Dave:
Have you ever thought that it’s too late to start investing and grow your wealth or that the market is too challenging or risky for someone who’s a little bit later in life? Today we’re going to talk to an investor who started investing at 54 who will leave you believing that you can do it too.

Dave:
Happy Monday everyone. It’s Dave. Welcome to the BiggerPockets podcast. Today we have a very inspiring story for you, or at least I was inspired. We’re talking to Jill Forsyth who started investing at 54 years old when she decided that she needed to come out of retirement when her retirement was not going as she had planned. Today with Jill, we’re going to talk about why it’s never too late to start investing, how you can grow your wealth in really strategic ways and how you can still buy properties today to scale your business. But before we hear from Jill, I’m actually going to invite on another guest we’re bringing on Kyle Mast, who’s a guest co-host of the BiggerPockets Money podcast. He’s also a CPA, and Kyle has really good advice and a good understanding of the fundamentals that underpin this idea that you still can invest even if you’re getting started a bit later.

Dave:
And he’s going to join us to talk about some of the tips he gives his clients and people that he teaches. So this is going to be a very fun episode if you’re getting started a bit later, or even if you’re starting pretty young, the same principles apply for pretty much everyone before we bring on Kyle and then bring on Jill, don’t forget to hit the follow button on your favorite podcast app so you never miss an episode of the New BiggerPockets 2.0. Alright, let’s bring on Kyle. Kyle, thanks for joining us today to lay some foundations. Before I talk with Jill, I could use some help.

Kyle :
Yeah. Oh man, it’s so good to be back here. This is one of my favorite topics. Sometimes people just think that they can’t start this game later and it’s just so not true. So this is going to be a fun one. I’m really looking forward to it.

Dave:
Well, that was sort of my first question. Why do you think people believe that?

Kyle :
Yeah, I think it’s probably our fault in some sense, and I’m going to throw myself into the younger category now only just in comparison because I’m really not, I’m pushing the 40 age now, but I think it’s kind of this world of the media that we put out. We focus on the early retirement, retire young. We always talk about people starting their twenties, knocking it out. You’re retired by 30, 35 and that’s just really a disservice and I really like when we get to talk to people who find out about this real estate movement or this financial independence movement maybe later on in their life, but really the 10 year time horizon, it doesn’t matter where you start that I always like to tell people 10 years is about all you need to really make something tremendous happen and you don’t have to work that hard. You have to be focused and you have to be intentional, but you don’t have to just work 90 hour weeks, but 10 years is just a good timeframe that you can do age 50, you’re at age 60 and you’re good to go age 55, 65. That’s a good framework to look at rather than you got to start when you’re 22 right out of college and knock it out by your 30.

Dave:
That’s a great way of looking at it. It really is just time horizon, right? It’s how long you have investments and how long you let them compound and how long you give yourself to learn the business. There are things that take time in real estate and in financial independence, but you do, I guess if you start late, let’s be honest, you do lose some of the upside because you can’t compound your investments for as long

Kyle :
For sure. Yeah, that’s definitely true. A 20-year-old, there’s always the statistics about putting a certain amount in your Roth IRA from when you’re 20 to 30 and then stopping and you’re good to go as opposed to from when you’re 50 to 60, it’s not even close. It is a million dollar difference. So yes, there’s that compounding thing, but there’s also a lot of advantages that come with starting later in life that you do not have when you’re younger. Just a ton of ’em. And people really overlook those unfortunately and just assume that, oh, I’m late to the game, I’m stuck in where I’m at and I’m just going to ride it out and try to live on social security.

Dave:
Alright, I’ll bite. What are the advantages?

Kyle :
So I would say one of the biggest ones is people’s income When you’re age 50, I’m using the age 50 mark and this can be anyone from I’ll say age 40 all the way up to I’d say up to 65. If you’re a healthy, educated mentally with it person and you want to start this retirement gain at age 65 and be done when you’re 75, that’s great. I mean, who is it? The famous thing we always talk about Colonel Sanders and Kentucky Fried Chicken, what he launched that company when he was 65, but your income at that point in your career is usually starting to get up to where the highest it will be. And that is a huge asset not only from just the sheer amount of dollars, the number of dollars that are coming in, but also the consistency that gives you in acquiring lending from any type of lender when they look back and say, oh, this guy’s been in this career for 20 years.

