Turning $12K in Rent Payments Into a $1.3M Real Estate Portfolio

Ashley Kehr:
Reginald Calloway’s first flip sold for $299,900 above the nearby comparable sales he’d been watching. But the renovation and sale ran long, his six-month credit card promotion expired, and financing costs kept growing. He knows the major project expenses, but still hasn’t calculated his final profit or loss.

Tony Robinson:
His path into real estate started with seller finance buildings for a childcare business, and today we’re tracing that journey into house flipping and new construction with plenty of hard lessons that changed how he buys, and we’ll cover setting a maximum offer, planning for rehab surprises, and calculating what you actually keep after sale.

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

Tony Robinson:
And I’m Tony J. Robinson. And with that, let’s give a big warm welcome to Reginald. Reginald, thanks for joining us on the podcast today, brother.

Reginald Calloway:
Yes, sir. Thank you so much. This is such a full circle moment for me, but I am glad to be here.

Tony Robinson:
And Ash, we got to say that we actually met Reginald at BP Con and we were sitting down with him at

Ashley Kehr:
Lunch. Yeah,

Tony Robinson:
At lunch Monday.

Ashley Kehr:
Yeah.

Tony Robinson:
And he was just telling us our story and Ashley like, “We need to get you on the podcast.” So full circle, definitely, and I’m happy that we’re able to make this happen.

Reginald Calloway:
Yes, sir. Same here.

Ashley Kehr:
So before you even owned real estate, what was life and work life for you and how did the childcare business that you told us about actually get started?

Reginald Calloway:
So I came to Kentucky in 2009, and I’m originally from Miami, Florida, and that was around the time of the recession. That time, it was really hard in Miami. The jobs was drying up. So I came to Kentucky to try another route, try something else, try something new. And I was with Jennifer from the day I got down here, and I can recall me just getting here and us riding by a building and Jennifer pointing at that building and saying, “I’m going to own that building one day.” Now she’s not into real estate, anything like that, nothing. Don’t know anything about mortgages, nothing. But she just said, “I’m going to own.” And at the time I was so new, I can’t even remember the business I was thinking about at the time, but it wasn’t childcare. And so we rode past that building. As time went on, Jennifer would end up working in that same building.
So the previous owner, before we got that building, called Jennifer and he said he wanted her to run his childcare. They was putting a daycare there. And we said, yeah, we named the building and everything. So Jennifer worked there. Since the day I got here, I tried to do my entrepreneur spirit thing. So I had a mobile car wash at the time, which coming from Miami was very profitable. Coming to a small town in Kentucky where some dirt on your truck is almost like a badge of honor.
It wasn’t the lucrative business I thought it was going to be when I first started out. So we started out there and then we were going and we were growing and Jennifer wanted her own center. So I started looking for buildings. And to make a long story short, I found this building. It was a warehouse. We took forever. We turned that warehouse into a small daycare. It was a small building, took all of our savings, which wasn’t much at that time, but took all of our savings and it took us to go through a loan program from one of my mentors, a guy named Henry Snorch. He took us through a loan program and this program was for people that didn’t have good credit, you know what I mean? And didn’t have everything together. And they will still work with you and give you a small loan, I think up to $20,000, 25,000.
And at the end of that, we got approved for that loan by the skin of our teeth. And I was in that daycare with the lights off at the house because we had spun all our savings. Jenny and my daughter had just went back to her mom’s house and I just stayed in the daycare because I was just so sad. I thought I tried everything. I had came to this new state that wasn’t going to make it. And then that night my friend called me and told me he had us approved for the loan. And so that loan opened the first daycare. And then Mr. Grace came a calling.

Tony Robinson:
Yeah. And Reginald, just to make sure I’m tracking, Jennifer’s your wife?

Reginald Calloway:
No, she’s my fiance, but we’ve been together forever. We going to get it done.

Tony Robinson:
Gotcha.

Reginald Calloway:
But yeah, we’ve been together since 2009. We going to get it done, but she’s my fiance.

Ashley Kehr:
Now, when you were actually going through college courses, you had a professor that was actually asking you why you weren’t investing. How did this kind of play a role in your actual investing career?

