How to Reach Financial Freedom Faster with “Slow and Steady” Investing

0:00She had the flips, the followers, and the financial freedom. But behind closed doors, she was unraveling. Today's guest built a seven-figure real estate business that nearly lost herself inside it. And in today's episode, our guest, Leika Devtha, shares how she traded burnout for balance and why her new book, Return on Real Estate, might be the blueprint you need.

0:28Well, obviously, Tony can't match my drama, but this is the Real Estate Rookie Podcast, and I'm Ashley Kerr. And I am Tony J. Robinson with no drama in my name. But let's give a big warm welcome to Leica. Leica, thanks for joining us today. Hi, guys. It's always such a pleasure to talk to you both because we walk away and I'm like, I learned so much from you too. So thank you for bringing it every episode for so many years. Truly appreciate it. Leica, we always love having you on the podcast. and today we are having you on to talk about your new book. It is called Return on Real Estate. So thank you so much for joining us.

1:10Thank you for having me. This book has been such a labor of love, but I have written it and I'm done with it and I'm so excited to just bring it out into the world and have everyone else read it. Lika, can you take us back to the peak of your hustle era? What did those days look like for you? Honestly, those were some extremely, now looking back, extremely hard, challenging days, because I would wake up and then I would just have to start putting out fires. And then my day continued that way till I went to bed. And so there was no rhyme, no reason, no calendar. It was just like, go, go, go. be dragged in different directions, not have like a clear vision or goal.

1:56And so it was just a lot of like helter skelter. But I feel like that's what most entrepreneurs go through because there's no roadmap. There's no boss. There's no team telling you like, this is how we're going to do this or this is the direction something has to go in. You are wearing all those hats and just trying to figure it out. And given that no one's been in your shoes in that location, in that deal, in that situation, it's you that needs to figure it out. You that needs to like kind of create that pathway one step at a time. And so it was a lot of figuring it out. Like how did you measure success at that time?

2:42By the number of deals that I bought, not by how they did or performed financially. Um, how, you know, um, there were no KPIs just based on how many deals am I buying? And that's going to basically catapult me to success. That was the mindset. So during this time period, you also have a family. So maybe give us a little insight as to what it was like raising a family, being a mom and also hustling. Yeah. So back then I only had one son and I was actually pregnant with my second. So it was challenging because the whole reason I quit my corporate job was to go and be a mom and just be more flexible, have more time for the family.

3:31And so when I started working in real estate and I started buying all these deals, I just had no time. So I did the opposite of what I had first set out to do. And also at that time, there was a year, this is 2015. I bought 11 deals in 11 parts of the city and none of them were close to each other. And I was like eight months pregnant, just driving from one house to the next, one contractor mess up to the next. I don't ever want to go back there and I don't want anyone else to go back there. I think there's something to be said because I feel like just our culture really promotes this idea of hustling.

4:16And while I think there's definitely some validity in the idea that you have to hustle, you have to work hard, like that is a requirement for being successful. I think where a lot of folks struggle, myself included, is how do you strike that balance or maybe draw that line where the hustle becomes counterproductive? Right. Like sometimes you can hustle so much that you're just hustling in a million different directions, but making very little progress. So you feel incredibly busy. You feel incredibly overwhelmed, but you're not making a lot of progress. Was was there a moment for you, Laker, where you maybe realized that you had gotten to that point?

4:57Yeah, I honestly truly believe that the hustle needs to be there. Like no one person can set out and say, I'm going to do X, Y, and Z and then make all the profit that they set out to make, not encounter any problems or have to deal with hurdles along the way. So if you don't put in that hustle and have that experience on all the things that can actually go wrong, you don't know how to make that right for years to come. So I think people have to put in that hustle, learn for themselves what works for them, what doesn't work for them, and how they deal with adversity when it shows up. Because I started with a class of 200 investors here in Seattle.

5:43And out of that class, two of us still flip homes 11 years later. And so what happened to the other 199 people, right? Right. It's it just so there's so much to be said for, OK, I'm going to hustle. I'm going to encounter all these problems, but then I'm going to show up and figure them out. And then when I move forward, I'm going to look back and say how not to do something or what did I do wrong that I'm never going to do again. And so for me, I think back when I was buying all those deals and I had 11 duds, out of 11 deals, you guys, I'm not joking, I probably made a 100k profit total. I walked away from that year and I said, okay, how can I completely change my idea, my strategy, myself, to never to do that again?

