Passive Real Estate Investing Strategies with Alka Kumar

In this episode, we talk to Alka Kumar about how concerns over burnout as a doctor led her to pursue additional streams of passive income, how she scaled after buying that first single-family rental, how she purchased a small mobile home park using her self-directed retirement account, and why she is focused on investing passively in real estate syndications.

Alka Kumar of YourWealthMD.com came to the United States from India with $40 in her pocket. Fast forward to today and she has been making a comfortable living working as a physician for the last 30 plus years. A few years ago, she realized that she was overworked and heading towards burnout. This forced her to look for passive and semi-passive sources of income which led her to real estate. She has now switched to working part-time as a physician and spends her free time focusing on expanding her real estate portfolio. That currently includes a local rental portfolio, a small mobile home park, and numerous passive real estate syndications.

In This Episode We Cover:

  • Why high-income earners such as doctors, lawyers, corporate executives would want to pursue passive real estate investing
  • Why she chose to purchase a rental property in a coastal community with cash
  • How she went about scaling her real estate portfolio after that first single-family rental
  • Why she transitioned out of buying single-family rentals
  • And much more!

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Transcript
Brittany Henderson:

Alka Kumar of your wealth MD calm came to the United States from India with $40 in your pocket. Fast forward to today and she has been making comfortable living working as a physician for the last 30 plus years. A few years ago, she realized that she was overworked and heading towards burnout. This forced her to look for passive and semi passive sources of income which led her to real estate. She has now switched to working part time as a physician and spends her free time focusing on expanding her real estate portfolio that currently includes a local rental portfolio, a small mobile home park and numerous passive real estate investment syndications.

Neil Henderson:

In this episode, we talked to Alka about how concerns over burnout led her to pursue additional streams of passive income, how she scaled after buying that first single family rental car she purchased a small mobile home park using her self directed retirement account, and why she's focused on investing passively in real estate syndications.

Brittany Henderson:

I'm Brittany,

Neil Henderson:

I'm Neil,

Brittany Henderson:

and this is the road to family freedom.

Neil Henderson:

Before we get to this week's show, we'd like to make you aware of something we are self storage investors, we buy existing self storage facilities and vacant buildings that can be converted to self storage in the Sunbelt. We buy them with cash and some with loans. And we use private lenders who become Equity Partners in our deals, these Equity Partners share in the cash flow in the profits when we sell when we find a deal that we're considering. We call the Equity Partners and offer them a share of the ownership secured by the property. So if you've ever driven by a self storage facility and thought, I wonder who owns those things, and you have any interest in learning more about the storage business, we'd love to chat with you head on over to road to family freedom comm slash storage. That's road to family freedom, comm slash s t o r a g and set up a time to check if you look forward to speaking with you.

Brittany Henderson:

All right, and I thought of us Let's hit the road to family freedom.

Neil Henderson:

Well, Alka Kumar, welcome to the road to family freedom.

Alka Kumar:

Hey, thank you, both of you for having me. very honored and thrilled to be here.

Neil Henderson:

We're thrilled to have you. So before we dig a little deeper, can you tell us why a high income earner such as yourself, doctor, a lawyer, a corporate executive would want to pursue real estate investing.

Alka Kumar:

In my case, you know, I work umpteen hours, six days a week, seven days a week. So it was taking a toll on me, I didn't have any personal time or quality of life. So I was heading towards burnout. And then I said, Okay, there has to be some way to line up, you know, more passive income, it doesn't all have to be active income, because you're working all the time, and you're trading your time for money. So that's why I'm I decided to cut back I went part time. So I worked like 50% of the time now. And then I started looking into investing to generate additional passive income. So that's when I found real estate. And then that got me started.

Neil Henderson:

And what time period are we talking? When did you sort of discover real estate?