Kyle :
He’s been in this one job for the last seven. This is a very stable person to lend to and you can do things that a 25-year-old cannot do in that sense. Another thing just maybe along with that is you’ve also hopefully saved some somewhere else, and I should say as we’re going through these, your money habits are always important no matter what age you are, like good money habits regarding how much debt you take on, whether it’s with your house, your cars, your leverage. So if you’re in a place later in life and you are strapped to the hilt with debt and you’re living paycheck to paycheck, this isn’t the conversation. The conversation needs to step back and you need to get basic financial live on less than you make, pay debt down, give yourself some bandwidth. That’s where it needs to go back first.

Kyle :
But then you come to this point where maybe you have some of that, you have some savings in something like a Roth IRA, a traditional IRA, maybe a 401k. You now have a basis for things like reserves or potentially using some of those funds for down payments that we can talk about that a little bit, the pros and cons of that. But you have things like the kids might be out of the house there goes a huge expense every year. I love my kids love ’em dearly and I’ll be happy when they’re gone though too. I’m going to buy a camper van and drive around with my wife. That’s the dream. So those are kind of the things that at least you’ve got some stuff going for you even if you’ve waited a while to get this thing started.

Dave:
Absolutely, and there are many financial benefits hopefully people have saved, but I think the maturity element is also there. I just judging by my life, I’m in my mid thirties though, my discipline, my ability to make good decisions, to stay calm when things go poorly with a project is just so much better now than when I started investing and when I was in my twenties. And there are non-tangible non-financial things that I think benefit you as an entrepreneur as you get a bit

Kyle :
Older. Yeah, that is so true. The more years you get under your belt, the more disappointments you have, the more you come out on the other side of it and realize that it’s not the end of the world and you learn something from it and you can do it better the next time. Yeah, definitely. I totally agree.

Dave:
So what are some common ways, let’s say a middle aged person, we’re talking about age 50 a lot here. A person could start investing in real estate should they use their 401k, their IRA?

Kyle :
Yeah, so there’s a lot of different ways you can get started and for me, I’ll start with the ideal way. If there’s a 55-year-old that wants to get started and say, I’m going to assume that they’ve got a decent income, they’ve been in the job for a while, I’m going to assume that they’ve got some retirement savings, whether that’s 4 0 1 KIRA Roth ira, it’s not enough to retire on, but they’ve got something there. Maybe $50,000. Let’s go on. Probably the low end actually. If you’ve been in a job for a while and you have a 401k, you’re most likely going to have in the hundreds of thousands of dollars. But I’ll go real low, go on the $50,000 mark. Some people will talk about you can take a loan out of your 401k to get started and use that as a down payment on a rental property and that’s a totally viable option.

Kyle :
A lot of people have done that. I had a previous conversation with Henry Washington, how he started, it was his wife’s 401k that they used to get started. Just an awesome way to get started when you don’t have any cash. But they were younger when they did that and they didn’t have any other resources or probably not as big of an income as someone later in life would have. My preference for someone who’s a late starter is not to bleed some of your other assets that you’ve already built up for a couple reasons. One of them is just straight asset diversification. It’s nice to have something else that’s a lot more liquid than real estate. You can get to a retirement account even if you’re penalized for taking it out in a pinch. If you need cash for some reason, you can get to it. It’s not like selling a property.

Kyle :
The other reason is that you can use those accounts as reserves for lenders, also as reserves for if you have a big expense that you can’t cover. But ideally for lending a lender, most lenders will look at a large Roth IRA or a 401k and they’ll say, oh yeah, you can back us up if you can’t make payments for 12 months, you’ve got plenty in there, you’re still working. We’ll take that for reserves. That’s great. So those two reasons right there, you’re not totally breaking apart the financial foundation that you’ve built, even if it’s not real big, you’re leaving it there. My preference is that you really focus on your current financial situation, your current income and expenses and just save like nobody’s business really. If you need to dial things back, if you’re serious about this and you want to start late, this would be the preferable way to do it.

Kyle :
Say you’re making 150,000 a year mid late career, dial it back so you’re living on 75,000 a year and sock away the rest of it, you’re going to pay some in taxes because you’re maybe getting in a higher bracket and you’re not putting it into a retirement account. So that’s going to bite you a little bit. But that is definitely the way, and if you can start that way, you’re not hurting what you’ve already built, you’re building upon it and you’re using it to benefit you going forward. If that’s not possible, then you can dip into those other accounts in certain ways. The 401k loan is not the only way, but there’s reasons to not do that too. You got to pay yourself interest on the 401k loan. The interest is after tax dollars that are going in there, you’re not getting tax benefit. It’s possible, but my preference, again, keep it simple, keep those assets, keep that diversification, start a whole nother vein and just hustle after it with your income expense ratio.

