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As an entrepreneur trying to build wealth, how do you find work-life balance? How do you prioritize your family and life when you work long hours for a better future? Is the time freedom you’re ultimately working towards worth the time you have to give up presently? Amanda Salovitch, today’s guest, shares the balance she’s been able to maintain as a full-time working mom, building a short-term rental business while going from zero to six units in a year and a half. 

Amanda has been passionate about real estate for a while. She became a licensed real estate agent fresh out of college in 2008. Amanda worked at a brokerage with another recent high school graduate, and when she decided to pursue a career at the bank, she watched him grow his investment career. The bank required a very fast-paced lifestyle, and it wasn’t until the pandemic that she began to slow down and reassess certain aspects of her future. She started listening to the Real Estate Rookie podcast and became inspired.

She purchased three long-term rentals shortly after she began listening to the podcast. She then closed on a property with three short-term treehouse rentals with various income-generating activities. While living a hectic investor life, Amanda always includes her kids as much as possible. Her ultimate goal is to have the time and freedom to live the life of her choosing with her family, and with the path she’s on, she’ll be able to achieve it soon!

Ashley:
This is Real Estate Rookie, Episode 207.

Amanda:
I don’t need a lot of information to dive into something. I execute really quickly where my husband is very much opposite. He needs all the details. He maybe is a little bit more emotional about it than I am. He needs to be like brought along. And so one of the ways that I got him on board is just by communicating with him, keeping him in the loop about everything that I do and then really just having him see how it’s worked. So buying this tree house property was very stressful. It was a nine-month ordeal and I don’t think anything could be ever more stressful than that. And so I think that having gone through that really helped him to see that things can work out and just to have the confidence like that we’ve done this so many times we can continue to do it.

Ashley:
My name is Ashley Kehr, and I am here with my co-host, Tony Robinson.

Tony:
And welcome to The Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, information and stories you need to hear to help kickstart your real estate investing journey. And I’m here with my lovely co-host. Ash, what’s going on? What’s new in Western Buffalo these days?

Ashley:
Well, I’m actually leaving Buffalo. I went to Idaho last week and I’m going back to Idaho this weekend.

Tony:
I thought, this is a recurring theme, right?

Ashley:
I even get a little Idaho timing. But yeah, so I just decided I’m going to take my kids to Idaho this time. I went for a conference last week and now we’re hopping on a plane Friday and we’re going to go to Coeur d’Alene and hang out with some friends. I have a couple friends that are doing triathlon, so we’re going to go watch that and yeah, have some fun.

Tony:
Enjoy it. There you go.

Ashley:
And you’re headed out today too somewhere.

Tony:
Yeah. Not to anywhere as fun. No, no. Joshua Tree is cool too, but we’re heading out to Joshua Tree. So our new operations manager, she just flew in for North Carolina, so we’re going out there to meet her, so she can get introduced to the whole team. So our new assistant, we hired, our cleaning crew, our handyman crew, we’re all getting together, just going to have a big team dinner and all, just have some good time, have some fun outside of all the Airbnb stress that we’ve created for ourselves.

Ashley:
Yeah, cool. That sounds fun. Are you guys going to stay out there? Are they staying? Is your new operations manager going to stay in one of the Airbnbs, so kind of-

Tony:
She’s actually staying all week, yeah. So she’s going to be rotating through a different property each night, just so …

Ashley:
Oh, cool.

Tony:
… she can get a feel for each place. We thought about staying, but we’ve been traveling so much lately that the thought of not sleeping in my own bed right now is probably one of the worst things that I could think about. So we’re just going to stay out there late and come back home and sleep in our own bed tonight.

Ashley:
So I’m excited about today’s episode. I thought Amanda was super energetic and she has something really cool that she just invested in and started opening. I’m not going to give it away. I’ll let you guys listen and see what it is, but it’s almost run as a short-term rental and a business model, but it’s not a house. It’s something unique that she’s doing, but Amanda gives great tips about having that work-life balance and things that you can do to keep that. There’s no way to make your work-life balance perfect or to balance it. If someone says that they have it perfect, they’re lying. They’re not telling the truth. They’re not being honest. So I think Amanda says a couple things that can really resonate with you if that is something that you think you’re struggling with, is creating your work-life lifestyle, I guess we can call it.