Alka Kumar:

This was about five years ago, like I said, I was heading towards one hour working for so many years, 25 plus years. And the kids were, you know, down, they're done with college, they are kind of on their own. So then I said, Okay, I need to focus, you know, on me, I need some me time, you know, to do things that I want to do. Because you know, it's good to have that income coming in. But then if you can enjoy it or you know, spend time on doing things that you want to do, then, you know, to me, I said okay, that's not good. So that's when I got into passive income mining of multiple streams of income.

Brittany Henderson:

Where did you learn about real estate investing? How were you introduced to that?

Alka Kumar:

Um, I've always been interested in real estate. And then I said, Okay, I want to start researching this. So I was on bigger pockets listening to podcasts, like, you know, your podcasts and multiple other podcasts, reading books, reading blogs, you know, just educating myself for many months, before, you know, I decided to move forward.

Brittany Henderson:

So can you tell us a little bit about the first investment property that you purchased once you decided that you were going to get into this?

Alka Kumar:

Yeah, the first investment property, it was actually an acquaintance of mine. And she said, Well, this is the buyer's financing gonna fall through why, you know, are you interested? Because she knew I was kind of looking for some investment properties near my area in Tampa, Florida. And I said, Okay, so I looked at the property, it was kind of dated, but it was still pretty decent was a two bath, two bedroom, single family home in a pretty good school district. So then I said, Okay, what's the worst that can happen? I was nervous, you know, I do take the plunge and plunk down a big chunk of change. But then I said, Okay, what's the worst that can happen? You know, it's not going to go down to zero. If I don't like it, maybe I can sell it or you know, maybe I'll have some loss, but it's still worth taking the rest of I bought the property for cash and then didn't fix it up. I didn't want anything to do with the property, I was really nervous, I gave it to a property management company. So they took a couple of months to rent it out. But once that mailbox, money started coming in, then then the light bulb went off. I said, Okay, this, this can work. So then I got more serious and bought some more rentals.

Neil Henderson:

And do you recall what that purchase price of that first two single family home was?

Alka Kumar:

Yeah. 260 $2,000. And this was also about five years ago. So the market was down at that time, not as hot as it is now. That property has, I think, doubled in value now. So yeah, it wasn't a high price point. It was renting for about 850 at that point. So I think that was pretty decent return.

Neil Henderson:

And did it require any renovations? Or was it turnkey?

Alka Kumar:

Yeah, it was dated, but pretty turnkey, you know, it had the old carpet, but it didn't need any major repair. So that was also another good thing. Because for my first property, I didn't want to, I didn't want it to be a big rehab, or, you know, big tear down and rebuild. So this worked out well, you know, that was just pretty much turnkey. Yeah, I had some savings. And I said, Okay, you know, let me just pay cash for it. And then we'll go from there.

Brittany Henderson:

Did you ever do like a refi? Or anything to pull your money back out?

Alka Kumar:

Actually, I have not, because that particular property happens to be in a flood zone. And if I were to get financing, the flood insurance is pretty steep out, then it didn't make sense. And then when my additional portfolio, you know, pretty much I have, everything else is finance. So I I like the idea of having one, you know, paid off property free and clear, especially a single family home. So you know, I can sell it in a hurry if I want to. So that's kind of my safety cushion. That makes sense. Gotcha.

Neil Henderson:

Do you recall, because this is a this is an issue that a lot of investors, especially in coastal communities may start to face? What? Have you ever looked into exactly what the cost of the flood insurance would be?

Alka Kumar:

Yeah, I think it was going to be about $2,000 a year. So not super expensive. But then I said, you know, let me just put that money towards something else. Yeah, it also varies from area to area. And this is actually quite a bit away from the water, but because of the area itself, was classified as flood zone.

Neil Henderson:

As you've grown your portfolio, you we were talking a little bit before we started that you you sort of went from that first single family home, and then where did you go from there the next couple of properties.

