Finding Performing Assets with Rachel Richards and Liz Benzschawel - hosted by Brian Briscoe
Updated: Feb 24
Episode 93 of the Diary of the Apartment Investor podcast with Rachel Richards and Liz Benzschawel - hosted by Brian Briscoe.
Brian Briscoe 00:00
Liz, we got Rachel on the line here. What do you want to ask her?
Liz Benzschawel 00:03
How and where did you find your best performing assets?
Rachel Richards 00:06
You have to be patient to find the right deal. It can take months, it can take years. But my first duplex it took us nine months to find. That was after we put in offers on properties. That's after we had an accepted contract and another property that fell through. And my best advice is don't settle. Don't get discouraged. Don't get desperate for where you're willing to settle for something that's less than perfect because if you wait long enough and you're patient, something will come up and that's the reason why all the other ones didn't work out.
Brian Briscoe 00:48
Welcome to the Diary Apartment Investor podcast with your host Brian Briscoe. In this podcast we bring some of the top professionals the apartment investment field to discuss various aspects of the apartment investing journey with the sole purpose of educating listeners to make wise investment decisions. The Diary of an apartment investor podcast is sponsored by Four Oaks Capital bringing you high yield returns through apartment complex investing. This is journal entry number 93 and part of our Ask the Expert series. Today we bring on experienced investor and best selling author Rachel Richards and aspiring investor Liz Benzschawel. Keep listening to learn why you shouldn't settle on that first deal and lessons learned in transitioning from single family to multifamily properties. And now the show. Welcome to the diary of an apartment investor podcast. I'm your host Brian Briscoe with forex capital. I'm super excited for today's show. It's one of our as the expert episodes. And we have two amazing people on the line with us. We got Rachel Richards and Liz Benzschawell. So first introduce you to Rachel at the age of 27. And I think this is absolutely phenomenal. Rachel Richardson quit her day job and retired, she's built up a passive income of $15,000 per month. She's a best selling author of money, honey and passive income, aggressive retirement. She's a former financial advisor and a real estate investor with 40 rental units. And by making the topic of money management, fun, entertaining and simple, she's helped 1000s of millennials work their way out of financial despair. So that said, super impressive. Rachel, welcome to the show.
Rachel Richards 02:17
Hey, Brian, thank you so much for having me.
Brian Briscoe 02:19
Yeah. So once again, very impressive. You know, I wish I had, you know, I'm a couple just a couple years older than you. I'm not gonna say how many, but that's what I'm working on right now is to get to that number. So I'm very impressed that at the ripe old age of 27, you've already got that built up. So what do you what do you tell us a little bit about yourself in your history? And how multifamily plays a role in all of that?
Rachel Richards 02:49
Yeah, for sure. So I grew up in Kentucky, I went to center college, I studied financial economics. But I was a finance nerd. Well before that, and I still am today. So I was reading books, even in middle school and high school learning about, you know, compound interest and stock market investing. But I read Rich Dad Poor Dad in high school. And that was my first exposure to real estate investing, I had always wanted to become financially independent. And at the time that that, to me was the clear path to achieve it. I didn't find out until later that there's all these other different types of passive income streams you can build. So I was really set on real estate investing. I do think it's one of the best term ways to build long term wealth, and every young person should own rental property. In terms of multifamily, specifically, my portfolio, it's kind of a variety, we actually have two single families, one duplex and three buildings that are 10 to 12 units each. The single families we didn't intentionally buy, they were my husband and I's previous primary residences that we just kept and rent it out. So I've always intentionally invested in multifamily. And that's for a few different reasons. Number one, it's because it's easier to weather the storm when you have multiple tenants and multiple units. So if you have a triplex and you have three tenants, if one tenant can't pay, or whatever is happening, where it's vacant, then you still have two other tenants that can potentially cover the mortgage and still earn you a profit. So it just seems a little bit safer, where you're diversified better. And then secondly, I think that I personally feel in my experience, that multifamily is a little bit less volatile. In terms of the overall stock market. I think single family can go up and down a lot more with recessions with cyclical things that happen in the real estate market. But multifamily to me tends to hold its value more consistently because its value is more so based on its ability to produce income, rather than you know the physical value of the property. So if you can be producing income consistently, then it will hold its value. Well. So that's kind of my thoughts on why I wanted to Get into multifamily.
