I Had 4 Kids, No Cash, and a Traveling Spouse: Now I've Got 4 Rentals

0:00I was scared to make my first phone call.

0:02Brandon Turner:Now she has four rental units and she's profited over$130 ,000 on her first two flips. In 2023, Joanna was home alone with a six-month-old baby while her husband was offshore working. And she was looking for a passive income stream that could help her have enough money to bring him home. Then I discovered real estate investing. Joanna didn't have any cash to start with, so she leveraged her home equity. I wasn't seeing many deals on the market. And that's when I started talking to sellers. She didn't have any construction experience, but she figured that out. I bought my first rental property for$100 ,000.

0:36Brandon Turner:And that's after she paid the seller$20 ,000 more than he was asking for. I'll explain that later. Now that house is worth double the amount I paid and it's cash-flowing hundreds of dollars. Joanna has made five more investment deals since 2023 right in our backyard of Northwest Arkansas. Her husband isn't working offshore anymore and her family has a beautiful new five-bedroom home. That's the lesson of this inspiring story. anyone can figure out real estate investing and start on the path to building financial freedom. You can even use the same real estate investing strategies I used. Because we're about to reveal them right now.

1:15Brandon Turner:Joanna, welcome to the show. Thanks for having me, Henry. This is cool. Like good full circle moment for me because I've been around you for a while and I'm excited for you to tell people your story because I think it's really inspirational. Yeah, I just in a short amount of time have been able to essentially change my family's life. It's a pretty big deal for us. I love it. I love it. So let's start at the beginning. Tell us how you got started. I'm a nurse. My husband used to work in the oil field and we had a lot of children. So at that time, we had four children. I was just like we need to figure something out to where you can come home um so he was working like out of town yes he was working um 20 days out of town and then he'd be home 10 days the boys were getting older and so I was just like they need their dad so I started thinking about ways that I could make money for us um also just thinking about when they go to college how are we gonna pay for all this so um so I started listening to bigger pockets actually heard you on a podcast, Henry Washington for North is Arkansas, able to achieve a hundred doors.

2:29And I was like, wait, there's somebody here who does this. So, um, I was raised in Serena, Arkansas and, um, immediately started following you immediately, um, started watching your funny videos and just was like, okay, I think I'm ready for the next step. Joined your mentorship in January of 2023 and then decided, okay, it's time for us to start sending mail. so started sending mail um and that is how I got my first deal I received a call um in June from an elderly man who was looking to sell his property he was getting older he didn't want to deal with the hassle of owning a home anymore his children did not live close and so he was ready for the next step in his life so of course I asked him all the questions that I needed to ask him and then in the end i was like what are you looking to get what are you what are you wanting um and he said you know i really would like to just get 82 000 and i was like oh okay yeah

3:28Brandon Turner:sounds great it's an oddly specific number yeah so he um in my mind i was like this house must be terrible because he only wants 82 000 and it's in the middle of rogers arkansas which is it was in a great location. So I go over to the house that evening because, you know, Henry's always like, you got to go that day. So we went, I went that day, looked at the house, made him my offer. And essentially I asked him again at that point, you know, what are you looking to get? And he said, you know, I really want 82 ,000. I said, well, I'll be honest. Your house is in great shape. I don't foresee you having any issues selling this house on your own.

4:12All I can offer you is a hundred thousand. What a negotiator. He was like, you heard me say that's less. He's like, can I sign this right now? I was like, yeah, sure. You can sign right now. And so he signed and we shook hands. I was like, it's a pleasure to meet you. And I left. Why can I just ask, why did you go with 100 when he wanted 82? In all honesty, like I just knew that his house was worth more than what he wanted. Yeah. And I knew that if he sold it on the market, he could probably get more than$82 ,000. At the time, I had a sibling of mine who told me, hey, I know you're starting this journey.

5:08If you find something, just know that I have$100 ,000. You know, I have that money to be able to. So that's all I had. And so that's what I offered because that's, you know, that's the best I have for you. I can't just give you$82 ,000. Like, I need to give you more because I know that your house is worth more. I know you're going to need more. And I don't know. To me, it was just the right thing to do in that moment. Like, I just, like, was like, I know I can give them$82 ,000, but I have$100 ,000. So even if I buy it at$100, it's still a really good deal. I think that's super commendable. Good for you.

5:50You know, we talk a lot on the show about real estate does not have to be a zero-sum game where one person wins and the other person loses. It should be mutually beneficial. And you created a good situation where the seller got more than he was expecting and you still got a great deal. And to me, that's the perfect example of a win-win situation you can create in real estate. Yeah, so he was really happy about it. I was obviously elated about it. And that was my first deal. I ended up helping him find an assisted living where he could move to. I helped him move some stuff out and sell some of his stuff that he left in there and ended up paying him that money of like what we sold.

6:36and he actually rode with me to title because he didn't have any kids around and he didn't drive anymore. So we drove together to title. Do you guys still hang out? No, we don't hang out anymore. He was so sweet and he was so happy to be in his community. So yeah, it was a really beautiful experience. So I ended up calling my brother as well, like right after and I was like, hey, you remember that 100K? I was like, I'm going to need that, buddy. So then immediately my brother was like, okay, so how are you going to pay me back? And so then my husband and I started the journey of getting a HELOC on our first property.