6:39And since then, I have made$100K profit on each deal at the minimum. And I think just having that adversity and learning from it was what helped me grow. So what were some of the things that when you had that realization that you started to implement? So if someone's listening, and maybe it's not even in real estate, just even at their job or something where they're feeling that burnout, they're feeling like they're not succeeding. What are some of the first steps you took to change your life and change that trajectory you were on? I love that question, Ashley. I think most people feel like they need to be good at everything.

7:18And early on, I realized that I wasn't good at door knocking and I wasn't good at direct mail marketing to sellers. And so I decided to just eliminate that from my business. I said, okay, I'm really good at having conversations and networking with like-minded people. And so that's what I'm going to focus on. Next, even deal underwriting. It was going to take me a lot of underwriting to get to the point where I could underwrite deals more realistically. Because what I was doing in the beginning was just building out these castles in the air. oh, interest rates are going to be lower at that point.

7:57Oh, my contractor is going to come in at a lower budget than what is recommended by a real estate broker. Oh, I am going to have all these buyers like just dying to buy my property. And so I think just taking a more realistic approach and almost underwriting in a very conventional manner, like really, truly helped me. But that doesn't mean that you have to go the other way and say, okay, I'm not ever going to make money on this deal because then you're just going to let go of a lot of really good deals. So it was finding that good balance, finding the right team. This is so important and it doesn't happen right off the bat.

8:37And if it does, you're really lucky and hold on to your team. But I had to go through 20 different contractors to actually find one team that works for me. And now they've stuck with me for eight years. And so that took a good three years to build up. And so just focusing on different aspects and then knowing your strength and playing to your strengths and then outsourcing or hiding out everything else helped me minimize how many different directions I was being pulled in, but also focus on what I was really good at. And like, I appreciate you sharing that because I feel that a lot of rookies do feel that they have to be experts in everything.

9:16And, you know, I've shared on the podcast before that I'm not a DIY guy. I don't change my own flooring. I don't install anything, you know, like we'll build the furniture. We'll put all that. Pretty for that. Tony. That's right. Actually, this one time when we were in Colorado together, we went to our friend's work site and Sarah made this a reel where it was like the, the, the girl's like, that's your man. And, or I think it was like Dr. Phil or something. A doctor. It's like Dr. Phil's voice. And he's like, that's your man. And she's like, yep. And it was me as Dr. Phil, like pointing at Tony, just sitting there.

9:53And there's our friend there actually working on the floor and stuff, doing these things. You guys have to go deep into the archives and find them. But it's there. My wife, my wife publicly shaming me. But I share that because for a while, I felt like I wasn't a good enough real estate investor because I didn't DIY, right? Because I didn't know how to do that. Ignoring the fact that I was good at other parts of the business. I was good at analyzing. I was good at managing projects. I was good at raising capital. I was good at this and that. But because I was missing this one piece, I almost questioned, like, okay, am I really a real estate investor if I'm not doing all of it?

10:26So for all of the rookies that are listening, from what Lake is sharing, it's that it's okay for you to specialize in certain parts as long as you supplement those other areas with other experts who can do it better than you can. So I appreciate you sharing that, Lake. But I want to go back because you talked about the money and, you know, 11 deals. You made$100K. That's like$10 ,000 a little over per deal, right? And these are million-dollar deals, by the way. And even just the risk associated with that, right? Like imagine the risk of taking down almost a seven-figure flip to make$10 ,000. Like that's a lot for a little.

11:04But I guess you mentioned that even when you started making more money, you were still filling behind. So why weren't you feeling like a success even as the money started to increase? I did feel like I was still doing a little with a lot. And so till I actually whittled it down to doing a lot with a little, I feel like I didn't feel like it was a success. Because what happened also was I got really good at flipping homes. So then I was like, hmm, I like learning curves. So let me go learn to subdivide a lot or let me go learn to build new construction or let me go learn to be a real estate broker.