Brian Briscoe 05:01
Yeah, that's awesome. That's awesome. So, you know, and I love all the benefits that it comes comes with as well. It's it's years and years of studies have shown that it is the most resilient class of real estate, you know, over downturns, and over the last several downturns, it's been the most resilient class real estate. And one thing that's great is everybody needs to live somewhere. So we're providing a basic human need, which is, which is awesome. So yeah, so over the years, I mean, you've built up actually over not very many years, you've built up a lot of passive income. What else is there in your, your portfolio? or How did you how did you get from, you know, the finance nerd reading Rich Dad, Poor Dad in high school to, you know, 10 or 12 years later being where you're at? Yeah, so
Rachel Richards 05:45
my passive income journey began in 2017. Before that, my husband and I did not have any passive income, no other like side hustles or side incomes. We were both working full time jobs. And something people asked me a lot is because I was able to scale from zero to 40 units in three years. So they're so they're always like, are you a trust fund, baby? So I always clarify, no, I'm not a trust fund baby. I in fact, never made six figures from a job or a salary. I was making $36,000 after I graduated from college. Part of the reason I could invest at a young age is because I didn't graduate with any college debt. So I paid my way through school. I didn't have my parents helped me or anything. They weren't they were not able to help. I sold Cutco cutlery actually Cutco knives that
Brian Briscoe 06:35
everybody has one of my business partners, you know, cut his teeth on Cutco. So yeah,
Rachel Richards 06:40
there you go. Yeah, so I got my sales experience paid my way through school and graduated without debt. My husband is a veteran. So he used his military benefits to pay for his college education. So we both graduated without debt, which was a huge advantage for us. Because even though I was only making $36,000, at first, I was able to save half of my income. Nice, I was living off 15 $100 a month, my first year, two or three years after graduating from college. So even though I hardly made anything, I could still save, you know, 510 15 grand a year to put towards a future rental property. So it,
Brian Briscoe 07:16
here's the deal, people who make twice as much aren't able to save that much. So that by itself is absolutely amazing. Excuse me, you're able to live underneath your under your means and save a lot of that. So for anybody listening, that is an absolute key to to being financially successful. So
Rachel Richards 07:33
yeah. And just to expand on that point, Brian, I feel a lot of people think that wealth has to do with income, right? the more money you make, the richer you are. But somebody's making 300 grand a year and spending 300 grand a year. They're not wealthy, they're broke, right? And then take another person making 36 grand and saving half of her income. Which situation would you rather be in? So Well, it really has to do with how much of your income are you actually saving? So I just wanted to kind of expand on that, because that's such a great point.
Brian Briscoe 08:02
It's like the rich, rich dad poor dad point is measuring wealth in time, if I remember, right, so yes, anyway, yeah, go ahead. Go ahead. Sorry, we we
Rachel Richards 08:10
know your guide your guide. So in 2017, my husband and I found this duplex that we wanted to invest in, it was great that we lived in Louisville, Kentucky at the time, that's where all of our rentals are located, it's a great place to invest low cost of living housing market is pretty reasonable. So this duplex that we found was 100 grand, we each by then had enough in our savings that we each put 10 grand in to get to our 20% down payment. And that's kind of how we started with that. Now Later that year, I wrote and published my first best selling book money, honey. And I had no idea that it would take off the way that it did. But it really started to bring in some meaningful revenue. And that was my first taste of Oh, there's actually other ways to create passive income outside of real estate investing. So for me book royalties has been a huge one. I have two books now. And they bring in anywhere from four to 10 grand a month in profit from my book royalties. And then my third biggest passive income stream at this point is from my online courses, I have an online course called Get your financial bleep together. So it's a lot of fun. And I probably make four or five grand a month from that. It's all pre recorded. So once I created it once kind of same way of writing the book, once you write the book, it's out there for the world to purchase and you can keep generating revenue off of it. So those are my three big ones that get me up to 15 get us up to 15 grand a month in passive income.
Brian Briscoe 09:39
Nice. I love that and and big biggest lesson biggest takeaway for me is, you know where you started $36,000 a year annual income is not a lot and I hear that excuse a lot. You know, you have to have money to make money and people with incomes lot larger than you like I said before, are having a hard time you know, doing what you did. And I think It's a testament to you. I mean, there's a lot of discipline that goes in that and amazing. Absolutely amazing. I do have one question from a personal interest standpoint, what branch of service was your husband? And
he was in the Navy? Maybe?
Brian Briscoe 10:13
That's okay. I guess. If you don't know, I'm active duty Marine Corps right now. I'll retire in July. So
Rachel Richards 10:21
Oh, wow. Well, thank you for your service.
Brian Briscoe 10:23
Thanks a lot. I appreciate that. We got the the GI benefits. You know, we heard you talking about the GI Bill benefit him going to school for free. I think that's that's absolutely amazing. It's it's a great benefit to have, you know, if you've if you've served on active duty, but
Rachel Richards 10:37
yeah, and the VA loan?
Brian Briscoe 10:39
Did you use a VA loan for your your rent, what are your rental properties,
Rachel Richards 10:44
we were able to use them for both of our previous primary residences. So we still have them now. They're still on the VA loan. So it turned into a really great benefit for us.