Dave:
I tend to agree with you and I want to just call out, I was actually working on a secret project before I was building this sort of calculator. We will release it to everyone sometime soon, but it’s kind of like a fire calculator and I was just messing around with how different savings rates impact your long-term wealth. And it’s insane just going from saving 25% of your pre-tax income to 30% can move your retirement date up by several years. And I know it doesn’t sound like a lot a big difference, but it actually can make an enormous difference even over a 10 year time horizon, let alone a 20 or 30 year time horizon.

Kyle :
Yeah, a hundred percent. And you know this from working on the spreadsheet, and this is like dating back to the og, personal financial independence, retire early movement when Mr. Money Mustache put out his blog post on the amazing, I didn’t even remember the post of it, but it was basically the shockingly simple math to early retirement and he had a spreadsheet. But the two sides of that equation are not only are you saving more, but at that same time you are learning to have a lifestyle that you enjoy on less. And that is what also pushes. You have these two rowers in a rowboat instead of one pushing you even faster in the same direction and it really makes a huge difference. And if you’re getting a late start to this, it’s even better because if you can readjust your lifestyle to where it’s still enjoyable, you still get to do the things you love, but you’re not just letting things float out and come back to you in Amazon boxes on your porch, then it’s great.

Dave:
Yeah, it’s like running a race and having the finish line moving closer to you as you start running faster. It’s both things happening at the same time, which is super cool. Yes, Kyle, thanks so much. We are about to bring on Jill, but before we do any last advice,

Kyle :
I think you have advantages a lot of them over people that are younger. We’ve already talked about it. I would say the biggest thing, keep in mind, we mentioned a little bit earlier, the 10 year time horizon. I’ve seen it again and again, doesn’t matter what age bracket it is, if you put your mind to something, whether you want to start a business, you want to do this real estate thing, you want to just retire early by saving a whole bunch into your 401k accounts, Roth IRA accounts that 10 year time horizon. If you educate yourself, you learn and each year are compounding towards that goal, you can do it. It’s, it doesn’t matter if you’re 20 or 50 or 60 anywhere in there. That’s totally a doable thing and the things that we talked about, there’s even more that you have that benefit you, but I’m so glad you’re bringing someone on that has done this to show that is possible. I hear the stories all the time, both sides of it that I can’t do it. And then I’ve seen clients in the past that have done it and have done really well and it’s been great. So yeah, thanks for letting me jump in here and add a few things and I’m excited for the listeners to hear your guest come on and talk about her. Great story.

Dave:
I appreciate your time, Kyle. Thanks a lot. We do have to take a quick break, but after this we’ll hear from Jill Forsyth about how she got started in her fifties. Welcome back to the show. Let’s jump back in. Jill, welcome to the BiggerPockets podcast. Thank you for joining me today. Thank

Jill :
You. It’s great to be here. Jill,

Dave:
You started investing in your mid fifties, which is not a story we hear about or talk about that much on this podcast. I’m excited to talk to you about it. I’d love to just know what made you decide to start investing in real estate after retiring from your first career?

Jill :
Money. Much money.

Dave:
Alright, I guess we can wrap the interview.

Jill :
Well, I mean it was one of those things where we had retired early to sales and we got to do that for a number of years and it was great fun, but we had a series of health issues and medical issues cost a lot of money and we kind decided that we were not going to be able to be fully retired and I didn’t want to be in my seventies going, Hey, welcome to Walmart, do you want a cart? And that was not how I envisioned my old age and my retirement. So we with great difficulty came to the decision that rather than getting jobs again, we decided we would start a business. So we started looking into different kinds of businesses that we might want to start with the remaining funds that we had.

Dave:
Well, this is super interesting because most of the people who come on the show focus on retiring early and use real estate as a means to get to that retirement. But you at least in the first go around, did it differently. Sounds like you and your husband focused on just building a high paying career. Is that right? That was the first step.

Jill :
Yes. And I mean that’s what we did. We both had great programming jobs our whole lives and we had substantial savings. So we bought an old sailboat and said, we’re going to do the sailing life. I’m

Dave:
Curious, when you retired the first time, what was your financial plan? Did you have money invested in the stock market?

