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From rookie landlord, to full blown real estate investor, to a real estate investing coach who’s teaching others how to create multiple cash flowing rental properties.
Sandra, how long have you been a real estate investor?
I’ve been an Investor 6 years now, 4 years full time since I left my corporate job.
What do you feel is your real estate investing expertise (fix & flip, wholesale, buy & hold, etc.)?
Buy & Hold. I’m a Landlord at heart. I figured out early on how to acquire rental properties that cash flow $500/month so that is definitely my sweet spot. I love helping others learn my technique because I feel it’s one of the best retirement strategies. It’s my retirement plan. I also wholesale, rehab, and am a Realtor with Worth Clark Realty. Ultimately, I love that I’ve found a career where I can help people find great places to live whether it’s short term, like renting a year or two during a life transition, or even if they just want a simpler lifestyle and no real estate taxes or maintenance expenses. I also love rehabbing — taking a tired old home and making a beautiful home again for someone. I enjoy helping people through life changes. For example, helping them sell their current house then helping them find a new place that better meets their needs (eg: growing family or downsizing). Most of my tenants are women going through a divorce looking to keep their kids in the same school while saving up for the down payment for their new “forever” home. I am divorced, which is how I got started with my first rental. I can empathize with these divorced women and their situations. I love that I provide a service that fills that huge gap for them during such a stressful time in their lives and their children’s lives. It means a lot to me to give back to someone who is trying to pull their life together, to get back on their feet when the safety and security of a solid place to call home has been taken from them. My rental investing funds my retirement while helping provide a nice, stable home for others. What’s better than that?
Approximately, how many deals have you done or been a part of in some way?
What type of deal was your very first real estate deal and what was that experience like?
My very first deal was converting the townhouse I bought after my divorce into my first rental property. It was a huge learning experience! It took me over a year to figure out all the pieces, legality, marketing, lease, etc., that I needed. My first tenant was super sweet but it was her first time living on her own. She asked me to increase rent to cover utilities because she didn’t want to have to deal with setting those up and all the monthly bills. Big mistake, that was my biggest lesson learned. She used way more water, gas, and electricity than I did! I’d been a manager for 25 years in my former career, so managing the property, the tenant, and the lease all came naturally to me, but the financial piece of all the expenses that can eat into your cash flow was my real learning curve. That experience was an eye-opener. It also taught me that we have to train our tenants. Some have never been homeowners and don’t know how to take care of a property at all, even the basic stuff like unclogging a toilet or shutting off the water main. So, to prevent damage, that’s our job; help them be more independent and not call for something that can be prevented or easily fixed. My second year, the second tenant, I had all the pieces figured out, made some changes, and voila! I was getting $500 cash flow every month! I knew I had to get more and this became my early retirement plan and how I would leave a legacy for my kids.
What aspect of real estate investing initially piqued your interest?
Five years ago, you couldn’t have paid me to accept the fact I would become a landlord and love it. I was an accidental investor. When I bought and built my townhouse in 2009, new construction prices were still at the top of the market. When I was ready to move on, I would have lost about $30,000 in equity to sell at the lower market prices at that time. So, I decided to learn how to do rental properties to keep it until it recovered its value, then sell it at a break-even point or a profit. Then I realized, after I mastered the cash flow situation, someone else was paying the mortgage down, it was appreciating, and I was earning cash flow. It was a huge epiphany; the trifecta of a perfect rental investment! I didn’t have a background in real estate or finance. I had been a dietitian and food service director in healthcare for 25 years. I wore a hairnet every day, trained employees, managed menu systems and catering events, and loved it, but it was time for a change. That was my first taste of real estate investing and how powerful it was for regular people like me.
What’s the aspect of real estate investing you love the most?
I said it previously and it may sound corny, but I do love the fact that we can build our own solid financial future and help others while doing so. With real estate and housing, I can help people find their perfect place or I can buy a problem property from someone with the options to wholesale it, rehab it, or make it my next rental. All of those things help people with their lives and their families, which in turn helps me build my future for my family.
What’s the one motivation that keeps you fueled to continue moving forward in this industry?