Brian Briscoe 10:52
Yeah, the first rental property I bought was exactly the same bought it as a primary residence using the VA loan. And I had a VA loan on that property for 12 years. And I lived in there for less than a year. But you know, the VA we just kept on let me refinance kitten kept on letting me take advantage of it. Awesome. second one was an FHA loan, you know, the same same thing, you buy a house living in for a year and move out turn into a rental. So a lot of good stuff there. Well, it's great. So let's let me ask you a question. What's, what's your big burning? Why are your motivation for all of this?
Rachel Richards 11:28
There's a few. But the one that comes up the most consistently, when I think back is, you have to know about what you have to know about me is that I grew up in a really wealthy County, it was a really wealthy bubble, unrealistic to grow up in. And just to give you some context, a lot of the kids in my high school got brand new BMWs, when they turned 16, my family was not operating that way. We weren't going on family trips, let alone even going out to eat at restaurants. So money was a stressor. Often in my family, we were always on a strict budget. And I just remember feeling like I didn't fit in at a young age. And that's not the way you want to feel in middle school and in high school. Yeah. So at some point, I thought to myself, I don't want to end up like everyone else struggling with money, I don't want to have to operate on a strict budget for the rest of my life, or have to borrow money from family and friends to make it to my next paycheck, I wanted to be different. And I realized that what I did then would either set me up for wealth or for poverty. So I, that's part of the my passion for learning so much, and wanting to achieve financial independence and kind of having this, these fears around money growing up that there's never enough money. And money is a stressor, and I want to have enough money so that I'm financially independent, but so that I can also take care of my loved ones if they need to financial support. So at the end of the day, that's, that's really my deep down motivation. Yeah,
Brian Briscoe 12:54
yeah, you know, there's a lot of similarities. My parents moved to a kind of an upper middle class neighborhood, I don't know, upper middle class, but my dad was a postal worker, you know, so that didn't make a whole lot of money. And all of our neighbors were, we had a lot of doctors in our neighborhood, I grew up thinking we were poor. You know, when, you know, we absolutely were not, we had everything we needed. But that's actually something that that I think, I started out with the same feelings, like, you know, I don't want to have the same money issues, you know, I don't want to have to put my kids in the situation where, you know, all their friends are going skiing, and they don't have money to pay for it. But that's, that's definitely been, you know, part of it part of my motivation as well. But anyway, good enough. So let's, uh, let's talk specifically about one of these apartment complexes that you've done. Can you tell us a little bit about how you went purchased it? And the the story behind it?
Rachel Richards 13:51
Yes, for sure. So I guess I'll talk about the fourth purchase we made, which was our first big building, it was the first building I think it's 11 units. A lot of people, you know, wonder how I scaled so quickly, because coming up with 20% down payment over and over again, that's hard to do. A lot of people will use the bur method and they'll refinance or whatever, find a hard money lender. Fortunately, my husband and I were able to keep coming up with these 20% down payments. So we bought that first duplex in 2017. It was 100 grand. The next building we bought was at the very end of that year, and it was $400,000. So it was
Brian Briscoe 14:29
quite a jump, big jump.
Rachel Richards 14:30
It is yes. And by then by 2017, my husband was making six figures. It's just that I wasn't so we were trying to still save really aggressively save 50% of our combined income, which you can do the math that adds up pretty fast. We were also completely saving the cash flow of every single rental property. So we weren't spending that money. We were saving that money to reinvest. But the third thing that allowed me to scale quickly is the fact that I had my real estate license. So I was actually a realtor In Kentucky, I never had clients, it was just for my own purposes as an investor, that basically meant that every time we bought a property, we would deplete our savings. But then I would get a commission check back for 1000s of dollars, because I was representing myself as the buyer's agent on the deal. So it's not uncommon that I would get three grand or six grand or sometimes 10 or 12 grand after we closed on a property, and we would put that towards the next down payment. So that's how we kept coming up with money really quickly over and over again. But yeah, that next building, it was at the end of 2017, it was 11 units, it was about 400 grand, we were able to get a conventional 30 year fixed rate mortgage on that. And yeah, so what else do you want to know about that one?
Brian Briscoe 15:46
Well, sounds interesting. I mean, so I love a couple of things about that. So you're able to do all of the financing yourself. You didn't use other people's money besides bank loans at all on this, right?
Rachel Richards 15:59
Right. Just besides the mortgages, we use our own money for the down payments.
Brian Briscoe 16:02
Okay, so when you when you went shopping for apartments, what were you specifically looking for? And what difficulties Did you have finding it? I guess.
