She Started Investing in Her 50s, Now She’ll Retire with Rentals!

23:35Ashley Kehr:Did you have to do any repairs at all? No, no. Well, once the water got turned on, there was a leak and we had that fixed. But that was it. Otherwise, it was perfect. I had a detect garage with a studio above and we're like, we can rent that out. This will be fun. It'll be so much. It'll be lovely. And so we were there New Year's Eve, I remember, and we stayed there. And I'm like, wait a minute. We have a mortgage on this now. Wait, this isn't relaxing. We have a mortgage on it. So we're going to have to do something about this. And so that's what we did with that money. We bought really, truly our first investment property.

24:12Ashley Kehr:And how much did you purchase it for? Oh, gosh. I think it was maybe$200 ,000. It wasn't very much. But this was probably eight years ago. So now it's worth more. Thank goodness. And we still have it, actually. Oh, really? That's awesome. That summer, we put it on short-term rental because I was such an Airbnb expert by then with our cabin and that one tenant that we had. But we put on, and it was a block, it is a block from the casino. So that was, people would come up for the weekend and they just, they loved it. And it was convenient and it was adorable and all the things that we loved about it, other people loved about it.

24:50well then fall came and um nobody really goes to cripple creek for the weekend because it's cold and snowy and it's not that much fun so then okay we got to get a tenant in here so we found a property manager and she got it rented it probably took a couple of months but so we had long-term rentals in there long-term tenants there for i don't know two years um and that's when we started really learning about real estate we're like you know if we converted the garage to another unit, then we could have a duplex. So we actually now have a duplex. We converted that to a duplex. So that's a nice cash flowing property.

25:28$200 ,000 for three units is pretty solid. So you guys take that money, you use that to launch into your first true real estate investment, but you don't stop there, Beth. I know you go on to start experimenting in all different types of real estate investing. So what was the next deal after this? And my mind is blown when you said 1895. I've never, I don't even think I've been inside a house that was built. Yeah. Two centuries ago.

25:55Ashley Kehr:You used to come visit me, Tony, and you. A lot of them. Right? Yeah. My job was when you said 1895. What came next? So, well, we didn't really realize we were investors. We were just like, we were just getting the mortgage paid. And then COVID hit and our business, we still had our medical spa and it got shut down. And my husband had always wanted to be a real estate agent because he loves looking at real estate. He doesn't like helping people buy real estate or sell real estate. He just likes to look at real estate. And so during COVID, he got his real estate license and I'm like, all right, I'm going to be a part of his life and help him with that.

26:38And so I found this Facebook page and this woman was teaching on how to be a real estate investor. And so every night we it was a five night program. We listened to that and we learned all the real estate techniques, Airbnb or the Burr method and flipping and house hacking and wholesaling. And our minds were blown. We're like, we could totally do this. so that's like giving a little kid uh a dollar back in the day and going to the candy store so that's how my husband was he's like we're gonna go buy we're gonna go buy real estate so he uh we knew denver which is where we're at the denver metro area was too expensive and um so pat was looking in pueblo colorado which is two hours south of denver and uh i grew up in colorado Springs, Colorado, which Pueblo, it was like the armpit of the world.

27:33It's just the nastiest place in the world. And so when he's like, look at all these properties we've found at Pueblo, I'm like, we're not buying in Pueblo. It's disgusting there. And he's like, no, no, really, really, look at how cheap the properties were. And they were. I mean, at that time, Denver, the average price was$600 ,000 for just off the MLS. And in Pueblo, it was$150 ,000 for the same kind of cute little house. And I'm like, yeah, but it's Pueblo. So no, gross. Well, at that time also, there was this TV show on Netflix called Undercover Billionaire. And Grant Cordon got sent to Pueblo of all places in the world.

28:09And he's like, this is the greatest town in the world. And I'm like, I don't even know who Grant Cordon is. But OK, if that guy says that it's a good place, we should go check it out. So again, on a New Year's Eve, we went that was when we do everything apparently. Yeah. So we went down to Pueblo and stayed New Year's Eve and we looked around this town and Pueblo, Colorado is the cutest little town in the world. It has a city park and a zoo and old little Victorian homes. And I mean, there's some yucky places, but it's got, there's a lot of history. There's a big reservoir. So I'm like, all right, let's go by, let's look down here.