Reginald Calloway:
So me and Jennifer are late bloomers. So she had been to college but didn’t finish and I had never been. So we started college and this was around the time, as I told you, the great recession when the jobs was laying off and they had these school programs. So it wasn’t many jobs, but they were paying for people to go to school and approve their education. And we tried to take full advantage of that. So we ended up in class and I took an economic class with a professor named Mel Evans. Now, Mel Evans was a real estate investor. He taught economics, but through the whole class he would talk about his real estate. He would take calls on his real estate. You know what I mean? Oh, he had all this stuff. And he just used to always say to me, “Calloway, why are you not investing in real estate?” And I kind of paid it no mind.
You know what I mean? I just though he was talking to kill time in the class, but he said it so much. So eventually one class, I just said, “Well, why don’t you tell me since you know what I mean? Because I don’t know why I’m not in real estate. Why don’t you tell me?” He said, “What’s the best financial advice you have ever received? It doesn’t matter who it came from, your mama, brother, sister, cousin.” And I could remember being stumped. I was told get a job. You know what I’m saying? Save some money, pay your rent. That was financial advice. But I remember this thing my grandma used to say. She used to say, “Make a dollar, save a quarter.” That was her financial advice. If you make a dollar, try to save a quarter. So I told him that and I said, so my grandma said, “Make a dollar, save a quarter.” And he said, “And that’s why the middle class and the poor never reached the top level.” And I was like, “Bewilder.” Because this guy had retired from the military, he had retired from the police force, so he had pensions, he had income coming in.
And so I was like, “Well, everybody doesn’t have that. Everybody doesn’t have $40,000 laying around.”

Tony Robinson:
Reginald, let me ask, I mean that sounds like potentially sound financial advice to save 25% of what you make. Why was this economics professor saying that that’s actually a trap for most people?

Reginald Calloway:
He said, “The rich family invests 50 cent, saves a quarter and leaves a quarter for enjoyment because you can’t chase growth without enjoyment.” So to me, because my family was fuel, you know what I mean? So when money came in, it was almost like it was going to leave and they hold it like sand and it just always slipped out like trying to hold a fist full of sand. And so I thought that’s where he was coming from with it. So he was trying to say, because I didn’t say anything about investing, I just say saving. He always said, “You can’t save yourself to rich. You have to invest.”

Tony Robinson:
And I think that’s such a great piece of advice because I think it is somewhat counter to what a lot of us learned growing up about money and what it means. And I think about the people who have only kept their money in a savings account for the last six years and think about how much they’ve lost in terms of inflation, but think about the same people who put that money into real estate for the last six years or who put that money into the stock market for the last six years or into a small business for the last six years. Those people have made many, many multiples of what they put into that. So you said enjoy 25%, save 25% and then invest the other 50%. I think that’s sound advice for a lot of folks that are listening.

Ashley Kehr:
Now let’s move on to your very first deal because it is so interesting to me how you actually negotiated this deal, and this was actually where one of the daycare centers were. So walk us through that conversation with the owner of the property.

Reginald Calloway:
So I get the advice from Mel, right? So Mel says the most important thing I’ve ever heard financially. So I tell him, “Well, we all don’t have a retirement plan. Everybody doesn’t have a 401k. Everybody doesn’t have a co-signer.” And he says to me, “Calloway, what you need money for?” And it just blew my mind. So he went on to explain what a land contract was, what seller finance was, what a quitclaim deed was, and several other strategies. And he said that there are people, and I can remember this, he said, “There are people with properties that are waiting on you to save them.” And this just was another way of thinking. It was just mind-blowing. It was totally reversed from everything I had thought and believed about owning property. So we are in the daycare. So Mr. Grace called, we finally get into this building that Jennifer had claimed, but we have a lease agreement, three years, first year $1,000, the second year 1500, the third year $2,000, and then we negotiate.
We renegotiate at the third year. And so I’m going in to pay the next year’s payment and move up to $1,500. And I got my check in my hand and I’m going to pay it. And just thinking about what Mel says, I said, and this guy named Mr. Grace, I say, “Well, Mr. Grace, what would you sell a building for?” And he looks at me, he leans back in his chair and he looks up and he says, “I can’t let it go for no less than $124,000.” I didn’t know if that building was worth $124,000. I didn’t know if it was worth $14,000, but I knew from the auto cooler I was reading, because I was trying to study real estate that I thought I was in a negotiation. So I automatically said, “I think that’s a little too high.” I didn’t know. Say, “I think that’s a little too high.” And I don’t know why I came with this strategy, but it just came out.
And I said, “I tell you what, we’ll take it for the 124. If you take the year we just paid, which was $1,000 a month, and put it as a down payment, which means we buy the building at 112, you’re still selling the building at 124, but we’re coming in like we’re putting a cash deposit of $12,000.” And I just said it and he’s leaning back in his chair again and he said, “Okay.” And I sat there, Tony and Ashley, for what felt like an eternity, it might’ve been three to five minutes because I didn’t know whether to move, whether to shake his hand, was I supposed to sign something? I didn’t know what had just happened. He was like, “I said, yeah.” So I go home.

