She Built a 3-Property Portfolio in 5 Years While Working Her 9-5

0:00Ashley Kehr:What if you found your very first real estate deal not on Zillow, not on the MLS, not driving for dollars, but standing in line at a food truck outside your hospital waiting for your lunch?

0:11Tony Robinson:And what if that one deal sparked so much in you that you went from nearly two decades as an x-ray tech to becoming a real estate investor, a licensed realtor, and someone doing her own home repairs, all while keeping a promise to her late aunt to do that?

0:31Ashley Kehr:This is the Real Estate Rookie Podcast. I'm Ashley Kerr.

0:35Tony Robinson:And I'm Tony J. Robinson. And our guest today is Stephanie Wagner. Stephanie is an x-ray tech in interventional radiology by day, a landlord, a realtor, and a woman who decided after her divorce that she was capable of a lot more than she had given herself credit for. She owns three rental properties in the Midwest and is on a mission to show other women that real estate is for them too, no matter where they are in life. Stephanie, welcome to the Real Estate Rookie podcast. Hi, guys. Thank you for having me.

1:01Ashley Kehr:Well, we are so excited to have you. Let's start at the very beginning. You spent nearly 20 years as an x-ray tech, and that was kind of your whole identity. What made you even start thinking about real estate as something that you could do? Actually, it started out as a kid. I have a couple of aunts and uncles that own several rental properties. And I remember going to a couple of them as a kid. And I remember actually my aunt that I was kind of influential in my life. She actually rented one of the units that one of my other uncles owned. My dad is one of 10 kids, comes from a really big family.

1:48And my dad was over there one day helping my uncle who owned the property. all three there's three uncles that were in this whole situation but my dad was helping them fix a pipe in the basement and I remember being like man this is really cool like my uncle has this business where the family is like involved in it and how I thought that was really influential to me that maybe one day I could have the same thing and so that's kind of what sparked my interest in real estate and then as I got older I ended up graduating college and my uncle who owned the rental property that needed that repair pulled me aside and was like, hey, like, how are you planning your retirement?

2:29Like, are you doing a retirement fund? Like, how are you investing? And he's like, have you ever thought about investing in properties? And I was like, you know, I really would love it. And I remember being a kid and being around you, being with you and your rental properties. And that I was like, I don't really know how to do it. Well, I had been graduated, I think, for about two years when I had met my husband at the time. And we ended up getting married and it was just something that wasn't interesting to him. He was very comfortable with just having the single family house that we owned and really had no interest in doing real estate investing.

3:09When I got divorced, it was like, it's now or never. I've got one life to live and I have to do a better job of living it and I'm just going to do it. so I ended up buying my first property.

3:20Tony Robinson:So it sounds like real estate was a seed that was planted for you early on, but it took some time and some life changes to get there. I think just one question, because I want to get into the first deal because you found it in line at a food truck, which is probably one of the craziest stories that we've heard in the podcast. Before we get to that though, divorce is something that is difficult for so many reasons. And I think a lot of folks kind of use that, I won't say as an excuse, but sometimes it is something that people fall into more of a rut afterwards, right? Like they're trying to kind of put the pieces of their life back together.

3:51Tony Robinson:But it sounds like for you is really more so like a, like a, like a rebirth, right? Like, like a reawakening. What was your mindset coming out of that difficult situation, Stephanie, that allowed you to pivot into this thing you've always wanted to do? And I know not everyone listening is going to maybe be dealing with a divorce, but sometimes there are other things that happen. We, we lose a loved one or we lose a job, something else somewhat traumatic happens and we can't find a way to kind of get ourselves back on the horse. What did that look like for you afterwards to really rebuild in the way that you wanted your life to look like?

4:20It's a great question. I think for me, I think anyone who knows me on a personal level knows that I'm a get it done kind of person. I've always been the kind of person where, you know, life will throw something at you. And to me, it's, it's okay to like have a brief pause where like you are focusing on your healing and, um, relining and what your goals might actually be both personally and professionally. Um, but just because you're getting divorced or you've had some sort of a hardship doesn't mean that you have to let the world keep you down. It's really ultimately up to you and the decisions you make in life that can keep you.