Tony:
She also touches on, and I get this question a ton, about getting your spouse on board and what that process looked like for her and her husband and how she was able to navigate that in her own relationship. So just like Ashley said, lots of good nuggets throughout this entire episode, so we’re excited to bring you her story.

Ashley:
Amanda, welcome to the show. Thank you so much for joining us. Do you want to get started with telling us a little bit about yourself and how you got started in real estate?

Amanda:
Yes, yes. Thank you, Tony and Ashley, for having me. I’m a big fan of the show. I’ve actually been watching since the beginning and I’ve learned a lot from the show. So hopefully today, I can pay it forward and somebody somewhere can learn something from me. So my name’s Amanda Salovitch. I’m from Maine and I live here with my husband Ross and I actually have three kids that are five and under, so Ivy who is five, my middle child Tatum who’s four and then my son Roman who is almost a year old. He’s 11 months old. And so busy life. I’m a full-time working mom and my husband has a full-time job currently. And then we invest in real estate on this side and I’m also a licensed real estate agent. So it’s a lot of things going on in this house.

Tony:
Just a little busy, right?

Amanda:
Just a little, full. I like to say full, not busy because we’ve chosen this lifestyle if you will. And I actually had a passion for real estate for a long time. So when I left college, I remember I moved in with my mom and this is back in 2008 and I had to ask my mom for the $500 to get license as a real estate agent because I had no money and I didn’t really know anything about real estate at the time. I just knew that I was interested in it and might want to try this new career opportunity. So I took the agent course and I ended up starting with an agency where there was another younger person. And I was fresh out of college. He was fresh out of high school.

Amanda:
And so neither one of us had ever purchased a house before and we wanted to work our way into real estate. And if 2008, it wasn’t really the ideal time, but we didn’t know any different and we also didn’t have any bills. So when we would get a commission for selling a house, we thought it was a big deal like we would split the commission and we were living the life. And I ended up going a different direction in my career and taking a job for a large bank and he ended up sticking with real estate and going more towards the investment side. And I had built up this really great career that I’m still in, I’ve been in it for 13 years or so and have had a lot of success. And I watched him over the years, building his business as I was climbing this corporate ladder.

Amanda:
And so over the … I was just grinding. So I ended up getting married, having a couple of children. I was working so much and I would leave the house at 6:45 AM, drop my kids at daycare, drive 45 minutes to work. Work, there was a point where I had 200 colleagues reporting to me. I had a huge team and I just thought like this was my life. I was going to be some sort of CEO of the company, but it was hard and it was tiring and I was traveling a lot. It was such a fast-paced lifestyle that when the pandemic hit and things drastically changed for me, I ended up working from home.

Amanda:
At that time, I was working on projects, so a little bit different than managing people. So when they were having everybody work from home, all the projects were put on hold. And so I was at home. My children were still in daycare and I had never really been alone that much in my whole life. And so it was right when The Real Estate Rookie Podcast started. And I always in the back of my mind knew I wanted to do something in real estate, I just was so busy that I never took the time. Every now and then I would go look at a rental property over the years or … My husband and I did a couple of accidental live-in flips. Our first purchase was actually a house hack, an unknowing house hack. We had his brother-

Tony:
We’ve got a lot of those on the podcast.

Amanda:
Yeah.

Ashley:
Yeah.

Amanda:
I guess I’m a genius, I invented house hacking. We were offsetting our mortgage with him living there. And so we had done a few little things. We had made some money selling houses and buying other houses and so we knew a little bit about real estate. We had bought a few houses. And so I started listening to Real Estate Rookie and The Bigger Pockets Podcast and I met up with my friend who is such a mentor to me, Matt, and the one that I originally was working with. And he had done a ton of flips and pretty much every different kind of investment that you can think of in Maine he had done. And so he has guided me over the past couple of years.