Tony Robinson:
But Reginald, I just want to pause here for a second because it was one conversation with him. Yo had never approached him about this topic about buying the building before. That was the first time you brought it up. And in that one conversation he said yes. There’s so much to unpack here, Reginald, about what went down in that one conversation. So I just want to make sure that we’re breaking this down for our listeners. I think the very first thing that I want every single person to take away from the story that you just shared is that you never know what the seller is thinking. And the only way that you can figure out what they’re thinking, the only way you can figure that out is if you ask them the question, if you put something in front of them and put the ball in their court.
Because you could have assumed, Reginald, that he had no interest in selling this property because there wasn’t a for sale sign out front. Yo guys hadn’t talked about it before. You could have just assumed he had no interest in selling it. But you asked one singular question and in the course of one conversation, you went from, “I’ve never even thought about real estate investing,” to now having a verbal contract on a property that you’re already in. So I think that’s the first big lesson is that we can’t assume what the seller is thinking, right?

Reginald Calloway:
There’s never a dumb question. Yeah.

Tony Robinson:
And the second big piece, Reginald, is that you basically negotiated like a reverse lease to own. In a traditional lease to own, you sign a lease with someone saying, “Hey, I have the intention to buy this in a year or three years or five years, and what I’m paying right now can maybe go toward the purchase of this property.” But you did it after the fact. You’d already paid him for a year and said, “Hey, can you give me that as credit since I already paid it to you?” And I think the lesson there is that you can get as creative as you

Reginald Calloway:
Want

Tony Robinson:
When you submit an offer to a seller. And as long as you’re not breaking any rules, you can say whatever you want to say and put whatever you want to put into that offer. And as long as you and the seller agree to it, you guys can say yes. I’ve heard crazy things about things that people have put into contracts. I’m trying to think of one. We had a guest actually, Ashley, where it was like the seller wanted the new buyer to keep this plant that they had planted or something. It was something they had done. They’re like, “Hey, please keep this garden that I planted as part of the contract.” I’m like, “Yeah, I can do that for you.” So whatever terms you can negotiate, as long as both of you say yes, who cares? It’s a win-win for both of you guys. So it’s an incredible story, Reginald.
I’m so happy we’re sharing this with folks because you would never even think that that’s possible.

Reginald Calloway:
Yes, yes, yes. And if I would have went to, who is now, he’s my consultant, one of my best friends, Henry Snorton, just from him living in the area for so, he might have said he’s not going to sell you that building. Because like you just said, it’s to ask the question, you just never know. You know what I mean? And I would put that on a lot of my ignorance and that my ignorance worked for me in that standpoint because I was too ignorant to know you probably shouldn’t even ask that question. You only got $40 in your pockets, man. You know what I mean? But I didn’t even know not to ask that question. So yeah, that’s

Ashley Kehr:
A

Reginald Calloway:
Very good point, Tony. That’s a very good point.

Ashley Kehr:
I think at some point it gets so overwhelming and you get analysis paralysis because there’s so much information where actually it might be easier for people to get started having limited knowledge because they’re not overwhelmed with it and the same thing in your situation. But tell us about a land contract. What is it and what are the terms of it? Who’s on deed? Who pays the property taxes? How did this work in your situation?