Jill :
We did. We had all of our money and stock market accounts and fidelity and he always, Steve does the and our business now. He is the accountant, he does the books, he does all the money and I manage the tenants, but he always did the money and he did a great job. He’s very frugal. I’m not. So we had money. He saved up. You have a thought on what you’re going to spend each year and we maxed out our insurance every single year. I mean, I think the first five years we spent $150,000 in medical expenses straight out of our retirement on top and we’re

Dave:
Like, oh my gosh,

Jill :
We just can’t do that. But we’re here. We thank you Cleveland Clinic. We’ve since recovered with real estate, but it was late to start, but you got to start from where you are.

Dave:
Absolutely. So this situation, it sounds like you decided to start a business somewhat out of necessity. You saw the writing on the wall that you were spending into your retirement. What about real estate in particular was attractive to you versus other entrepreneurial options?

Jill :
We looked at a number of options. In fact, we did another long shot option too because my husband had quit smoking as a part of all this that happened with a vape. So we actually opened a vape shop knowing that was a long shot at the time, we didn’t know how the regulations were going on it, but it pretty quickly became clear that was going to be a job, not a business, that we could then make more passive. We talked to a man the biggest, the man that had the biggest boat on our doc made all his money in real estate and he had actually

Dave:
Made, so that’s a good indicator

Jill :
In North Carolina. And we chatted with him about rentals and about operating a rental business right before we came back and bought our first eight rentals.

Dave:
And how did you go about learning how to buy rental properties?

Jill :
Biggerpockets.com.

Dave:
Oh great. Well, I like hearing that. So no seminars, it sounds like, well you attended one seminar, but what did you go on BiggerPockets to learn? I’m just curious, how did you find BiggerPockets first of all, and what were you going on there specifically to figure out? I

Jill :
Found BiggerPockets through a Google search and I was just interested and I mean we had decided at that point that that was the way we were going to go. We had I thought a good skill for that. My husband is super handy. He is a great carpenter, but he is a clever fellow and he can fix just about anything.

Dave:
So you went on BiggerPockets and just wanted to learn how to buy rentals. Did you pick rentals given where you were in life, you sort of wanted something? I assume that was a little bit more on the passive side of the investing spectrum.

Jill :
I thought that we could get it to a point where it would be passive and I like to reduce risk and I felt like especially with our experience with the vape shop, that commercial real estate, it can sit vacant for a long time and how it goes is more subject to the vagaries of the market than really housing is where everybody needs housing. You don’t have to have a retail shop. Our funds were pretty limited to start with, so I felt like we could start in Akron. We were still a cashflow place. We still are to a lesser extent, but we were still a cashflow place where you could buy off the MLS properties that cash flowed.

Dave:
So is that what you did? You’re in Akron, Ohio and you’re looking for ways to support your retirement. You focused, it sounded like on maximizing cashflow as your primary metric of success.

Jill :
That was with our first property. That was what we did and a low entry point because we didn’t know how it was going to go. And that ended up being probably the riskiest way to go and we were lucky that it worked out that we could do it. There is no good neighborhood around the University of Akron. There are none of the student housing areas are good neighborhoods. It is all what I now know would be an investor grade D neighborhood. And I thought, well, these were on the very outskirts. They were a mile out from the school. So they were a little far out the ones that we looked at, but I thought they had been more well maintained than a lot of a hundred plus year old properties in Akron. Akron’s full of money pits old hundred. I mean the average age of the housing stock in the city of Akron is over, I think 70 years old. It’s super old. Most of the housing in the city is and the actual city proper, so everything’s old. It’s hard to find newer properties.

Dave:
Yeah. So you mentioned something, Jill, that I want to touch on. You mentioned that finding something that was cash flowing and at a low price point was risky, which may seem a bit counterintuitive to people. Can you explain why that particular decision was risky for you?

Jill :
At the time I didn’t realize how risky it was. I only realized that now because I now know that that was a D neighborhood and it’s super hard to manage D neighborhood properties. And we were lucky that it turned out that we had a skillset that allowed us to be successful in that space. But we were just lucky. We really didn’t know that we would be successful managing those kind of properties. And it is, I didn’t even realize how bad we had it until we bought the next set of properties and they were in, I think most people would call ’em a C neighborhood and Akron, they’re really more of a B neighborhood for Akron. But until we bought those, I did not realize how bad that I had it managing the D properties and then you go, holy crap, I see all these people on the forums talking about how awful it is to manage D properties, but I didn’t realize until I got something easier how hard it really was.