Rachel Richards 16:11
So I wasn't even specifically targeting apartments, but I was looking for any multifamily where the numbers worked. One advantage of having my license is that I would often be the very first person to know if a deal came up on the MLS, right? Right. Because often it is extremely hard, if not impossible to find good deals on the MLS, because that's where everyone goes, it's already very competitive. But my license gave me just a slight time advantage, I could be down at the property within 30 minutes of it being listed and making a verbal offer on the phone. So I actually found all of my deals through the MLS because I was pretty quick, pretty savvy. I found some deals that were you know, expired and cancelled listings. And I would call the list agent over and over again. And then I would get a deal that way. But yeah, this one happened to come up, I saw the cash flow on it. I thought there's no way this, this building is producing this amount of money. And so we went over and we saw it, and it was and I think we were the first person to see it and make an offer. So we were just able to scoop it up. Got lucky on that one.
Brian Briscoe 17:11
Right. Right. So so your your realtor license kind of is one of the big keys in your success here. Because you're able to find the properties before other people are able to make a quick offer on them before other people and a lot of times first offer that comes in, you know, if it's if it's a reasonable offer, you're gonna get accepted. Yes. And then you're able to go from done off, it's really double dipping, but you're able to take advantage of that realtor license and get the commission, which was three about 3% on of the purchase price.
Rachel Richards 17:42
Yeah. And then you split that with your broker. But I always had like a really good split at 20 or something like nice.
Brian Briscoe 17:48
Yeah. So you're, you're still getting, you know, to two and a half percent of purchase price. Yep, this rolling straight back into your bank account, because you were the buyer's buyer's agent on the deals. So that's awesome. Now, a lot of people who come on this show are syndicators with large unit counts, you know, and I'll tell you what, I've got 485. But I don't own all 485. So something that I think a lot of people in my position would absolutely trade places with you to have 100%. You know, you and your husband together, I don't know if it's a common law state or not, but 100% of 40 versus a small sliver of 500. But I think that's amazing, you know, especially off of, you know, the the salaries that you guys had, and you just slowly built it up. A lot of people will use excuses of why they can't get there. And you and your husband found a way to, you know, over and over again put up large sums of money to to buy real estate. So
Rachel Richards 18:47
thanks, thanks. Yeah, I mean it when people look at my story, I know it sounds cool. And it sounds impressive. And it sounds even easy, just looking at it and on paper. But what people don't see is the two or three years of complete and utter sacrifice. And just know I've never worked harder in my life, as I did between 2017 and 2019. I mean, we were both working full time already 40 to 50 hour work weeks, we were acquiring real estate on the weekends and managing our tenants. And I was writing a book in the evenings. So it's kind of this trade off of Do you want to work your butt off now. So you can get yourself in an amazing financial position, or, you know, wait until later and maybe not be able to do those same things.
Brian Briscoe 19:30
But I had one more one more thing, it's not just working your butt off, it's working your butt off in a smart way in a way that's actually going to produce the passive income. I think a lot of people kind of feel like they're on a hamster wheel, you know, more often than not where they're, they're putting in all the effort, but they're not going anywhere. I think you did it very smartly, where you were putting all that effort into something that was going to pay you you know, passive returns for you as long as you own those properties, you know, and as long as your books are selling, you're going to get that royalty and as long as buying those classes, you know, you put a lot of effort into building it. And now you're reaping rewards. So yeah, definitely appreciate all of that. And I think you watching, I think it's amazing what you've been able to do. So
Rachel Richards 20:13
thank you. Thanks.
Brian Briscoe 20:14
So what is next for you?
Rachel Richards 20:17
I'm one of those people that I always have 50 ideas that I get really excited because my passion is truly teaching women about finance and real estate investing. And so it's hard not to be a workaholic, even in retirement, because this is what is fulfilling to me. So this year, I'm probably going to be launching a real estate investing course, my platform has told me they want more content about this, they want to know how I did it. So I'll probably be doing that. And I actually just launched a mastermind for women who wants to create passive income. It's called women on fire. I filled up my 2020 class for 2021 class, but I'm starting to think ahead for 2022. So lots of exciting stuff.
Brian Briscoe 20:57
Awesome. If somebody listening wants to get more information on that. Where do I send them?
Rachel Richards 21:04
Yes, go to money, honey rachel.com. And you can find info about that. And also, Brian, what I'd love to do for your listeners is if anyone wants to download my passive income starter kit for free, then you can go to money, honey rachel.com slash bonus to download that.
Brian Briscoe 21:21
Yeah. And I actually went there last night, you mentioned that you bring it off or out. And I have not downloaded it yet. I've got the link in my email, and I just gotta, you know, click and download. But thank you. Yeah, so encourage everybody, I'm gonna put that in the show notes. So anybody who wants to take advantage of that bonus, worth the trade off? Well, that said, we've got Liz on the line, let's introduce her real quick. Liz's career path has been in sales. And she recently discovered a passion for real estate investing after purchasing a single family home in Madison, Wisconsin. She partnered with her brother, who is also an electrician and has a construction background. And they're currently looking for multifamily value add properties to purchase and to build their passive income so they can be like Rachel. So that said, Liz, welcome to the show.
