Helping a Pharmacist Go From “None to One”
Marissa Deuel, PharmD, shares her experience in the first cohort of the None to One Group Coaching Program and her successful approach to investing in real estate.
About Today’s Guest
Marissa Deuel has lived in West Texas most of her life. She graduated from Angelo State University in 2014 with a Bachelors of Science in Biochemistry. Marrisa then went on to pharmacy school right after, graduating with her PharmD from Texas Tech in 2018. Currently, Marissa is a retail pharmacist at a local grocery store, H-E-B, going on 4 years. She married my high school sweetheart in 2014. He also works in healthcare as a Respiratory Therapist at their local hospital. The couple doesn’t have any kids, but they have a Pomeranian, Bear, and a rescue cat, Prote.
Episode Summary
Do you need a push to purchase your first real estate investment property? In this episode, our hosts, Nate Hedrick, PharmD, and David Bright, PharmD, MBA, BCACP, FAPhA, FCCP, chat with Marissa Deuel, PharmD, about how she took a leap with the first cohort of the None to One Group Coaching Program to meet her real estate investing goals. Listeners will learn how Marissa, a full-time retail pharmacist, is fully committed to property development with financial freedom goals. Without being swayed by the ‘easy choice’ of putting her savings in seemingly safe places, Marissa took on real estate investing, even in a challenging market. Throughout the program, Marissa has uncovered ways to tackle property prices, create her recipe for successful investment and renovation planning, and manage all the emotions that naturally come with the negotiation process. Where others may have been intimidated, Marissa has tapped into her love for spreadsheets to tackle renovations and move forward with her investment. Her process for breaking down huge tasks into multiple small tasks is a factor in her success in large-scale project management like renovations. Marissa shares her inspiring story of going from zero real estate investment properties to purchasing her first property with success in vetting properties, self-managing her real estate investment, maximizing value, and much more.
Key Points From This Episode
- An introduction to today’s guest, Marissa Deuel.
- Marissa’s pharmaceutical background and her connection to the hosts.
- The motivation behind Marissa’s property investment.
- The clear criteria to filter through potential properties.
- Why you should always check your numbers before investing.
- The vetting, offering, and negotiation process when purchasing a property.
- How to manage the emotions behind a business transaction.
- A rehab plan to maximize the value of and rent of a property.
- Marissa’s recipe for successful renovations.
- How to self-manage and budget your own property.
- A look into the “None to One” course.
- How to start planning and walking the path of real estate investing.
- The most useful resources for your real estate journey.
Highlights
“If it doesn’t meet that one percent rule, we didn’t even want to look at it.” — Marissa Deuel, PharmD [0:12:36]
“When we walked in the property, we had those goggles on like, “What is wrong with this place? Why is nobody making offers on it?”” — Marissa Deuel, PharmD [0:14:43]
“And even if I can do it, do I want to do it?” — Marissa Deuel, PharmD [0:26:38]
“I am not just going home and watching Netflix for hours. I have a plan. I have a to-do list, and then when I am at work, I am not looking at it but when I am off, these are the things I need to do.” — Marissa Deuel, PharmD [0:29:45]
Links Mentioned in Today’s Episode
- None to One Group Coaching Program
- Apply for the next None to One Group Coaching Program
- YFP Real Estate Investing Podcast
- Email Marissa Deuel: [email protected]
- Connect with Marissa Deuel on Facebook
- Connect with Marissa Deuel on LinkedIn
- YFP Real Estate Investing
- Join the YFP Real Estate Investing Facebook Group
- Your Financial Pharmacist Disclaimer and Disclosures
Episode Transcript
[INTRODUCTION]
[0:00:00.4] NH: Hello and welcome to the Your Financial Pharmacist Real Estate Investing Podcast, a show all about empowering pharmacists to achieve financial freedom through real estate investing. I’m Nate Hedrick and each week, my cohost David Bright and I explore stories from pharmacists all over the country who are achieving their real estate goals while maintaining a meaningful career in pharmacy.
Whether you’re a first-time investor or a seasoned pro, we’re here to provide education and inspiration about the world of real estate. Please note, this podcast is intended for educational purposes only and should not be considered financial or investment advice.
[0:00:42.1] NH: Hey, David, how’s it going?
[0:00:43.6] DB: Hey, good, thanks man, how are you doing?