Dave:
I guess by trial, by fire you went for one of the harder property management situations first and then hopefully managing properties and C-Class neighborhoods just got a little bit easier for you as you scaled up.

Jill :
It did, and we’re continuing to move up in our neighborhoods now so that it’s easier still. But managing D properties, we just had to solve problems that normally wouldn’t be the landlord’s problem to solve. You know what I mean? It’s like if you have somebody that’s 70 that’s in one of your properties and they don’t have a car and they get bedbugs, how many people do you think are going to drive them with their bedbug stuff to a laundromat? The number is zero. It’s like that’s not going to happen. You are going to have to fix that problem and no matter what your lease says, if you don’t fix that problem, it’s going to ruin your property. So we just fixed things as they came up, whatever it was.

Dave:
So Jill, I’m curious, given this situation and your goals, which was to sort of create a more passive income stream for your retirement years, why did you keep going? It sounds like you had a vape shop, you gave up on that, that was too much work, but it sounds like when you got into real estate there was a lot of work too. So what about real estate made you continue? Well, we

Jill :
Actually kept the vape shop going while we did a good part until the FDA rules came down that just said that was going to, I wasn’t willing to operate in a quasi-legal space and a lot of people were and they’re still out there doing that, but I wasn’t comfortable with that at all. So we actually kept both businesses going while we were just seeing how things were going to go. But I felt like the real estate end of things, it was temporary that we were going to be able to get to a better place where we weren’t having to do quite so much work that we would get everything fixed up. And that’s what you think initially when you start, you think I’m going to build my team and then it’s going to be easy and then I’ll just pay people to do all the stuff and you don’t realize when you start out that your team is going to change constantly. There’s no such thing as a team that you start with and you finish.

Dave:
It’s like a sports team. You get some people on and they’re there for a couple years and then they move and maybe you have one person on your team who sticks around for 10 years and then there’s one position that you’re changing it out every six months or one year. That is just the inevitability of it.

Jill :
Exactly. That was one of the biggest surprises I think to me was it. It’s like, oh my god.

Dave:
Yeah. So I’m curious, as someone who started later in real estate, do you think that gave you an advantage or do you see it as a disadvantage for growing your portfolio?

Jill :
It was kind of both. It was both in that we did have money to start with. We did have money. We were very on our first deal, we were pretty bought eight units for $137,000 in Akron.

Dave:
Was that one property or you bought an eight unit?

Jill :
It was two four units side-by-side. We bought it with conventional financing because they were four units that they were right next to each other, so we bought the eight at once.

Dave:
And you said that it’s an advantage that you had money to invest, which is certainly true, but given your story and some of the financial difficulties you had gone to just prior to that, did it feel like a big investment? Was it nerve wracking to make that decision?

Jill :
Yes.

Dave:
Yes. I would imagine that it’s a big chunk of what you had saved up and you just sort of went with a pretty big swig of taking eight units on all at one time. We

Jill :
Did. We did. And the amount we had to put down was a smaller portion. I think we started saying we were going to try to, we had a half a million dollars that we were going to buy real estate with and that was most everything that we had, so we had decided to go all in. Do you think

Dave:
For folks who may want to be starting later in their lives in their forties, fifties, or even later, even if they don’t have that amount of money saved up, do you think it’s still possible to get into real estate?

Jill :
I mean it depends on what you’re trying to do. If you want to supplement social security and you are handy and can fix the house yourself, you can buy a duplex and live in the other half and cut down on your bills, you can buy two duplexes and if you’re doing all the work, you can probably come close to getting another 50% increase on what social security will pay you. So yeah, although I heard a lady on NPR right before we started and I wish I could remember her name. I have looked. She was an author and they were interviewing her and they were asking her, she was 75 and they said, you’ve just gotten this lifetime achievement award. And she laughed and she said, I did not pick up a pen and start writing until I was 57 years old and I just got a lifetime achievement award at that 75. And I’m like, I looked at my husband, I’m like, this woman gives me hope, baby. She gives me hope writing.