Liz Benzschawel 22:08
Yeah, thank you so much for having me. And I gotta say, You're, Rachel, you're part about your background. And I guess, Brian, you too, that really hit home for me. I came up from a similar, very similar background. I just wanted to say that really hit home and you guys were talking about that?
Brian Briscoe 22:23
Yeah, I mean, it's being a parent. Now. You know, it's one of those things, that there's a lot of sacrifices that my parents made for us. And I think moving to that neighborhood where they were stretching, just to be in the neighborhood has been a key factor in my life. I mean, we were living in not a great neighborhood before that. But yeah, I mean, it's, there's definitely a sacrifice on their part. And it's paid off, I think dozens of times over with, you know, me and my siblings, but great. Yeah. So let's Why don't you tell us a little more about yourself?
Liz Benzschawel 22:54
Yes, sir. So, out of college, I started working for one of the largest beverage companies in the world and a leadership development program. From there, I started, I got into outside sales, working in uniform rental sales, did that for about six years. And now I'm currently working in vaccines as a private account manager. So I work with large health systems in the Wisconsin area on the portfolio of vaccines are used for pediatric, adolescent and adults. And then, when I was 24, I bought my first house, I started getting into rentals. So I started house hacking before I knew there is really a term for it. I just in my mind, it just made sense. Like, why not live with my good buddies and have them pay me a discounted rent to help me pay off my mortgage rather than having them pay to have to live in an apartment complex. So that's kind of how I got into it. And then I just saw what it could do. You know, I could, I saw, I love the fact of putting my hard earned money to work for me, basically, while I sleep. And Rachel, another thing that you said that I loved was the amount of work that goes into it, because there's so much work upfront, but once you have it in place, it's such a beautiful thing, because you just get to collect on that. So that's one thing that I loved about it. And then now, so this year, I'm going to be purchasing a multifamily property with my brother, he also has single family rentals. So you're just kind of brainstorming and looking at how we could pull our capital to make a larger purchase. And what attracted us to it is, of course, the cash flow, being able to scale and roll it over into a new purchase, but the appreciation and then also what you can get from cost segregation. So that's, that's what really caught our attention to want to go down that road.
Brian Briscoe 24:37
Yeah, there's a lot of benefits to it. I mean, the cash flow, the appreciation that debt pay down, and I mean, it's it's hard not to look at the tax thing. I mean, we just in the last year, we've seen all the drama around the former President Trump's taxes and how he paid almost zero income tax. You know, it's just one of those things where, if you're heavily invested in real estate, You're not going to pay a lot of taxes. Yeah. Which is, I think an awesome thing for, you know, people who are trying to, to grow their their wealth. You know, you don't have to say that. So well, that's great. So what's what's your big burning? Why, what? What motivates you for this?
Liz Benzschawel 25:17
I mean, I feel like I kind of touched on it earlier. It initially was family, I grew up seeing my parents sacrifice so much to give us what we had. And like I had mentioned the school we went to there a lot of people that came from very wealthy backgrounds. So it was like, my parents gave up so much to give us what we had. And so my mom was a teacher, my dad was a civil engineer for the city. And so like my mom, being a teacher, she was very passionate. She's very good at it, but they make peanuts. And in my dad's, my dad was the breadwinner. And he was in a job where he was really unhappy and felt stuck, because he prioritize providing for us over kind of going the route that he wanted to that would make him happy. So I kind of saw that and I didn't want to be, I've been, I wanted to have options. So I never felt stuck in what I was doing. I don't feel stuck in my w two now. But I like having options and backup plans. So if I can put the money I've worked hard to earn to work to make more money for me and then have other options in the future for my family and loved ones. Like that's, that's definitely my why. Awesome. Awesome. Yeah, so much appreciate how you put that it does give you options, and it does give you a great backup plan.
Brian Briscoe 26:30
But your cars My favorite part of this show, Liz, we got Rachel on the line here. What do you want to ask her?
