She Started Investing in College and Already Has 5 Rental Units (And Counting)

22:46Tony J. Robinson:So when you say like digging out those two units, is it putting walls back up that would kind of like carve those additional two units out? Or yeah, I guess what does that scope look like to bring back those additional two units? Yeah. So somewhere along the lines, people were putting down walls and you can tell that it was it was put there just because the original hardwood floors would be running under these walls. and when we look when I took down the sheetrock you can tell that there was framing for doors where there aren't doors anymore and there are areas where they just put up sheet like sheetrock and you can tell that there used to be a door there and there are other small areas that are I guess considered closet space which they definitely just put there just to put there Or make it a bedroom, count as a bedroom probably.

23:43Yes, definitely, definitely. Now, did you have any, with the property being like that, was it already separately metered as a six unit? Like did each have their own water meter, electric meter, or is it all in one meter? Did you have to do anything like that? Or even like, you know, did you have to get more furnaces or something like that or extra boilers? I have a family that's a single family home, but at one point in time, it was a duplex. And so each floor is still separately metered. Each floor has its own HVAC and it's still mechanically set up. So did you have to do anything with the mechanics of the property and the metering?

24:25No, because this fourplex slash used to be sixplex was actually a dormitory way back when. So all of the utilities are tied together. And in Dallas, it's actually kind of common for the utilities to be included. So I pay the utilities, but those costs are in the rent. Now, let's fast forward to 2026. So this building basically decides to declare war on you. You end up having four separate disasters. So take us through each one of those. And let's start with the January freeze. Yeah. So in January, Dallas had this massive freeze and it essentially turned my front lawn into a giant ice skating rink.

25:13So this year I discovered that the way that the property is positioned, that the sun never actually hits my front lawn. So while all the neighbors' lawns were thawing out, I was essentially stuck in the ice age. And I was we were stuck in that ice age for at least an extra week, a week and a half. And I had to convince my boyfriend to come help chip the ice off the pavements so that the tenants are safe. And it did take us quite a long time. But at least I know for next year.

25:49Tony J. Robinson:Let me ask, right, because I don't live in an area where we have to deal with like freeze like that. And maybe you can give some insights. But like, how do you prevent that? Like, how do you make sure that you're, you know, the sidewalks and all those things don't freeze over? Yeah. So people are salting the sidewalks. Now, it does help. But in Dallas, it doesn't actually snow. It like sleets and then it gets super cold. So it just ices over. And so it's really hard for the ice to really go away at times. so even if you salt everything it will still freeze over it's just about how much easier it is to pick up all pick up the ice I guess yeah that's the same thing we do in buffalo is sidewalks are salted um like there's so many different types of salt like some is harmful to pets uh some can actually erode your sidewalk like I've seen um landlords put in their lease agreement that they don't even allow the tenants to salt because it does erode on the sidewalk, which to me is just more of a liability.

26:58But yeah, that really is the main thing. Or actually a lot of businesses, when they're doing new development, they actually put in, like you would do a radiant heat in your house, the in-floor heat, they put that in the sidewalk. So your sidewalks are heated so it melts the ice and the snow before, you know, it even gets to.

27:21Tony J. Robinson:So you deal with the freeze first and you chip through that. What's the next kind of disaster that hits you on this on the fourplex, Megan? Yeah. A few weeks later, these unwanted tenants, these raccoons decided to move in. They broke in from the outside through the inner wall. They knocked over a full pint of white paint and I walk into the stairwell with these tiny little white paw prints everywhere up and down the staircase. There's two extra holes in the walls for them to exit out of. I mean, at that point, I wasn't even mad. I was just like, I can't believe this is happening. How do you deal with raccoons?

28:09Tony J. Robinson:Is it calling the pest control or like, who do you call? I'm not have been sure for a raccoon. Yeah, I actually learned that raccoons are considered critters. They're not pests. They're too big to be considered pests, I guess. So lots of, they came in, they put cameras in the walls, and I guess they spray pheromones outside of the building so that they're attracted to those pheromones instead of the ones in the building. We had an issue at one of our properties with flying squirrels. And from the inside, they sound like mice. They sound like rats are inside, right? So we had guests who were reaching out to us saying, hey, we're pretty sure there's like rats in the ceiling.

28:50Tony J. Robinson:We're like, oh my. And this is like a cabin in probably like one of the more wooded areas that we own. So like, oh my goodness. It turns out it's flying squirrels. But apparently flying squirrels are really hard to get rid of also. So it was like a few rounds of trying to get them out that we had to go through. so you've got the ice then you've got the raccoons what what hits you next megan yeah not even a month later i find out the century-old cast iron plumbing had collapsed in a very disgusting fashion i would say i won't go into too much detail but let's just say black chunks coming out of the drains thankfully this unit i just finished renovating so no one was living there but you had just finished renovating it.

29:33Exactly.