5:05It's either they keep you down or you choose to take that negative and you turn it into a positive. For me, this is something I've always wanted to do. And I remember my dad, when we went to look at that first property, I remember him being like, Steph, this is going to be hard. Do you think you can do this? And I was like, Dad, what's the worst that happens? I call Lisa back up and we list the property and I sell it. And then I just rent the rest of my life. And I was like, I mean, I can totally see why people would want to rent. I mean, there's not a lot of responsibility when you're a renter, right?

5:38Like the, a lot of the responsibility falls on the owner of the property, the landlord to take care of your tenants. And so for me, just because you experience like a hardship in life, whatever that might end up being, it's really up to you to make the best of your life. Like I said before, you only have one life to live and you really have to do what it takes to make your dreams come true. And if your dream is doing real estate investing, sometimes it isn't always easy. Not everybody wants to house hack a house where they're living in one unit. For me, I lived in one unit and I rented out the other.

6:20You could also have a single family home where you're renting out bedrooms. That's not for everybody. It's not the life for everyone. But if you want to build wealth in real estate, you kind of have to make some sacrifices and you have to have a certain personality to be able to reflect that. And for me, I knew that that's what I wanted to do. I knew that like working a full-time W-2 job isn't something that I want to do all the time. And I'm hugely passionate about real estate, whether it's building wealth in real estate or affordable housing. I'm very, very passionate about it. And I guess that's, for me, that's actually what keeps me going is it's a passion of mine.

7:00And you have to find what your passion is. It might not be real estate investing. It might be something else, but you have to do whatever it takes to make that dream happen.

7:09Ashley Kehr:And sometimes too, Stephanie, it's not even the dream or the passion of real estate. It's what real estate can do for you and give you. And real estate just ends up being the best vehicle to get you to that point in time. So that's a great example of how you were able to stay motivated to stay on this path. So you eventually did get your first investment property and you ended up getting a little discouraged after walking several properties with your agent. But then one day waiting for lunch at your food truck, what exactly happened in that moment? Yeah. So I was outside at the hospital I work at.

7:51And I remember discussing with one of our OER nurses that I had looked at a property with my agent and how I was like, man, the numbers just didn't make sense. And even then, like back then, I didn't like really know about the numbers, but I knew enough to know that this house needed a lot of work. I didn't have the funds to do it, to do it properly. It was like a full gut on the second floor and the first floor was rented. So I would be living in the unit that was already gutted. And I just knew that I couldn't do that. So I was talking with Chad about it, one of our nurses. And I was like, man, this is like, the market is insane.

8:32Like this house needs so much work. To me, it was like a dumpster fire. And I know that now as a real estate investor, dumpster fire could equal opportunity. But at the time, I wasn't in the mindset where I was brave enough to do this, but not brave enough to take on that big of a project. So when I'm talking with him, there's this lady who kept like turning around and looking at me. And then she'd look at the food truck and then she'd turn around and look at me again. And then I was like, well, maybe she knows Chad. I don't know. so then chad gets his food and walks away and then same thing she's like looking at me and like then finally she came next to me and was like hey i overheard the conversation you had with that man and i heard that you're looking at buying a property and i was like i am i'm actually looking at buying a rental property and she's like oh that's that's insane she's like where are you looking at buying and i was like oh i'm looking at buying in west allis and walkershaw and she's like oh my fiance and i are getting ready to list our duplex in west allis if you're interested, you can come and look at it.

9:34And I was like, I'm absolutely interested. An off-market deal with no competition. In this market, I'm absolutely interested. So we exchanged phone numbers and I'm texting her back and forth. And she's like, you're asking me questions that I don't know the answers to, but I'm going to give you my fiance's number and he'll be able to answer questions about the mechanicals and roof and all that stuff. And I was like, perfect. So then I'm exchanging information with him. He gives me a list of updates. And I was like, man, this is legit. Like they're really going to list this property. And I just feel like I got a gold mine, you know, for my first, first one.

10:12Um, so then I was like, I don't know what to do now. This is like for real. So I text my agent and I was like, Lisa, I think I found a property. It's not on the market. What do I do? And she texts me back two words and it was call me. And I was like, man, am I in trouble? Like, how does this work? So I just talk with her about how I feel like this is a real, real thing that these people are actually getting this house ready to be listed. And I would really like to see it. What does that look like for me? And so she explained to me, um, kind of what like buyer agency would mean. Like she would represent me as the buyer and she would help facilitate the, um, the purchase of the property, drafting the contract and going through everything with me.