Liz Benzschawel 26:36
Yeah, thank you. So I was wondering, one of the questions I had, how and where did you find your best performing assets? I know you mentioned the MLS earlier in the show. But I was just kind of curious, how was it just running numbers seeing deals and running numbers that caught your attention? Or how did you go about that? Yeah, for sure. I
Rachel Richards 26:55
and one thing I always tell people is you have to be patient to find the right deal. It can take months, it can take years. But my first duplex, it took us nine months to find. That was after we put in offers on properties. That's after we had an accepted contract and another property that fell through. And my best advice is don't settle. Don't get discouraged, don't get desperate for where you're willing to settle for something that's less than perfect. Because if you wait long enough, and you're patient, something will come up. And that's the reason why all the other ones didn't work out. So for us, that was that duplex that we found in 2017, which also turns out to be one of our best investments that we own. For that one specifically I was looking at I kind of mentioned it earlier, but I was looking at expired and cancelled listings on the MLS. And I was just reaching out to the list agent to say, Hey, what's up with this? Why is it expired is the seller going to put it on the market again. And I would just keep track, I would keep a spreadsheet of these of any ones that looked like they had potential. And you know, once a month or once every other month, I would just reach out to that agent and be like, Hey, you know, I hope you've had a great month. I'm still interested. I'm here whenever your seller is ready. So it wasn't ever like an annoying email. It was just I want to stay top of mind. That way when it comes back on the market. Maybe they'll tell me first. And that's exactly what happened with the duplex. That agent reached out to me. They said, Hey, we're gonna put this on the market soon. Would you want to make an offer first, which is like a goal. That's amazing.
Liz Benzschawel 28:25
I love that. Yeah.
Rachel Richards 28:27
So that's how we got that one. And that's one of the best deals we have ever done.
Brian Briscoe 28:31
Nice. Nice. And what a lot of people hear when they come on podcast is the hero success stories. And I love how you said it took you a lot of time and a lot of offers and a contract that fell through, you know, just goes back to the amount of effort you said, you put in a ton of effort 17 to 19 to get there. Awesome.
Liz Benzschawel 28:49
Yeah, I love that too. The two things I take away from it, not settling for less than perfect. Because I feel like I really like that because I feel like I've also heard just getting that first multifamily under your belt is what you need to do. But I feel like if I'm going to invest in it, I want to make sure I'm positioning myself as best I can to be successful. So I don't want to jump at anything just to do it. But I have heard that from other investors. So I like I like that what you said and then also the duplex what what I've seen is some people care about doors, but I mean, I care about cash flow. So it's like I don't care what asset it is, as long as we can get cash flow from it and then grow. So I loved I loved your points on that too.
Rachel Richards 29:29
Yeah, exactly. And to add to that, Liz I'll say Don't underestimate underestimate the power of networking. I used to hate that term. I didn't want to network but if you can just approach people with a genuine curiosity to learn more about how they found deals, how they're finding deals, how they became so successful like most people are so open to that so you know joining your local real estate investors associations, joining local real estate investors meetups, just getting to know people in in your area that can open the door to being presented with a lot more off market opportunities as well. Yeah.
Liz Benzschawel 30:06
I love that. And Brian that's that's what got me here was going on your on your on meetup. So yeah,
Brian Briscoe 30:13
they got it Friday networking, which is awesome. We missed you. Were you on their day? I don't think they were you
Liz Benzschawel 30:18
know, I wasn't sorry. I usually try to make it every Friday at noon. Yes. That's what time it is our time so I need to get in on this.
Brian Briscoe 30:25
Yeah, yeah. 1pm Eastern time. You know, noon o'clock since noon o'clock central time. Real Thing.
Rachel Richards 30:31
It is now.
Brian Briscoe 30:33
Totally now. Oh, hatless. One point for what you said, you know, the Be patient and stick to your guns in that first deal. Still definitely applies. The first deal is a catalyst. But if the first deal is bombed or falls flat, it's going to be your last deal. So yeah, what she said applies 100% to getting that first deal.
Liz Benzschawel 30:55
Yeah, I love that. That's what I felt my gut. So when I hear to do it to do it, to get it under your belt, I just to me, I was like, ah, doesn't doesn't seem right to me. But
Brian Briscoe 31:05
big big Asterix on that one you still have it still has to be profitable.
Liz Benzschawel 31:09
Yeah, yeah. Yeah, I'm not gonna throw my money at a dump. Yeah. So another question I had is, what's something that you learn transitioning from single family homes to multi family homes, that you wish you would have known before starting the process. I'm like, smiling over here, because I could list for hours, the mistakes I made, learning how to be a multifamily landlord.