Reginald Calloway:
So I negotiate the contract with Mr. Grace. I go home, I tell Jennifer, “I think I brought a building.” She says, “You think you brought a building?” I say, “Yeah, I think I brought a building.” And she said, “Did you think you remembered to put gas in the car?” And I was like, “I took $20 and put the gas in the car. I still brought the building. We’ll go.” And I went to Mr. Grace and just to say how green I was to the real estate thing, I signed that agreement without taking it to anybody. It was a very big mistake. It worked out in my case, but it was a very big lesson that I learned. When I take the agreement to my mentor, Henry, this is what he tells me. He’s like, “You already signed it. What you bringing it to me for?” I was like, “Oh, I did the process wrong.” But Mr.
Grace was a really good man. He said it, and I didn’t know what good terms was, but the deal was 180 months, 15 years at a 10% interest rate. It was top loaded, so all the interest would come out in the beginning, and it was no down payment, no balloon payment. I didn’t even know balloon payments existed on land contracts because I never had one. And so it took me a while to even knew they existed. So the contract was really good and all we had to do was bring value, and we had that through the daycare that we had built.

Tony Robinson:
Reginald, let me ask, can you define land contract and how is that different from a traditional purchase?

Reginald Calloway:
So what I came to find out is land contracts, it’s the same thing as seller finance. So the seller is representing the lender. So it’s not like he’s the bank, so he can take whatever terms he choose to take. So if you got a low credit score, he doesn’t have to count that. If you don’t have enough money in the bank or reserves, he doesn’t have to count that. So the seller becomes the lender, from my understanding of it. So that was the only way we could purchase those buildings because we didn’t have the credit scores or the reserves to go through traditional lending, which is how most people get started in real estate.

Ashley Kehr:
Now, since you’re doing this without using a real estate agent, you’re not using a lender, what are some of the ways that maybe you did or you didn’t do, but a rookie listening should do as part of their due diligence without having somebody to hold their hand through an inspection or to get an appraisal done? Is there anything you did or maybe looking back you wish you would’ve done during this under contract period?

Reginald Calloway:
So it took me, in my situation this particular, because it took me years to realize that I was in real estate, and that’s after owning the buildings because I had the benefits of real estate, but I never felt like an investor because we were putting stuff into the daycares. It was into the buildings, but I couldn’t realize the equity at that time, so I didn’t see it. So when we were adding on to the buildings, I just saw us trying to make the daycare because the daycare as a business itself took all of our attention to just keep running and keep that system going. So to rookie investors, I would say always do all your due diligence. You should know if you can get a survey of that property, try to get your hands on the survey. This is something you can actually sell it.
It’s something I could have asked Mr. Grace. I did not ask. If you can get a prior appraisal of that building and the seller might have it, and that goes back to just asking these questions. I mean, they can only say no. And so I would tell rookies to do their due diligence and all that part when it comes to commercial and when it comes to seller finance. But like we said, Ashley, at some point for me, I just got to go. I get analysis paralysis. I will overthink it. Once I start thinking, I never go because it’s always wait till this perfect time or soon as this happened or soon as that happened. So I usually, once I get all my ducks in a row and I’m convicted and I think I put all the guardrails I can around me, I just kind of go, but that’s kind of walking on faith.
So it’s to each its own how you do that, but that’s how I go about it. But you should do your due diligence. You should talk to a real estate. If I did it now, I would have my real estate agent pump that building. You know what I mean? I would call my insurance company to say, “Hey, if this building never caught on fire, these are all things you need to know when going into this building, and you need to take the land contract to a lawyer before you signed it.”

Ashley Kehr:
Now this kind of leads us into your first flip. So once you’ve actually decided you’re a real estate investor, you actually buy a residential property to flip it and you buy it at auction without even seeing it. So tell us about this process. What did you bid for it? How did the property actually turn out?