11:46And so then you get back in that cycle of having to learn, build a team, find what you're good at, find what you're not good at, and then edit and then repurpose and then move forward. So I just feel like it takes a while to just find your rhythm, find what you're good at, and then continue to do that for eternity. But having said that, I can tell you this, I bought a deal just last year that is 10 years in that I would have never bought before. And I'm like, why did I do that? Because I went against my judgment. And that deal has just been so painful. And the only reason that I'm able to get it to the finish line is because of the network and the net worth and the community that I have today.

12:34But if it was a rookie that had done that deal, they would have been in a hot mess right now. So we still make those mistakes because I still take risks. And that's just who I am. I like taking risks. And I like doing making something out of nothing. But at least I am cushioned. So if you don't have that cushion, you're just starting out. Be more cautious. So it wasn't one particular project, what Lika calls the flip that broke her, but that everything finally cracked at this point. So we'll get into what happened right after word from today's show sponsor. You just realized your business needed to hire someone yesterday.

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16:12So this was flip number 39. And you would think by the time I've done 39 flips, like I know a thing or two about buying the right deal or in the right neighborhood. And that's what I thought I did. I bought a house in one of the most premium neighborhoods in Seattle, around Seattle called Kirkland. And there was this brand new hot shot outdoor mall that was coming up down the street from where this house was. But it was a 900 square foot home. There were two bedrooms upstairs, and they were both like tiny where the roof line was literally not very high. And then we We bought it and there was a whole thing with my city where there was an Amazon head tax that went into place and then people just stopped buying homes.

17:01A, they stopped buying homes and then B, we got stuck with a really like the permitting and then the inspections on this house. It was a 900 square foot house and we did 39 inspections because the inspector was just on our case. It was awful. he kept making us redo work where we were already grandfathered in because we bought the house that way. And so it was just really a tough culmination of things. And then with the fact that people just stopped buying deals, I ended up losing 65 grand on this 900 square foot home. And at that point, And I was like, oh, my God, like, why? Why me? Right. Everyone feels that way.

17:47Like, why am I buying the bad deals? It's coming out of it. I realized that I had kind of leveraged my portfolio in a way where I was doing one risky deal for every three really good deals, like home run deals. And so it was OK to make a loss because that's the cost of doing business. But again, I'm going to say this, if you're just doing that one risky deal, or if you're just banking on that one deal to get you out of, or to make you all the money you need to make in the year, a lot could go wrong because so much hinges on that one deal. And so I would say like, when you're underwriting deals, don't over leverage, do two or three, if you think you can afford a million dollar deal, like do two or three smaller deals, like three, 400K deals, even if you have to go outside the city or whatever.

18:41But especially when you're starting out and you don't have all the other pieces figured out, it is so important to manage your business. And although that deal didn't break me, it made me question why I was doing this. And just one follow-up to that, You say it made you question why you were doing this. How did you come up with an answer to that? Because I think we all reached that point as real estate investors. We were like, damn, is this really what I signed up for? So what was your inner dialogue like coming out of that deal? So that night, I'm not joking. That night I was having dinner and we had ordered Chinese takeout and I got a fortune cookie.

19:25I hate fortune cookies, but I opened this because I felt like eating something sweet. And so I opened this fortune cookie and it said, you are meant to be in real estate. Shut up. Stop it. I am not even joking. Like if you go down on my Instagram, like somewhere in 2017, I posted this photo of my fortune cookie and I was like, what? I still feel like hot flashes thinking about it because I'm like, what in the world? Like it was like a sign from God saying you have to be doing what you're doing because at some point you're going to get over the hurdle. Right. OK, me and Tony are going to be together tomorrow night.

20:04Tony, we're ordering Chinese food and we're going to open those fortune cookies and see what they say. That must have been like the local the local realtor who's trying to like promote their business through the fortune. Yeah, was it on the back at the other side?

20:19That's that's a crazy one. That's actually a great marketing idea. they're inside the fortune cookies right yeah i should get like oh my gosh i'm listing my flip next week i should just take the address and put in every fortune cookie possible and be like you need to go buy this house you need to go buy this house or just offer them if you do an open house so when people crack it be like where you are is where you were meant to be or something you know like that's directly saying buy this house but like that is incredible like whatever the street number is, if it's like 382 or whatever, be like 382 is your lucky number.

