Ali Boone – Lifestyle Entrepreneur, Real Estate Investor specializing in turnkey rentals at Hipster Investments, with a Masters Degree in both Aerospace Engineering and Spiritual Psychology Investments, talks to Neil Henderson and Brittany Henderson, the hosts of The Road to Family Freedom podcast. Ali Boone shares the lessons she learned from losing $40,000 on her first deal and becoming extremely successful thereafter, how to properly approach turnkey rentals, how she established Hipster Investments, and she talks about her book, Not Your How to Guide to Real Estate Guide to Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet.
Neil Henderson [0:24]
Greetings, friends and families. I’m Neil and
Brittany Henderson [0:27]
Neil Henderson [0:28]
you’re listening to the road to family freedom. Our guest today is a lifestyle entrepreneur and successful real estate investor specializing in turnkey rentals at hipster investments. She holds a master’s degree in both aerospace engineering and spiritual psychology. So not only is she smarter than all of us, she’s also got the heavens figured out and she knows how to get Welcome to the road to family freedom.
Ali Boone [0:52]
Oh, thanks for having me. I’m excited to do this one I love. I love the premise of what you guys are talking about.
Neil Henderson [0:57]
Thank you very much. We’ve been you’ve been on our list for a while and serendipitously actually, I think you had somebody reach out to us. So it was we’re glad to have
Ali Boone [1:08]
it’s meant to happen. The heaven blue stars aligned? Yes, yes.
Brittany Henderson [1:12]
Alright, so let’s get right into it. Do you recall sort of an aha moment for when you decided to get into real estate investing?
Ali Boone [1:24]
I actually, you know, it’s funny, I didn’t have an aha, it was kind of a kind of snuck up on me sort of interesting because I had a corporate job. And I was for basically from minute one of being in my corporate job, I was trying to figure out my way out. And I knew just I was reading books. And this was not before the internet. But it was before there were so many resources on the internet. So I had every hardcover book possible. And I had kind of deduced that the only ways I was going to get out of my regular job and kind of be on my own was either going business for myself or get into real estate. I didn’t really know what that entailed. Exactly. But those are the two avenues I really kind of pursued. And ironically, a few years later, as I was still kind of researching stuff, I had decided to go into business for myself. And I ended up a couple weeks later, just randomly this real estate investment, I of course had signed up for every email as possible, because I was trying to everything not to work, my corporate job. And a real estate deal had kind of landed in my inbox was like, this will be something that entertain me, it was like a webinar. And, you know, I can do kind of whatever. And so I watched the webinar, and I was like, wow, I I actually kind of like this. And so even though I was trying to find my way out of corporate, I decided, well, while I’m stuck here, I might as well do something smart with my money. So while I still have a W two paycheck, and I can still afford things and you know, whatever. And so I like all investing kind of on the side. And that doing that I ended up meeting a lot of people, there was all sorts of networking going on. And just really one thing after another kind of played itself out. And the next thing I knew I was quitting my corporate job to run my real estate investment business, who knew? Very good.
Neil Henderson [3:06]
So I’ve heard you interviewed before, and I know this story, but I’d love to hear you recounted that your first real estate investment was in a third world country.
Ali Boone [3:19]
I know where this was going. That was that was. That was the webinar that landed in my inbox that started my whole career. It was a it was a Nicaragua, which for the record, I had to map where that was first I don’t know where I thought it was. But I didn’t realize I was in Central America. And the the webinar was about it was a pre construction development. And a whole the whole slew of big players were in on this like Wyndham hotel, like this was a big deal. And you and this was right after I had just kind of explored some properties around Los Angeles. That’s where I live. And I was like, I’ll find a rental property and whatever. And I was I was looking at the price to on these properties. I couldn’t figure out where the returns were. And all of a sudden, this invite shows up in my inbox inbox for beachfront bungalows, 30 and $99,000 with an option for seller financing in Nicaragua. And I thought, you know, if I can do anything to ruffle people’s feathers, I’m all over it. Like I like to do anything that makes people go. What are you doing? Well, what better to do that then be fun bungalows that aren’t actually built yet and a third world country. So I was all over it. And, and I will say that I didn’t just jump on it for the excitement of it. I actually kind of, I assumed it was a scam. And so I watched this webinar, and I reached out to the people. And I was like, I’m interested. And I was like, I’m snickering to myself, like, I’m going to I’m going to show them this smarter. And they sent me a contract and one thing led to another and sure enough, actually ended up investing. It seemed totally legit. There were like I said, big name players involved. And I got to go to Nicaragua a whole handful of times, then it turns out, it’s pretty much my favorite country on Earth. Yeah, so it was it was really interesting how it all happened. I thought it was just going to be kind of a karma thing, but that the people I met through that investment, were the people who how I ended up getting a turnkey. So that’s kind of where the whole thing started in Nicaragua, ironically. And then they kind of came back to the US and turnkey them pure MROZ, what, seven, eight years later, maybe been turned to use all the time. So it was a good time?
Neil Henderson [5:33]
And did. Were there any lessons that you learned from that deal? Good or bad?
Ali Boone [5:40]
Yes, the lesson is don’t invest in a third world country. As the famous pre-construction development, even in the States, I’ve heard similar stories on the states, as the famous horror story goes, the development went belly up, the money suddenly magically disappear. Weird. And no one can figure out what happened. And to this day, I haven’t gotten any of that money back, supposedly that I have a settlement agreement. So the guy who was in charge of it, he supposedly is back and trying to redo all this. And we’re all just kind of like he’s laying around the country, we’re like, are you going to do a whole development all at like, okay, let’s see who invest with you. Supposedly, there’s a settlement agreement. But the problem was, so there’s two kind of morals about starting number one. Anytime you’re dealing with developers, and since being in real estate and talking to a lot more people who have invested in with developers, even again, I’m estates, things can just turn on a dime. So there’s risk there. And just because you have a contract, saying you’re going to get paid out, doesn’t mean they’re not going to skip town or skip the country, and you’re never going to see it. Like that’s a pretty realistic thing. The second moral of the story is, once you’re out of the United States, you really don’t have a lot of leverage in what like, if that happened in the States, like the government cares about that the authorities care about that all whatever, but they don’t, they kind of care about me in Nicaragua, but they don’t really have a lot of authority. So you’re really taking out a lot of safeguards, what what chance, you might have to recoup and, you know, have the person dealt with or whatever, you know, you’re in a third world country, and there’s been some lawsuits, some groups have gotten together. And I don’t know that they’ve accomplished anything, because of an arbitration clause and all sorts of drama. And, you know, it’s Yeah, so, you know, there are less risky investments, I think, what we can all take home from that. But again, if you want to third world countries, you know, I love a good adventure. And, and I will say for, you know, there’s a lot of people in real estate who are fearful, they’re scared, and I lost my first $40,000 in real estate on my first investment. And that is really scary to people. But I can tell you being on the other end of it, I have made every bit of effort $30,000 up in other ways, it’s what allowed me to start my company, it’s what allowed me to get out of my corporate job, I basically got five or six free paid trips to Nicaragua, which were amazing. You know, the lessons I learned, everything I pulled from it is worth so much more than 40,000. So, you know, it’s, so it’s kind of a you can, you can get them less risky investments, if you’re more fearful. But then, as far as the fear component, you know, just because you lose some money right off the bat, or at any point doesn’t mean it’s the end all. So that’s, that’s a big thing that I really took from that is it created my whole life now. And that’s how I have to look at it not it’d be nice to have that money back. But, you know, it is what it is.
Brittany Henderson [8:44]
It’s kind of like investing in college.
Ali Boone [8:50]
Sure, I probably spend more than 40,000 in college.
Brittany Henderson [8:55]
But yeah, it’s kind of like going to school. You know, you don’t, you don’t just magically get that money back. But the lessons and the information that you get from spending that money, because, I mean, again, because you’re using the knowledge so
Ali Boone [9:10]
yeah, I actually love that analogy. And it’s so true, you may not walk out with like a hard copy certificate degree, but you’re you’re in the school of hard knocks, like that’s, that’s where you’re getting your experience. That’s where you’re getting the lessons and that is real estate, like it is on the job training more than you can prepare yourself to a certain level. But after that, you have to learn from the experiences, you just have to, I don’t want say you just have to dive in because I don’t want someone to dive in too soon. But at some point, you do have to dive in and just learning what you’re going to learn.