Reginald Calloway:
So I come to the conclusion I’m doing residential real estate. And so for a couple weeks I had been going to an auction, didn’t bid on nothing, I’m just going. And so I finally saw this property and I tell Jenny, I’m going to bid on this property. This is something you shouldn’t do. So this is a record, it’s not advice. So I’m just giving you a record. So I fall in love with this property, you know what I mean? It was 1,785 square feet, three two. It had a nice yard and I was like, “I want this property.” It was in a nice neighborhood. So I pick a property and I tell Jenny, “I’m going to win this property.” That’s the worst thing you can do going to an auction because now you already committed to it. So no matter how the property keeps rising, you just keep going up with it.
So I go to the auction and this property probably should have stopped at somewhere around 120, 125. But I had another guy in the bid with me and he just kept going up and I just go one over and I go up and I go one over. So by the time I come out of that auction, I’m at $157,000. And I say, “Cool, right? 30, $40,000 renovation, no problem. Sight unseen. I don’t know this. This is old pictures I’m looking at online, doing none of my due diligence. I’m saying just as green as they come.” So we get in the property and the property’s a total gut. It’s going to take $100,000, nearly $100,000 to renovate this property. And I’m doing the whole renovation. So I had a bank that’d cover 85% of the 157. So all I had to do was come with 15% down on that, but I had to cover all the renovations.
So that’s going on my credit card, going on my Lowe’s card, and it all started off good. Got my Lowe’s card, I had my reserves, you know what I mean? I was like, “Okay, I can do this.” And I had some friends that was in real estate that lend me his subcontractors and everything. So we going through that and I’m up to the top on my Lowe’s card. I get up to the top on my credit card and the Lowe’s card has this six-month period of no interest. So I go through it and I get on the market about March of 2025. And the house was in a flood zone, but the house itself wasn’t in a flood zone, so it didn’t need flood insurance, but the whole area was in a flood zone. But I’m thinking, okay, that won’t affect me. I’m outside the flood zone.
And floods, it hasn’t rained here and flooded in 40 years. So what can happen? We get on the market, get my house up, get the pictures up, and three days on the market. Yeah, Hopkinsville experienced the worst flooding in 40 years. So I can barely get to the property. When I do get to the property, all the houses around it are flooded.

Ashley Kehr:
But yours isn’t?

Reginald Calloway:
Mine isn’t. We on dry ground, but every house… So what happened was the realtors started telling their clients soon as they say, “Oh, I like this house. Hey, hey, hey, hey, that’s a flood zone.” Well, even though that house was outside, she was saying the area, let’s just look somewhere else. Let’s just look somewhere else. So I sat on that property longer than I expected, but I really did nice finishes on it, and I really thought I was suited for the flips because me and Jennifer always look at houses and we always are like, “This is what I would want in a house, and I don’t like that house because it has this.” I though we were suited, so I thought the house we made and the extras we went over because that budget got to 90,000. I had some friends that would’ve stopped at 60, you know what I mean?
Just trying to put what you can and put makeup, what it called, makeup on the pig, and just trying to get what you can and get out. But I went on ahead and put the extras, put the tile showers, put the granite. And so that house sold. I still sold that house. I got out of that house, but by the time the six months had left on the Lowe’s card and then my 0% interest on my credit card elapsed, that type of interest I couldn’t even calculate because I didn’t know how to calculate it at the time. So when I came out of that deal, I know I paid the bank back. I just don’t know if I made any money. I learned the lesson, so I learned that just because you get a check at the closing table don’t always mean you made a profit.

Tony Robinson:
Let me ask, Reginald, because obviously you said that you tried to put nice finishes and all those things. What do you do differently now when you create that initial scope that you didn’t do on that first property to make sure that you don’t have as many surprises? Now obviously this one was slightly unique because it was auction, but what did you learn so that you can have more confidence in your scope of work and your budget moving forward?