29:35Tony J. Robinson:What does the fix look like? I mean, do you have to replumb the entire place? Was it just that unit? Yeah. So I had to go trench the gravel, the backyard. They had to dig under the building. I guess cast iron isn't supposed to last too long. So it was not tilted towards the main line, which is why it was backing up. And so they had to go in. They had to put in PPC pipes everywhere. And it's working now, but it was definitely a process. What was the cost for that, Megan? Just like ballpark. It was around, I would say,$80 ,000. Oh, my God. Man. So is there any cast iron left at all? Um, I, I've left the ones in the walls because I do have tenants in some of those units.

30:28And according to the plumbers, it would, I mean, they would have to go in and rip out the walls and they wouldn't even know how much to rip out. They would have to basically rip the walls first. Yeah. So it was going to be a very big process. I mean, it's everything's working now. So currently working on getting some cash flow going right now to be able to fix that in the future. Yeah. I mean, that's like crazy that$80 ,000 doesn't cover all of it. Yeah. I just thinking about, did they, what did they end up replacing it with that they're saying is a better, sturdier material. Do you guys do pecs or copper?

31:15I believe that it was just PVC piping that they used. According to the plumber that I was using, they try not to go for the copper or anything like that that could erode. So I guess plastic is the next best bet.

31:34Tony J. Robinson:Now, I think, Megan, for a lot of folks, they go through all of those experiences. and at some point they're thinking to themselves, maybe I should just sell this thing. Like maybe real estate investing is not all that it's cracked up to be. Did you have any of those moments yourself? And if so, what stopped you from just calling it quits? Definitely. I mean, my first thoughts are, are you kidding me? Like, I can't believe this is happening right now. And I sometimes want to just lay on the ground and throw in the towel. But I try to give myself about half an hour to be like, why? And freak out a little bit.

32:12And then I go back to work. You know, I've realized that these properties, you can't control things like that. The chaos of it. If each time a setback happened like this and I thought of it as a failure, I honestly wouldn't be able to keep going. So I'm trying to tell myself, you know, failure isn't failure. It's tuition for future success is what I'm trying to tell myself. I just need to be more prepared for anything that can go sideways, whether it's the cast iron plumbing or the raccoons. But those things are out of your control and I can't control that chaos. So controlling my response is what I'm trying to do.

33:01I've definitely learned to stop beating myself up for not being perfect. Definitely focusing on being more resilient. Tony and I talk about this a lot on the podcast, but when you get to the point where you realize your reserves are actually meant to be spent on the property and that's not your life savings and that's not your extra cash that you have as that is to maintain and take care of your property or for future improvements, things like that. Once you like switch that mindset, it does make it so much easier to actually write that check, hand over that money. And then the next thing I think you basically said it is emotional regulation, like not letting yourself get stressed about it because it's just going to make the situation worse for you.

33:48And like, you know, thinking about it, processing it, taking action and not letting yourself like me. I used to just like freak out like this is the end of the world. I'm done with real estate, you know, and it's like, get to the point where like, okay, I know how to handle this. Or even if I don't know how to handle it, I'm going to figure it out and get through it. This is part of the job that I am doing.

34:10Tony J. Robinson:Okay. Megan, you've, you've gone through the ups and downs with this deal, but you don't quit. In fact, you do the opposite. And now you're doubling down on building the right system to find your next deal, which we'll break down right after a quick word from today's show sponsors. If you think property management is expensive, try mismanaging a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early. That's expensive. A good property manager isn't overhead. They're protection against small mistakes turning into big losses. And that matters more than ever in this economy.

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37:54Tony J. Robinson:If you're buying rentals, refinancing, or growing your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for. All right, welcome back. So before the break, Megan walked us through the 2026, just like barrage of issues from her fourplex. But now the question is, what is she doing with everything that she's actually learned? Because the way she's sourcing her next deal isn't what she'd expect from someone whose dad is also an investor. So Megan, when most investors talk about sourcing deals, they name some sort of software, right? You said Redfin and Zillow officially replaced you scrolling on Instagram and that the real decision gets made in like that 30 minute drive.

38:31Tony J. Robinson:So what are you actually looking for on that drive that no algorithm can show you? Yeah, I'm essentially looking for what the vibe is, the specific lifestyle, you know, indicators that these algorithms can't really capture, such as, you know, well-maintained landscaping, or how are the kids playing freely in the front yard or even in the streets, you know? I also look at the practical proximity to essential grocery stores or to gas stations or depending on who I want as the next tenant. I will look at, say, if I want to go gear towards traveling nurses, I will look at properties close to hospitals and whatnot.

39:24So I'm trying to determine if it's an area where people actually want to live, basically, rather than just a place that they happen to be. So I think that the numbers will always follow the neighborhood, not really the other way around. And so by spending my time walking the streets, seeing the community through future residents' eyes, I essentially know exactly who my future tenant is going to be by the time I submit my offer. I think that's such a great point because data statistics can be very misleading. If you were to look at the Buffalo market and you were going to look at South Buffalo, you could see that their houses are, I just had my agent tell me that she just sold a house.