Neil Henderson [9:39]
Well, and I think it’s also a lesson that real estate development is a an entirely different animal from buying cash flow real estate.
Ali Boone [9:49]
And then for me to go to turn keys from that totally different world. Literally the opposite. Yeah. And that’s why I say like, there’s a big difference in going and preconstruction the element and a third world country, you know, them things that are actually already performing, which is huge for people to understand.
Brittany Henderson [10:08]
How did you like get into the turkey market? How did you find that?
Ali Boone [10:14]
Well, the guys who were kind of, they were the ones who had found this whole Nicaragua deal. And so they were my main contacts down there. They were actually in the States, but they were working with us Nicaraguan development, and they at the same time, so this was in 2011. And as we all know, that was kind of right in the heat of the crash. And at the same time, turkeys had really a turkeys have been around forever. But they they really made a name for themselves in this past crash, because that’s when they really it became a common viable concept. And people were really looking at them. So turkeys had started at this point. And in 2011, they were already working with turnkey providers and Memphis and Phoenix. And I just happened to come in and meet them at the time, they were more focused on next album, but as the Nicaragua stuff was going on, and even before Nicaragua fell out, they were still interested in the turnkey side. So they were going around different markets, they were meeting different turnkey providers really getting, I don’t say familiar with the concept, because they already knew about it, but really kind of, they were heading up, you know, finding good providers, finding good deals, really scouting out what was out there. And it happened to be that in I think we were probably even poolside talking about it at 1.1 of the guys said, Hey, listen, you know we work with turkeys also. We’ve been in Memphis and Phoenix, I want to give you a heads up. We haven’t told people this. But our next big market is Atlanta. And I know you’re from Atlanta. And you know, I just come in, you know, if that’s something of interest, I was like, Well, yeah, if the next thing market is somewhere that I’m really familiar with, I for sure want to check into that. So it was maybe a couple months later, I went to I was going to Atlanta all the time anyways, because my parents still live there at the time. But I’ve met my first term key provider toured around properties, and I was hooked immediately, because one thing that had really kept me out of real estate was the idea of how much work it was going to take. I had no interest in finding deals, negotiating deals, rehabbing properties, wilmorton, none of it. I was like, I mean, I can do it if I have to. But I just I’m not a hammer stoner. And so but I didn’t know there was an alternative. And so the minute I learned about the turnkey concept of I, you know, I don’t I I’m not completely hands off. But for the most part, all the hard stuff is done for me. And it happened to be in Atlanta and the deals at the time, were insane. My very first turnkey, I bought for and it was a night it’s like it’s I still have it. It’s like it was a great house. Two stories really cute is only $55,000. And it was getting 975 a month and rent like those are huge ratios. And so I was I was honored. I was like, Oh, well, I’m still going to Nicaragua, having fun there. But I want to buy those properties. And those are cash flow MMO. They’re happening right now. And that’s what set the stage for all of it. And I’ve been pretty much hooked on Turkey’s ever since.
Neil Henderson [13:08]
So that first property was in Atlanta. And it was you were all in 55? Or so you had to but it was a cash purchase?
Ali Boone [13:21]
No, well, we actually got a mortgage on that one. So it only took about 10 grand down if I’m doing the math on that right about 10 grand down and a little bit for closing costs. Like, it’s funny because people are letting you know, they’ll reach out to me now. And they’re like, hey, what can I return? You know, what returns Do you get on your properties? And I’m like, you don’t want to know, you really don’t want to know and all of that. Because the thing is, it was a lot of a market timing situation. Because we knew that when I was about to boom, and all my properties that I bought there have since doubled and tripled in value. And that’s super great for me, but it’s it’s not realistic today. And so yeah, but yeah, so 10 grand them and I, I was able to buy that first one. But then my question was, how can I keep buying more of these? How many sets of 10 grand do I have? And so one of my really close friend of mine for years, most of my adult life, he was doing some work overseas, and he had a lot of extra money. Well, we ended up joining forces, and I did all the work and took the mortgages and he put up the cash. So then I was able to scale because it was him as my sets of 10 grand plus at the 10 grand so that that made a huge difference. And it was it got exciting fast. It was it almost became a little addictive. I mean, even in Nicaragua to Nicaragua, I ended up with the firm blow and buying a home site, which would work. But then once I bought the first turnkey I’m like well, I want another turnkey. And I want another turnkey like it’s it became a problem. It was a lot of excitement really fast. But it is again because everything was on sale back then.
Neil Henderson [14:58]
Yeah. So that Bry you on that you’re your partner, allowed you to buy more deals or just bigger deals.
Ali Boone [15:09]
Neil Henderson [15:10]
more deals. Gotcha.
Ali Boone [15:12]
Yeah, cuz the one major disadvantage was turnkey. So if you compare turnkey to doing it yourself, like you’d go out, buy a distressed property, rehab, it force the appreciation, you’re able to recoup, usually a lot more if not all of the money more than what you put in. Wait, until I think on my words, you they’re able to pull out the money that you put in in the first place, or at least most of it. And with the term keys, you know, you have to put 20%, down, minimum plus whatever closing costs, and there’s no way to force the appreciation on the turnkey. That’s the absolute major downfall to turn keys is there’s no there’s really no room for the appreciation. And so therefore, you really have to have set sets of 20% down. And once you’re out of those, you know, how many 20% downs do you have? Because you’re using not really able to pull those back out?
Neil Henderson [16:02]
Yeah. And there’s no real, it’s not not really an option to go out and try and borrow those funds, hard money, you know, anything like that, right?
Ali Boone [16:13]
Yeah, for a couple of reasons. Number one, is it’s a long term investment. So the hard money long term would run out, but also even get a little creative on this. But yeah, wink wink. But the when you get a traditional mortgage, they’re going to check the source of all your funds. And so they may be the ones who want to, you know, they say, No, you can’t borrow the time, because actually, when my partner and I, I guess I’m safe to say that it wasn’t illegal by any means. But it was a creative method is I can’t You can’t accept a gift as they call it of money. So if he was giving me 10 grand to buy this property, he would give it to me two months ahead of time, and we let us see them. So then when the mortgage, lenders would check for the source of all my funds, they weren’t checking that far back. Because if they had seen that, give me $10,000, they wouldn’t allow that. So we got a little creative on my friend. Yeah, yeah. So that is the limiter there is. This is probably a whole other conversation, there is another option with turn keys these days. And I’m very cautious about saying this because you really have to know who you’re working with, because there’s a lot of risk in this. But there are turnkey providers now. So for anyone listening who don’t, who aren’t as familiar with the turnkey, is once when you buy a turnkey, everything is already done for you, the rehab, there’s tenants and it’s performing. And you get to verify all of that before you put a diamond to it. And so really the turnkey providers holding all the risk. And the other method to that is they still do all of the work as they would normally, but you fund it. So you buy the distressed property and you give them the money for the rehab, they do all the work for you. And on the reward for that is that you do get to keep the it forced appreciation because you’re the one who gets to keep the extra equity. So that is the one slight caveat to the turn keys where you can finagle it to not be forced to keep all your 20%. And there you can put usually pull more back out, once you do the cash out refinance on the other end. Again, you have to be I work with a provider who does this and they’re phenomenal. But I’ve seen a lot of belly, things go belly up almost more dramatically than my Nicaragua stuff on that. So, you know, but that is something to keep in mind, of course, in that appreciation is a huge interest. And but you kind of want the hands off part of a turnkey, there are combos, combo options as well.
Neil Henderson [18:38]
Gotcha. So on a traditional turnkey, you know, they’re making the money, they’re basically flipping almost flipping the house to you because they’ve acquired it as a distressed asset. They’re rehabbing it, they’re selling it to you for retail. And that’s how they that’s how they make their money plus the management fees.
Ali Boone [18:56]
Now how is a house and they they really are tremendous flippers. That’s their business. Mike, I’m glorified flippers are just here now on big scale.