20:58So you get this sign from the universe, Lekha, that you should continue to do this. But I guess what did that moment, what did that deal teach you about identity as a real estate investor and what you wanted out of it? I think I had accomplished quite a bit by then. I had already done 39 deals. And I was like, okay, if I can just continue to go forward and not look back, and instead just be positive about this, don't be doom and gloom. And just, you know, think about all the good things that can come out of this and my experience thus far, then it doesn't matter if one deal is a dud, I can still continue to do this.

21:39And now looking back, I have done 60 plus deals after that. I have sold millions of almost$100 million of real estate since that year. And I've been on a TV show. I just launched the book. All those things could not have been possible if I had quit back then. I definitely have those moments too, where I'm calling home and saying, list it all, we're selling it all on time. I just think like, oh God, wouldn't that be so nice just selling it all? But then I think of the actual work that you have to actually go through to sell a house, like coordinate with the tenants, get it listed for sale, deal with the showings, like all of that.

22:24And it's like, eh, nevermind. I'll just keep doing what I'm doing. I'm a pretty lazy investor. But Lika, along this way, you did kind of mention some of your mindset shifts that came in. So you talked about maybe what were those changes when you had that mindset shift to really be your return to intention? You know, as an investor, even as an entrepreneur, I think you have to constantly talk yourself off the ledge, but you also have to constantly talk yourself to just jump off the ledge and then open your parachute on the way down. So it's been like, I talk to myself all the time. I'm like, okay, this is fine.

23:05Like this went wrong, but this is what I did to overcome that. The other mindset I would say is so important is that you have to, you have to crush all obstacles and just keep moving forward. It has to be one day at a time. Yes, today is a bad day. I have to deal with all of this stuff that's going on, But tomorrow is a new day, right? And so the more hurdles you can solve each day, you're going to get to that bright sun. Like if you think about it, the last three years from 22 to 25 has been the worst since I started in this business. Interest rates have been high. Buyers have vanished. So any house you put on the market, you have to list right under the actual like selling price that you want.

23:57You want to be super conservative on your rehabs. You can't go and like shine up the house like I typically do and spend 150K over my rehab budget. Everything has to be so measured and so perfect. And then find the right sellers to work with, find the right buyers to work with, find buy the right deals. There's so much that has gone on the last three years that has kind of switched again how I run my business. And so you just have to constantly, you have to A, be flexible, don't be over leveraged, make sure you have enough capital or ways to raise that capital, and then build a community. I cannot even insist more.

24:36Like, I appreciate you sharing that. And we're actually bringing on James Daynard and Thatchwin, two of the probably most experienced real estate investors that I know, to specifically talk about investing through the ups and downs in the different cycles because they've seen plenty in their experience. but I think what you just said, like hit the last couple of years have been some of the hardest in real estate ever. The people who make it through this will be so much better on the other side. And the people who like start in this are going to be, I think even better than the people who were around in the years prior to it.

25:09It's almost like think about the people who grew up during the great depression, that generation had a level of financial maturity and just like, hey, we're going to save everything that we can because we've seen how bad it is that the next generations didn't have to worry about. So I think the investors going through today, they will be better for it if they can make it through. And I appreciate you sharing that. And I think that's why it's so important. And we joked earlier about today's episode not being too negative, but I feel that there's value in sharing the hurdles and the obstacles because Because when you go to social media and you're on TikTok, Instagram, wherever you pick your poison, a lot of it is just the good stuff.

25:55And it always makes it seem like everything is perfect. And I think that can make it difficult for people who are looking to get started because they're like, well, man, I don't have it all figured out the way that Tony and Laka and Ashley do. I can't do it the same way that they can. But when we share these moments, I think it humanizes the journey of being a real estate investor. And it shows that even the three of us with whatever level of success that we've had, we're still figuring it out for ourselves as well. That's why I, you know, Tony and I will do our like goal setting for the year or whatever.

26:27And like every year I know when we do like the end of the year, where did you end up? My thing is completely different than what I set my goal on. because I just, I, I it's, and it's not shiny object syndrome is that I am so conservative with my investing, so conservative. And I have not scaled or grown as much as other investors that I know because I am so risk adverse and so conservative. And for a long time, that was very hard for me as I'm not growing and scaling enough. I need to be doing more. I need to be doing more, but I also haven't had a terrible, terrible deal either. So there are benefits to not scaling and growing or trying to do too much at once.