7:20So we were homeowners at the time. We bought our house in 2016. And so by 2023, we bought it for$130. And when it appraised at that time, it appraised for$250. Okay. Oh, wow. So we were able to pull out$100 ,000 HELOC on that property. And I paid my brother back like two months. So once we closed on that, I paid him back. So he lent you the money to close and you paid cash for the deal? Yes. Okay. Then you paid him back with the HELOC. Right. Was this a flip? That was the idea going in for it to be a flip. After just telling my family members about the property, They were like, it's in such great shape.

8:04Like, you should just keep it. So we fixed it up. We put new floors in it, granite, painted, did some other work that needed to be done. Put a renter in it. Six months later, refinanced.

8:15Brandon Turner:Great. So we were, it appraised for$220. Woo! Right. Okay. And I pulled out just the one, it was like$110 that I was in it. Amazing. Yeah. So. Perfect burr. Right. Right. Right. It was rent for it rents for fifteen hundred. It's a great deal. And yeah, the mortgage is like eight hundred or so, something like that. Amazing. So for you. Yeah. And it's still in really good shape. So that was man, I was so happy about that. So what I really love about this story and just kind of what I want to put out there, because I can see the comments already like, oh, I could do this, too. If my family had one hundred thousand dollars.

8:55Brandon Turner:Right. Like, I get it. You did have a brother that gave you$100 ,000 to buy it. But that just bought you time. Because what you did was you went and you pulled a HELOC on your primary. And a lot of people do have a primary and have equity. And that's a great way to find capital. Because once you pulled that HELOC, you just paid your brother off and you were all in it with your own money. So this is something that people can repeat. And I think one of the benefits and one of the safety net that she had that I want people to realize is don't just go pull a HELOC and then go buy anything. Right? because if you use borrowed money and buy a bad deal you put yourself in double hot water yeah right but you use credit card yeah exactly but you used heloc money and you bought a really good deal and that gave you exits you had equity so if something were to happen and you were like you know what i need to sell this thing you could have sold it got all that money back and you were safe so helocs are great tools to use if you buy a good deal and protect yourself man that's super cool I've heard it a bunch of times, but it still gives me goosebumps when I hear it.

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13:58Brandon Turner:All right, we're back on the BiggerPockets podcast with Joanna, and she was telling us about her first deal, which ended up being a rental property. So what happened next? Oh, so after we bought that one, it was July of 23. My husband was laid off from his job and I was not working at the time. So I had just had a baby when we bought our - Baby number five? Baby number five. Congratulations. Yeah, baby number five. And I was like, okay, crap, I'm a nurse. So I told him, I'll just find work. I'll work. We were on a call with you, with your group, and I was just telling you about our situation. And you said, well, why don't you come work for me?

14:41That'll be good experience for you while you find a nursing job. So I said to her, I'll do that. Huge mistake. This is going to end now. So I was officially Henry Washington's acquisition manager. So yeah, so I started working for him. And about a month later, I also started working as a nurse. So I would work three days, 12 hour shifts. And then on my days off, I would work for Henry. And then my husband was at home with all the kids, which he loved. Wow. Actually, I even more doubled down on like, I need to learn this stuff. You know, I mean, I was very blessed on my first deal. I was very happy about it, but I was still very scared.

15:34So I. I'm still scared all the time. So I worked for him and that helped me a lot. Just like running numbers, talking to the sellers, going through the process. and I finally got another call from a mailer in April of 2024. It was a house on an acre out by the lake. And so I went out there to see it. I offered him, I think I offered him$130.

16:07Brandon Turner:Did he ask for 110 and you were like, no, no, no. I've got 130 for you. He's like, I could get Henry to pay you 150.

16:19He also was an older man looking to travel. He wanted to buy an RV. He also was looking into like investing into other things. And so he wanted like liquid cash. So we went back and forth a little bit on that one. And we ended up settling at 140. Was it the idea to flip this one? Yes. So this one, I wish I wish I would have kept it. It's a cute home. And it's like not even five minutes from the lake. So I ended up putting new floors in it, painting it, granite. And it was a very light flip for me. So I was like, okay, I see why people do this.

16:54Brandon Turner:What was the rehab budget on it? So the rehab on that one, I think we spent, what,$30? $30 on it? That was light work. It took a lot longer than it was supposed to. But anyways, we ended up putting it on the market for$275. Yep. So you were in for$170. $170, yeah. Yes. 24 hours later, we had a offer for full price. Unbelievable. That's so cool. Yeah. So did you just finance it with cash because you pulled that 110 out of the first deal? Or did you use any financing? When we refinanced our rental, we used that money to pay the HELOC back. So we had 100K in HELOC. That's right. Okay. By this time, I had already pulled a HELOC also on my rental property.

17:40So I had$100 ,000 from our primary home, and then I had$75 ,000 in a HELOC from our rental property. So that's the money that I used to pay for it and to fix it. It's just an example of how once you get that first deal or second deal, you can use the equity that you have, and that starts to build momentum. It never gets easy, but it makes every deal a little bit easier.