Rachel Richards 31:35
One of the big ones for me is like, and I think for most real estate investors, and people that are into finance is this tendency to be super frugal, right most of the time, that's a really good thing. But there is such a thing as being too cheap and trying to cut corners. So this has to do with our property managers that we hired. And the mistake is that we tried to cut corners here, I always tell people, if you really want this to be a passive investment, you absolutely have to have to have a property manager in place. Even if you're going to start out self managing, like we did, make sure you can still afford a property manager and that the numbers will still work so that you can give yourself that option down the road. So that's the first thing. The second thing is when we hired our property managers, I'll just tell you this really fun story. We had this couple that had been working for us doing things like maintenance, cleaning, the common areas, stuff like that they were super hardworking, always went above and beyond. I've never known such hard working people, it was a husband and wife. So when it came time for us to hire a property manager, we thought, Well, why don't we give these people a shot makes them employees of our company. That way, we can save a little bit of money and just be more hands on with the way that they are managing things. So that's what we did. And it was great at first. And then about six months in, my husband went to collect rent from the on site lockbox one day, there was a lot of rent missing. And it was not just the normal tenant paying late, it was a significant amount. So of course, we're trying to call our property managers and they're totally Mia. We never heard from them again. They still $6,000 in rent money that weekend. And we found out they'd been squatting and vacant rooms and units in our buildings for almost a year. So talk about a big wake up call, a huge violation of trust. And definitely a low point in my journey. I mean, we can laugh about it now. I, I was naive, you know, I was naive in hiring them. I was thinking we're gonna save money. But sometimes when you are that cheap, it ends up costing you so much more in the long run. And that was the moral of the story for me is that that's not the place to cut corners. When you hire property manager, you want to find someone that's licensed, bonded, insured and qualified. Because if we had done that, and one of their employees did that to us, they would have been liable for the damages, not us. So it sounds like to me now it sounds like such an obvious thing. But I just didn't know better at the time. So I share that so that hopefully other people can learn from my mistakes.
Brian Briscoe 34:11
Yeah, I think a lot of newer investors, especially on the smaller unit counts think that they can either do it themselves, or they try to cut costs, you know, and I think one of the biggest complaints on like real estate forums that I see is how much it costs for property management. But, man, they are the most important part of your business. They really are. You know, that's that's a huge thing. And I've tried managing single family homes from other side of the world before and it doesn't work well. I was
Liz Benzschawel 34:37
gonna say and that's what allows it to be passive is having that property management management company in place that can handle that stuff reliably.
Brian Briscoe 34:45
Yeah, never. You'll never be able to scale if you don't, if you're if you're managing your own apartments.
Rachel Richards 34:49
I'd love to add in another lesson learned if that's okay, because I have another one. Okay. So cuz Lizzie, I know you mentioned you're looking for ones you can maybe add better You too, and renovate, especially with your brother's experience. So I think this will be relevant to you guys. We've done a couple of renovations on our properties. But one of them was something where the whole thing needs to be renovated. So it's not like it was just one unit. And there were other tenants. So there was no one living in the building, the whole thing needs to be renovated. I didn't realize until after the fact that an empty building that's clearly undergoing a renovation is a target. It is a target for people to break into, to damage to rob you. And so we had closed on a property one week, and it was it was exactly like this. It was a huge duplex, we were going to renovate the whole thing. It was maybe two days later, that I got a call from my contractor. And he called me in the morning, he said, Rachel, I have bad news. And I was like, What? And he said, somebody has broken into the property. Now, just the day before, we had had 10 to $15,000 worth of brand new appliances delivered to that property. So my guts sank. And so I was like, are the appliances still there? And he said, Yes, they're still there. And I was like, Oh, my God, thank goodness, these happen to be they were probably just teenagers, they broken and they took what they could carry. So they, they took like the lockbox, they took some of the contractors tools. And ironically, they took the security system that we had purchased and had not yet installed. So moral of the story is you have to protect your physical assets. And I'm talking, once you leave that closing table, you better have a security system in place, you better have an internet person that's going to come over and hook you up. So you can put your security system up, you better have signs and warnings saying this property is under surveillance. Because if we had had that in place, that wouldn't have happened. And luckily, it wasn't horrible for us. But it could have turned out so much worse. So that was a huge learning lesson for me as well.
Brian Briscoe 36:56
We have we have one property that has a we bought it with a high vacancy was like a 55% vacancy for occupancy when we bought it, and a couple of the couple of units got broken into. And it was teenagers just wanting to do stupid stuff.
Liz Benzschawel 37:11
Brian Briscoe 37:12
But yet the break a window and open the door. And it looks like they just sit in one room on a mattress. But yeah, it's something you definitely need to watch out for. good lesson learned on that one. It's great to learn to learn from others mistakes. You know, I mean, Rachel, I'm sorry, you had to go through that. But thank you so much for sharing. I think a lot of times people hear that all the roses, you know, and make people make it sound like rainbows and unicorns. But there's ups and downs and a lot of work involved too.
Rachel Richards 37:40
Yeah, no matter how much you know, you will make mistakes, you will waste your time you will lose money, eventually, it's bound to happen. But I think if you just look at it as a tuition payment, like they robbed me of $1,000 worth of stuff. Well, you know what I paid $1,000 to learn a very important lesson, and I will never make the same mistake again. So I think like just knowing you're gonna make mistakes, and how can you learn from them can help you from feeling discouraged.