Neil Henderson [19:04]
And then so how does someone how does the person who’s doing the force appreciation? How are they How are they making their money?
Ali Boone [19:13]
They are, I don’t know actually selling you say that will say like, wait, if the investor does a distressed property. I don’t know if I’ve ever asked because I don’t know if I cared. Like all I know, I get I get the force appreciation on the other end. I’m sure I’m sure that’s built into the rehab cost is my best gift. So if you put let’s say you buy the property for 60,000, they put 40. m, I’m sure. And so you’re 100 m, and now it’s worth 120 hundred and 30 that extra equity is yours, but I’m sure their margins are built into the rehab costs it would have to be.
Brittany Henderson [19:52]
So talking about, you know, you’re saying that some of these turnkey providers, you have to really know who you’re working with. How do you vet all about betting is a turnkey provider.
Ali Boone [20:05]
You know, it’s all turnkey providers. They are a funny, funny, like, Oh, so many places like a go. A quick sidebar, I recently started a turnkey rental properties Facebook group. And every, like Monday, Wednesday, Friday put out like a tip or a helpful something or another. And I think it was, I think it was this week. My tip said something about, I don’t remember what it said. But it involves saying something about how turnkey providers at some point hit a psychosis. And I was like, that one seems a little dramatic. That’s kind of true, turnkey providers are funny. So if you want to go with us, if you buy a standard turnkey, so you’re not paying anything until everything is verified. Technically, at that point, the turnkey provider themselves doesn’t matter. Because you’re verifying everything about the property and who’s selling it to you, or what they’re telling you doesn’t matter. Because everything you need to verify you can verify on your own. With that said, I say it’s technically true, because most of us don’t know how to do due diligence on properties that will so in the turnkey world, because it does attract newer investors and people who are not as an in as deep in real estate. It does, you end up relying a lot on what they tell you. And so at that point, it does matter. And, you know, it’s you have to do your own due diligence, you have to you want to get a property inspection, you want to verify that everything is turnkey providers telling you is true. So it just makes life easier if you happen to work with a really good turnkey provider, because then you’re not really swimming upstream to do all these verifications, and whatever. And so as far as vetting the providers, it’s, it’s a little tough, like how are these days is a little bit easier, because a lot of the really good ones have been in business for a long time. Whereas in 2010 32,012, everyone in their moms had started a turnkey company. So it was really hard to it was the remarkable in the bedroom. It was harder to establish proven track record, you know, the ones that are really up and trucking along today have probably been around for quite a while. And with me, it’s so much in the communication. First of all, you want to make sure the rehabs are consistent you want to I let them tell me why they do what they do and how they do it. Like how do you decide the neighborhoods in the market? How do you decide, you know, such as lesson and when they can explain that, to me, that helps me understand and I try and focus on the turnkey providers, but focus a little bit more on a nicer but not Nice, nice, because you’re not going to cash flow and an a neighborhood on a property but not not dangerous properties. Like they most turnkey providers are experts in their market. And they know where the niches are like where’s the best combination of cash flow, less risk, because there’s higher cash flow and riskier areas, but they’re not trying to put that on you. So someone says in the communication? And usually my answer to that is if you’re brand new, and you have no idea how to vet a turnkey provider or a turnkey property, work with someone who does like that’s, that’s what I do, like I help people do that, because I’ve been in Turkey world since 2011. And I still get thrown for a loop. Sometimes I’m like, wait, what’s a red flag? And people that are smarter than I am on it, say, Oh, well, you want to be careful that because of this and this and so even I’m missing. So I think the shortcut to vetting turnkey providers, is work with my theory in life is work with people who are smarter than I am. And, you know, once you get a couple, a couple of different heads that you trust in, you know, looking at them, things make a lot more sense. And I feel like I gave a completely non concise answer. Because, you know, it’s, there’s not a distinction close to that a turnkey provider, there’s a more clear checklist for the properties. But the providers are a little bit of an interesting breed. And just for the record customer services, not usually they’re stronger soon. So that can make it a little bit challenging.
Neil Henderson [24:17]
So that sort of leads us to what you do at hipster investments. So you’re you have you have access to a lot of you have a lot of experience with working with a lot of different turnkey providers, and you’re able to basically help people navigate that correct. And that’s, that’s right. Gotcha.
Ali Boone [24:36]
Yeah. Yeah. So kind of the premise of when I started the company, it was really this idea of getting started, because people heard me excited about what I was doing. They’re like, wait, what are you buying? And who are you buying through? Because kind of like this whole turnkey provider discussion is Who do you trust and who should we work through. And so what I do is, I have a pretty big network of turnkey people, both on the provider side and the on the side of the people who met the markets and the turnkey provider. So with all of that combined, I have a pretty good feel for who to trust to not to follow a system. But that’s really where I come in to number one, I can introduce you to people that I know have a proven track record. But then also over the years, I used to call myself a glorified Matchmaker, like that was you know, I match people to where they need to go and all them. But over the years with the turn keys, I’ve definitely taken on the role of emotional support dog, because like I said, a lot of newer investors are coming on, they’re fearful, they don’t know what’s going on. And so I just kind of stay by their side and support them through the buying process. And then even when say on the turn key, if any challenges come up, whatever, they can always reach out to me and say, hey, what, what should I do in this situation? And that’s where that’s where I’ve probably done more of that, and I have matchmaking.
Neil Henderson [25:50]
So, you know, you bring up a good point, and I’ve actually heard you talk about a little bit about this is that so much of real estate is not necessarily the deal. The deal is important. It’s just the mindset and getting over the fear, correct?
Ali Boone [26:07]
Yeah, for sure. Can you? Okay,
Neil Henderson [26:14]
we got a delay. Go ahead.
Ali Boone [26:22]
Um, yeah, you know, I think that’s totally true. I actually have a book coming out soon, I wish it was out now. So I can offer it to you guys. But in the next month or two, it’s actually called not your help to guide to real estate investing. And the whole thing is about mindset. And, you know, with real estate, it’s, the deals are for sure. Important. The numbers are especially important. But ultimately, what’s going to make or break you as an investor, in my opinion, is your mindset. because number one, I always say like if your mindsets month, correct, there’s no how to get in the world that’s going to help you. And you have to have a certain mindset. And like we talked about a failure with Nicaragua, you have to be okay with that, because it’s just a you know, there’s a lot of investors who get in, they did invest kind of on the side, no big deal. And they really don’t have many big problems. Like there’s no major financial loss, things just kind of go smoothly. But for a lot of investors, things don’t always go smoothly. And it’s the mindset that is going to carry you through that or make you stop. And it’s the same, you know, I have my own company, I’m an entrepreneur. And the same mindset for that is, it’s not so much what happens with the business or the business decisions, it’s whether my mind sets in the right place, and I can withstand whatever the challenges. So that’s, you know, whatever facet of real turnkey, they’re one of the easiest things you can do in real estate, but there’s a lot harder things if you’re flipping and rehabbing or whatever. It’s, yeah, you have to learn, you have to you have to take some self initiative to learn how to do those things, because we didn’t learn in school. But you’ve got to have the confidence to know that if something doesn’t go quite right, it’s okay. I mean, it can be frustrating, it can be challenging, but it doesn’t say anything about you personally, it doesn’t say anything really personal about anyone, it just is what it is. And how do you overcome that and learn from that, because that’s really, the most successful investors in the world, at least in my opinion, are the ones who persevere through the challenges. I mean, it’s almost like a rite of passage. So yeah, I hundred percent agree like a fetus happen to have a very natural skill set. And it all comes really easy to you. Cool, like, mindset, not may not be a player, but that’s not most of us. So you know, if you can go in with the right mindset, I think it changes the whole course of your success for sure.
Brittany Henderson [28:40]
Do you have a title for your book yet? Because by the time this podcast comes out, it may actually already be out depending on that kind of stuff. So we can we can help promote it?
Ali Boone [28:53]
Yeah, for sure. And it is called not your How To Guide to real estate investing life lessons on how to your mind before you hack your wallet. And so if you buy time this comes out if that book is out, but if you all I have some I have another something or another to offer your listeners, but if you contact me through that, if the books out, you’ll for sure get notice about it. And you know, I’d love to hook you up with a copy. And you know, tell me, you found me on the podcast, and we’ll we’ll see what we can do. Awesome.