[0:00:45.0] NH: I’m great man, I’m doing really well. We just wrapped up our first round of the none to one course with 10 really awesome pharmacist and I just, it was a blast, I really enjoyed that.
[0:00:54.5] DB: Yeah, I really enjoyed it. I thought I was super fun to see the growth come and offers come and just to see the fight and determination that each pharmacist had during the course to really kickstart the real estate investing journey, it was just fun to see that energy.
[0:01:08.6] NH: Yeah, and especially in such a short window. I mean, the multiple strategies people were working through and people that took real action in a short amount of time of finding a realtor, finding a lender, evaluating properties, putting in offers, I mean, it was really cool to see people that committed and ready to go.
[0:01:26.6] DB: Yeah and some, like Marissa who is our guest for today, were able to buy and even start working on a house during that very short window of the course, it was super impressive.
[0:01:34.7] NH: Yeah, so Marissa, a full-time pharmacist, Marissa Deuel, full-time pharmacist at HEB down in Texas and just really awesome individual who again, committed to the program of, “Okay, I’m going to follow these rules, I’m going to purchase a property and see how it goes” and I just was really impressed with her tenacity and we knew we wanted to have her back on the show to talk about her experience and what that was like.
[0:01:58.4] DB: Yeah, one of the things that was super impressive to me about Marissa as well that I think we get into is about halfway through the recording today is that she’s just very hands-on with his first project, very intentionally hands-on.
You know, when we started out, my wife and I are like, I was way too scared to do a lot of the rehab and do a lot of the work and tried and did not end up being successful, being a property manager and I couldn’t even tenant the place, I had to turn over before I even had a tenant in there. So, but she dove in headfirst, doing rehabs, committed to being a property manager, so she’s a really exciting story of being really hands-on.
[0:02:34.6] NH: Yeah, and for those who might have missed the earlier episodes or the announcements about the none to one course, what we try to build or what David and I piloted was this idea that if you’re ready to purchase a house, you’re ready to invest in real estate but you need that help to kind of get over the next hump, right? You need somebody that’s going to be able to take you from analysis paralysis mode to action, making the decision and purchasing that property, we want to be that force, that thing that helps you out through that.
So, we created this course as sort of a pilot, to kind of test it out, we’ve learned a couple of things along the way, we’re trying to make it better for the next round, but it was a really cool way for us to connect with some pharmacist who were ready to pull the trigger and actually help them do that on properties they were looking to buy, which is really fun.
[0:03:19.8] DB: Yeah, it was super fun, super encouraging to be in that group of pharmacists that are really just high octane and just really ready to go and so, that was just an exciting Zoom room to be in, right? So doing that, engaging with that group week to week, and like you said, we have made some changes, made some improvements, expanded a few topics, kind of based on the feedback we received.
So with that, we’re planning and running to know their cohort later t his fall so if you’re interested in staying tuned and knowing when that’s coming, check out, yourfinancialpharmacist.com/nonetoone and it’s one spelled out, O-N-E. So, yourfinancialpharmacist.com/nonetoone.
[0:04:01.0] NH: Yeah, we’ve got a, join our waitlist button there so you can – without any sort of commitments, they’ll get an email, stay up to date about what’s going on, the details, the class, when it becomes available. Obviously, David and I, we’re dropping more info about it as it becomes available here on the podcast but if you want to make sure that you don’t miss anything, definitely head over to that website, yourfinancialpharmacist.com/nonetoone and join the waitlist. That one sure that you don’t miss out.
[0:04:26.3] DB: Yeah, we’re just really excited to see pharmacists dive into the world of real estate investing and start that journey just like Marissa did, it was super fun just to see that group of pharmacists grow and achieve things they wanted to achieve.
[0:04:39.1] NH: Yeah, so hopefully her story today will give you some insight into what the course is like and some idea of just what it can do for you to have somebody else guiding you through the process. Again, just hope you guys enjoy the interview with Marissa as much as we enjoyed working with her. So, we’ll take you to it.
[INTERVIEW]
[0:04:55.8] NH: Hey, Marissa, welcome to the show.
[0:04:56.9] MD: Hey, thanks for having me, guys.
[0:04:58.5] NH: Yeah, this is awesome, we’ve been getting to know each other over the last, I don’t know, gosh, 12 weeks now, through the none to one course and it’s great to bring you on to kind of talk about your experience. Again, just appreciate you being here.