Alka Kumar:

After that, I bought a duplex. And this was actually listed, you know, on MLS, I found agent referred to me by somebody I knew he was a commercial broker. So he helped me deal with some number crunching. And that duplex was a pretty decent deal. And the owner actually said, Oh, I have another duplex right around the corner do or buy that too? So I said, All right, let's take a look. So I looked at that, and then it made sense. And my broker introduced me to our local portfolio lender. So I put 20% down and they were able to finance the rest of their so I bought both of them at the same time.

Neil Henderson:

She bought two duplexes. And then where'd you go from there?

Alka Kumar:

After that, I bought a condo battle mainly for my son's use. It was near University in Tampa, he was going there. So I said, well, instead of him paying rent, let me just get a two bedroom, two bath condo. And then he had a roommate. So the roommate was kind of covering his rent, and I bought another duplex. Then I bought a four Plex, not three Plex and then a four Plex.

Neil Henderson:

So you very quickly transitioned out of single family homes for the most part, can you talk to us about why?

Alka Kumar:

Because a single family home, so I think my ROI was not as good as multifamily. And also, if it's vacant, then it's 100% vacant, with duplex. If one side is very kind, it's unlikely that the other side will be making at the same time. So I felt at least you know will be you know, I'll have some income coming in and sell logic, you know, going with three flags, and then a four Plex scaling up economies of scale.

Neil Henderson:

And you did something that I've heard Brandon Turner from BiggerPockets. Call the stack sort of you know, you know you you buy a single family home and the next thing you buy is a duplex and maybe the next one you buy is a four Plex or an eight Plex whatever you start to, you don't stick with buying single family homes, you know, and that's it's very interesting. When people get started in real estate investing, they often sort of talk about well, I want 100 doors and Most people only really only think about single family homes. But really what you should be doing is learning, you know, with each deal you're learning. And you want to try and stretch yourself and go for a little bit bigger deal each time and start to scale that way. So you're not stuck in you know, I mean, because it's still a lot of work to buy a single family home. And a lot of times it's it's about as much work as it is to buy a duplex triplex or four Plex Would you agree?

Alka Kumar:

Yeah, I totally agree. And I like the small multifamily is because, you know, I'm very risk averse by nature. So it was a like algorithm to a 50 unit apartment after my first single family. So this has been a nice gradual transition, you know, up to four units. And then I have a mobile home park, which is small, and now I'm looking into mid size mobile, home park or mid sized apartment building. So that's my comfort level. So I totally agree. I think that gradual progression is useful.

Neil Henderson:

Gotcha. So you've gone from single family home to some small multi families to now you said you've purchased a small mobile home park?

Alka Kumar:

Yeah, that is correct. That's my first out of area investment.

Neil Henderson:

Where's it located?

This is located in South Carolina.

As you've grown your portfolio, you've also shifted into more passive investments. Can you talk about Talk to us a little bit about what that looks like?

Alka Kumar:

Actually, I'm still self managing my portfolio, my local portfolio. Lately, I'm using I've started using a leasing agent just to find the renter, and then I take over and then I managed. And my goal is my goal was really to learn the business in the next Friday self managing, but my eventual plan is to give it all to a property manager. But then now I know what's involved, how to do better property manager properly, and gradually, you know, transitioning towards more passive income. So I can work from anywhere in the world, I can grow travel. So that's what I'm building towards.

Neil Henderson:

Are you only buying those active assets? Are you also investing in some real estate passively in any syndications, things like that?

Alka Kumar:

Yeah, I'm also invested passively in about eight different syndications. And this is mainly through my retirement account, I have a self directed IRA, and a solo 401k self directed. So I've invested with multifamily, done some private lending, industrial mortgage note funds, some new construction. So just across this, you know, different things across the real estate spectrum, because I like to diversify. And also each asset class is different. So, but Self Storage is my next one. But you all know from you.