Dave:
Absolutely just 18 years, you’re eight years. In 10 years you’re going to get your lifetime achievement award. Yeah, I like what you said earlier, Jill, about supplementing social security. I think a lot of folks think that to be successful in real estate it needs to replace a hundred percent of your income or it needs to be your full-time career. But there are obviously many very worthwhile and worthy more modest goals in real estate like what you just said, imagine being able to, if you’re on social security, increase your income by 50%, that’s an incredible goal to work towards and Jill just gives some really practical tips on how you can do that. So I totally agree with the idea that it’s never too late to invest and hopefully just doing one deal will improve your financial situation.

Jill :
I think that’s true.

Dave:
We have to take a final break, but while we’re away, make sure to check out biggerpockets.com/forums. This is one of the ways that Jill grew her education in real estate investing and it’s actually how I met Jill and invited her onto this podcast. So hopefully it could be helpful to you too. Welcome back to the BiggerPockets podcast. So what’s going on with you now, Jill? You started with eight units all at once eight years ago. What does your portfolio look like today?

Jill :
We have two companies now. Our initial company owns currently 53 units and we’re no longer buying in that company. We took on a partner at the end of last year who has taken over a role in the business of managing our renovations and our maintenance and that for us is a huge step in the right direction and she is excellent. It is a woman that she ran a drywall crew for 30 years. I worked in tech as I was usually one of the only women in the room. She was on construction sites running a drywall crew, so we were super happy to find her. But anyway, we actually started out with eight units in that company too that we bought in December. So we have 53 units in our original company and eight units in our new company and she’s a partner in that company. There are four of us and we own equal shares.

Dave:
That’s great. And I imagine that the Akron market has changed considerably since you started. Do the deals that you target look different now?

Jill :
Oh yes. So yes. In December we bought a group of three duplexes that were side by side. It was actually an off market deal through my commercial agent that I usually work with that he set up that he hads. And then we bought another two units that are in a neighborhood where we already owned 10 units, 10 duplexes, so we own 20 units and 10 duplexes and I saw ’em doing the trash out and ran over there and said, Hey, do you know if they want to sell? Because they were trashing out the place and it was a mess. So they sold, so we got everything at once in two separate deals then. But yeah, that deal on that place was more than I paid for any of the other 10. And the side-by-side units were in Falls, which is a nice suburb of Akron. It’s a great rental. It’s a B neighborhood rental suburb of Akron, but we had to pay 95 a unit for those properties and they were losing money at purchase to the tune of like $2,500 a month.

Dave:
Whoa, why is that? Why so much per month? They

Jill :
Were so under market on the rent.

Dave:
Oh wow.

Jill :
They were renting two bedroom, one and a half bath town houses in a B neighborhood for $690 a month. I rent one bedrooms now nobody renovates nicer than us. They really don’t. I’m not just saying that because they’re mine, but they really are nicer than anybody else’s. But we rent one bedrooms in Barberton, which is not near as nice as falls for seven 50 small one that was so far under market that it was just like people are like you’re paying how much. That was just unheard of rent and that was kind of why they sold them. I think those were their only properties and they had all these old people in there and they didn’t want to raise the rent.

Dave:
So you were able to renovate it and get that cashflow positive. I’m asking because I think a common thing that we hear right now is you can’t find cashflow, and I do think it’s in a lot of markets it’s hard to buy something stabilized that is cashflowing. You have to generally do a bit of work. So I’m just curious what kind of work you had to do to get this to be a positive cashflow deal that was worthy of the time and the risk that goes into the investment?

Jill :
The hardest thing for me was I wrote what I call my bad news bearer letter to all the tenants that were living there and I told them here’s the situation and I sent ’em the market rents. I have that rental meter and I sent ’em the market rents for everything around there in the last 12 months and I told ’em the situation that we were buying them at the market price and we would be paying them to live there, the two that had leases until their leases were up. But everybody else we gave 90 days to and said, here are the other properties that we have. We had a couple places we could rent at lower price points. If you’re interested in any of these, this is what we have option, but the rent is going up effective March 1st to them. We didn’t go quite up to market rent, but I went up to 1125 on the existing units from six 90, so that’s substantial.

Dave:
It’s a difficult thing to do. It was kind of you to offer other units. Did anyone take you up on that?

Jill :
They did not. I had one of two people moved, which my hope was that we wouldn’t lose more than the two people in their units that the former owners had renovated. The nicest two units were on leases at 800, which was still losing $250 a month through this October. So we’re still losing money on two of the units where we’ve lost a lease, but the rest of the units went up to the market price. But we ended up renovating two of ’em and the renovations came out really beautiful. I think they were some of the prettiest ones we’ve ever done. I did one of the existing tenants, there’s daughter rented one of ’em at 1295 and then I got the other one rented at 1350. So that put us cashflow positive as of July one. So we just went cashflow positive on those. I was

Dave:
Congratulations. That’s great.