Brittany Henderson [29:25]
So with turn keys to get back to the subject of it. With with how do you kind of select the market to invest in with a lot of single family homes? You know, we’re looking at cash flow markets. There’s like a lot of that goes into that I’m sure that the turnkey provider probably does a lot of that. Are there specific markets that this is more viable? In?
Ali Boone [29:53]
Yes, yeah. For sure. The the turnkey providers pretty much do all of that what we do on our end is verify that we like to market ourselves. And so for a turnkey provider, you can buy a property in turnkey condition, it could be the property next door to you, it just means it’s rehab, no work is needed tenants are and it’s cash flowing. But when we’re talking about the turnkey properties, they are coming from these companies who this is all they do. And so for a company like that to exist, they have to be in a market that number one has cash flow opportunities. And number two has enough distressed inventory, that they can keep this going because by the time they set up shop and get their businesses going, they need to be able to do this for at least a few years. Because as anyone in real estate knows markets change all the time. Like I said, My turkeys came from Atlanta. And that was, what, seven years ago. And I don’t recommend Atlanta now for turkeys at all. Because everyone walked in there, they bought everything up, prices soared returns are squeezed now you still get cash flow there, but became a very saturated market. And that’s a normal market cycle. So the markets are always changing. So they need to be in a place where they can at least be for a few years, they’re probably not going to be there for a lifetime, but at least a few years to justify their business costs. And you know, they are market experts. So by the time they learn the markets, and they know what they’re talking about, and they know where to get the deals, they got a sustained for a while, so and then on. So that’s on their side. And then our side, for instance, Memphis is one of the most popular famous turnkey markets possible. It’s been going since at least 2010, if not a little sooner. And people today one of the first markets out there like oh, I’m looking at Memphis, and I’ve never been a Memphis fan. Like I don’t like the funded the market fundamentals about Memphis, I don’t have an interest in investing there. I don’t whatever. So you end up with a whole pile of markets that the turnkey providers end up in because it meets their criteria. And then of those markets. What we do further removed from it is the which of those markets, do we do we agree with their assessment? Do we want to support that market? Like if a turnkey provider right now is in Detroit? I’d be like, you know, maybe it’s definitely a little to let’s say, where are we in August 2019. You know, someone listens to this in two years, and maybe a totally different story. But I’m with you, it’s a little bit too soon for me. But that’s you know, so that’s what we look at. Because there’s kind of different layers to this. There’s a turnkey providers who they’re the techie people, they’re the ones who are good at finding deals, they’re good at rehabbing, they’re good at, you know, they’re good at all of the hands on stuff that they do. What they’re not as good at is the customer service side with a couple of exceptions, but for the most part, customer service is fairly atrocious with turnkey. But like they’re not portfolio strategies, either. Like if you’re an investor, and you’re like, Hey, I think a certain amount of money and I really want to I want to maximize this, like I want to really build out my portfolio, they’re going to look at you and be like, Okay, this I mean, you want to buy properties, like what, what do you want, whereas the different layer of it like my me, and the people that I work with, we’re the ones who can do that we assess the different markets that the providers are in, we can vet the different market or the different turnkey providers, we can help a portfolio we’re kind of a customer service buffer, that kind of thing. So just, you know, understanding the different layers in the equation. But yeah, so the markets are always changing. And they are only in certain markets. A lot of people say, Well, I want to buy a turnkey. And I don’t know, Vegas, for example, I’m like, well, but there’s not any turnkey companies in Vegas. Like it’s not a market conducive to their business model. So yeah, they’re in very specific markets, usually in the Midwest, in the southeast, and a couple here and there in the northeast.
Neil Henderson [34:00]
Um, any common pitfalls that someone should look out for when working with a turnkey provider?
Ali Boone [34:09]
The psychosis that inevitably sets them
Neil Henderson [34:14]
because, you know, this is actually that brings up let’s let’s sort of pivot here for a second because that, you know, this is a common problem that people you know, they get involved with a property manager, oh, my God, my property managers, so great. So amazing. Everything from him. And the next thing, you know, they’re in an insane asylum where they fled the country with all of their and psychosis, you know, because it’s really hard to manage, it’s a really hard job as you are right now. And I do wonder if there’s just a point where they just snap. Yeah.
Ali Boone [34:57]
And it’s funny, it’s funny that you say property management, because those are the two. Being a turnkey world, obviously, I deal with a lot of property managers to and the turnkey providers themselves and the property managers of all the people in the equation, those are the two that was their minds every time. And from what I’ve observed, what I think happens, and I it kind of, it makes more sense to me is what I’ve seen, and especially with property managers, and like you said, you get on with a property manager, they are just gold, they are just rocking your world, everything is flawless. Well, what happens? when that’s the case? Well, you’re going to tell everyone about them, as does everyone else. Well, all of a sudden, and same with the turnkey providers, everything’s great. Oh, man, you gotta buy a property from the sky like this is phenomenal. Well, the more people that they get the number one reason that I, at least in my observation that I’ve seen that people lose their minds, is they grow too fast. And they are, like I said, turnkey providers are really good at what they do, which is rehabbing. It’s finding deals, it’s whatever it is not necessarily running a business, like planning a business is such a different skill set than the trade or the skill of what you’re doing, and, or what the business is doing, I should say. So very often, property managers and turnkey providers, both are not good at scaling and getting bigger. So, you know, think about a turnkey provider, everything’s going phenomenal. Well, but now they have so much demand, they have to bring in a beat team, contractor side and rehab team. Well, what happens when the beat team comes in while the rehabs start to the quality goes down, and then, you know, things spiral fast. And same with property managers, all of a sudden, they’re so busy, they’ve got to bring in the beside handyman, they’ve got to hire people, and half the time, they accidentally hire idiots, and you know, everything spirals fast. And so it’s really kind of a, it’s, it’s not to scare people away from it, it’s just kind of a habit in your awareness that who is phenomenal today may not always be phenomenal tomorrow. And that’s your role. As the investor with turned to it’s so easy to think that you can be 100% hands off, and I’m one of the culprits of calling them hands off properties, but it’s not true, you’ve got to be willing, you’re still the owner, you’ve got to be willing to step in and make changes if necessary. If your property manager starts to fuck, all of a sudden, you you got you need to do something about it viral and get a new one. And it’s easy to remedy but you know, the habit in your awareness that things can change quickly. But again, this is one of the advantages of working with people who have been involved in this and who know what’s happening. And, you know, it’s, it’s, you know, the good news is, luckily, if a turnkey provider loses their mind, chances are it’s not gonna affect your property a whole lot, because you verified everything before you bought it. And if they, you know, flee the country or whatever happens, it shouldn’t make a big impact. But occasionally, it doesn’t matter. So yeah, that’s when I say the psychosis that sets on it definitely is not to scare anyone, it’s just, it’s a reality of business. Second half of them have any business, like businesses have a really hard time growing a lot of times because they don’t know how to do that properly. So and same with market cycles, like get in on a good market when it’s early. And when the turnkey provider is happy and smiling and motivated. And keep doing that, you know, you don’t have to stick with them through their psychosis.
Neil Henderson [38:21]
We interviewed short term rental guy recently named Michael Hamilton runs as well. And one of his great pieces of advice was get your systems and processes in place while you’re still small. Yeah, and then start to scale, pour some gasoline on that fire and get it burning hotter. Whereas if you don’t have your systems processes in place, and you then pour gasoline on the fire now, you’ve just got to brush fire.
Ali Boone [38:53]
Yeah, yeah. And Man, I wish he could give that exact advice to all the property managers and turnkey providers, because that’s a 100%. What happens is, they don’t get their systems and all that in place. So then when the boom does happen, they just, I mean, they go crazy pants.
Neil Henderson [39:09]
Yeah. And it’s not, you know, there’s a fairly sort of turnkey person right now, I don’t really want to say his name, but he’s a TV personality who’s gotten a lot of trouble?
Ali Boone [39:24]
Oh, I know, we’re talking about. And he’s done a lot of damage to the turnkey name. He has.