Neil Henderson:

Gotcha. Well, and you bring up a great point. And this is something we I try to encourage any other investor, real estate investor that I talked to, if they have some active way of earning income from their real estate endeavors, is to start looking for ways to diversify and invest that reinvest that capital that you're earning into, you know, assets that you were that don't require your time. You know, I tell people, you know, you if you're if your house flipper making six figures, find a way to carve off some of that money into a self storage or mobile home parks or multifamily or note investing or whatever. And it's amazing to me the number of them that that are afraid to get out of that comfort zone once that once they get into their little niche. They don't want to they don't want to branch out of it. So I applaud you for for taking that leap.

Alka Kumar:

Yeah, I know best investing passively in syndications and other people do. Because the returns are pretty good. And your time environment is very little. Yes, there is work upfront to vet the sponsor and do your proper due diligence. But I love that monthly or quarterly consistent cash flow coming in. So that's really useful to me. I'm also investing in the stock market. But you know, that's not consistent return. You know, you can come to back money every month coming in, depending on where the market is at and your investments. So like the slow and consistent, you know, consistent return from real estate from my passive syndications. And so far, they've all worked out. Great.

Brittany Henderson:

Awesome. So you are a single mom to two kids.

Alka Kumar:

Yes, two kids.

Brittany Henderson:

And you said both of them are out of the house at this point.

Alka Kumar:

Yeah, they are. Yeah.

Brittany Henderson:

Yeah, since you've been, you know, doing all this and kind of learning through your investing. Have you been teaching your kids about money and investing? Are you kind of to impart that knowledge on to them.

Alka Kumar:

Oh, yes. Oh, yes. So every time I talk to them, real estate has to come up. And my kids roll their eyes or Here comes mom, again, talking about real estate. But I think that soaking it a writing is going into their subconscious at some level. So they know, you know, they're pretty financially savvy, so they know how to, you know how to not live within your means and how to invest wisely. And they like the idea of consistent monthly passive income. And one of my goals is, you know, after I pass on, I want my kids to have that consistent passive income coming in from real estate. So that way they can, you know, do it, they can work at a lower paying job, if that's what makes them happy. Or if they want to work part time or they want to travel, then, you know, they'll be able to do that. So I want them to have that opportunity.

Brittany Henderson:

Is there anything in particular that you would recommend people do to help educate their kids?

Alka Kumar:

I think just talking, I think our education system is really lacking in terms of imparting enough financial education to our kids. So the onus is on really parents to impart their knowledge and to talk about it from an early stage. And, you know, inform them what you're doing and be open about your own finances. I'm very open with my kids about my finances. So they know where everything is where everything goes, you know, expenses income. So I think that helps a lot.

Neil Henderson:

And I look back on my public school education, and I think the most financial education we got was maybe balancing a checkbook, really. And that's just addition and subscribe, subtraction, you know, and you never really, I never learned anything about credit. I never learned anything about investing. You know, you basically just learned how to, you know, how to be a W two employee and keep your checkbook balance. But the problem is, most people don't even know how to, you know, how to keep a proper budget?

Alka Kumar:

Yeah, I totally agree. I grew up in India. And in India, I grew up in a time where we didn't have credit cards. So it was zero, if you didn't have cash for something, you know, you don't have cash to pay, you didn't buy it, it was as simple as that. So there are no, you know, that or credit card, and for my son, and for my daughter, both of them, what I did was, you know, when they had some part time jobs, you know, in their teenage years, I actually took a small loan from the bank, for both of them, even though we didn't, they didn't need the loan, and then they paid it off every year. So interest was very small. So it was $20 a year overall. And that really helped build their credit. So yeah, both of them have high 700 credit scores, and they know the importance of you and your debt under control, and living within your means.

Neil Henderson:

It's a very interesting, it's very interesting idea, I think it's a great idea, because one of the major contributing factors to your credit score is your the age of your credit score. And so the sooner you can, you know, open your first credit account without abusing it, obviously, speaking to my my 18 year old self here, the better off you'll be.