10:57And she asked me if I could communicate that information to the seller. And I did. And he was interested in what we had to offer. So I said, well, at this point, I'll just turn over communication to Lisa and you guys can discuss things further. And then she helped me facilitate buying the property. It was kind of a crazy story. I never thought that talking about a failed attempt at buying real estate could end up turning into actually buying one off market. But this is what it goes to show talking to people about being an investor, talking to people about being a realtor and expressing like what your dreams, you just never know what those conversations, what can happen from those conversations.

11:45It's really important to let people know like, hey, I'm doing this thing. Are you interested? If you're not, you might know someone that is. so you can end up getting a deal that way. And I think now that I know a lot of investors end up getting properties that are off market just by having a simple conversation.

12:03Ashley Kehr:Well, every time I'm in line for something now, I'm going to make my kids ask me, mom, you have rentals. Mom, what's the next house you want to buy? Mom, where are you wanting to look at your house? Bring up conversation of buying rental properties, maybe so it will over here. And I want to hit on that point of using an agent for an off-market deal because usually everybody tries to avoid paying commission to an agent. And I'm selling a property right now that I'm selling to my tenants. I am having my agent represent me as the seller to negotiate and to handle the whole deal with my tenants. So it is worth it for me, for her to handle all the paperwork.

12:47Ashley Kehr:It is worth it for her to deal with the home inspection for her to, you know, just handle the whole transaction for me. And we've had a thing where come up where we have to replace the chimney. And, you know, she got all the, my agent got all the quotes from me. My agent coordinated with the tenants when the work would be done and all this stuff, then negotiated with them that they're going to pay half of it. So right there, it's already been worth the percentage that I'm paying an agent. And especially if this was your very first deal that you were doing, like it is so nice to have somebody to kind of walk with you and show you the ropes of what you should do.

13:26Ashley Kehr:Like there's so many things like even just doing a walkthrough inspection before you close on the property, like the day that you close, like nobody's going to tell you that. And how else would you know unless your agent says, OK, we're going to the property at noon. You're closing at one. We just want to make sure everything's OK. So I definitely do think that like paying an agent, even if it's an off market deal, in some cases can be super valuable. I agree with you as a realtor. I also agree with you. But it also takes like almost the pressure off you trying to communicate and like get this deal to close between buyer and seller.

14:02You know, selling a house and buying a house can be hugely emotional depending on the situation. and having that buffer between people, it just, it makes things easier. Not only that, but it takes away that, you know, the legal liability of things too, right? Like I'm taking, I'm taking on that responsibility as the agent. I'm willing to drive that bus. And that's something I think that's frequently overlooked. And then even if, say I am working a transaction and I don't have the knowledge of something, I work for a brokerage that has 900 agents in it. And I can reach out to all of them and ask them questions.

14:44Or like someone has, you know, a contractor they prefer to work with, but I'm working a deal and we need to get something done before closing. More often than not, I send out an email and like five minutes later, I have like five people emailing me back a contact. And so working with an agent, even as an investor, can be hugely valuable just in that in itself, especially if you're buying a property that could potentially be like you're out of state and you're buying a property in the area that I'm in. I know the area. And if I don't know the area, I can reach out to people that do. And I'm going to drive that area because my name's on the dotted line here too.

15:21And I want to make sure that my client is taken care of. So there's a lot of value, I believe, in having a realtor work a transaction, even if it is off market.

15:32Tony Robinson:Lots of great lessons for rookie investors to learn as they go through that first deal. And an experienced agent can sometimes help with that learning curve. We're going to take a quick break, but when we come back, I want to hear about the second deal because Stephanie said she wishes she had managed the tenants a little differently on that one. And that there's a really important lesson in there for any rookie who's thinking about the people side of being a landlord. We'll be right back after this. A couple of weeks ago, I traveled to the East Coast for my dad's wedding. It was quite the trip.

16:00Tony Robinson:I had the honor of walking my 71-year-old father down the aisle, which is something I never imagined I would get to do. I spent time with family and friends I hadn't seen in years, soaked in the East Coast charm, and of course, enjoyed a lobster roll, which always makes a trip out there even better. But while I was there, I was thinking that while I'm on the East Coast, my home was sitting completely empty the entire time I was away. That's why Airbnb's co-host network is such an interesting idea. If you've ever considered listing your space on Airbnb but don't want to manage everything yourself, you can hire a local co-host to help create your listing, manage reservations, message guests, and provide on-site support.

