so what I tend to look for, like I said, curse review, I tend to look through the five, 10 top size cities and then do my calculations from there. But then from there, looking like I’m saying these different aspects, also I look at the general safety of the area because that’s something that matters. Especially as people are trying to. I tend to buy two, three, four bedroom homes. And so that’s something that you’re going to have families. And so they’re going to want to make sure it’s safe kind of locations. And so if the trajectory is it’s pretty stable or it’s a little bit getting better from a crime perspective, then that’s something that’s a good indicator as well.
Additionally, when I think about markets, I think it’s important to think about your investing in real estate is similar to a stock portfolio. So this is something, I think I might have heard it on one of the BiggerPockets podcasts, but I really like this idea of portfolio architecture. So for example, we have a couple here in Utah of rentals, and that is more of an appreciation play. They give a little bit of cash flow. I mean the first one more so, but a little bit of cash flow, but it’s more, “Hey, this is going to appreciate over time.” So these are more the appreciation play that you’re hoping for. So Ohio, to me, when we went into that and looking at the appreciation of the homes versus the cashflow potential, I looked at that as more of a middle of the road type of stock essentially where it’s going to have cashflow, it’s going to have a little bit of appreciation, but it’s kind of a nice blend.
And then as I looked at different markets, I was like, “Well, I still want to get some cash cows, as it were, that just truck along and just give you some good cash. We’ll appreciate, but maybe not as much as say like in Utah.” And so that’s where I went and found my Indiana market. So it’s really where you are in your investing journey as well as helping even out the risk. Because it’s been funny looking at my investment portfolio during coronavirus from 2021 to now where some properties, I mean, even some of my cash cow area, they’ve actually been appreciating quite a lot and I did not anticipate that. And my rents are going up and then it’s slowed down a little bit. And then another market I’m in Indiana, actually, I thought that was going to be pretty stable over time for the rents.
And then those started ticking up. And so it’s just interesting because I think it helps you both even out your risk as well as help you know where maybe you want to start your journey depending on what your goals are. Are you talking a 30-year time horizon that you’re thinking through or are you talking more five to 10 year? That’s going to decide a lot differently as to when you’re looking through the markets, what makes the most sense. Now,

Ashley:
Angela, you’ve also had a really good strategy of looking at listings on the MLS and determining that there may actually be something inaccurate with this listing. And this specifically happened in a property in Indiana. So can you kind of break down what you noticed and what was the outcome of this property? This

Angela:
Property I love so much because this just goes to prove, again, MLS, people are not perfect. And so maybe things get listed wrong or maybe details are missed. Pictures aren’t uploaded that you can find pictures elsewhere on the internet. So in this case, this is a property that had one photo. Actually, let me back up. So this property is one that I’d been looking and looking, running numbers on a lot of properties. And if you’ve ever tried to underwrite properties, you sometimes get desperate. You go and you’re like, “I need to buy something. I want to buy something.” And so you kind of go back around, you’re like, “Maybe the house is okay. Maybe I can figure it out.” And so I went back to this particular one and I happened to. A lot of times in a lot of markets, if there’s people that are tenants in it, they won’t have inside pictures.
But life hack, if you go and you take that address and try to put it into Google or your search engine of choice and put that address and say for rent, a lot of times the property managers might have interior pictures from his last trying to be rented on apartments.com. Or especially if it’s a duplex, it might have property pictures from separate listings, like the different unit numbers on Zillow. So you can actually send here pictures. And so I saw some interior pictures and I thought they looked really nice. And so whereas people might’ve looked at the outside, just a normal brick duplex, might not that much. I’m like, “The inside looks pretty decent.” And so I looked at the notes on the listing again, and it had said that each side of this duplex was a two bedroom and a three bedroom and that the rents were something like 650 and 750.
And even for this market, that seemed quite low versus because I already had a couple of rentals in that area. But conveniently it said this property’s managed by, and it was actually my property manager. So I thought, oh, I’m going to call them and ask them why is the rent so low. So I Talked to the property manager and I talked to her and I was like, “Hey, this property I’m interested in.” She goes, “Oh yeah, yeah, that one.” And I was like, “Given that it’s a two and three bedroom, why is it rented for so low?” And she goes, “I’m sorry, what?” She goes, “That’s a three and a four bedroom.” And mind you, this house, for perspective, if this is a three and four bedroom, this house was listed just shy of 150,000. If it’s truly a three and four bedroom, it’s a $200,000 house.
And so I was like, “Wait, are you sure?” She goes, “Girl, I actually walked that property. I’m the one that took the photos when I was the one that got that rented.” And I was so excited, but not suddenly I was like, “Well then why with a three and a four bedroom, are you renting it for 650 and 750?” And she’s like, “Where are you getting these numbers?” And I said, “What’s on the listing?” She goes, “I don’t know who put that in, but the rents are 995 and 1125. So you’re talking a difference of $1,400 versus 2120.” And so I was so excited. And so I immediately went to go negotiate on it. And funny enough, it was something that I got the details on what happened because it was actually my realtor. It was their broker who had listed it. And apparently there was an investor who was like, “I’m important.
I want the broker only to list it.” And so the broker’s busy.
And additionally, apparently whenever this, because I didn’t tell my realtor until we got under contract because I didn’t want it to blow up. And so once I got under contract, I told him he thought it was hilarious. And afterwards, after the whole deal closed and stuff like that, he hassled his broker about it. The broker said, “Hey, I was just going off of what the owner told me.” So the owner didn’t even know his own property. And so he listed it and priced it accordingly. No one walked the property to verify this. So I ended up getting a killer deal. And additionally, when they were going through for the inspection, there were some things where there’s tenant rights that. I mean, it was the middle of Indiana winter, it was like December, and one of the furnaces wasn’t working. And the electricity to the upper stairs, upper area of one of the duplexes didn’t have any electricity.
They were running lights up and toilets weren’t working and they were still paying rent. And I wrote back, I’m like, “You guys have to fix some of these things. These are living rights if you’re a tenant.” And they’re really unhappy with it. But I’m like, “This is not even a me thing. This is a legal thing.” And so ultimately on top of getting a killer price on the house versus what it could have sold for, we got about $10,000 of repairs of a new furnace, electricity fixed, new toilets put in, all these kind of things. So this went and was a property that cash flowed us just shy of $600 a month on it. And then now we’ve raised rents and everything. And so we’re actually at a 23% cash on cash return on that home.