Jill :
So we actually, we aren’t making a lot of money because we didn’t raise the other people up much over cost, but as people move on, we’ll get them up and we may get, I think one of the people is going to stay in October and probably one will leave.

Dave:
I think that’s a good approach. It’s a hard thing to do, but obviously when you make an investment you are expected to generate a return and you need to create the right amount of revenue. But I respect the fact that you do it in a considerate way because you can go to market, you can push everything even above market if you wanted to, but trying to be respectful of people and understanding that creates a difficult situation. It’s a balance that you have to strike and it sounds like you were able to find the right balance for you and your business. Jill, I’m curious, what is next for you? You’ve tried to retire once you’re back into real estate now. Are you going to keep going? I

Jill :
Am. I actually like, I’m one of the weirdest that thinks property management and this is my role in the company now that SRE is doing renovations and maintenance and my husband does the accounting and the books and I manage the properties and I actually really enjoy managing properties. I don’t know, it’s a weird thing to find that you

Dave:
Like you are not in the majority.

Jill :
I know, I know. Isn’t it funny that you get old and you find out what you really would’ve liked to have done all along? It’s like, oh, I think it’s fun. I

Dave:
Actually, that’s nice. That’s great.

Jill :
I actually really, really we have, because when you look at renters, renters, the vast majority of renters are 25 to 35, so we mostly have young people renting and it’s been enjoyable dealing with the young people I’ve met tons and tons of nice, really nice young people.

Dave:
Well, I’m glad to hear that. It’s so nice that you found what you’re doing and found something that is meaningful and enjoyable for you. I’m curious, Jill, if you have any advice for other investors or potential investors who may be getting started a little bit later in life on their investing journey?

Jill :
I guess know what your goal is. If you want to just have one duplex, then know what your goal is and it’s okay to change your goal because now right now I’m about to sell 22 of my units and I’m going to take that 22 units. We have a lot of forced equity and market appreciation in them, and I think I’m going to get almost a million dollars for that sale on that sale and I’m going to take that and buy hopefully a 4 million property. That’s my goal right now to do, and we are not going to renovate to the extent that we’ve been renovating. I don’t want to continue buying things that require quite as much work. And most of the stuff that we bought, I didn’t even consider habitable. They were fully inhabited, but I did not personally, I didn’t rent them when we got the tenants that were there out a lot of times because I wouldn’t have rented an apartment in that condition to someone. I

Dave:
Think that’s really good advice, Jill, because a lot of people, I imagine, obviously I’m in my mid thirties, so I can’t say, but I would imagine that for a lot of folks who are in their fifties or sixties or considering getting started a little bit later, that the prospects of a lot of time is not very appealing. But I think as you’re showing, it really is about what your goal is and what trade-offs willing to make. If you’re willing to spend a lot of time on something, you’ll probably generate a better cash on cash return, but you don’t have to do that. You can buy something in a B neighborhood, you can buy something that’s in better condition. You can make all sorts of decisions in real estate that support your lifestyle. That’s the thing I love about, it’s that you can basically customize whatever type of deal, whatever type of investment you want to your goal. And so if you are someone who’s starting a little bit later and investing, just know that it doesn’t need to be you at the property every day managing. Jill likes that, but you might not. It doesn’t need to be you managing maintenance. It sounds like Jill and her husband have successfully outsourced that. So I just want to underscore the idea that depending on your goal and your personal situation, you can customize it to your stage of life, your financial situation, and really whatever you’re looking for.

Jill :
And we’ve changed what we are doing now. We didn’t have a million dollars to start with to buy something with before, but now because of what we did, we do. So I’m going to be able to buy nicer properties in a nicer neighborhood.

Dave:
That’s great. Jill, thank you so much for being here. We really appreciate your time. If you want to connect with Jill, I know you’re active on the BiggerPockets forums. That’s actually how I first met you. I was perusing the forums as well and saw a very interesting and thoughtful response that you wrote there. So thank you for participating in the forums. We appreciate that you can connect with Jill there, myself there as well. Thanks again for being here, Jill. Thank

Jill :
You so much for having me,

Dave:
And thank you all so much for listening. We appreciate you all. We’ll see you again soon for another episode of the BiggerPockets podcast. I.