[0:05:08.9] MD: For sure.
[0:05:09.9] NH: So why don’t we jump right in, tell us a little bit about your pharmacy background and your pharmacy story, and what brought you here?
[0:05:15.1] MD: Yeah, I’m a retail pharmacist for a local chain in Texas called HEB, they’re a really great company in the community and they’re just really great to work for. I graduate in 2018 and this is the job I got right out of school. So don’t plan on going anywhere for a while, it’s a great company, retail pharmacy, I like that you could just go to work and when you leave, you don’t take work home with you. So it’s nice to have a little side project when you leave work and don’t have to worry about taking homework like if you were a professor or something like that.
[0:05:46.7] DB: So yeah, that’s a great dive into that separation of that. I feel like you hear a lot of pharmacists talk about where the pharmacy world, you leave that at work, you get out, you’re looking for a different gear, something different to work on and so that sounds like a lot of your story but can you walk us through the real estate why and your journey of what made you get into real estate investing?
[0:06:09.5] MD: Yeah, so, my husband and I, we’ve always been interested in real estate, go to open houses for fun, neither of us wants to be a realtor so we already had kind of crossed that off the list. We did all the right things financially coming out of school, tackling student loan debt, doing the whole debt snowball thing. I paid off my student loans in October and so, the next thing was like, “Okay, let’s do the cars, let’s do the house” and then we’re looking at you know, 1 percent car loans and two and a half percent house versus putting that money towards something that could make us money.
So, that’s when we kind of shifted gears and we’re thinking, “Okay, what’s the next step?” Around that time, it was the New Year and I saw YFP post, the application for the none-to-one program, and it just kind of clicked like, “Oh, this is the next step for us.” We knew the market was kind of in a weird place. We didn’t know if we were going to be purchasing a property in 2022 or not but the knowledge that would come from that class would last forever so that’s when I decided to apply for it, got in and that’s when we started shifting our investing and snowball focus more towards investing that money into something that will grow us money as opposed to paying off small percentage debts.
[0:07:18.3] NH: I love the thoughtfulness there of just like, tackling the financial plan kind of in a step-wise fashion, that’s so important. I think a lot of people we talk to are interested in jumping into this and that’s great. I love the enthusiasm. David and I talk about this stuff all the time so we love it but you have to do it in the right order and you have to do things with her good financial base and so I love that that’s how you guys approach that. That’s just going into this from a position of financial strength just sets you up to do so many more things with so much more – so much less stress, I guess.
[0:07:47.4] MD: Right.
[0:07:47.8] NH: It’s great that you show that example. You get to that point though where you’re like, “I’m ready. We’ve got the finances figured out” were there roadblocks? Were the things that were holding you back that you felt like, “I just need a course, or I need something to kind of springboard me to that next step.”
[0:08:01.0] MD: I think it was just that initial push like we both knew we wanted to do this. We’d listen to podcast here or there, forums, things like that but actually starting it and doing it, we just always put it off. Put it off an excuse, “Oh maybe next year” or whatever and so, when that course came up, that was kind of okay, let’s be serious about this, even if the market’s not right, we can get our ducks in a row and start to really think about it and make those connections.
[0:08:26.9] NH: Love it.
[0:08:27.4] DB: So I like that being serious about it, I want to dig into that for a minute because you definitely have been serious about it, like, you have really dove in here and I love that. So can you walk us through that search process and that very first part of being serious is that finding the properties. So how did that work for you? What did you dive into in order to start searching and finding a property that’s a really good fit for you?
[0:08:51.2] MD: Yeah, so homework week one of the none to one program was going find your realtor and get preapproved. I was like, “Okay, we’re doing this” so, my lender are – she’s a longtime friend so, when I told her what we’re planning on doing, she was very like, motivating like, “Oh my gosh, this is so exciting,” and so, that got me kind of geared up for it and then, I met a realtor, we met many realtors buying and selling houses throughout the years but I finally met one that was on the same page as us.
I was a little worried looking at investment properties that some realtors might not give us the time because it’s a low-cost house or whatever, as supposed to a $300,000 house but I think we really built the right team around us that just got us really excited and amped up to just start. So, my realtor, she sat down with us and asked what our criteria was, to set up those MLS searches and things like that.