Alka Kumar:

Yeah, that definitely makes sense. And even before the credit card, I took a like I said, small loan from the bank. And actually, the bank manager told me that she said, Well, why don't you take off, you know, four or $500 loan for your case, and just pay it off. So that helps to build their credit. And then they can get a credit card easier, with a higher limit. So that's what I ended up doing. And I think that really worked well.

Neil Henderson:

So if you were forced to start over tomorrow, knowing absolutely nothing about real estate investing. What would Alka Kumar's real estate MBA look like? How would you go about re educating yourself?

Alka Kumar:

I think the first thing I would really do is hit the books, listen to podcasts and educate myself. So maybe, you know, for a couple of months, if I didn't have any money, I would really network with other people, other investors, because there are quite a few investors who are looking to park their money you know more for better return with real estate. So team up with people who have money, and you know, we can do one with very little money down, you can start doing deals. So and then get in the game. At some point, you know, you have to take action, and you won't know everything you won't know you know what he steps ahead of you. And things won't be perfect. But I think the key is to really get in the game and just take action.

Neil Henderson:

And in particular books that you that were especially influential for you.

Alka Kumar:

I have read so many books, it's so hard to like come up with it. I think the millionaire real estate investor knew that was a good one that I remember. And ABCs of real estate investing,

Neil Henderson:

and you also break up, you bring up a good point, and something we harp on a lot. So if you listen to the podcast a lot, you're about to hear another lecture from Neil that you've probably heard multiple times, which is, find a way to get started. There's only so much you're going to learn from listening to podcasts and reading books, the sooner that you can just get in a deal. And I don't mean just any deal, I mean, get into a deal. That's it's not going to make you rich, but a deal that's not going to bankrupt you if it goes bad. Because you will learn so much more than you will from listening to a podcast or reading a book. And you'll you'll exercise that muscle and it won't be the next deal will be less fear inducing, and more and more excitement inducing.

Alka Kumar:

Totally agree. And I think, you know, the fear will always be there. It's not, you know, it's just going to disappear after your first year, you will always have that fear. But the trick is to overcome that fear. And what I like to do is I like to see what's my downside? And I actually write everything down the road, these are the negatives or drawbacks is this, these are the things that can happen. And I also write down if this were to happen, what would I do to mitigate that? So that helps a lot seeing it on paper? You know, and if you can handle that worst case scenario, I think there shouldn't be any problem. All right, well, can you tell us what a day in the life of real estate investing looks like for you how much time usually spend? For me, since I'm self managing, I do do my own bookkeeping. And, you know, I'll deal with the talent issues, but I have a system, I have people who do the work. So you know, let's say there's a problem, the tenants will just text me, and I'll text my handyman or, you know, call the AC company, whatever needs to happen. So then they would just go fix the issue, I just make an electronic payment. So it doesn't really take that long. Once you have systems in place. Like I said, I'm using a leasing agent, or at least leasing the units. So that helps. And then I also like to, you know, listen to podcasts and then reach out to different syndicators, you know, talk to them talk to different investors. So that's, you know, my other part because I'm always looking to invest more passively as well. So that's, it's kind of a mishmash of different things in real estate.

Neil Henderson:

Do you have like an idea of how many hours a week you're spending on your real estate endeavors,

Alka Kumar:

probably about 10 hours on my when I'm working, I work every other week. So one week on one week off. So on my week on, I'm pretty much you know, working in, in my radiology field, and on my week off pretty much most of the week is real estate related. So very real estate hack. So I would say, probably, like 30 hours on the exam off, and most of it is actually educational, or, you know, talking to wholesalers, talking to other investors, you know, looking at deals, which is more enjoyable, you know, then property management.

Neil Henderson:

One of the great things that you do, I think, which is really smart is the you hit, you've hired out a leasing agent to handle the placing of tenants in your properties, because that is often, you know, one, you want somebody who's kind of experienced with screening tenants and to, you know, it can be a lot of work to place a tenant, because you have to, you know, you have to show it, you got to do background check, you know, review applications and things like that. But once you, you know, a lot of times once you have somebody in place, it can be, you know, fairly passive. Are there any other tasks from your real estate business that you would like to farm out to somebody that would make your life better?