Neil Henderson [39:30]
And and I don’t, and I don’t know, I don’t I don’t know him personally. And I don’t know that there is any Larson part on his side? My guess is, and I don’t know for sure. I don’t really I’m not maybe the people who’ve lost money, you feel differently. But my guess is he just got overwhelmed. And like, like so many turnkey providers, he grew too fast and started partnering with people that we’re not so good.
Ali Boone [40:03]
Yeah, the rumor is I don’t I don’t know the ins and outs of what happened to either, but the rumor is that the company that was I’ve always been a little unclear on who is in which part of the equation but you said he brings people in, there was a company that he was working with directly, and they apparently were the bad ones. And he got kind of tangled up in it, supposedly, I don’t know. But you know, the the lesson of if anyone knows who we’re talking about, or whatever, the ultimate lesson to take home as due diligence, like, you need to know that because I think a lot of people bought properties that either didn’t really exist or had accidentally burned down before they close or something. And that was the big thing. It’s like, wait a minute, I appreciate your frustration and how bad you know, you’re kind of hose over here, because you bought a property that doesn’t like have a roof on it or something. But at the same time, this is what I was talking about a lot earlier, is you’ve got gotta do due diligence, like there should be a property inspector who goes to the house. And now if the property burns down three days before closing, you probably wouldn’t have much of a chance of knowing about it. That was one of the stories I heard. But you know, Property Inspector, who should be third party, is should relay a lot of that information to you. And again, this is one of the big things that really put turkeys gave turnkey the bad name back in the crazy days of 2011. And although, especially with international investors, because turkeys were so cheap, you could get a $55,000 phenomenal property that rents for 1000 a month. And especially with international investors, there were a lot of people out there who knew those international investors, were never going to check up on anything. And there were people companies who are fortunately, out of business now. But they sold them totally bunk properties that they advertise this phenomenal and turnkey. Well, you can’t do that. Like you can’t, I mean, they can’t do that. But as an investor, you can’t put your trust 100% on the other person, it is absolutely up to you to verify that you’re getting with advertisers. And I try and tell people like these turnkey providers are giving you a product. After that, it’s really up to you to ensure that you’re getting the product that you want, and that you are expecting and whatever these are not. These aren’t sales people they’re not, you know, they’re not trying to sell you a scheme. They’re just they’re providing a property. So you verified a property just like you would if you were doing it all yourself. But yeah, that that company that you’re talking about, that’s I again, I don’t know, the ins and outs of exactly what happened. Other than we’re all kind of suffering from the bad name of turnkey is now because of it. But I just see such a big hole of lack of investor due diligence, again, new investors don’t really realize that they need to do that due diligence. So that’s, you know, lack of education was part of it. But you as the investor have to take some responsibility for verify what you’re about to buy.
Brittany Henderson [43:02]
Yeah, it’s probably you get a lot of newbies that are like, you know, that that go towards that turnkey? And they probably don’t know, yeah, that they don’t know what to look for. They don’t know how to do the due diligence, which I imagine, you know, people awesome,
Ali Boone [43:20]
yeah. And there’s so there’s some kind of, there’s a mindset that I’ve seen, when, because they are considered kind of hands off rental properties, which I get it you in theory should be totally hands off. But it seems like over the years that I don’t know if it’s the marketing of turn keys, or what happens, but there’s something in people’s brains that tells them I don’t need to ever do anything, and I you know, everything’s gonna be taken care of for me, Well, okay, but like, some people would own a property. And let’s say, I think I heard a story one time that like a dishwasher had malfunction, or something in front of the kitchen floor and the end, because we always touch base with people, like, you know, hey, how’s your property going? any hiccups, any? You know, what can they help us? And they’re like, Oh, well, I had this unexpected $7,000 repair that kind of beat up my cash flow. And I was like, I’m sorry, 7000, for what? And the dishwasher have malfunctioned and flooded the kitchen floor. And I said, my first my first question was, well, did you call your insurance company? And they’re like, Oh, no, I didn’t think about that. I’m like, Okay. Like, you know, it seems like the marketing of turnkey is has given people the idea that they can just turn their brains off, and not have to do anything. And that, I think has been, I’ve tried to adjust my verbiage and my marketing and all that, because that’s not the case. I just, you know, again, it does attract a lot of brand new investors. And, and when and there is a reality, I think, if you’re going to own real property, like if you invested notes or read or syndications, or, you know, things I really are pretty hands off, and so on also doing the work that anyone can do that. But at the point, you want a real property, I think it’s the reality that not everyone should own real property. Because at some point, you need to be willing to put your foot down, you need to be willing to make a decision, you need to be willing to potentially stand up to somebody. And some people just don’t have that in their personality. And for quite a long time, we were getting people who were like that they just couldn’t bring themselves to step in and manage their own property, not literally manage their own property, but manage their investment. And I was like, oh, okay, so we need to not, it’s great. Turn keys can absolutely allow people who wouldn’t otherwise get into real estate get into real estate, and I’m one of those people I probably would have done this I just swinging a hammer. And so there, there’s that the good side of it. But on the other hand, if they can be tempting for people who may be real estate’s not they’re not quite there thing. So you know, finding a balance in the marketing is been kind of one of my goals, because I don’t want to UNF it’s, it’s not something that’s really, you know, that you can handle later on. And not to say it always goes bad, but you have to be willing to make some moves sometimes.
Brittany Henderson [46:11]
So, you’ve done a lot of these turnkey properties over the years. But you’re just now becoming an actual landlord. What, what was?
Ali Boone [46:25]
Yeah. Yeah. So over all the years I was I was a writer for a long time. And my big things that I’ve been always been preaching is positive monthly cash flow, not buying for appreciation, not landlord in your own properties, everything. And sure enough, I went into some partners last year and bought a duplex local to me in Venice Beach, which is negative cash flow, pure speculation. And I’m the landlord. And I was like, Wow, it was, it’s been, it’s been a phenomenal learning experience for me and I really learning to be Atlanta, I had to learn to put my foot down, you know, I talked about people not being willing to put their foot down, I was a little bit of a wussy myself. It was always easier with property managers over the phone, because you know, I’m not right in front of them. But now I had tenants and I inherited in one of the units of this duplex, I inherited a tenant that still haunts my dreams to this day, like I am just I’m like, Guys, I don’t this woman just oh. And I had to learn very quickly to how to stand up to her. And she didn’t make it easy. And so I really grown as a person because of this, but it has confirmed everything I have ever preached about why you may not want to landlord your own property, like you know, I have to I have to go meet him dealing with handyman. And if I was handy, or myself and I could do a lot of the repairs, it’d be a totally different story. But I’m not good at that stuff. So I have to have a handyman and handyman are as bad at communication as turnkey providers or worse. And so trying to wrangle them in and wrangle tenants, and right now one of the units is vacant, I have to show the property and I’m like, this is why I don’t do this. Man, I get that it’s some people’s cup of tea, but it is not mine. But I’m still going to do it because the property is only a mile from me. And it’s a it’s a higher end property, which makes my clientele and tenants for most part, you know, a higher caliber of people except for the crazy ones. But yeah, it’s it has confirmed everything I’ve always preached about why don’t like when Martin.
Neil Henderson [48:38]
So the greatest tip I’ve ever heard about landlord and your own properties is to never tell the tenants that you’re the owner, always just be the property manager to give yourself some insulation between, you know, sort of take the decision off of you say, let me go talk to the owners and see what they say and come back and go Yeah, yeah.