Sadly, nothing new was really hitting the market, especially under $130,000, which is what we were looking at. So, it’s kind of hard but throughout the course, we were doing deal analysis and things like that. I started looking at getting further down the rabbit hole of listings and got towards the end of stuff that had been sitting on the market for a while.
I know a lot of people get kind of weary of those but the one we were looking at had been on the market I think three or four months by the time we looked at it and initial reaction’s like, “Something’s wrong with this house” we looked into it, and it had never been under contract so, we were just, “Let’s just take a look at it and see what’s going on.”
I ran the numbers before we went to look at it to make sure we weren’t wasting the realtor’s time, wasting anybody’s time. They had recently come down in price from $130,000 to $110,000. It was still sitting for about three weeks, still with no offer. So, I was thinking, maybe in another week once they hit that month mark, they might drop it below a hundred so we wanted to get in there before they made another price drop.
We were pretty lucky that it was just the second house we looked at and the numbers worked out. Like I said, if we were just been looking at those new listings every day, we would have missed this because this was like further down in the list search.
[0:10:55.1] DB: So there’s a lot that I want to just highlight and unpack in there. The first thing is the criteria, because I think that’s really critical that you built clear criteria, you gave that to your realtor, you use that to look through properties and that helped you to filter out because can you – for everyone listening, what’s the metro area that you’re investing in?
[0:11:14.1] MD: I’m in San Angelo, Texas which is a town of about 100,000 people in the Middle West Texas, there’s no interstate running through here. It’s about three hours from any major cities. So, we’re kind of in the middle of nowhere but we still have a college, we still have a military base here so there’s still good rental potential and growth.
[0:11:33.1] DB: Nice, nice, and from there, you were able to hone in on something below a hundred and thirty, you had specific criteria, can you share a little bit more about what those criteria were that you shared with your realtor?
[0:11:43.7] MD: Yes, we wanted to be less than $130,000 because the rent, the higher rent prices don’t do well here. Some of these starter homes are like the 116 up and there’s no way we’d be able to get rent to meet that, so 130 is kind of that cutoff point that the rent makes sense. We weren’t afraid of renovations, we just didn’t want anything major like foundational issues.
We wanted this to more be like a cosmetic type thing or maybe move-in ready with the price point, we knew that. We weren’t going to find something move-in ready so we were ready to put some work into it.
[0:12:17.5] NH: So, you mentioned something important there that I want to go back to which is, you said, you ran the numbers in advance, before you got the realtor involved, talk us through some of those other numbers, right? You talked a little bit about rent rate and making sure that was the right number but what were some of the other pieces that go into that that you had to make sure we’re lined up.
[0:12:33.3] MD: Yeah. So initially, we went with the 1 percent rule, making sure that if it doesn’t meet that 1 percent rule, we really didn’t want to look at it. I kind of built a spreadsheet out already where I had put expenses. Most of what I’ve been seeing on forms and podcast as most people put about 25 percent aside for expenses. So, 10 percent per property management, we did 5 percent for vacancies, 5 percent for repairs, and 5 percent for CapEx and so I just kind of plugged that in, did a quick mortgage calculator based on what my lender told me I was accrued for rate wise and put that in there.
My goal was to be cash flowing, at least $100 on our first property and the numbers on this even at selling at $110,000 were meeting all of that criteria. So once that was all good then I said, “Okay, let’s go look at the house because yeah, the realtors are busy, we don’t want to waste their time to go look at something that isn’t even going to work out.”
[0:13:28.0] DB: Yeah, I love that, and you mentioned the 1 percent rule in there. For those that are unfamiliar, the 1 percent rule says, right? That your rent rate should be 1 percent of the purchase price. The rent rate per month should be 1 percent of the purchase price. If you’re buying a $100,000 house, it should rent for a thousand dollars a month.
That’s kind of a baseline, gold standard of, “If it’s at least this, we can start to look at it and see if the rest of the numbers make sense.” The other one that you mentioned there that I think, I just want to highlight for our audiences, the differences between repairs and CapEx. Can you define those two different pieces for audience?
[0:14:00.2] MD: Yeah, so the CapEx is going to be like your major things, your HVAC, your roof, those types of big expenses that come every 10 to 15 years. Your repairs are going to be stuff like, the tenants calling you in the middle of the night about the leaky faucet, like you all will say, just those little things that come up.