40:15It was 70 ,000 over asking that it sold for. And you would think like, look at all of this and be like, wow, that's amazing. But you could literally go down one street and you could get 10 houses down that street. And I would not buy ever a house that's after those first 10 houses. It can be so specific for the neighborhood. And I just think that's so valuable. Yes, you can buy sight unseen. You can buy in a market you've never been to. But if you have the resources, have the opportunity to actually go and go around the neighborhood, it's definitely going to give you an advantage rather than somebody who isn't.

40:58Now, Megan, you've talked about walking a property on your own, and you've talked about going with a contractor and asking, where's your dad, or talking to your boyfriend about the job. What was the first time that actually got under your skin, and did it even bother you at all? It definitely bothered me. It was very hurtful, honestly. It was for the very first unit that I wanted to renovate. Whenever I first started, I did want to outsource a lot of the work. But when these contractors would come up to me asking me if I was the tenant or the assistant, it was just very disheartening. So it really, it made me question if I'm even doing anything correctly.

41:51Am I even allowed to be here? Like, why are they asking if there are other people here? You know, but there have definitely been times where my dad had come to help since, you know, these contractors are ghosting me or my boyfriend will come help me and they'll look at them and ask them these questions. And I'm very grateful for my inner circle. They will just look at them and say, don't look at me. Like, this is not my project. Talk to her. So I've definitely tried to stop convincing people to work with me. I'm just going to let my work speak for itself, really. I honestly think you have an advantage.

42:34and I've thought this for a very long time that like you can find out if a contractor has flaws and is not going to be you know good to work with or is going to try to take advantage of you uh from the back so like if they're already you know trying to you know pull a fast one on you or you know not take you seriously or whatever like you already know how the job is going to go and you already know how to move on. Where Tony, he goes in, the guy treats him right. He doesn't try to one-up him or whatever, but Tony's not going to see this guy's faults in the beginning or this contractor's faults.

43:16And then he's going to find out later on in the job when he tries to pull the fast one after he's already got the job. So I have noticed that it can be somewhat of an advantage that you, as a real estate investor, you do know stuff. You have a lot of knowledge. And when you can point out right away that a contractor isn't taking you serious, you can actually find out, you know, if they're not going to be a great contractor for you.

43:41Tony J. Robinson:Megan, you've said that your why isn't necessarily about being rich, but it's more so about having freedom. At 24, what does freedom actually look like for you right now? Like, what is that picture of freedom in your mind? And what's the next piece of this machine that you're building to help get you there? Yeah. So at 24, freedom to me is being able to book the flight to see my family and friends without asking for permission from my boss or being worried if I have X amount of days of PTO left and if I can even use them or not. Um, real estate definitely has made it possible for me to prioritize people over a desk.

44:25And, you know, I'm able to go celebrate my grandpa's 90th birthday soon. So it's a lot of, it is a lot of work, but it's very rewarding. I would say, um, my next piece in my machine. Well, I've actually put in four separate offers, but they've all been declined. But, you know, maybe it was a good thing. Maybe maybe it was a sign. But I am actively looking for my next deal. I'm looking into co-living, actually, mainly because I need cash flow for future loans. Just because of all the repairs I've had to do this year on my fourplex, my buy criteria has changed to a more workforce housing solution.

45:12and that has been reflected in the changes in the cities I'm looking in to invest in and stuff like that. That is going to be such a great attribute to have is that you're willing and able to pivot your strategy, your buy box as the market around you changes during your investing journey. Well, Megan, thank you so much for joining us today on Real Estate Rookie. Where can people reach out to you and find out more information about what you are doing? Yeah. So please follow my Instagram. It is megan.chow.invests. So come follow me. Sorry. I don't think that was so bad. No, but that was actually so nice because everyone's usually just like, you can find me on Instagram, but you were like, please follow me.

46:03So everyone go and follow Megan because she actually asked and asked nicely. But Megan, also we have to give a shout out to your dad because previous to this recording, when we were at a TurboTenant meetup, we actually got to meet your dad along with you. So we got to do a shout out and say hi. Shout out to my dad, Arlen. He's following him as well. Well, I am Ashley and he's Tony and we'll see you guys on the next episode.

46:35Tony J. Robinson:Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener. As a rookie investor, especially if you just got your first deal, it is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal.

47:06Tony J. Robinson:So head over to biggerpockets.com slash guest if you want to be a part of our show. Again, that's biggerpockets.com slash guest, and we'd love to have you on. You can't reason with the sun. Trust us, we've tried. This summer, it's time to put that angry ball of fire on mute. Columbia's OmniShade technology is engineered to protect you from the sun's harsh rays that can burn and damage your skin. The sun is relentless, but so is our gear. Level up your summer at Columbia.com to spend more time outside and less time slathering on aloe lotion. You're welcome. Columbia. Engineered for whatever.