Reginald Calloway:
I learned how to deal with contractors. That was the big thing. So it was my first time dealing with a contractor, and then I learned that when they give you a price, it’s for their finishes. So if they give you a $200,000 price, it’s with their finishes in there, but I expected my finishes. So I bumped heads with my contractor on that. And when it came to the scope, I don’t even think I had a scope. Everything was word of mouth. You what I mean? I need these showers done. I can do that for you. It wasn’t nothing written down. It was, “Give me 2,200. I’ll do that for you.” I was like, “Okay, do that for me. Give me 2,275 and I’ll do that for you.” And this is how that job went. So I had already read Henry Washington’s, I think it’s Real Estate Deal Maker.
So that book had prepared me, but I knew after that first flip, I knew I needed way more mentorship than just reading that book. You know what I mean? I needed mentorship also. So I took my lessons on that, and after I got out of that deal, I joined Henry Washington’s, I think it’s Roll to the Closing Table Mastermind, and it changed my whole real estate view and strategies from there. It’s been a totally different life ever since I joined that group.

Ashley Kehr:
Okay. So now that you’re in Henry’s group, you learned about doing a mail campaign. So walk us through your first mail campaign and how did it actually turn out for you, but along with what did you actually say when you mailed these people to buy their houses?

Reginald Calloway:
So I get into Henry’s class, and it’s a whole community, right? So Henry’s there, but the whole community is there to help you. So he gives me the mailing campaign strategy and I start on that. So Henry always says that it’s two ways to find deals. You can either use your time, you can go yourself, drive for dollars, knock on doors, things of that nature, or you can use your finances, mailing campaigns, calling campaigns, things like that. So the strategy depends on the person. And so I didn’t like getting cursed out in person, but I can kind of take it over the phone. So I though the mailing campaign was best for me. So I started that mailing campaign and my first 20 calls were really vicious cuss outs, like, “How did you get this? How did you get my number? How did you get my address?
I’m not selling my house. And if you ever did a mailing campaign, you know what I’m talking about.” So I got a lot of those calls, and then I got this one call with this seller, and this was the first deal that I made. And so the seller calls and he has this house, it’s a nice house. He says, “I want 69,000 for it. I’ve been in the Henry Group, so I know my scope. I know what I might have to do to the house, and I know the ARV that I think I can get on it.” So I’m like, “I don’t know about 69. I can give you 55.” And he says, “Okay, but I don’t sign the purchase agreement or anything.” Okay. So I call him the next day and he doesn’t answer. I called him a couple days later, he doesn’t answer.
At this time, I’m negotiating with myself. Everything that could go wrong, I’m think going wrong. This is all in my head, and I’m like, “Oh, okay. He probably know how much it’s worth. Oh, I probably need to go up on the price.” He probably felt disrespected when I finally get on the phone with him, and this is how green I was. Everybody can learn from my mistakes. When I finally get on the phone with him, before he speaks, I tell him I can go up to 65. And he said, and this is how God has always been there for me because you don’t look out for children and fools. And so he says, no, we agreed on 55 and I’m okay with 55. He took $10,000 out of his pocket and I was negotiating with myself. So rule number one, never negotiate with yourself and make sure you get you a purchase agreement and lock that house up so you can sleep at night.
So we went through with that sale. He said he didn’t answer the phone because he had bumped his toe. They were an elderly couple. He had bumped his toe, so he was trying to get back right. And so we got that house and I brought it for 55,000 and I took it to my bank and they had it appraised and it appraised for $142,000. So I had a little over $80,000 in equity and I thought I knew what was going to happen after that. And then my banker, instead of, because I thought I was going to refinance cash out, but instead of doing that, he gave me a line of credit of $125,000. And so that’s what started the strategy of the small lots, new construction and the flips.

Ashley Kehr:
So with this property, you ended up keeping it then. This wasn’t a flip, you kept this as a rental?

Reginald Calloway:
Yeah, I still have it. So the property came with a tenant in it that had been there for 12 years. They didn’t put a dime in it. I mean, I had my air condition guys go over there and make sure the air condition worked right, but they just did some tune up and I had my plumbers go over there to make sure the lines are snaked out. But I didn’t put a dime in it. It cash flowed from day one.

Tony Robinson:
Reginald, I think the theme that I’m seeing with your story is that you don’t let your fear stop you from taking action. I’m sure you were somewhat fearful walking into that landlord’s office the first time for the childcare center and cold pitching him on buying the property. I’m sure you were somewhat scared the first time you bought that property at auction. I’m sure you were somewhat scared the first time you sent that direct mail campaign and you had to pick up the phone and talk to someone. How do you overcome that fear and do it anyway?