28:43So we ended up finding, so we found out about how to get on wholesalers lists. and so we, I'll make this very short, we found a property and we went and walked through it and during that time it was so chaotic right it was it was like you could walk into a house and this is what one of the realtors said that we met at the flipping house or the house that we that we were looking at he's like you could have dog poop on the walls and you're gonna get three offers above asking and I'm like what I don't even that doesn't even make any sense but it was true So we toured a house, we put a bid in and we got it.

29:18We got this house that we were going to flip. It was below market. I didn't understand why they were using a wholesaler because it was a great house. They should have just put it on the MLS. But I know that's one of those mysteries in real estate, right? It's like, why did they do it that way? I don't know. But anyway, it was to our advantage. So, yeah. I just want to ask because obviously you're still in Colorado, but it is a new market for you. And you mentioned it briefly, which said we got on the list of a wholesaler. There are a lot of rookie investors who don't understand how to start building those connections with wholesalers who have the keys to unlock all of the deals that tend to make a little bit more sense.

29:58So what did you actually do to get in contact with these wholesalers in a market that you didn't actually live in? I think probably at that time, my husband went on Craigslist and said, I want to buy wholesale properties. And there were just people there where they're like, hey, I want to buy this below cost. Now you can Google buy wholesale properties and they'll find all these companies and that's what they do. And they go out and they door knock and they, you know, they get these contract. They get these properties under contract for below cost. It's it's that's a whole world that I'm not interested in.

30:30I would never want to be a wholesaler. It sounds on paper like it would be fun, like you just go help somebody get out of their house. They're going to lose and you help them pay off their whatever. But I just didn't want to do that. So, yeah. It's a grind. Now it's, yeah, right. And so, and that's, anyway. So we just bought another flip just recently. And I'm like, why is this even, why is this property being sold to a wholesaler? Like they could just sell it anyway. I'm sorry. I'm rambling. I ramble.

31:02Ashley Kehr:Tony, did you wholesale for a little while? Yeah, we did it back in 2021, I think it was. And yeah, I mean, a lot of it was us getting, you know, cussed out by home sellers saying that we were the 18th person to call them today. And how did you beep this? And, you know, you should beep this and, you know, all these other kind of crazy things. But we dig it if you do, you know, which is, I guess, the price you have to pay. Now, when you saw your$65 ,000 profit, what did you do next? And why did you choose to roll it into two more properties instead of just taking the win and pocketing it? So that was how much we made from our very first flip.

31:41It took us about, I think, a month, maybe six weeks. And we fixed everything, which now we don't do that. But even then, we turned around and we sold it in two days. We actually only got one offer.

31:55Ashley Kehr:Two days. Wow. Yeah. And we made a profit of, if I did the numbers right, which who knows if I did, but we made about$65 ,000. dollars. So what we found is that it was so much fun. Real estate and real estate in general is just fun. And it was fun taking this kind of house that just needed some love and making it, improving it and giving more life to it. And then turning around and finding somebody who's like, this is my forever house. I love it. I want to buy it. And so that was just, and then we made money at it. I mean, it was fun. So we took that$65 ,000. And instead of spending it on something that we didn't want, we're like, let's keep going.

32:40And let's stay in Pueblo. And so my husband, who loves looking at real estate, found a house that was, it had a for sale sign in the front, but it was not on the MLS. And he called up the agent and he's like, yeah, that's for sale. Well, you know, it's not on the MLS. Oh, well, I don't know. So we looked at, we had, we looked was right it was like 160 70 000 it didn't need any work and it needed a little cleaning and some paint but it had hardwood floors the bathroom was fine had cloth foot tub in it and we had a contractor who had helped us on our flip and he's like you should do this as a short-term rental and we'll manage it for you and so we're like okay because it's two hours away we can't do a short-term rental but we know how much money those could make so let's turn this into a short-term rental.