Tony:
I think the lesson here for rookie investors, and I’m curious if you’d agree, Ash, for you as well, because obviously you bought a bunch of long-term rentals as well, is that sometimes the listings that you might question like, “Oh, it’s only got one photo. This must be a terrible listing.” Or, “Man, this has been listed on the market for 389 days. It must be a bad listing.” Sometimes those turn out to be the absolute best deals. And I think if there’s a lesson for the rookie audience, it’s don’t take anything at face value. And exactly like you did, Angela, can you dig a little bit deeper to understand, is there something to uncover here that allows us to manufacture a much better deal? So man, what an incredible story. So Angela, obviously an incredible deal here on the duplex, but as you found markets that have worked and you want to keep growing your portfolio, I think a question that a lot of rookie listeners have is, how do I keep scaling?
Where is this money coming from? Because maybe I pull all my money and dumped it into deals one and maybe number two and how do I keep going? So how did you use your existing homes to create ways to fund the next purchase?

Angela:
Yeah. So that’s something that I now advise everybody on of how we’ve been investing because this is something where home equity line of credit, incredibly useful. So for listeners, many are probably familiar, but just to kind of quick level set, a lot of times I’ve talked to people and they’re like, “Oh, to get money out of my house, I have to go and refinance the house to get the money out.” But maybe they have a lower interest rate, so they don’t want to do that. They’re like, “Oh my gosh, that’s going to be a whole thing.” Or they think they have to get a home equity loan, which is the difference basically between your current normal mortgage to what it’s worth now. And so that can work. But the thing that I didn’t like about that idea was that, again, it took me a year and a half to find my first real purchase deal of an investment property.
So during that time, I’d be paying back principal and interest, therefore dwindling my stockpile of money. Additionally, if I had cash from my normal W-2 or cash flow to pay down that home equity loan, that’s something that it’s not changing my payment every month. And so I didn’t love that I did. And so that’s where I learned about the home line of credit, which is essentially kind of like a credit card on your house, but at a lot more affordable rate. So in the case of my homeek line of credit right now, I’m getting loans, for example, investor loans, DSCR type loans under LLCs for about 7% interest right now. And my homework line of credit’s only like a 775. So it’s a very manageable type of rate. And I tend to like homeic line of credits, HELOCs that are interest-only payments, have as long of a draw period as I can, and then have at least a 20-year repay on the backend.
Now there’s nuance to you can do another homeic line of credit before I have to do the repay period. But in essence, what’s fantastic about this is if you do it on your primary home, it’s something where a lot of times it can be something, like in my case, on our primary, I’m able to do 100% loan to value. So let’s say for example, my house is worth 600,000 and my loan is say 400,000. So I can actually access all 200,000 of that availability, which I joke is kind of like monopoly money because it’s only because the market says that it’s worth something, but you’re still living in your house.
But I really, my regret and in this investing is I didn’t know yet more about this because you can get homework line of credits on investment properties. So we did on our first home, the townhouse, but it only let you do an 80% loan of value. So there’s some that’s locked up that I can’t touch. And so anytime I’ve had friends that are maybe trying to do the little, I’m going to try to rent out my first house. I’m like, do not do anything till you get a homework line of credit on it because there’s normally not an annual fee. If it’s your primary home, usually you don’t have any payment to get one put on. And so even if you never touch it, at least it’s there in case of emergencies or whatnot, or even if you don’t ever invest. But in the case of us, we got it afterwards, we got it on the investment property and then we have it on our primary home.