16:42Tony Robinson:Find a co-host at airbnb.com slash host. Summer bookings sound great until someone slips by the pool, gets hurt on your dock, or damages your property during a long holiday weekend. end. A lot of short-term rental investors don't realize their standard policy may leave gaps when it comes to short-term rental activity. That's why investors use Steadily. They offer landlord insurance built for real estate investors, including short-term rentals. And if you're a BiggerPockets Pro member, you'll also get 5 % off your landlord insurance premiums. Visit biggerpockets.com slash landlord insurance to learn more.

17:18Tony Robinson:Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows. The deal makes sense. But then the lender looks at your personal income, your tax returns, your debt to income ratio, and suddenly the deal doesn't qualify. That's the disconnect. Because as investors, we're not buying based on our W-2. We're buying based on the asset. That's why Host Financial offers DSCR loans designed for real estate investors, where qualification is based primarily on the property's income, not your personal finances. So no W-2s, no tax returns, and no DTI requirements.

17:59Tony Robinson:And with loan-to-value options up to 80 or even 85 % on eligible deals, you can keep more capital available as you grow. If you're buying rentals, refinancing, or scaling your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for.

18:18Ashley Kehr:Okay. Welcome back. So Stephanie, let's talk about deal number two and the tenant situation. So on this one, you wish you had managed your tenants differently. So let's kind of set the stage here. They are on a fixed income and raising their rent has been really challenging for you? Walk us through this situation and maybe some of the lessons you have learned being a landlord. So I think the people aspect of being a landlord to me is like the hardest part. You can call a plumber to fix a leaky pipe or you can call an electrician for an outlet issue. But managing people, I think really in any aspect of life is always the hardest part.

19:00And with these two particular tenants, they have been at that property and lived in the duplex for one for 20 years and the other for 13. So they've been there. This is their home. However, you know, raising a rent to what we considered market value is really hard on two people that are on a fixed income. And so I think in this transaction, I wasn't able per the contract and what I agreed upon. I wish I would have pushed harder to have the tenants removed. So I could have brought tenants in that could have paid market value. But if I wanted to buy the property, the people who are selling it, it was an estate and they are not landlords.

19:46The person that passed away was a landlord and they were willing to take on that responsibility. The family that inherited the property did not want to do that. And they didn't want to be responsible with removing the tenants. And I wish I would have pushed a little bit harder to have them removed only because the fact that they are extremely low rent paying. One, I was able to get on HUD housing through the housing authority. And we were able to negotiate that up to close to what market value is. And then I had the second tenant apply for housing assistance, too. However, we're still kind of waiting to see on that.

20:23I gave her a deadline of what I could keep her for, for how long. And then if we go past that deadline and she's not able to get approved or increase her rent, then I will give her 60 days and she'll have to vacate.

20:37Tony Robinson:Yeah, because I'm just curious, like when you say that you got the first Senate on HUD, like was that you applying as a landlord on their behalf or was it the tenants going through that process themselves? So the tenant already, he already had, he already was approved and was receiving benefits from the housing authority. We just, I had to work with his social worker to get his rent up to what would be close to market value. And so when I was working with his social worker, I had to run comps, like rental comps, and send them to her to prove that this would be rent in that area to get his unit up to market value.

21:19Now, he's lived there for 20 years, and it's hard to do improvements to increase the value more when someone's already living there. But there's some things that can be approved on when a tenant is living there. um so if i wanted to raise it higher in their mind they i needed to do improvements on his unit however i also knew buying this property that it was a bit of a hoarding situation with that tenant in particular and which was a big reason why the property did not sell for the three oh no six months it was on the market for six months before i ended up writing an offer and that's that's why they didn't want to deal with somebody who had a hoarding situation but But for me, it was like this property, if he were to leave, could increase the value exponentially just by him leaving the situation.

22:09And I ended up getting a screaming deal on it because of his hoard situation. It brought a lot of opportunity for me. And I wasn't I was willing to take on the responsibility of having to have him removed if he doesn't stay in compliance with fire code compliance and ordinances. And I work with him on that. There's a dumpster on site right now, and he's removing some of his stuff from the property so he can stay in good standing for the housing authority. He can still receive his voucher.