33:28So we bought that house in June, middle of June. And I immediately got it set up on Airbnb and we had it booked for the 4th of July. So it took us two weeks to turn that around. And we had it booked for, I think, four straight months and made, I mean, so much money. It was so, it just was fun. It was fun because people loved it. And they, and then I love helping people, but I also love making money. And I learned from my med spa, those two things are not mutually exclusive. it. You can have fun. You can help people and you can do what you're supposed to do. So that's what we were doing. The other thing that we did with that$65 ,000 profit is we bought actually, we bought two properties down in Pueblo.

34:10One, we turned into a short-term rental. We actually closed on both those properties on the same day and we were going to just flip that other property, but we ended up losing our contractor because he got really burned out because we were moving at the speed of light and he was managing these properties and having to turn them over every couple of days. And then the one kind of challenge about Pueblo, Colorado is August super hot. And so that's by now we're into August and he got burned out and he quit managing the short-term rental and he quit finishing our flip. I just want to say that's like the biggest fear for every real estate investor is that you build a relationship with someone and then for whatever reason, they don't follow through.

34:59They kind of stop mid-job because now you as the investor are left to pick up the pieces. And I want to talk about that. But before we finish off the story about the contract, we're going to take a quick break to hear a word from today's show sponsors and we'll come back and finish that story. If you own a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, chilly weather, and higher guest turnover, having the right coverage is more important than ever. Steadily offers insurance designed specifically for short-term rentals, covering property damage, liability, lost rental income, and even unexpected issues like bedbugs.

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38:50It's an IRS-compliant strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost Segregation Guys is the go-to firm, having done over 12 ,000 of these studies with$500 million in total depreciation identified. Head to costsegregationguys.com slash BP to get a free proposal and see your potential tax savings. All right, welcome back. We are here with Beth, and she just broke the news that her contractor kind of burned out in the middle of not one but multiple jobs. So I guess, Beth, maybe describe the moment that the relationship kind of broke, I guess, like what went wrong?

39:33What did it put at risk and what did you do in those first like 24 to 48 hours to try and keep things moving along? I remember where Pat and I were both standing. We were supposed to go to dinner with our contractor and his wife. And we had made plans to go to this little Mexican restaurant and they called and said, oh, we can't go. We have to go do something else. And we knew what that meant. We knew that they were quitting. because of other things that had happened. And we both just looked at each other and said, what just happened? And what does this mean? Because they're doing this and they're doing this and they're doing this.

40:05And oh my God, what are we going to do? And so sure enough, they're like, we're not doing this anymore and give us our money that you owe us. And here's the keys and good luck. So we went on Craigslist. My husband's really good at that. And he found another person to finish this house, finished the house that we were flipping. And we shut down. I think we probably had a couple more short-term rental appointments or bookings that we finished. And I found a cleaning lady who would go in and she moved those around for a couple of months, but it was just too much work. So I'm like, let's turn that house into a medium-term rental.

40:45And to answer your question, Tony, sorry. You just, you have to deal with it and you have to, it's like all hands on deck. And what are we going to do? And you have to just, you have to focus on solving the problem. So, okay, we've got to finish the house. All right. Find somebody to finish the house. We got to find somebody to clean the house because we can't do it and turn it over because we have bookings. You just have to find somebody. And when you have that laser focus on finding what it is you need, because it's not like it's life and death, but it kind of is because it's your business. It's like the universe really does conspire to help you and you find those people show up.

41:22And so the contractor that we found to finish the flip, he did a really good job, but he moved at the speed of a sloth. He was so slow. So it took what, it should have taken about a month. It took him like three months. And so it was done in November. Well, then it's too late to try to sell it, right? right it's in Colorado at least you just can't sell anything in that fourth quarter so we ended up um turning that property we put that on the market to no what did we do we turned that into a long-term rental which wasn't the goal that wasn't what we were going to do with that money I wanted that cash so we could buy another flip but we turned it into a long-term rental we actually still have that property and we're on just our second tenant in what is it four years So that turned out, it turned out okay.

42:13The house that we had is a short-term rental. We turned that into a midterm rental and that went really well for a couple of years also. And that was nice money and pretty easy money. And that cleaning lady that I had found, she would go in after the month and however long that contract is, she would go in and turn that over. and then we just had a couple of bad experiences and I'm like you know let's just turn this into a long-term rental so that's we still have that property also and that is a that's been a very nice investment for us it's still it's still booked so yeah.