And so what’s been great about that is it lets us be able to not feel under pressure to buy a home because money’s ticking out of our bank account every month. It’s ready to go when we’re ready to buy a home. We go and use that for down payments. And then with the cashflow that we get in, we suck that towards paying down the loan, which then is nice because then your monthly payment’s ticking down every month as well. And then obviously two plus our W2 income, we’re putting that into it. And then so therefore you’re buying into days dollars instead of having to save up for the next down payment. That might take you a year or two. So you’re able to buy that property and then just sock down till you have more availability and then you go buy the next property. So that’s kind of how we’ve been doing investing.
So again, this is something, again, almost every single property I bought is on the MLS and using money that’s just in your normal home. So you don’t have to have some high income kind of job or anything. And additionally, when you’re thinking about what houses to get, this is something that I’ve tried to tell others too, because every property that I’ve bought, I’ve always underwritten that HELOC payment as part of that. So for example, a house might be 16% cash on cash return after I pay off the HELOC, but in the interim, so maybe let’s say afterwards, let’s say I could do $350 a month in cashflow, but even considering property management, mowing fees, mortgage payment, interest, all of that, and the HELOC payment, instead of maybe $350, I’m still cash flowing 200 bucks. That’s still money that just because I had equity in my house that I’ve leveraged, I’m still cash flowing over top of that.
So it’s something that’s even more comfortable for us to feel to invest because it’s something where you’re able to have even cash flow using money that you didn’t even have to save up for.

Ashley:
Angela, I think that’s a really big question for rookie investors is, but how do I pay the HELOC back? And you just said it right there, you work it into your numbers. So when you’re analyzing the deal, you’re basically putting in there that you have two mortgage payments on this property. You’re factoring in the first mortgage that’s on the property and then your HELOC that you’re going to be paying back and see, do the numbers still work? And Tony and I actually both did this on properties. We both are turning primary residents into rental properties, but before we’re moving out and into a new primaries, we put HELOCs on. And I think another thing you mentioned that is really important to listen to is that it should be free to do this. A lot go to local banks, credit unions, things like that. I don’t know about bigger national banks.

Angela:
It’s normally those lower ones that get you those deals.

Ashley:
They’ll cover the appraisal fee. There’s no closing costs, nothing. I didn’t pay anything. If I close the loan, if I close the line of credit in three years, I will have to pay like $1,300 or something like that is the fee they will charge because I haven’t banked enough interest for them to accumulate because I closed the loan. So that’s the only thing. And I just had to sign a document saying if I close in three years, this is what I will have to pay to do it. In comparison to going and refinancing your actual property, you’re probably going to pay a new appraisal. You’re going to pay a commitment fee. You’re going to pay closing costs, all these different things to have it done. Where with the HELOC, you shouldn’t be paying anything. So if you’re getting charged to do your HELOC, make sure you shop around and find it for free.
I did one that was for six months, I think like 4.99%, and then it will change to whatever the variable rate is, probably around seven to 8%. Tony, what about you? Did you get any kind of introductory rate on yours?

Tony:
Yeah, same. I want to say it was like five and some change for the first six months. And then yeah, it goes variable. But to your point exactly, Ash, we pulled the HELOC on the current primary before we’re moving out here in three weeks or so. So I think it’s one of the best tools. And we’ve interviewed a lot of people who have kind of repeated that same process of turning their primaries into rentals, and that’s how they build their entire portfolio. So it’s your current house, assuming that you’re willing to accept some of that risk, I think could be one of the best tools to help a rookie investor actually get started as a real estate investor.

Ashley:
And you guys coming soon, Tony’s first long-term rental in a long time. In a long time. Breaking it down.