Amanda:
And in that first, in 2020, within six months, I would say of going down this journey of just learning, how I can invest, I purchased three properties. I was pregnant for all three of those, so it’s a little bit crazy. So those are three long-term rentals, and then recently within the past couple of months, I closed on another property which is three short-term rentals, so taking advantage of that vacation market here in Maine and they’re actually a unique property. They’re treehouse rentals and-

Tony:
Oh, we got to dive into that for sure, treehouse rentals. I don’t think we’ve had anyone on the podcast that has something that’s cool and unique as that. But before you go to Matt, I just want to clarify, so you started your journey in 2020. Just set the table for us, how many units are you currently at today in total?

Amanda:
Yeah, so I have three single-family homes that are long-term rentals and then I have three short-term vacation rentals.

Tony:
That is amazing growth in a relatively short period of time. And there’s a couple things I want to go back to now before we keep going. So first you mentioned that you had this friend where you guys started in real estate at the same time. You decided to climb the corporate ladder, he decided to build his real estate business and both of those decisions were totally fine, right? You made the decision that you felt was best for your family, he made the one that he felt was best for him, but it just always, I think, stands out to me how society kind of preaches us and coaches us to want to climb this corporate ladder where, and a lot of people who climb the corporate ladder quickly, they are people who are ambitious, they are people who are driven, they are people who are disciplined.

Tony:
And it’s like if you took that same drive ambition and discipline and applied it to a business that you owned yourself, how much could you do in 13 years, right? And we just saw what you did from 2020, right? You’re at six units in two years maybe, imagine what you could have done in 13 years. And obviously, I’m not saying this to poke fun at you, but it’s just like I think it’s a lesson that I think a lot of the rookies need to hear, is that if you apply that same level of focus and dedication that you give to your day job to a business that you own yourself, you will be mind blown with the achievement you can reach in a short period of time.

Amanda:
Yes. And I think about that all the time. It’s like hard to look back and think, “Oh, man, those properties I was looking at were so cheap. I wish I bought them,” but honestly, what I’ve learned in my corporate job is completely invaluable. I would not be able to do, even close to what I’ve done if I didn’t have that experience, especially with the projects that I work on and being able to manage change has been really helpful to me. And the other thing is, I don’t know if you guys have ever heard of the StrengthFinder.

Tony:
Yeah.

Amanda:
I think it’s called the Gallup StrengthFinder Test.

Tony:
Mm-hmm, yeah.

Amanda:
And so that’s something that I had taken through my corporate job and one of the … It’s funny you mentioned it, Tony, one of my top strengths is an achiever. And so always looking to do the next thing, get the next thing and I found that … So I always thought I wouldn’t be satisfied not having my corporate job, but I found that it’s just as satisfying like closing deals. And not only that, but in this past year, I also got relicensed again as an agent, really just because my sister was representing me and she was getting all these commissions off of me and I knew how to do it and I’m thinking, “Oh, my gosh, I could be putting this money back into the deal or back into a rehab. And so if I know how to do, it’s awesome. I can put in an offer at 11:00 at night without having to bother anyone.”

Amanda:
And so other things have fallen into my lap, I guess. I didn’t intend to be representing anybody, but I like to specialize in helping newbie investors. And I found a lot of success in that and just enjoyment. So it’s exciting.

Tony:
I love seeing the growth, Amanda, and I think it’s a testament to what could happen when you really narrow in and focus on building a business for yourself, as opposed to just climbing that corporate ladder. One of the thing you mentioned I want to go back to is the time piece, right? So just to clarify for me, are you still working your day job as well?

Amanda:
Yes.

Tony:
So you’ve got your day job. You have a family, three small children underneath the age of five and you’re building the short-term rental business. That is a lot to manage. That is a lot to keep all the … You’re juggling a lot of things, I guess, is what I’m trying to say. So how are you managing your time right now? How are you making time to fulfill your work requirements, your family requirements and still focus on building this business on the side?