Alka Kumar:

Yeah, definitely. I think I'm in the process of evaluating some property managers and just giving at least a portion of my real estate portfolio to a property manager, because that's a little bit farther out. For me, it's like an hour, hour and a half dry. Those, you know, there's a cluster of properties and the county that's closer to me, you know, that's much easier and that tenants, some are stay much longer. And some, some people have been there for four or five years. So they're very, like low maintenance properties. Those I think I will continue, and then I'm also looking to hire out the bookkeeping part of it. I've been, you know, doing my own QuickBooks. And in terms of like screening and you know, showing the property Yes, it can be worth but I think with online, you know, pretty much all my leases are online. You know, streaming is also online, so they just have to send an email and then they applicants can apply. So it's not that difficult. But yes, it is time consuming. So that part I'm going to give to a property manager. That's my goal.

Neil Henderson:

Do you have an idea of how many units you have right now?

Alka Kumar:

Yeah, I have 16 units with my multifamily small multifamily portfolio. And the mobile home park is nine spades, so it's really small. But I wanted to dip my toes in the water, and just see how it pans out. And it's in my self directed IRA. It's a Roth self directed IRA. So the all the income is, you know, accumulating in my Roth IRA, and I can take it out tax free, you know, when I retire, and that's being managed by a property manager.

Neil Henderson:

Gotcha. And you said, that one's in South Carolina?

Alka Kumar:

Yeah.

Neil Henderson:

And so it's 16 units, in addition to that, or it's 16 plus that.

Alka Kumar:

Yeah. 16 and then plus the nine space.

Neil Henderson:

Okay. And then, how long have you owned the mobile home park?

Alka Kumar:

for about six months?

Neil Henderson:

Okay. So for maybe somebody who doesn't, you know, somebody who's maybe dipped their toes into small multifamily, but they've never bought a mobile home park? What are some of the major differences in purchasing and operating a mobile home park?

Alka Kumar:

I think mobile home park is more of a running business, if you have homes that are owned by the park, if there are tenants or homes, that you are just maintaining a parking lot with utilities, essentially. So it's easier that way, you know, you're not repairing the homes or fixing the homes if tenants own their own homes. So in that way, it's going to be more passive. But typically, most mobile homes do have some homes that would be parked on home. So then you have to either, you know, sell it to the tenants or maintain them. So in my case, two homes were power poles, and five were, you know, tenant own homes. So we ended up selling those power poles also. So pretty much everything is not rent only. So it's easy. You know, it's a simple, simple process.

Neil Henderson:

So your park doesn't have any Park owned homes.

Alka Kumar:

Correct. At this point, we don't have any Park.

Neil Henderson:

That's the little that I do know about mobile home park investing is that's much more desirable, desirable, is to not have any Park owned units.

Alka Kumar:

Yeah, that's most people look for their own homes only. But most parts do, we'll have some component of park or homes, but then you can fix them or you know, sell them to tenants as handyman special. Some people even give mobile homes for free, they are older, and they need a lot of work. So you can advertise as handyman special and just take $500 as token money. And then they can start paying the lot rent. And if they're handy, they can fix it. And some investors actually will take that on, and then they will fix it and they will rent it, you know, they'll pay you the $300 lot random, they'll rent it for like 700.

Neil Henderson:

And you're you're investing in that through your self directed Roth IRA. And the reason that you have to have a property manager is because that needs to be completely hands off investment, correct?

Alka Kumar:

Yeah, that is correct. Although the Roth IRA subject, it does allow supervision of the park. As long as I'm not physically doing any work in the park, I can, you know, collect rents, I can go visit the property or you know, I can talk to contractors, I can call for repairs as needed. So all those activities are okay, the only thing you can do is actually go in and physically fix the house, you know, you can paint you can change the light bulb, and I'm not good at those things. Anyway. That's my forte. But even then, I think is just useful to be completely hands off. So the property manager is taking care of everything.