Tony:
We got to do a debrief once we get it up and running. Well, guys, don’t go anywhere. Angela’s going to close out with an unusual short-term rental that most lenders would not touch. The simple questions that unlocked both financing and insurance and the tenant placement that brought her story full circle. We’ll be back in a minute. All right guys, welcome back. So Angela, your portfolio now includes nine properties and 20 doors across multiple states. But let’s look at the newest strategy, the one that you’re building toward and what the journey has meant beyond the numbers. So your newest property is very different from the rest of the portfolio. You decided to pivot into short-term rentals in Arizona. What made that feel like a compelling opportunity for you? And speaking of financing, how did you get that first deal financed?

Angela:
So this is something where I guess important to note is I started with just normal single family duplexes. I then tried to graduate up. My husband and I realized, “Hey, this is fine, but we could move bigger, quicker if we bought bigger properties.” So we went and got an eighplex in Indiana. So I felt like that was a baby step to getting to this next step of short-term rentals because that in and of itself is its own thing, how it’s appraised, how it’s valued, running that. And I think that was important to have that step because it got me a little more brave into doing something different. And this is something where we personally have gone to many a different Airbnb on family trips and have loved it. And it’s something where for tax benefits, in our case, we knew it was going to be very impactful for us because I knew I was going to self-manage.
And it’s worked out great for that because a lot of times I think it’s worth noting long-term rentals tend to be about a 10% fee for property management, whereas short-term rentals often can be 20 to 25%. And I knew myself, I get too involved even during when there’s lease-ups in my long-term rentals that I’m like, “Okay, what are we thinking? What’s our interest on this yet?” So I was like, “Oh, especially with the short-term rental, what if it’s not booked? Maybe I want to have them tweak things.” I’m like, “For tax purposes and for my own sanity, I think it’d be good if I managed it myself.” And so this is something that we were curious after. We liked a certain area in Arizona, and so we decided to move forward with getting a long-term rental, or sorry, a short-term rental. Now, this is something that I started looking at the market.
I picked another investor-friendly realtor who specialized only in selling short-term rentals. And so we started talking about the different markets and looking, and there wasn’t anything that was really compelling yet for me, but when I opened it up, it was interesting because I happened to see one that I though was listed wrong, and it was listed as a modular home. So a little different from a mobile that it doesn’t have the seams or anything. The outside looks a little like a mobile home, but the inside looks like a normal house. And so it was listed as an eight-bedroom, five-bath house, but it was only listed for just shy of 420K. Whereas in that particular market, normally such a sized home would be about eight to $900,000. And so I was pretty excited because I understand maybe because it’s a modular home, that was the case.
But when I looked into it more, I talked to the individuals that the 10% down vacation home loan type of people that I’d already pre-qualled with. I talked to them about this particular property and they said, “Oh, we’re not going to lend on it because it’s over 20 years old.” And I did not know this was an issue for modular homes, mobile homes. And every single lender of my normal network that I’d already pre-qualled with, they were like, “Nope, pass, pass.” And so I happened to know there was another group that was looking to buy this home. And so I had to move quick. And then I thought, I’m like, “Well, wait, somebody had to have lent on this because they just bought it two years prior.” And so I asked my realtor to go ask, “Hey, can you see who they had bought it through?” And so she got who they had got the loan through.
And I talked to that particular group, never heard of this group. And I talked to them and they’re like, “Oh yeah, we’d lent on it. We lent on it just two years ago. Yeah.” I sent that man 45 different documents to prequal that day so I could get the pre-qual letter to go and offer on it.
And I did the same life hack for that for the insurance because I asked for some insurance and it was just over the no flood zone. So it was like a hundred-year flood risk. So it wasn’t too big of a deal, but a lot of people were like, “Because it’s modular, because it’s in this little bit of a flood zone, we won’t do it.” And I was like, “Well, it worked for the loan. Let’s ask for this.” I had found one insurance group that was going to do the insurance on it, but when I did and checked with the group that they were already with, doing so saved me a thousand dollars a year. And so I was so excited that I just copied their homework and I was able to do the loan on the deal. And just like earlier, we talked about the 1% rule with normal long-term rentals.
With the short-term rentals, the idea is 20% rule. If you look at any of the short-term rental calculators out there for your particular area, the idea being if you buy a $500,000 house, you want to find one that gets about 100,000 gross because that’s going to be including cleaning fees, platform fees, things like that. And this is something where it had been running as a very sad looking Airbnb prior to me. I’m talking very cheap linens, very towels weren’t matching. They were trying to charge hundreds of dollars a night, not varied pricing. And they had cups from T-ball team 1995 in the cupboards. And so they had in the prior year, according to the data I’ve obtained, had got about 68,000 in rents, which is still fair given what they were offering. I came in, put tons of themed, tactfully themed decor. It’s Arizona. You got to have the nice kind of native type rugs and bowls and just cacti, and just lots of art pieces.
And from all of that, better photos, dynamic pricing, really good hospitality, really have a lot of automation set up that makes it really good too. Whereas they had only got about 68,000 this year already, and we still have more of the year to go. For the year’s bookings, I have $97,000 on the books. So we’re at something like 23% or so rule right now. And so again, we still have more time to go. So it’s crushing it. We’ve loved it. And it’s just something where because I’m able to provide a premium service, but my house is half the cost of my competitors, I’m able to be a more affordable choice. So affordable plus a premium feel, great reviews, and get tons of bookings from that, which means that we’ve been able to really succeed in that and have a lot of fun with us as a family that it fits all of us even.