Ali Boone [49:02]
I remember I was running when I was at, I went to grad school at Georgia Tech, and I was living in Midtown Atlanta. And this woman who told me she was my property manager, we ended up real. I think I was there for a couple years. And she was awesome. And for the longest time, I thought she was actually the property manager. And towards the end of it, she finally fessed up that she was the owner, like, you’ve been the owner the whole time, I was like, well, Who are you calling when you say asked to go call the owner and get his permission she like myself. a scammer? But yeah, that’s um, and I’m, I’m fortunate in that because I think there’s different layers of landlord and like, if you know, if you’re the I actually rent my apartment that I live in now, and the man, the property manager of this unit has like 30 some units. And I think in those cases, when you have a much less personal relationship with your tenants, that it’s an absolute good protection, you know, and it depends on what kind of caliber tenant you’re, you know, you’re in a really cheap apartment. So you’re running higher end, whatever it is. And the fortunate thing about this property is it’s a really nice, higher end the property and one reason that I’m showing it myself, and I’m not going to a real estate agent for it, is I want the personal relationship with the tenants like I’m not in this to say slumlord. But I remember, one of the first applications I got on the open unit was these two girls straight out of college, had no money, but the parents were rich, and we’re going to cosine they both drove femurs, they were like 24 years old, I was like, that is not what I’m in this for, like the woman who ended up renting the apartment. My parents were in town one time, we all had a glass of wine together like I want, I really strive for those people that I can have not a personal relationship and depth. But you know, we’re cool, we’re not running off of a contract, if they have a problem, I’m going to accommodate their you know, you throw me a bone, I throw you a bone. That’s, that’s how I like to do business on. Fortunately, this property’s nice enough where I can get those people in. And I wait until I find those people like when I’m showing the property, I’m not in this to fill the place and to get the numbers I’m in it for my life to be easier. And I want the units are full, my tenants are so phenomenal, that I really don’t have to do a lot occasionally myself to meet a handyman or something. But you know, they make my life easy. And that’s what I look for. But that’s something for people to consider that if you are going to landlord or buy a rental property. Who are your tenants going to be? And what kind of relationship Are you going to have to have with them? And is that something you want like it because if he the lower end, you get the cheaper properties, the more dangerous areas like it’s a whole different dynamic than what I’m dealing with out here. And I still don’t like landlord in but I have definitely the better end of it. Yeah.
Brittany Henderson [51:49]
Well, with the I mean, maybe not the land learning piece. But what does a let like a day in the life look like for you? How much time are you spending on your the hipster investments business?
Ali Boone [52:02]
Oh, that is a loaded question. i for i know two days of mine are the same at all I am so all over the place. So it’s kind of cool. So the turkey is very minimal time I had a conversation with the property manager actually, just before we started recording, it was very brief, there was a hiccup with a maintenance charge. On the term keys, I probably spend if all if everything is going normal, I probably spend an hour or less a year. I mean, it’s very, very minimal. And occasionally it’s just an email here and there. The property that I’m landlord and when both units are filled, very minimal time. I mean, I it was funny because last year we had bought the property. And when the tenant was moving on the back, I was in touch with her so often that you know, because once they moved them, there were a few more things that needed to be repaired and stuff like that. And so at one point, a couple of months have gone by and I think I talked to her at all. And I was like weird, like, I felt like I should be doing something. And I was like Oh, is this the life of lamb, I don’t have to do anything. This is cool. So when everything’s going it’s very minimal time right now it’s vacant. So I’m having to spend more time showing it and deal with a handyman. But even still, it’s in the comparison of things. It’s not bad hipster investments, very much like a real estate. Like a real estate investment. You can be as busy in your business as you want or at least busy so hipster really like I can go travel for a week or two I could probably even do it for a month and nothing changes I have employees they are handling the day to day stuff I’m really kind of more on the innovation side you know, what things are we doing next and then I if there’s a email or client something or another that they need me for they can reach out to me. So I’m really purposely set up that company where not only do I not have to work on it all the time I can it’s all online so I can travel anytime I want and take my laptop and still work which is huge. I’m a freedom girl like I want location freedom I want I can we’re talking about van again earlier, I can hop in a van again and go travel wherever I want to for as long as I wanted to just with my laptop and still work. So that is huge. And but I you know, General day, I’m such a month. I guarantee you I’m probably more likely working on hipster at midnight than I am during the day because during the day, I teach wine as a fun side gig I go play at the airport, I go workout. So yeah, I have No two days are the same. But I can tell you the general theme of all of everything I do is do as little of it as possible. You know, like outsource? Because I don’t want a quick, a super quick story of why I love property managers and being hands off and said a landlord and myself speaking of Nicaragua is one time I was Nicaragua I was in the pool at a pina colada in my hand and my phone rings and it’s the property manager on one of the properties in Atlanta and he said, Hey, a storm just blew through and took half your roof with it. I was like, Oh, that sounds discouraging. And I said What should I do? And he said, Well call the insurance companies I hang up with him. I’m still in the poor, mind you in Nicaragua, third world country. And I call the insurance company said hey, I was part of a roof. They said, okay, cool, what’s your property managers number will coordinate with him to send the adjuster out. I like cool, appreciate that claim started, popped the manager message saying hey, the adjuster is going to call you to schedule. I literally did nothing else ever for the whole thing. And I sat back and I was like, you know, if I was a landlord on that property, what would have had like what I first of all, I probably split my pina colada down. But then like what I have to fly out to go deal with it. And then even if I go to the property, I don’t know how to fix the roof. Like what do you know, the work, I literally am that whole thing never put my pina colada down and or got out of the pool. And it took maybe 10 minutes, my life and a roof had just blown off my property like, that gave me such a perspective of why I pay those property manager fees every month, so I can stay in the pool in Nicaragua. That’s exactly why I do it. But you know, that happened to my property here in Venice, I assume. And so, you know, that’s a whole workload. And yeah, so that’s really why I do the things that I do is because I don’t, I don’t want to be a slave to my investments I don’t want I’m not looking for a second job, I’m not trying to work on them. I just want the actual investment component. And that really comes from not doing all the work yourself. And some people it’s great for, like, if you have the skills and the interest, I totally get how that would be fun for you do it, like go for it. But I’m not one of those people. And so it really does become about the systems, it becomes about outsourcing, it becomes a situation of learning to manage people, instead of managing properties or rehabs or tenants or whatever you’re managing. You’re like the senior manager, you’re managing the managers, and the managers are managing the more detailed components of it all. So yeah, that’s why I do what I do. Because I do not like it’s even hard for me to teach flying, because I actually have to show up at the airport a certain time with like, an outfit on. So I look like keep it aside. I’m like, Oh, so yeah, the very long winded answer to your question is no, two days of mine look the same. But they are all usually somewhat adventurous, I can tell you that are better for man.
Brittany Henderson [57:39]
What other kinds of systems do you have in place? I mean, you’ve said you have employees, you have anything that that you’d be willing or think people be interested in knowing about? who
Ali Boone [57:52]
see what’s something cool. I don’t know if any of the system themselves are cool. I’ll tell you Hi, guys. So the systems is, and this is probably good for anyone starting out whether it’s starting your own business, whether it’s real estate investing, whatever. The one thing, well, actually, I take that back, that’s kind of different story. So for the business, I started out doing everything myself, because what I really needed to find out was what needed to be done for the business. And then I could decide what I could outsource and let someone else do. So for example, I used to do all the emails, well, I was a writer on bigger pockets. And I was getting I was literally responding to emails from the minute I woke up to the minute I went to bed, I was like this doesn’t seem very feasible. So eventually, I hired one of my assistants, she handles most of the bulk of emails. And so it was really a piece by piece type of thing. On the contrary, that with the rental properties, one thing I hear a lot from people who are thinking about using a property manager, instead of being the landlord, they’re like, well, I should landlord the property first. So I can learn, you know, whatever needs to whatever property manager needs to do. And then I’ll hire the property manager. And while I agree with that theory for business, I don’t agree with that theory for real estate. Because with business, it’s harder, because there’s so many moving components, the the head honcho, if you will, would be the business owner, like that’s me, and I can’t replicate that I can get multiple people to cover different aspects of it. And I can figure out how to make them all work together. And you know, it’s a bunch of puzzle pieces. With a rental property. Your only job really is to manage the property manager, you don’t really need to know a how to fix a toilet be, you know how to screen for a tenant, because they’re the experts, they unlike the business people they can they know all of the different facets of the one thing that you’re trying to do. And so in my opinion, going back to my theory of make sure you work with someone smarter than you, they probably know how to do all those things way better than you do. And if your goal later is to build an empire or have multiple properties or whatever, you don’t need to know how to fix toilets, you need to know how to manage people. So I think that I mean, it’s not a cool or fun answer at all, because I really, I can’t think of a fun system or process for anything. And like, I come from engineering world and you know, they love a good process. But you know, it’s a little bit of a, if you want freedom, and like you said earlier about you have to get the guy you interviewed saying get the systems and the processes in place before you need them. And I think one reason that people don’t do that as number one, it really sucks to develop them. Like it takes time. It’s boring, it’s like, you know, whatever, but by the time they actually need them, it’s kind of too late. And so really putting an importance on how critical those things are. Even if you don’t like doom and it’ll seem like it’s taken up a lot of your time to build them. But once they’re in place, then you’re going to and that’s what’s going to free you up to start innovating, start doing different things, whatever you want to do.