Amanda:
Yeah, it’s not easy, but it’s worth it. I think that if you have a really strong why, it makes everything worth it in the end. So I do a few different things. One, I try to involve my kids as much as possible. So I know that sometimes you can let your why become your excuse. And so obviously I’m doing this to have more time, freedom with my kids in the future, but that doesn’t mean that I can’t have them tag along now. And so I bring them to showings. My kids have been to so many properties and so many showings. And sometimes I will say the properties are so sketchy. Like I went to one a few weeks ago and I brought my kids and I ended up saying like, “Hmm, I’m going to lock the doors. Just stay in the car. Just stay in your car seats. I’ll be right back. This is going to be really fast.” I know it’s going to be fast because there’s not much to look at and it’s disgusting.

Amanda:
So when I came back out, there was a woman circling my car, I think. So they had gotten out of their car seats and they were pounding on the backdoor. And I think that she thought I kidnapped them or something and I’m like, “They’re mine. They’re okay.” And she’s like, “Okay, I wasn’t sure what’s going on here.” And so that was just a funny story, but they’ve been to a lot of properties. One of them, they call the trash house. I try to get them to help. They’ve filled dumpsters with trash before. The other thing I do is just small actionable things I try to sneak into pockets of my day.

Amanda:
So for example, today I’m working from home. I work from home most days. I have a really flexible schedule and I’m very fortunate for that, but I knew I had to … There’s a property that I want … I had a tenant reach out to me yesterday that she wants to move out. She’s on a month-to-month lease at this point. She’s been there for a while. And so I knew that this was an opportunity where I might want to sell and scale up. And so I knew I had to contact a 1031 lawyer today. And so during my lunchbreak, I made that phone call and it took 15 minutes and it’s just like one thing that I could sneak in. So nights, weekends, just in between calls that I’m on.

Amanda:
I have a lot of vacation time. So whenever we close on a property, I always take a week of vacation to do whatever needs to be done to get it ready to rent. And then anything that can be automated, I love putting processes in place. So for example on our short-term rentals, we have automated messages that go out like right when they book, they do autobook and then they get a message from us. I don’t have to search for properties. I have certain searches on the MLS that come right to me. So I just check my email. I try to have as many processes as possible.

Amanda:
And the other thing is I have a really supportive husband and it wasn’t always that way. He and I are very, very different. Another test that I had taken actually through work is called the Kolbe. Have you guys started that one?

Ashley:
Mm-hmm.

Amanda:
It’s like your MO, your method of operations, so it’s like how you operate. And it’s really important to know how you operate in comparison to the people that you work with. And so for me, one of the things that it determined was that I’m at something called a long quick start which means that I don’t need a lot of information to dive into something. I execute really quickly where my husband is very much opposite like he needs all the details. He maybe is a little bit more emotional about it than I am. He needs to be brought along. And so one of the ways that I got him on board is just by communicating with him, keeping him in the loop about everything that I do and then really just having him see how it’s worked.

Amanda:
So buying this treehouse property was very stressful. It was a nine-month ordeal and I don’t think anything could be ever more stressful than that. And so I think that having gone through that really helped him to see that things can work out and just to have the confidence that we’ve done this so many times, we can continue to do it. And a huge win for us and I’m so excited for him as he actually put in his notice at his corporate job. And he’s done a lot of things on the side. He has other businesses on the side that he’s managed over the years. And so he’s going to dive into that, but he is also in the wintertime going to help us to build this business even bigger. So I’m excited to see what happens with that.

Ashley:
Amanda, I want to touch on the mom piece of it because this is a question I’m sure you get asked a lot is, how do you balance it all? And it’s a question that I get too, and honestly, I hate the question because I think of large majority of the time, it’s asked to the moms and not the dads. And my husband should be the one that’s getting asked that question. He works way more than me, he takes all the kids to their doctor’s appointment and I love that you said that part of why you can juggle it all is because you have a great spouse to co-parent with and that’s the same with me too. And so I dislike that question because I feel like, especially now, I feel like that the household responsibility has really shifted 50/50 where it’s a lot more of husbands and wives taking on the responsibility of the children and the housework where, yeah, maybe 20 years ago it was the wife would stay at home. She’d balance everything. Maybe have a career.