[0:14:16.9] NH: That’s awesome. I had this out for a second and like, congratulate you, right? Because you’re actually teaching this stuff back to us when 12 weeks ago, we taught it to you. I think this is so cool. I love that, this is great. All right, you get at the point now, you’re renting numbers, it makes sense, you guys walk the property, you like it, it works. It’s at a 110 and on its way down, what did you do with the offer in terms of how you submitted that or how you work through the offer part?
[0:14:43.1] MD: Yeah, when we walked in the property, we had kind of those goggles on like, “What is wrong with this place? Why is nobody making offers on it?” It was extremely dirty, riding on every single wall, every single door, no socket covers, it had been vacant. We heard different stories, anywhere from six months to four years and we’re not exactly sure how long it had been vacant and there was a slight roll on the floor.
It was a peer and bean house and we’re like, “Okay, maybe it’s something foundational” which we were kind of weary of but only an inspection can tell you that. Kind of walked in there with those goggles on, my realtor was really good about pointing things out as well. I just had my notes app open on my phone and I was just writing everything down. That way, I can go home and put it like a price to it and she was really good at picking up those things that I would not have noticed.
So her, me and my husband were all there and we all just kind of looked at each other like this house makes sense but it makes sense in the 90s as well. I went home and put a price to all the little things we picked out. I used a strategy, I don’t remember who said it on the podcast but they made a strategy of picking a really specific number, so it looks very thought out to the seller.
So, we came in, I think it was like, 93,287 or something random like that to make it look really, really thought out. We were willing to pay up to 110 because we knew those numbers worked, we knew they were probably starting to get desperate with how long it had been sitting.
They ended up coming back at 95 and asked us to pay for all of their closing cost. We said, “No closing cost” because we’re trying to keep as little cash in the project as possible so hopefully, we can do a second project and so we all agreed, everybody pays their own closing cost, 95 even and so, I think we lucked out getting something under ask in this market for sure.
[0:16:38.1] NH: That’s awesome, and why do they always counter your weird numbers with an even number? Everybody always does that to me, it’s got me crazy like, “Let me have a weird number, come on.”
[0:16:45.4] MD: Yeah.
[0:16:47.6] DB: But that is also a lot of ping-pong back and forth in negotiating, which I feel like can be a really stressful moment especially when you are thinking like, “Oh, I could pay up to a 100, why don’t we just take this. I just want this really bad” but you seem like you had this very methodical, very focused, very diligent process of negotiation to make sure that this was a business transaction and not something you were overly emotional about.
How did you do that, particularly for your first purchase? I feel like that’s a really difficult thing to do.
[0:17:16.7] MD: There was some points where it was emotional especially when we came back with that 92, 93 offer when they were asking 110 because we did really want the house and we saw the potential in it. That waiting was a little bit hard but at the end of the day like you said, it is a business transaction, and we need to be smart about it, smart about the numbers and I am all about numbers on spreadsheets, that really needs to make sense for me to move forward on something.
[0:17:41.9] DB: Now, it sounds like you found that house with really meeting all of your criteria at this point because you have found something that needed cosmetics, like writing on the walls is like wild to me but also a pretty simple fix, right? You get out the primer and the paint roller and you cover it up and then you paint and so that’s pretty simple, no light switch covers, and no socket covers, right?
Those are like a buck, so you can go with a screwdriver and fix those, so you found some relatively simple things, but you also mentioned you were concerned about the foundation. I’m assuming you had a home inspection and how did that process work?
[0:18:15.6] MD: Yes, so I reached out to my realtor, “Hey, who do you recommend? I want someone really, really thorough on this project?” and so she handled scheduling somebody for me and getting all that straightened out for me. He was very thorough, went through everything with us right after the inspection, so he walked through every single line item. Again, everything that came back was mostly cosmetic.
A couple of things like, “Oh there is no cover on the crawl space” and just little silly things like that but nothing super major, so that’s what we’re excited about.
[0:18:47.0] DB: Nice, so you were probably expecting a few things and you got a few things but nothing that made it a deal-breaker. It still worked particularly 95 when you are willing to go up to 110. It sounds like, yeah, fewer the $15,000 worth of hiccups, yeah. So no, that’s really good, but that kind of leads into the next step is, so then you’ve purchased it, right? You had the big signing day, you went to closing, you got it done.