Neil Henderson [1:01:07]
Okay, last question, non real estate related. What’s the scariest thing you’ve ever done for fun?
Ali Boone [1:01:15]
Oh, man, I’m scared scariest thing I’ve ever done for fun. I’m like thinking of all the cool things I’ve done. I’m like, was I scared? Let’s say I finally skydive that I wasn’t scared of that because I’m used to little planes. I have volcano boarded down a volcano. I was kind of scared on that one but not terrible. I volunteer in prisons all the time. And for some reason I’m less scared there than I am walking around the free world.
Brittany Henderson [1:01:46]
I think this question
Ali Boone [1:01:55]
because I’m such a work on like, little random areas like big things. I would scare most people. I’m like, that’s cool. I will tell you I have no interest whatsoever in scuba diving. I that I think would absolutely terrify me to the point. I peed my pants. Like I don’t trust my swimming skills. I don’t like big month miles. Well, big monsters, obviously lots of vision in my head. I’m not comfortable things swimming towards me.
Brittany Henderson [1:02:25]
Yeah, it’s not for you. Although peeing in your wetsuit is is not a full pot. It’s how you keep yourself warm.
Ali Boone [1:02:34]
I like that. I did a snorkel and Alaska one time and because it was so cold, we had I think was it like seven millimeter wetsuits, and the near trauma, like panic inducing of like zipping that thing. I mean, it’s like, like, and I actually, it sounds so dumb, but normally makes me really nervous. Like it takes I didn’t why I think you’re before last or something. And after maybe the first 1015 minutes, I was totally fine. It was so amazing. And they were like turtles and it was cool. But for the first 10 or 15 minutes, I was seriously breathing at a very rapid speed. Like and I was like man Yeah.
Brittany Henderson [1:03:16]
Yeah. Sounds like you’re more of a bird than a fish.
Ali Boone [1:03:20]
Yeah, and the the things that do scare me are when I don’t have an exit strategy. Like I actually am super funny. Last weekend, friend there was a surprise birthday party for a friend and it was at a pool in a apartment complex. So me and my friend went to this apartment complex and we got lost in the apartment complex like we couldn’t It was really oddly setup. We couldn’t find the door to the pool. We couldn’t find anything out. I actually started getting nervous like I can. Because it’s like well, if I don’t have an exit strategy like a volcano no problem. Thanks for surfing I just bored faster like I haven’t out if I don’t have an out for something. That’s when that’s when I started. Hello controller she’s
Neil Henderson [1:04:05]
bringing actually Brittany and I met on a dive trip in Hawaii.
Ali Boone [1:04:09]
Oh funny. We’re, we’re diverse.
Neil Henderson [1:04:12]
And it’s funny because I’m actually the most nervous I am on any dive is almost always when I’m up on the surface about to go down.
Ali Boone [1:04:21]
Oh, really? And once you get down there, okay, yep, totally fine.
Neil Henderson [1:04:25]
Because I feel I feel a lot more vulnerable on the surface. Like I’m like I don’t like you don’t belong. And
Ali Boone [1:04:32]
like you’re about to enter into someone else’s world type of thing.
Neil Henderson [1:04:35]
I’m like, well, you just can’t see you can’t see quite as well. And there’s a whole world you know, the whole world underneath you that you can’t really see but once you get down there and kind of look around, it’s not as it’s not as knows.
Brittany Henderson [1:04:49]
So a lot of likes, you know, at the top you’re like getting everything ready and making sure that I mean, like for me even though I was like I knew how to scuba dive I was always like paranoid that i doing everything right. It’s kind of because it was I’ve been doing it long enough for it to be like second nature quite but you know, so yeah. It’s probably just like anything where it’s has a mild danger component like you sort of Yeah,
Ali Boone [1:05:16]
make sure you get a lot of my diver friends to the they get way more nervous snorkeling, and then they’re like, oh, snorkeling, terrifying but dive in a totally fine. I’m like, Whoa, okay. My parents actually just, I was eating dinner with them. They live a couple hours for me and I was eating dinner with them a couple of weeks ago. And somehow scuba, my non interest in scuba diving came up and my mom reminded me apparently when I was like, I don’t know if I was like nine or 10 years old or something like that. We were at Six Flags and Georgia and they I don’t know if you guys remember there was a ride there that for kids that like you get in this little submarine thing by yourself and it takes you underwater kinda like bumper cars, but underwater. Well, apparently my submarine got lost. So like I saw all the other boats go back to surface and all the kids got out and they actually a whole new set came in and I was floating off my steering wheel didn’t work anymore. And I was actually starting to kind of lose oxygen because there’s a little tiny thing and they ended up having to send like a like hardcore people into the water to chase down my submarine and pulled me back out. And my mom said when I got out like she said her face was white because she’s like, I’m Hi, my my kid. And so when I got out she said My face was just like sheet white. And I was like, Is that why I don’t want to scuba dive and Diana Ross underwater. So like, Oh, yeah, Six Flags up. Oh, I did the little childhood traumas. You never know you never remember them.
Neil Henderson [1:06:46]
Well, listen, Ali, thank you so much for sharing with us today. As we said at the beginning of the show, you’ve got a book coming out soon, but you also do still have an evil?
Ali Boone [1:06:57]
I do so I was actually going to offer your folks free copy of the ebook. So the ebook is well, little funny here. It’s called turnkey rental properties, one on one, the Definitive Guide to hands off real estate investing in which there goes my hands off. Like I mean, hands off, I we gotta work on that we’re gonna have the title, I think. But yeah, it’s an E book that really covers kind of what I think for the most part, everything you need to know about turn keys and explains the different players in the game. It opens with kind of me explaining why I mean, I’ve said it a lot on here, but why I like turn keys, why they worked for me. What’s the lookout for different market things, whatever. So happy to give you guys a free copy if they start a website just for your folks. If you go to WWW dot hipster investments, com slash road to family freedom. It’s just for your your crew. And then so if you get that you’ll be in a our email system, whatever you’ll absolutely get noticed when the books coming out I’m hoping to it was actually going to come out within the month. And I just Of course decided to add a section to it. I was like, Oh, of course I would make my own life more difficult. So it might be a couple months from now. But yeah, so you’ll be the field you’ll know about it will be offering discounts will probably make it super cheap in the beginning so we can try and get some reviews on it. Yeah, so definitely go get the free ebook, and then be in touch anytime there’s links to how you can contact me on that page. Yeah, and stay in the group. And I love saying hi to people. So reach out. Don’t be shy and Yeah.
Brittany Henderson [1:08:39]
Great. Awesome. It was really great talking to you. Thanks so much.
Ali Boone [1:08:43]
Joe, thanks so much for having me. You guys are fun. And like I said, I love what you guys are talking about road to family freedom is kind of my my favorite thing like how can we all be more free in our lives. So if Real Estate’s one way to get there, let’s do it.
Brittany Henderson [1:08:57]
Awesome. Don’t leave, don’t leave.
Neil Henderson [1:09:02]
Well, that was Allie Boone from hipster investments. It was great having her on hearing her story and getting to talk, we got to talk about aviation as well, after before and after. hear an airplane nerd. Well, that’s what I do. So for you What was the key lesson.