42:48Ashley Kehr:Beth after having to learn how to pivot and change strategies what are maybe some things you implement now when you're managing a project or a rental that you wish you would have done before? So the way we funded a lot of these projects was through my medical spa. So we don't have that medical spa anymore. I sold that. And now my husband and I both have W-2 jobs. Why? I don't know, but we do. And so what I wish I had Yeah, exactly. So and it is it's nice to have insurance and whatever. But I wish that I had been wiser with the budget and the money and really like, you know, everything I've learned on Bigger Pockets about how to analyze a deal.

43:36We would analyze a deal by going in and going, what a cute house. Oh, and we could paint it this way. And then we do this and we didn't really run numbers like we've learned how to do now. And we've had to learn how to run the numbers because we just don't have that. I mean, my med spa was kind of a cash. It was a cash cow. So I just if I needed money, we just we'd make some. That's one thing I learned is like, oh, we need some money. Well, let's make some. And that's what I'm loving about real estate and why we decided to get back into flipping, because I do like I like making some money. And flipping is a really fun way to make some money.

44:11And I get to help people. I get to be creative. My husband gets to find things. He loves to find things. and then we have a nice little payoff. So what I would do different is just look at the budget and be a little bit smarter, which now that's what I'm learning how to do. Beth, one follow-up question on the transition back to W2, because I think for a lot of folks that are listening, the goal is to get to, hey, I've got my own thing going and that's kind of sustaining me, but you've ventured back into the stability that comes along with that. What was the decision-making process that you followed to say, hey, we're going to put the med spa up for sale versus continuing to run that alongside the flipping and the other rentals that you own?

44:58When we were shut down for COVID and we got to have a life and try other things, when then we had to go back to work for a couple of years, we realized how burned out we were. And it was one of those decisions that we kind of just made within a couple of days. It's like, let's put the business up for sale. And so we found a business broker and they had said, well, it's probably gonna take about nine months to sell your business. And we're like, all right, that's perfect because then we can make some more money and save some money and maybe even pay off one of these properties. It's sold in an hour.

45:35So we closed within a month. So it went from nine months of, I could I have a lot to do in nine months to I have a lot to do in four weeks. And so it was it was a miracle. And we got out of there. And yeah, so then we realized, OK, we still don't have quite enough money. And now we're kind of bored. And that really was we're kind of bored because we couldn't do too much because we didn't have that money that we were making. So we're like, let's go get jobs. So I started working for the post office. I thought that would be a fun job. I can get paid to exercise by walking. I can be outside and I could be by myself.

46:16I just needed my own. I needed to be away from having to wheel and deal and make sales like I had to do at the med spa. And then six months later, my husband started with the post office, too. So we're both mail carriers. If you work for the post office for five years when you start at our age, we're both in our 60s. if we work five years we get to we get a pension it's not a big pension but it's cash flow for the rest of my life is how i look at it and we also get to keep all our insurance so i think that's a that's a win-win-win so yeah we have a job that's gonna give us cash flow i mean that feels like a good retirement strategy i love the concept of like how you describe it if i am by myself I don't have to talk to anybody throughout the day.

47:01Well, I honestly, Tony, I'd never listened to podcasts. I'd never nothing until I got this job because now I am by myself all day. I've got my headset on and I that's when I really discovered was BiggerPockets. I've been at the post office three years now. So I have I get paid to learn and I get paid to exercise. So, yeah.

47:23Ashley Kehr:Well, Beth, thank you so much for joining us today. I really enjoyed this conversation. I still think it's incredible that you made the$65 ,000 off one flip in a short period of time. And that was almost the same amount as that IRS debt you had. And I can imagine that took way longer than the flip did to actually pay that off. But congratulations on all your success. And thank you so much for sharing your journey and also the lessons you learned and what you would do differently too. So Beth, where can people reach out to you and find out more information? You know, I'm not on social media. So my email is beth.goodproperties at gmail.com.

48:05Who am I? Beth.goodproperties at gmail.com.

48:09Ashley Kehr:Well, Beth, thank you so much. We really enjoyed having you on today. Thank you very much. I'm Ashley. He's Tony. And we'll see you guys on the next episode of Real Estate Rookie. 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 to help someone else get their first deal.

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