You brought the big check, you bought the property, and then you got to get in there. So that also feels like a pretty intense moment especially as you walk into this place and then you start to see like, “Oh, I do have to do light switch covers and the crawl space cover and all the cosmetic things” and you even took it a step further, right? So can you talk us through the rehab plan that you had built to maximize the value of the property, and maximize the rents of this property?
[0:19:34.3] MD: Yeah, so this neighborhood is kind of up and coming. It’s I wouldn’t say a bad neighborhood, just a lot of people that live in their houses for a long time and they haven’t been touched but there is a lot of empty lots that these brand-new houses are going up on so it is increasing value. We also just got an interstate-approved that runs right next to that house, so there is potential for maybe like commercial sales down the line with that property.
But we knew that if we put money into this, we would be able to get money out of it because there is two homes within the last year that just sold on that street for over $250,000 and it’s a street with only six houses on it. Two of the six sold for that. Either they’re rehabbing them, or they are tearing them down or they are finding empty lots and building these houses. We knew that we want to maybe put better finishes in there.
The cabinetry was fine, it was custom-built cabinetry, but it was just really, really dated. It had multiple coats of paint on it, but we knew if we fix that up, put stainless steel appliances in there, really clean it up that we could really get our money back out of this. So as opposed to just paint everything, clean it up and rent it, we’re doing a little bit more on it than some people may have but I think potentially, it could really benefit us in the future.
[0:20:54.2] DB: So can you talk about that for a minute, with some of those fixes, I know that also is a major intimidating piece to a new investor is to go in there and have to do all that work and to do all that rehab. So how are you getting that done and what was your recipe on that?
[0:21:08.1] MD: Like I said, I am really into spreadsheets so just writing everything out and making a list is really big for me and being able to check things off. When you put it into small little to-do tasks it becomes more manageable, so yeah, we’ve painted a room before. We have replaced a sink before, we have done all of these things at points in our lives but never all at once, so when you break it up into this thing, this thing, this thing, it makes it way more manageable than looking at it as the whole picture of, “Oh my gosh, I have to do all of these things.”
[0:21:39.6] NH: Yeah, it can get overwhelming when you are walking the property and you start to just see all of this stuff that you have to buy and go to the hardware store like, “This is going to be 30 trips to Home Depot, what am I doing?” but you’re right, if you break it down into a list, it can feel a lot more manageable. It’s a lot but easier, that’s great and you guys are doing a lot of the work yourselves too.
It sounds like it is not a lot of contractor management, you guys have some of the skills and it is mostly cosmetic things anyway. You are bringing in, basically your own. You are taking days off work and things like that, is that right?
[0:22:06.3] MD: Yeah, correct. My husband is pretty handy, so most of this I learned from him. The only thing we’re contracting out is going to be the exterior painting but that’s just something we don’t want to tackle. It is just a big project. Weather depending, that should start this week but yeah, everything else we’re doing ourselves.
[0:22:24.6] NH: That’s great. I like to tackle my projects too. I make a list of the things I don’t want to do and then those are the things that the contractors get to handle. So speaking of doing things yourself too, you guys are also going to be self-managing the property, is that right?
[0:22:37.2] MD: Correct, that’s the plan, for now, things can change obviously. In our budget we budgeted for property management just in case it becomes overwhelming, especially being our first property that we have that money already aside for that.
[0:22:50.1] NH: Yeah and that can really help too especially when the first year is often the worst year and it brings in the extra cash flow, right? When you are self-managing it yourself and then later on once you built up a good reserve fund then you can turn it over to somebody else and it’s not so burdensome. Are there other things that you are doing? I know you are still in the rehab phase right now.
Are there other things that you’re thinking about for the tenant placement things or putting the property up for sale or not for sale but for rent and what that’s going to look like for you guys?
[0:23:17.5] MD: Honestly, I’m just kind of taking it day by day and I don’t want to get super overwhelmed with that part of it because I think that will be the hardest part for us. I know with the way the Internet is now, there’s so many resources out there for listing properties and even doing online lease agreements and sending online payments and I’ve heard quite a few recommendations for those types of websites.
So the next step would be looking into those types of things and figuring that out but just taking it day by day right now.
[0:23:45.7] NH: I love it, it’s the checklist approach. I think it’s awesome, right? This is the next thing on the checklist, I am going to get it checked off and then I’ll work my way down, that’s really cool.
[0:23:51.9] MD: Yes, exactly.