Reginald Calloway:
I got a book coming out called Growth Ain’t Free. And in that book it describes what losing taught me. And so for the beginning of my life, I felt like I just lost. And not just bets and wins, but lost on everything outside of my control. So if it could go wrong and I thought I had it right, something would come that wasn’t inside my control. And for a long time I thought that that meant that success wasn’t for me or it was for other people because it looked like it came to them so smoothly and everything. But what that taught me is every time I got back up, it was building a resistance and I was building up resilience, but every time I got down. So it didn’t feel like that when I was younger, but I had been wrong so many times and I had been knocked down so many times that it became almost like water off a duck.
So I was never afraid, but in my teens and early 20s, I felt like it was a curse. You know what I mean? And then Mel Gibson told me something.
Mel Evans, one of his sayings is, “Nothing happens to you. Everything happens for you.” And I just kind of live by that. So I see my mistakes now as building me to be the person that I am. And if somebody was there to tell you that when you was younger, maybe you wouldn’t have took it so bad. So by the time I got to Kentucky, I was like, “What’s life going to tell me? It’s going to tell me no.” I had already heard that it was going to knock me down. I had already been there, you know what I mean? And I know that growth comes attached with a sacrifice of equal or greater value. So there’s nothing you can achieve too without having to give something up. And you know what I mean? Whatever that is for you is different for every person. So what’s ready for that growth.

Tony Robinson:
You said growth comes with an equal or greater sacrifice. Is that what I heard?

Reginald Calloway:
Growth comes attached with an equal or greater sacrifice.

Tony Robinson:
That is great. I love that. I got an 18-year-old son who I’m talking to a lot about right now about what young adulthood looks like. So I want to share that with him. Rajana, as we wrap things up here, I just want to go back to the initial daycare building because one of the things we didn’t talk about earlier was the fact that this daycare that you initially purchased, it was one building, but there were actually three buildings in total. And you actually over time end up buying all three of them. So I just want to clarify for the listeners, the first building you seller financed basically at a purchase price of 124 with no money out of pocket because he took your 12 months of lease payments as your down payment. With that initial starting point of 124, did you have to put any cash into the acquisition of those other two buildings or was it all the same kind of process?

Reginald Calloway:
No, we didn’t have no cash to put in, but just let me say that. But if we would have, we would have, but we didn’t have… But no, Mr. Grace was really gracious on our start. So he financed pretty much everything from the purchase of the property to the rentals. Now he was getting 10%, and this has been 2014 when you can get a 4% mortgage on that type of property. So he was getting 10%, but he told me something. I remember telling him I though the 10% was high. He was like, “This is just Mr. Grace.” He said something like, “I though you wrote off the interest.” He was like, “So why would you be worried about something that gives back to you at the end of the year?” I just had never thought about interest that way. He was like, “Yeah, the interest is the only thing you can write off.
You can’t write off the principal.” I say, “Oh, so I’ve been thinking about interest in a different way since then.” So we got that first building. We end up growing out of that first building, needing a second building. Mr. Grace owned another building on that corner. We looking for a building, go to this building that wasn’t what we wanted. Jennifer’s pregnant with my youngest daughter. I don’t know where the argument started at. We both didn’t want the building, but so I don’t know. She was pregnant. It could have started from anywhere. You know what I’m talking about, Tony. I ain’t got to tell you, but I don’t know. She’s yelling in the car. I raised my voice two decibels and Cherry Lou, my daughter who wasn’t born yet, you can see her kicking. Tell daddy to shut up. Yeah, he’s too loud. We are in front, we just ended up in front of that building a week later.
I tried to make this quick. A week later, that building flooded. The company that was in there moved out. Mr. Grace called again. He was like, “You want another building?” We was looking for another building, but I tell Mr. Grace, “Hey, I can’t make this building make money unless you make it into a childcare.” He was like, “How much?” We went and got the numbers, got the architect, we got that building done, got that building open. The third building was sitting right next door. It was just this old green building. Mr. Grace said, “You want to buy this one?” I was like, “I don’t know what I’m going to do with it.” So I’m taking this walk and just in my head, phones got me some motivational music on, and I’m taking this walk and I called Jenny and I said, “We going to buy the third building.” She said, “I knew you was going to say that because it’s going to be a daycare.” I was like, “Whoa, whoa, whoa, whoa, whoa, whoa, whoa.
Nobody said it. We just going to buy it, you know what I mean? We should buy the building because we don’t want the mechanic to get the building to have the cars all outside the building. So you want to control the property if you can, that’s in your vicinity or in your direct area if you got a commercial building.” So we got that building and eventually, to make a long story short, we turned that building into our third childcare. So now we have what’s called the childcare campus. The first building we brought is the baby house. It goes from six weeks to three years old. When they turn three, they go down to the second building we brought, which is Small Steps two. It’s a preschool. It goes from three to five years old. The new daycare that we just opened, which is the third building, is an afterschool center.
So it goes from five to 12 year old. So we have what we call a childcare campus, like a little campus.