Tony:
Angela, incredible story. But I think the biggest lesson that I want rookies to take away from hearing that is that you talk to all the lenders that you already knew and all of them said no. And then you talk to one person and immediately they’re like, oh yeah, we do those kind of loans all day. And I think that’s the biggest thing is that oftentimes rookies can get fixated on one no from one person and think that everyone’s going to have that same response. But different lenders focus on different things. And there are some lenders for whatever reason that won’t touch modular homes. And there are probably other lenders out there who like 90% of their business is modular homes. And they’re like the modular home lending people that everyone goes to. So as you’re searching for and hunting for lenders specifically, don’t stop until you get the answer that you’re looking for because I guarantee there’s someone out there who will lend on the type of property.
Now, will the rates and the terms maybe be a little bit different? Probably, but at least they’re willing to give you what it is you’re looking for. So don’t stop at the first no. Keep chugging along until you get the person who actually understands the asset that you’re trying to buy. Well,

Angela:
And I think to your point, I think something people need to think about is that interest rate is higher, but the numbers still worked out for me. And I think that’s another thing too. A lot of people, even in this current climate, they talk about the higher interest rates and they’re waiting for the interest rates to come down to buy. But yet it was not bough a few years ago that people were saying the house prices are too expensive, so they didn’t want to buy. And so that’s something I think so incredibly important to think about. Really, I always like to use the Cecil analogy. So if you think about, at the end of the day, you have the house price and you have interest rate. And at the end of the day, it tends to be like this in the marketplace. But holding it all together, holding it up is a number.
So that could be $2,600, for example. How much somebody can afford. In a normal traditional home, for example, like a single family home. Or in your case, what number you need that to be to be able to make it cashflow. So at the end of the day, it doesn’t matter. Right now I’m buying homes. That particular home was like a 775 interest rate. And I just bought a single family home in Indiana a few months earlier, two months earlier for a 6.5% interest rate. So that hurt a little bit, but my numbers still made sense. And in this particular case and where we are in the economy, if you buy the higher interest rate but your numbers still work now, you have the chance to, if the interest rates drop eventually, you can actually refinance and actually benefit from that lower price. Obviously make sure they work today, but it’s something where it’s not something you need to be scared about buying in today’s current interest rate environment or that particular deal in my case where I was like, “Oh, that hurts.” Again, if the deal works for you, it works.

Ashley:
Well, Angela, thank you so much for joining us today to share your story, share your experience and the lessons learned along the way. Where can people reach out to you and find out more information?

Angela:
Yeah. So I mean to get actual investing Instagram up or whatnot, but you can feel free to reach out to me on BiggerPockets under Angela Wassam. Additionally, you can email me at angela.n as in [email protected]. But yeah, happy to answer any questions people might have. And good luck investing. And I hope everybody actually jumps into it because it genuinely is life-changing for, in my case, myself and as well as my generations to come.

Ashley:
And I think that’s why it’s so impactful to have other rookie investors onto the show to share their journey that is achievable. And I mean, just as you said it, it is life-changing. I think Tony and I can both agree with that, that real estate has also changed our lives drastically.

Angela:
And I think too in wrapping, I want to just mention it is such an amazing thing what you can do when you actually jump into investing because I grew up in HUD housing and one of my most impactful moments of investing was when I had a rental that I was having a HUD housing Section eight voucher individual trying to apply through. And it was a gal with some kids and we accepted her and she’s still there. She’s been there a few years. And I remember when we accepted her, I started crying because here’s this full circle moment where I grew up in that kind of household. And now I get to provide a clean, safe environment for that group, that family and her kids. And again, you can make the difference both for your family as well as other families out there, depending on how you are as an investor.
So it really makes your life and others totally changed.

Ashley:
Well, Angela, thank you so much for joining us. Everyone, thank you for listening. If you’re not already, make sure you are subscribed to our YouTube channel at RealEstaterookie. You can also find us on Instagram @biggerpocketsrookie. I’m Ashley. He’s Tony. And we’ll see you guys on the next episode.