[0:23:53.0] NH: Good.
[0:23:53.3] DB: Nice, so this feels kind of awkward then coming off of like the checklist one step at a time but looking at the end of the checklist and that final goal, right? You are going to be creating like as you work this plan through, you’re going to be creating a lot of equity by doing a lot of this work yourself, you have already bought this, I think you said earlier before we started recording, you bought this below the existing appraisal. Is that correct?
[0:24:15.3] MD: Correct. Yeah, so we bought the house for 95 even and it appraised for a 105. My lender said, she can’t even remember the last time a property appraised over sales price, so kind of going into that, we already have essentially $10,000 that we are putting into this house, free, if you look at it that way and our rehab budget is about $12,000 to $13,000. I think once we get it fixed up the way we want to, depending on what the market looks like here a little bit with interest rate hikes, I am hoping that it will probably be worth around $120,000 to $130,000.
[0:24:51.1] NH: That’s awesome.
[0:24:51.9] DB: So that’s awesome. Yeah, 120 to 130 when you are all in for 95 plus the repairs there. So yeah, you’re definitely looking at with assuming that you come in on budget, which is always a big assumption for a project like this, right? Assuming those comps come out at the end, you’re going to be sitting on a decent chunk of equity there, which is awesome and a great way to start off your investing.
Have you thought about cash-out refinance or anything like that towards the end of the project? I simply ask because you said that you are thinking about doing more of these as well over time.
[0:25:25.4] MD: Yeah, so doing I guess the cash-out refi BRRRR method is on our radar. I don’t think we’d get everything back out of this, repairs plus down payment, but I think we can get a good chunk of it based on my calculations maybe about 10 to $12,000 back out of it. So that would give us our repair money back to go do another house essentially. When we had kind of our budget in mind, we were hoping to get two to three properties like this within the next year or two.
We are already kind of looking to see what’s out there for the next one, interest rate hikes have kind of made that a little more difficult. My husband being very ambitious, he’s looking more of maybe houses that are around 40 to $50,000 possibly buying them cash and then really doing a bunch of work to them to help with those resale values.
[0:26:14.9] NH: That’s great. I feel like now you’re with the first one under your belt, you’re going to have the experience to be able to do that and especially even if it is just walking the property and knowing, “Yes, I can do that” or “No, I definitely need to hire that out. I need to figure out what that cost is” that level of experience can be almost more valuable than, “I can do everything in this whole house and this $80,000 rehab is all mine.”
Sometimes it is even better just to know what you can and can’t do, so that’s going to be really great.
[0:26:38.8] MD: And even if I can do it, do I want to do it?
[0:26:41.9] NH: Exactly. I love it.
[0:26:44.4] DB: Yeah, I remember being in the middle of one of our first rehabs and we did like paint. I mean, I can’t even really call it a rehab, you know? Even halfway through that, I’m like, “I can’t do this again” so the fact that you’re looking, you’re into rehab like this where you’re doing kitchen, you are doing all of these things and then you want to go and like really double down on a bigger rehab, that’s really impressive too. That makes it sound like things must be going well, so that’s really cool.
[0:27:08.5] MD: I think at that point, we might be looking at a contractor but yeah, we’ll see.
[0:27:15.0] NH: Well cool. I want to bring this full circle. So obviously, you were in the none-to-one course, again, really excited that you are able to achieve the goal of getting the property and all of that. Can you maybe talk us through just what was one of the things that you felt like the course helped with the most in terms of getting you – I know you said it was really the thing that jumpstarted you but was there anything in particular that you said, “Man, if there was one takeaway I had that really got me to that finish line and it was this.”
[0:27:36.3] MD: Yeah, I think it was just having that network of people who are all going through the same thing as you and we have open line of communication not only with you guys but with everybody in the course. It is really interesting to see where everybody is at, what they’re doing, a lot of really unique ideas that I probably wouldn’t have thought about in real estate investing that don’t necessarily work in my market but are very interesting to hear about.
Then just having that direct line of communication that when a question comes up, you can just ask it and get answers right away because sometimes when you Google some of this real estate investing stuff, you can go down a rabbit hole for hours and days and you get all this conflicting info. To just really get that one-on-one feedback in real-time, that was probably the biggest plus for me.