Brittany Henderson [1:09:24]
And one takeaway that I had those that was interesting and and might not be super relevant, like buying turnkey, specifically, but that I think is really useful for people who want to get into real estate generally and have like systems and kind of offload things is to manage people not properties or not the small stuff. So really figure out you know, your systems and how to get those things for other people do, there’s a word there that I outsource, that’s the word that I’m looking for, figure out how to outsource those parts that you don’t want to or can’t do, and then manage the people that are doing them so that you get your time back, which is, you know, for us, that’s the that’s part of the goal is to have that freedom of time. And so I think it’s just a really good reminder that in whatever you’re doing, and part of, I guess the turnkey piece is that you’ve already got those people that you’re managing in place, you know, she was very, you know, on it about, you can’t just, it’s not completely hands off, like, once you’ve purchased it, all of those management pieces are in place, but you still have to, you know, participate in managing those people or, or figuring out problem solving pieces for things that are above that particular person. So it’s, it’s a lesson that is so useful, so that you’re working on your business instead of in it, as we’ve probably said, a bunch of times before, and we’ll keep saying it again. And again, again,
Neil Henderson [1:11:12]
for me, and you sort of alluded to it there, which is, you know, take responsibility for your own due diligence, you know, this is you’re not buying a mutual fund, you’re not buying a you’re you’re not buying into syndication, where there’s going to be someone else operating it’s not, it may be called a passive investment. But it’s not just a completely passive investment. And you need to verify the things that the turnkey operator is saying, you know, find a find another property manager in the area and confirm their rental comps that they’re the turnkey operators telling you find a real estate agent to do a broker BPPPO broker, get them to basically, you know, verify that the the property is going to you know, that’s the what is what it should basically appraise for. Take responsibility, don’t just think that I’m just taking some money and stick it in the bank, and it’s going to earn me a percentage, and I’m not going to have to do anything.
Brittany Henderson [1:12:16]
Yeah, yeah. Well, and I mean, even with other, you know, investments, you still do your due diligence in some way, you know, you you interview a financial advisor before you allow them to invest your money, like you do some kind of due diligence, it’s silly to think that in this, you know, that this would be the one place that you could just be like, Fine, whatever, you do it all, it’s, it’s fine. So, um, alright, well, let’s run quickly through our, our other pieces. So knowledge, how did she acquire,
Neil Henderson [1:12:58]
I would say she, you read a lot, she said, she read a lot of real estate books in the beginning. Yeah. But it was mainly I would say, is learning but doing she basically, she bought
Brittany Henderson [1:13:09]
school of hard knocks, I contend she spent $40,000 on a nice educational experience. And really, I mean, she got a lot of experience out there, that’s that, that that didn’t apply strictly to what she’s doing. Now. However, losing that money led her to the people who got her into turnkey and stuff. So it was probably for her, you know, it was definitely well worth spending that money and getting those lessons. And, you know, just like the school analogy, you also meet people at school that become, you know, part of your network and can help you in different ways. And that’s, you know, it’s the whole thing with like fraternities and sororities.
Neil Henderson [1:13:54]
And I would say even in some cases, that’s more valuable than the education, you know, people, you know, not to knock the Harvard education new Harvard grads. But with a lot of schools, it’s, you know, you may learn the exact same thing, you can take classes, from Harvard online, you can listen to lectures by the same, the same professors. But what you’re not getting is that network of other Harvard grads and the businesses that come through and hire people and things like that. So it was a $40,000. Guru program for.
Brittany Henderson [1:14:36]
Yeah, so. And I guess that kind of covers the money piece,
Neil Henderson [1:14:42]
as well. Because she, she she spent $40,000 on
Brittany Henderson [1:14:46]
that on that. But then we maybe we go down to her first turnkey deal. That one was the 10,000 cash down, plus a little bit for closing, and a 50 $55,000. mortgage. And so it was that 10 k down. I don’t know, if we talked about where it came from, I assume you know, she had a pretty high paying job, but maybe it was just part of came from savings savings.
Neil Henderson [1:15:13]
But it definitely and keep in mind, there’s not a lot of $55,000 homes that are renting for almost $1,000, almost $1,000
Brittany Henderson [1:15:23]
Neil Henderson [1:15:26]
in Atlanta anymore.
Brittany Henderson [1:15:27]
She says it specific
Neil Henderson [1:15:28]
day, she says specifically, the price points higher, but it’s still you know, you’re going to probably need if you’re going to buy a turnkey property, you’re more likely going to need to come to the table with 20% down. And we didn’t get into you know, she sort of hinted at some of the ways you might get around that. And some of the ways she kind of got around it was she basically had a partner who put them in gave her the money and let it sit in her account for a period. We’re not advocating them. It is possible. But you know, there there are a lot of mortgage providers will frown on that they don’t like that they don’t like having gifts in a gray area gray area.
Brittany Henderson [1:16:12]
Awesome. Alright, so time. I’m Ali has constructed her life, to let her do whatever she wants. And we talked a little bit more to her like on a personal and after the podcast. And I will say she really does what she wants when she wants for the most part and spends probably as little time as she can on the like management of her business. Now it sounds like she does do some content creation is when I got a feel for so for her a lot of the actual management for real estate investments is very minimal. Timing wise, and that’s that is again, like one of the benefits of turnkey if everything is set properly, and you’ve got a good property manager, all those kinds of things is that it takes away a lot of the time piece because you’re not having to find the property and, you know, rehab and do all those things. And you’re not having to manage the property on your own. So I loved
Neil Henderson [1:17:16]
your story about being in the pool in Nicaragua through a pina colada. Yes. Yeah, damn it. Yeah.
Brittany Henderson [1:17:24]
Yes, exactly. Well, not, I mean, that can be one of the huge benefits of not just I mean, turn keys, but also if you do want to put some, you know, some effort in on the front end doing kind of like the single family PR method, sort of, you get the same sort of thing at once you’ve set everything up, if you’ve got a property manager, you’re kind of hands off, you’re not really doing much. And you’re just kind of taking in that cash flow and making a decision if needed. So
Neil Henderson [1:17:53]
sorry, I’m missing missing my phone here. I’m we’re expecting a phone call. I keep having to like wake myself, so I apologize for that.
Brittany Henderson [1:18:03]
Kind of very, you can cut that out.
Neil Henderson [1:18:09]
So and she talked about she said she spent as little as an hour a year on the turn keys that are up and running. And then she said, You know, I think she said kind of an average and where she said sometimes six hours sometimes.
Brittany Henderson [1:18:27]
Yeah, yeah. I think she just works on stuff whenever she feels like
Neil Henderson [1:18:31]
could she do this Saturday from anywhere in the world? Yes. Yes. Yes. Miss pina colada, sipping pools women in Nicaragua.
Brittany Henderson [1:18:43]
Yes. Yeah. Alright, awesome.
Neil Henderson [1:18:47]
That was Ali Boone from hipster investments. Don’t forget to grab a copy of her free ebook at hipster investments.com slash road family freedom. We thank her for her time with forward to meeting her in person someday. So let’s hit the road.
- Key Lessons Learned: Manage people, not properties. Take responsibility for your own due diligence.
- How did they acquire their knowledge or what knowledge did they need to acquire? Ali Boone read a lot of books about real estate. She also got experience by losing money earlier on.
- How much money did it take to get started? Ali spent $40,000 on her first investment. Then for her first turnkey, she spent $10,000 cash down, some closing costs, and a $55,000 mortgage.
- How much time does it take now? Ali has constructed her life to do whatever she wants when she wants. She spends as little as an hour a year on her turnkeys that are running, with an upwards of 6 hours.
- Could they do this strategy from anywhere in the world? Yes.
What you’ll learn about in this episode
- What was Ali’s ground-breaking ah-ha moment in real estate?
- Were there any lessons that Ali learned in her first deal?
- When you invest in other countries you run the risk of not having protections.
- How did she get into the turnkey market?
- What were the advantages of taking on an investment partner?
- What are some of the risks of a turnkey?
- How do you go about vetting turnkey providers?
- What is the premise of Hipster Investments?
- What will make or break you as an investor?
- Ali talks about her book: Not Your How to Guide to Real Estate Guide to Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet
- How does Ali select the market to invest in for turnkeys?
- What is her advice about property managers?
- Get your systems in place before you start to scale?
- How do you vet tenants as a landlord?
- How much time does she typically spend on Hipster Investments?
- What other kinds of systems does she have in place?
- What is the scariest thing she has ever done for fun?
Help Us Out!
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- Free eBook Turnkey Rental Properties 101: The Definitive Guide to Buying Hands Off Rental Properties by Ali Boone
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