Brittany Henderson:

But your ultimate goal is to be able to have some more location independence, do more travel, is that correct?

Alka Kumar:

Yeah, absolutely. I want to be able to travel so that's why I'm growing my active portfolio and you know, give it to a good manager. And then also my passive investments in syndications. So have you know, kind of both to travel and then just manage everything remotely?

Neil Henderson:

Okay, so our last question, and this is one we started asking all of our our guests, which is if you had $50,000 that needed to be invested in the next 90 days, where would you place it and what type of return would you be expecting?

Alka Kumar:

I would probably buy a duplex or a triplex depending on the area, you know, you can use that as a downpayment. And you know, by that if what I find is sometimes you know, the the core metro area gets expensive. Most people, you know, can't afford to buy. And the numbers don't work. So something around the outskirts, like my properties are pretty much on outskirts of Tampa. So something within two hours, I think most people can find something that would be reasonable or go to like a smaller secondary market. You know, find a good property manager, do your due diligence upfront, and I would put that into small multifamily.

Neil Henderson:

What kind of return would you be expecting on your $50,000

Alka Kumar:

um, I shoot for at least 10% return. And in Malta, in my small multifamily, I pretty much pulled all of my cash out from those deals, so I don't have any of my own money in those deals anymore. So that's I've done the bird brrrr strategy that BiggerPockets talks about. So that's been pretty good.

Neil Henderson:

Gotcha. And so once you do that, once you've pulled out most of your capital, you basically have an infinite return. Gotcha. Well, Alka Kumar, thank you so much for for sharing with our audience today. You've got your website, your wealth, MD calm. If any of our guests want to find you, what's the best way for them to reach out to you?

Alka Kumar:-:Brittany Henderson:

Okay, awesome.

Neil Henderson:

Well, it's great talking today was great meeting you.

Alka Kumar:

Thank you, both of you. It was a pleasure. And thanks for all the great work that you do in educating and putting up putting out so much great content.

Neil Henderson:

Oh, thank you.

Brittany Henderson:

Thank you.

Neil Henderson:-:Brittany Henderson:

I have a couple that goes Why don't you go first, so I don't steal yours?

Neil Henderson:

Oh, I see how you're going to be the idea of scaling. Don't get you know, don't get comfortable buying 10 single family homes. Our good friend Alex felice, who was one of our first interviews he was on, he's on episode 50. And I think he's also on episode three, Episode Two, Alex bought like seven single family homes using the same $70,000. So using the bur method, which is great. But even he if you talk to him today, he admits that he kind of stayed in the shallow end of the pool a little too long. And he probably would have been better off, you know, going for a duplex or you know, and then a four Plex, and then you know, and scale and he's now bought a 24 unit apartment building, I think he just bought 52 unit, and he's looking for something bigger. And so just keep an eye out towards Sure. Buy that single family home, single family rental, whatever it takes to get you started. But very quickly start looking for ways to go for bigger deals by a small multifamily in a in a beach community and turn into a short term rental. I don't know who would do something like that.

Brittany Henderson:

Don't do and we're trying.

Neil Henderson:

Yeah, more more to come on that later.

Brittany Henderson:

Sorry, tangent.

Neil Henderson:

Alright. So anyway, what about you?

Brittany Henderson:

I think one of the things that she talked about with why she moved into more small multifamily bigger portfolios quickly was because the ROI was better than on a single family home but also, you know, she talked about vacancy. If you have a vacancy and single family home, you have 100% vacancy. And a multifamily situation. If you have one vacancy, you're not at 100% and you can kind of it's a little bit easier to float your costs and it you don't lose as much so I think that's something to consider as a pro when moving into the small multifamily or multifamily space. And then I just wanted to do a shout out to for if you've got kids taking out a loan for them to then just repay with minimal interest as a way to build their credit. I think that's a great idea and you know, needing a credit score. kind of sucks. Sometimes there's some, you know, cons to it, but it's Part of our financials is system now. So you can play the game in that way, and help your kids kind of get ahead. Money. She started with 62,000 in cash is what she did for that first property. And then after that, we got an exact amount she did 20% down on that double duplex deal and then did a bur so or no, not a bird. Sorry. I can't know what kind of lending she did.