Ashley:
So I always find that question interesting and I really liked how you said, “Don’t make your why become your excuse,” and that resonated with me so much because I felt so much mom shame and guilt when I first started building my business and I was not present all the time. I was not doing everything my children needed. I was handing them off to my mom to babysit sometimes, so I could get work done. I was working late hours. My husband would take them out to the barn and do stuff with them around the farm because I was working. And I think that because I didn’t fit the mold that my mom had done and staying home with the kids and everything. It was really hard for her to watch me not be that. But for me, it was, “Okay, my kids are young,” and everyone would say to me, “Your kids are only young once.” “Well, my kids are only 10 once. They’re only 15 once. They’re only 20 once.”

Ashley:
And when I look back at my childhood, I don’t remember being two. I don’t remember being four, but I remember as I got older what my life was like and what my relationship was like with my parents and what … We had a great life. I’m not complaining about that, but I want to have the time after I’ve built my business to spend more time with my kids and have that flexibility and that spot maybe as they’re older. So you’re saying, “Don’t use your why as your excuse like, ‘Oh, you know what? I need to hang out with my kids this weekend instead of going to look at that property,’” and then even including them, I think that’s hard sometimes to figure out a way to include your kids in your work and it doesn’t seem like you’re dragging them along. Well, a couple things you can do is pay them, okay?

Amanda:
Mm-hmm.

Ashley:
Then you can put, open up their own retirement account because they have earned income now too. My five-year-old, he loves to go to properties if I give him a GoPro. I give him a GoPro and he is in charge of recording that whole property. When I took him to Seattle a couple weeks ago, I have footage of inside of every single cabinet and cover of that. But just finding little ways for them to be involved and give them a little responsibility, I feel like has really helped my kids want to be part of our businesses. And the same with the farm, my eight-year-old, he works on the tractors. He’s got his own tools. He knows how to change and fix different things on the tractors that I have no idea about. And I’ve just been watching and learning. And I think that kids really do start to enjoy being involved in some of those things if they have their responsibility and have a fun little job to do and it makes them seem like they’re important too.

Tony:
I just want to add because I’m so glad you’ve mentioned that statement because I had that written down and circled on my paper as well that your why can be an excuse. And I think especially for people that are balancing family responsibilities or any responsibilities for that matter with trying to build a real estate business, it’s easy to say, “Oh, I can’t do this because of my kids,” or, “Oh, I can’t do this because of my job,” or, “I can’t do this because of my community obligations,” but if anything, it should be flipped the other way to where it’s like, “I have to do this because of my kids,” or, “I have to do this because of my,” whoever.

Tony:
And I’ve shared many times in the podcast before that I was 16 when my son was born and I know a lot of other teenage parents that went down a different path. And for me it was like, “I have to figure this out because I need to be there for him. So I have to go out and get a college degree. I have to go out and build the business. I have to go out and do these things because I want to make sure that I can provide for him, that I can provide for my family.” So yeah, that really stuck with me too, Amanda. So I’m so glad you shared that.

Ashley:
Tony, I want to ask you real quick. How many times have you been asked that? How do you juggle family and raising your kids?

Tony:
Ashley, I have gotten that question quite a bit, but I think I’m also very vocal about how important my family is to me. So I think that’s what leads into those questions more often than not, but I can say I’ve never … I don’t think anyone’s ever made me feel guilty about building my business while also trying to be a parent.

Amanda:
Yeah. Yeah. And the way I look at it is I could continue down this path of climbing this corporate ladder and seeing my kids even less or I could see them a little bit less now and then hopefully have the time freedom in the future. I think of that meme that always goes around, I think I shared it once on Instagram, it’s like the old flex was nice cars and houses, but the new flex is time freedom. And I so resonate with that and that’s all we want really in life, my husband and I.