Tony Robinson:
Reginald, you spent $12,000 in lease payments to control that first building and it turned into three. If you had to put a number on the total campus value today, what do you think it’s worth?

Reginald Calloway:
We went through the refinance process eventually, so I wanted to get Mr. Grace paid while he was living. He was elderly and I wanted to pay him out. Then we wanted to open the third building and it was going to cost… The third building cost about $175,000 to re-renovate and make a childcare ready. We took those buildings up in 2025 and we brought the first one in 2014 that had all three by 2017. Those buildings appraised for 1.3 altogether.

Tony Robinson:
You took $12,000 and turned it into a commercial building worth $1.3 million.

Reginald Calloway:
We did.

Tony Robinson:
That is incredible.

Reginald Calloway:
Thank you so much. I started with you guys. I just want to say this, this full circle moment. I got to say this. When I started real estate and I knew I was coming to residential real estate after the daycares, I Googled, how do I get rid of it? BiggerPockets, BiggerPockets. That’s all that kept coming up, BiggerPockets. I saw this podcast that said rookie investor and it was right there for me. Tony was on there and Ashley was on there and for me to be on here today, you know what I mean? I’m going to try not to cry, but for me to be on here today, man, is really, really big. To me to meet you guys at bigger pockets, it was like when I met you guys, it was like, okay, I’m not going to cry about the hotel bill. No more on the way home, because I was crying about the hotel the whole time.
But I said, “I’m not going to cry. You guys got to get my book.” And it was just awesome and you guys are really genuine, good people in person because you can meet some people, you know what I mean? They’re good on camera, but may not be as nice in person and you guys are everything I though you would be. And I’m so gracious you guys got me on here. I really am.

Tony Robinson:
Appreciate all the kind words, Reginald. Yeah.

Ashley Kehr:
That’s the power of BP Con is making those connections and meeting people.

Reginald Calloway:
Yes, yes, yes. I had a ball. BP Con, if you can get there, and I know you know everybody’s finances is everybody’s finances, but if you can get there, and I always say, if you can just get in the room, just give yourself a chance, just like Mr. Grace, just get in a room and give yourself a chance and you might be surprised what’s waiting on you.

Ashley Kehr:
Well, Reginald, thank you so much for joining us today. Where can people actually connect with you and find out more about what you are doing with real estate?

Reginald Calloway:
I have a real estate company called ASC Real Estate Solutions. We should have a link down for you guys to find. I also wrote a book called One Step Above: The Visible Ceilings That Shape Ambition, Identity and Growth. It’s about breaking through ceilings. You can also find that at onestepabovelegacy.com. I have a new book coming soon, which is called Growth Ain’t Free, and it’s basically this whole breakdown in a book. So it goes a little bit before and it goes a little bit after, but it gives you the breakdown and it’s called Growth Ain’t Free: Faith, Leverage, and the Real Cost of Building Wealth. So if any of you guys want to get to me, you can get to me there. Hopefully we’ll have a link for you, but I thank anybody that, and I hope it helps anybody that’s looking for that breakthrough.

Ashley Kehr:
Well, Reginald, thank you so much for taking the time today to share your story, your journey, and to inspire the rookie listeners. I’m Ashley, he’s Tony, and we’ll see you guys on the next episode.