18:07Brandon Turner:It never gets easy. It always feels scary. Yeah. But when you buy a good deal, you do have somewhat of a safety net. And it sounds like the second one was a good deal, too, because you were all in for$170. You had it on the market for$275. Had an offer full price in 24 hours. So what were you able to net walk away with on that one? I walked away with$82 ,000 on that one. $82 ,000 is your lucky number. It's the second time that's come up today. Can I ask this for some perspective? How much were you making as a nurse? Oh, God. I think I was making yearly probably like 50, maybe. 50 to 60 a year.

18:47And how long did that whole flip take you? Probably about five months because I let him stay in it. Yeah. I let him stay for a month. It took us about a month to fix it all up. And then, yeah, once it hit the market, it was. Unreal. Yeah. So imagine at this point you're all in on this. You're like, yeah, I just made more than my annual salary. Me, my husband was like, okay, we're doing this. I did both of the jobs. You're like, that's what I'm talking about. Both jobs combined.

19:11Brandon Turner:Henry's cheap.

19:15So, so yeah, I mean, that was, you know, my husband was like, this is crazy. And I was like, this is crazy. So I continued to work for Henry. I continued to do my nursing job. While I was fixing that one around June, another house came up that a wholesaler had. essentially he contacted me and was like do you know henry washington and or do you work for henry washington i said yes i do and so he said i have a house and i'm looking to sell i went to go see it made the offer made the offer for me yeah made the offer for henry and um henry you know the goat he's just had all these projects going on so he was like It's too busy.

19:58Yeah, he was so busy. So he was like, hey, you know what? Do you want to do this one? And it was a very scary one because it was not what I'm used to. I'm used to these little pretty ones that I can just, you know, put some floors, paint, granite. You know, obviously I was not going to say no, but I was definitely scared. And so I was like, yeah, no, I'll take it. It's not a big deal. Yeah, I got it. And so he was like, all right, find money. Oh, you thought I was going to pay for it. So my mother-in-law had just retired. And I knew we were on the brink of closing the one by the lake. So I was like, that money is going to come right back to me.

20:46So I talked to my mother-in-law about lending us money. And then my other brother also, we were just having a discussion. and I was like, I don't know where I'm going to have to get these other$50 ,000 because we went under contract for$150 ,000 with her. And he was like, well, you know, I have a HELOC on my house. I can just let you borrow that. You could just pay me the interest on it. And same with my mother-in-law. I actually was the one who had the idea because she had it in a savings account and it wasn't really making her a whole lot. So I was like, listen, I'll pay you 10 % on your money if you let me borrow it.

21:19That's fair. So I borrowed the money from them to pay for the Bella Vista. closing yes um and then once i closed on the lake one when we got that money i used that money to rehab the bella vista one can i ask you a little bit about this because in real estate everyone always talks about private money right right private money it sounds like this like organization of like bankers who are like handing out cash left and right but usually it's friends and family at least when you're starting. It is very, you know, I do some private lending. I don't really lend to new people if they haven't done a couple of deals.

22:03But I imagine it's hard to approach your family and friends with those conversations. Can you just tell us a little bit about like how you approach those conversations and how they went? Definitely. So I really had to lay all the numbers out for them and let them know that their money was secured by the asset, right? So So, you know, with my mother-in-law and my brother, I just let them know, listen, if I was to sell this how it is, you could still get your money back. It's a good deal where we could clean it up, put everything in a dumpster, get it nice and clean, and we can probably still sell it as is for X amount of dollars and you can get your money back.

22:44Like I wanted them to know that it was a safe investment for them, that I wasn't just like making up numbers. And, you know, I really had to explain everything out to them, what I planned on doing and what the value of that house was. I mean, that's great. That's how a bank would think about it. Right. Looking at the collateral and operator experience.

23:07Brandon Turner:So this one, you paid one for 150. You put how much into it? We actually ended up putting 60 into it, which was about budget of what we were meant to put in it. And we sold it for$281. Amazing. Yeah. So you made, what,$40? Yes. One thing I didn't budget for was, like, windows. That was something that I wasn't expecting, but still worked within the budget. I have a lot of uncles that helped me on that one. That's nice. Yeah. I ended up getting a roof for, like,$5 ,000. Oh, nice. So that helped me. In terms of roofs, that's almost free. What is your uncle's phone number? Yeah, so that helped me out with the budget.

23:52I was able to put the money that I thought I was going to put into a roof into the windows. My stepdad does floors and tiles, so he did my floors and tiles on that one.

24:01Brandon Turner:Not for free, though. Yeah, not for free, but he helped me out. Yeah, yeah. She got a dose of reality on this. Yes. Because it didn't sell in 24 hours. And when I tell you this girl is freaking out after like two weeks on market. What did you do wrong? That she didn't have an offer. I think a whole generation of investors felt that in 2024, though. 25. Oh, my gosh. Yeah. Yeah, I listed it in October of 2024. And crickets. I did everything brand new. So roof, windows, water tank. I mean, everything was new. Everyone wanted the heating and cooling system. They wanted a brand new heating and cooling system.