Neil Henderson:

It's more conventional. She just she did some portfolio lending. Typically 20 to 25% down on those. But you know, you can get in for less than $62,000. But she did the like she said, you know, she had her reasons for keeping it all in cash. Don't regret that at all, I think is probably a good idea. Knowledge knowledge.

Brittany Henderson:

Why do we have to go in the same order every time?

Neil Henderson:

Cuz, cuz I'm OCD.

Brittany Henderson:

Okay, well, but knowledge is before money on the list. I'm just kidding. It's fine knowledge.

Neil Henderson:

She, she got educated, you know, podcasts and books. And we talked about what her real estate MBA would look like. And it was pretty much the same podcasts and books. And she said she would also, you know, seek out other investors network.

Alka Kumar:

Yeah, she she kind of She didn't say this in as many words but find people that have what you don't. So she talked about, you know, if you don't have money, find people that have money. But we've talked about you know, if you have time, but not money, find someone you know, vice versa. And if you have money, but not time, then lots

Neil Henderson:

of money and time but no experience find somebody with experience.

Brittany Henderson:

Yeah, exactly the whole

Neil Henderson:

time.

Brittany Henderson:

Time. So she said she spends about 30 hours a week when she's not doing her medical job to the doctor. Um, so she's working probably what amounts to a full time, full time. job. I mean, she has two part time jobs. And they they

Neil Henderson:

think that's fair. I mean, she's she said probably 10 hours a week when she's doing her day job. And then when she's not, she said it was you know, 20 to 30. could she do this strategy from anywhere in the world?

Brittany Henderson:

With the correct systems? Yes, sir.

Neil Henderson:

Yeah, I would say I'm so I'm going to kind of go halfway between I think, I mean, a lot of her portfolio is more active right now. And more local to her. She obviously she's bought the mobile home park in South Carolina, which is a little ways away from her and she's got a manager in place.

Brittany Henderson:

That's I mean, back if she sets up the system.

Neil Henderson:

Yeah,

Brittany Henderson:

she puts people in place to take care of those become more passive.

Neil Henderson:

Yeah. And obviously the syndication is our syndication is a lot more passive, and you can do them from anywhere.

Brittany Henderson:

getting to the point where she can really have that location independence.

Neil Henderson:

Yes.

Brittany Henderson:

Should she choose it and for her, it doesn't like she wants to move somewhere else. So she can definitely do some traveling and vacation. Yep.

Neil Henderson:

Okay, once again, that was Alka Kumar, from your wealth, MD. calm. Be sure to check her out. I'm Neil Henderson. We're doing this all again next week.

Brittany Henderson:

I'm Brittany Henderson. Let's hit the road.

Neil Henderson:

Are you Brittany?

Brittany Henderson:

I am. But that's not how we usually end the show says very confused.

Neil Henderson:

Sorry, we're a little punchy. Alright, let's hit the road.

Brittany Henderson:

Bye.

Neil Henderson:

Hey, before you go, if you like the show, we would be delighted if you'd head over to pod chaser and leave us an honest review. And do let us know why you liked the show how long you've been listening, and in particular, what you find really useful or entertaining. And let us know if there's anything you think we should change. Also, if you have specific questions about real estate investing, especially self storage or short term rentals, shoot us an email at info at roads, the family freedom.com and we'll be happy to answer your question on the show. We might even turn it into an entire episode. Thanks for listening. We're doing this all again next week. Until then, safe travels on your road to financial freedom.

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