My kids. I want them to see that, with hard work, an entrepreneurial work ethic, training, and surrounding yourself with positive people, you can help others and build a good life for yourself along the way. I lived the corporate work life for years, which isn’t for everyone. It got me to where I could make choices and leave that rat race but working for yourself and building your own business is so much more rewarding and gave me the flexibility I was ready for in life; to spend more time with my family and to do the things I wanted to do like travel.
What was your single, most difficult challenge in real estate investing that you’ve since conquered?
Accounting and taxes! In the corporate world, working for an international company, I had a whole team of finance and accounting people supporting me. I was in charge of a multi-million dollar budget, but I didn’t have to do the accounting for it. I submitted my numbers into our software, had routine meetings where there was support staff to call if I needed, then I would receive completed reports, which I was very good at interpreting and managing. When you have your own business, you have to build that infrastructure yourself, usually from the ground up. That was a huge pain for me and now, in year three in doing this full-time, I have finally gotten it built and have all of that under control. I’m still learning and making accounting mistakes but I have a team of financial experts and CPAs again and that’s where I thrive.
Why do you feel your real estate investing organization is a vital, valuable asset to the Saint Louis market?
I improve communities! When I buy a house in need of repair, vacant, run-down, etc., it’s an eyesore for the neighbors and is detrimental to their property values. I help improve properties by cleaning them up, updating them, and enhancing curb appeal, which means they are selling at a higher price, therefore helping all the neighbors’ home values increase. Plus, it puts a happy new homeowner in a place that they love and can thrive. Homeowners and tenants staying in the area for good schools, contribute to the local economy, by paying taxes & utilities where maybe, they weren’t being paid for years. Doing these things means I’ve just added one more person in the community that cares about their property and will spend local money at local businesses. Real estate investors improve neighborhoods. We come in and get things done legally, within compliance, and cooperate with local municipalities to keep our permits. Sometimes we are taking better care of our properties and spending more money on improvements than the neighbors. Rentals aren’t always a bad thing. Many times my properties are the best on the street. I want my property values to go up. I care about my homes, therefore, take good care of them, the tenants and my clients.
What aspects of your organization stand out the most as helping Saint Louis metro families and/or business owners?
Firstly, helping women find good housing while going through a divorce. They want to keep their kids in the same schools while providing a stable home environment to keep them safe and well-adjusted during that stressful time in their lives. Changing schools is a huge stress on the kids, so having clean, safe, attractive rentals in areas with good schools is so appreciated by these women. They may only stay 1 year but they are so thankful and appreciative of the chance to live where they can help their kids the most. Secondly, improving home values through rehabbing and keeping up my rental properties. Taking homes that are outdated, in disrepair, or are just neighborhood eyesores, then making them into homes people are proud to live in, help improve communities.
What do you feel should be the next trend of focus in the real estate industry?
With the impact of Millennials on the housing market, they are the next big demographic/driving force that we can’t ignore. They will drive the purchases, which means as investors we need to be one to two steps ahead of them with what we are going after, to feed that demand.
What’s the most recent lesson you’ve learned in this industry?
People don’t value our time in this business. We are hustling every day to find more deals, find good contractors who do quality work, find perfect homes for people, help sellers get top dollar, etc. People underestimate what we do behind the scenes, so we have to find ways to show value and earn trust upfront. We investors don’t do loads of work only to have them walk away dissatisfied or planning to do this themselves.
Where would you like to take your organization in the next 10 years?
I would like to build my portfolio of rentals to about twenty cash flowing properties, at $500/month each, so I can semi-retire early, work part-time, and travel more.
What one key piece of advice would you give to new real estate investors?
Get a coach in the very beginning. Invest in yourself to save yourself of a long, hard road with a steep learning curve.
What great piece of advice or inspiration did you receive from a fellow real estate investor?
Surround yourself with people doing better than you, learn from them, be like them, and do what they do.
To hear Sandra’s appearance on the REI Success: Saint Louis podcast, click play below.
To hear Sandra as a co-host of the STL REI Girls podcast, click play below.
Contact Sandra Holtmeyer
Company: First Freedom Properties, LLC
Expertise: Real Estate, Real Estate Investing, Landlording
Address: 1395 Jungermann Road, Suite E, Saint Peters, MO 63376