Brian Briscoe 38:04
Yeah, yeah. But I think a lot of ways, something I did, and not everybody does this, but I paid a lot of money for a mentorship program. I've still made mistakes. But I think that that's helped me to not make as many mistakes. I know Rachel, you're you're coming up with a program, you know, to help people do it. And I love it. I love that you're so open with it and honest about the mistakes you've made. That's, that's going to help other people a ton in the future. So they don't repeat the same mistakes you've made. Thanks. I appreciate that. So well. That's it. We're running out of time here. Let's see Liz, if you got one more quick question. We can probably fit that in. But you think
Liz Benzschawel 38:40
Yeah, I would love I would love to slide one more in. So what do you think has set your has set you apart from other investors? Because your story, you have a great story? And I'm sure people hearing it think why why can't I do that? Or I would like to have that. What are you saying because you're like you apart from other people.
Rachel Richards 38:58
The thing that I said that I think sets me apart and really sets apart the 1% from the people who want to achieve financial independence and want to invest in real estate but just don't quite get there is the ability to execute the ability to take action. Because Sure, we can read books, we can listen to podcasts, we can learn things all day long if we want. But if you don't stop at some point and say, I am prepared. And now I'm going to take this action and implement it. You just won't ever get there. And that can be it. That's the scariest thing is deciding to take the first step. But we really need to, to become go from being consumers of information, to taking action on information if we want to get anywhere. So that's what I think. I mean, knowledge means nothing without the ability to execute.
Brian Briscoe 39:47
I love that great answer. Yeah,
Liz Benzschawel 39:49
I would have guessed that answer before I before I asked it that like if I had to think of what your answer would be. I would have guessed that that taking action and having the balls to actually move on something as opposed to just Knowing it's a good idea you want to do it actually going out and doing it. So I love that.
Rachel Richards 40:04
Yeah, Zig Ziglar has this quote that I love to share. And he said, You don't have to be great to start. But you have to start to be great.
Brian Briscoe 40:13
Yeah, that is amazing. You know, something, I love this analogy, it's like you're carrying a torch to the woods, or you know, not a very powerful flashlight, you know, you can only see a couple steps in front of you, you know, what's the best way to see further, take a couple of steps, you can see two or three steps in front of you. And if you if you want to go further, you've got to take those two or three steps in what you can see to be able to light up the whole path. So I mean, with one flashlight, you can light up an entire path, but it requires you to keep on moving forward. But anyway, I love it. Well, this has been a great, great conversation. And thank you both so so much for your time today. I got one question for both of you. And Rachel, you go first, how can listeners more learn more about you?
Rachel Richards 40:59
Well, thank you. Yes, both of my books, money, honey, and passive income, aggressive retirement are on Amazon and ebook, paperback and audio. And then again, if anyone just wants to download my passive income starter kit, that would be a great way to kind of sign up and get in touch with me. So you can grab that at money, honey rachel.com slash bonus.
Brian Briscoe 41:19
All right, awesome. And we'll put links to the books and links to the money, honey rachel.com slash bonus in the show notes. So anybody who wants it once again, just go to the show notes. Tap it. And there you go. All right, Liz, same question for you. How can people learn more about you?
Liz Benzschawel 41:34
I can be reached at firstname.lastname@example.org. Or I can also be found on LinkedIn under Liz Benzschawel.
Brian Briscoe 41:42
Alright. And LinkedIn is where we met each other. First of all, I think so. That's
Liz Benzschawel 41:46
Yeah. Well, I think I was I think I was actually tipped off to your meetup for my friend Julie, who's an accredited investor. So nice. And then I think we got connected on LinkedIn.
Brian Briscoe 41:56
Then LinkedIn. Yeah. Who is a meetup first in LinkedIn? Yeah. Okay. Yeah. Great. Yeah. So LinkedIn is a great place. meetups are a great place, but awesome. All right. So thank you so so much. I appreciate your time. And this has been a fun fun hour for me.
Liz Benzschawel 42:11
Yes, it has.
Rachel Richards 42:11
Thanks for putting us together. Brian. This is a lot of fun. And good luck to you, Liz. You'll have to keep me posted on your progress.
Liz Benzschawel 42:17
Thank you so much. You got I'm definitely interested in your 2022 class too. Yeah. Yeah. I'd love to have you got one already.
Rachel Richards 42:25
There we go. There we go.
Brian Briscoe 42:32
Thank you for listening to the Diary of an Apartment Investor podcast today brought to you by Four Oaks Capital. If you'd like to know more about how to invest in apartment buildings, you want to be a guest in our show, visit our website at FourOaksCapital.com/podcast or email us directly. If you're still listening, you obviously like the show. So pull out your phone, app, subscribe, and leave us a five star rating on your favorite podcast app. And we'll see you again next week.