[0:28:22.4] DB: Yeah, one of the things you started off with that I think probably resonates with a lot of pharmacists knowing that we are all a little more on the analysis paralysis side of things or a little more detail-oriented and risk-averse is when you talk about just being stuck and like listening to podcast, going out and doing some learning, which is like having trouble getting started, what would you say to others that are in that same kind of stuck, having trouble getting started and wanting to get started on that path towards real estate investing?
[0:28:49.8] MD: I think just building that team and being ready for when the opportunity is right. So whether that be like a mortgage lender, a realtor or just a group of people who have done it before or maybe a group of people who haven’t done it before but want to just getting that team like set out that way when something does come along you’re ready for it.
[0:29:11.6] NH: Awesome. Well Marissa, we really appreciate you coming on and talking about this. I want to pivot to our last section, our final infusion questions, and David, I think our last question was kind of question three already but that’s all right, we’ll still hit them all here, which is good. So Marissa, what is one tangible strategy that you use to make sure your investing works hand in hand with your career as a pharmacist?
[0:29:30.7] MD: I think for me, it’s writing things down, having a calendar, separating that time out so I know when I am not working, these are the things I need to be working on for my side gig, whatever that might be that way I am not just going home and watching Netflix for hours. I have a plan, I have a to-do list, and then when I am at work, I am not looking at it but when I am off, these are the things I need to do and just separating those two times.
[0:29:56.7] NH: I love it. It is amazing how much time you can save by cutting out just a few shows of binging every night. I totally hear you.
[0:30:03.6] DB: I think for a lot of pharmacist types, it’s really helpful to have that list and how much peace that brings you so that when you are working, it is not running in the back of your mind of like, “Oh my gosh, I forgot to do this” but no, you can really just detach from that and know that it’s handled because you have organized yourself and you have worked that process. I think that’s super good.
[0:30:21.4] MD: Yeah and I think real estate investing can be as little hands-on as you wanted it to be. So my approach and my story might be a little overwhelming for some people, especially for first time but there is plenty of opportunities out there that don’t require this much work outside of your pharmacy work.
[0:30:39.7] DB: No, that’s a great point. The second final infusion question is what’s one resource that’s been most helpful to you in your real estate journey whether it’s a book, a podcast, person, author, website, whatever that would be?
[0:30:50.3] MD: Honestly, it would be you guys as podcast. That’s really the first thing that got me into the real estate investing rabbit hole. Of course, I will Google things here and there and get different blogs and things but most of my information has come from your podcast.
[0:31:04.8] NH: Thanks, that’s awesome. I think that’s the first time we’ve been cited as the favorite resource. That’s cool, so it took us a year David, we made it, well, good. Well Marissa, again, we really appreciate you being on the show. We really appreciate you being a part of the class. It’s been an awesome just to get to know you and to see you grow into this real estate investing investor.
It’s just really cool, so appreciate you coming on and we’ll wrap things up here with where can people reach out if they want to connect with you and learn a little bit more?
[0:31:29.6] MD: I think you guys have my email, so if you want to give that out and then I am active on Facebook mostly and then I do have a LinkedIn. I read my messages, so it is just my name, Marissa Deuel on Facebook or LinkedIn.
[0:31:42.0] NH: Perfect. Well, thanks again for joining us. We really appreciate it.
[0:31:45.1] MD: Yeah, thank you guys.
[0:31:46.0] DB: Thanks so much.
[END OF INTERVIEW]
[0:31:47.6] ANNOUNCER: Thanks for listening to the YPF Real Estate Investing podcast. If you like what you heard on today’s show, please leave us a review and subscribe to the show so you never miss an episode. If you have a question, know someone that would make a good guest or want to connect with Nate or David, head on over to yfprealestate.com and join the growing YFP Real Estate Investing Facebook group.
[DISCLAIMER]
[0:32:09.1] ANNOUNCER: As we conclude this week’s episode of the YFP Real Estate Investing Podcast, an important reminder that the content on this show is provided to you for informational purposes only and it is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.
Furthermore, the information contained in our archived newsletters, blog post, and podcast is not updated and may not be accurate at the time you listen to it on this podcast. Opinions and analysis expressed herein are solely those of your financial pharmacist unless otherwise noted and constitute judgments as of the dates published. Such information may contain forward-looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward-looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer.
Thank you again for your support of the YFP Real Estate Investing Podcast. Have a great rest of your week.
[END]
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