Ashley:
Yeah, and I think that’s a great example of what you just said right there. Yeah, I’m gone traveling sometimes for three, four days at a time, but then when I’m home, I get to be super present with my kids, because those plane rides, man, I pound-out worked during those. And that’s different, yeah, there’s somebody else that could be, “Well, I’m home every night to put my child to bed and you’re not,” but yes, you’re gone five days a week, 9:00 to 5:00. So every situation is different and it’s however you want to look at it, but I agree with you. It’s that time freedom. And my kids, they get that and I can be more present too. And I think that’s a huge thing as a parent is being able to not only have your kids in the same room, but being present and being able to enjoy that time. And that’s what I really strive for to.

Ashley:
Okay. So let’s push the mom, Amanda, away and let’s get back into just you as a real estate investor. So let’s talk about how you’re financing your deals, how you’re finding your deals. Are you still active as a real estate investor now or I’m sorry, a real estate agent?

Amanda:
Yeah. Yes. Yeah. Yes, to both, I’m doing both. Really though, I obviously don’t have the time that I would like to have for being a realtor. Hopefully in the future when I do eventually leave my corporate job, I definitely want to do that more. So right now, I just focus on anybody who comes to me that is a newbie investor really. And the way that I differ than other agents is being able to understand what they’re trying to do because I’ve done it and I am an investor and then helping them to really run the numbers and understand the numbers is very important and I don’t see a lot of agents, especially here in Maine that are able to do that for clients.

Amanda:
And then yes, I’m investing actively, but actually, like I said, I’m looking to do a 1031 exchange on a property. This will be my first time doing that. So I’m super excited and it will force me to take action because I had set a deadline for myself that I was going to buy my first multiunit by August 8th. Actually, it was my deadline to be under contract that I had set for myself. So this opportunity coming up randomly or this tenant wanting to move out by the end of the month was actually really cool. It was a blessing and it’s just going to force me to find that deal quickly and so-

Ashley:
Amanda, real quick, can you explain what a 10 31 exchange is for somebody who doesn’t know?

Amanda:
So I haven’t done one before and I’m not an expert, but I did talk to attorney today. And basically, when I sell the property that I’m looking to sell, the money that I make will be held in an account and then I’ll have 45 days to identify a property and then I’ll have 180 days to close. So he said that the best way to do it is to identify a property that I’m under contract in just to ensure. Because if you identify, let’s say, three properties and you don’t go under contract on any of them, you actually get your money back on day 46 and you have to pay taxes on it. So it’s really important to be under contract and for that to go through. So I will be taking very quick action after I sell. So the tenant will be out at the end of the month. I will list it and then they just need the information to hold the funds.

Tony:
Yeah, so we did a 1031 exchange last summer and the big benefit with the 1031 is that you’re able to take 100% to the profits from a sale of a property and roll all of those funds tax-free into the next property. So you don’t have to pay any taxes on which you gain from the sale of the property. Just one piece of advice for you, Amanda, I’m glad you mentioned it, but yeah, when we did our 1031 exchange, we waited a little bit too long to start identifying that next property and it was bonkers last summer, right? Trying to find good deals out there. So we were like, “Oh, my God.” It was like, one of the most stressful things we’ve done, was trying to find that property before that time elapsed on us. So it’s definitely a very beneficial product for folks that are investing in real estate.

Amanda:
Yeah, and the market here in Maine is very crazy. So it will be really important for me to identify a property right away. The other thing about it too that I learned was it has to be a liked property. It can’t be worth less than what you’re selling for. And I wasn’t planning on that anyway. I’m trying to scale it into a bigger building. I was looking at a few six units and so it doesn’t have to be like if it’s a single family, it doesn’t have to be another single family, you can do something. It just has to be more expensive basically.

Tony:
Yeah.

Ashley:
Yeah. And that money doesn’t even have to cover the cost of the property of what your profit is. So say you’re profiting 100,000, it doesn’t mean you have to go and buy $100,000 property. You could buy $1 million dollar property and just put, use that 100,000 as part of your down payment. And then maybe bring another 100,000 of cash for the extra 10% of the 20% down payment and then go and get a mortgage for the rest of the 80% too. So that is the great advantage of the 1031 exchange too, is when you are able to scale up so quickly using that.

Tony:
And speaking of scale, that leads me into my next question. So Amanda, you’ve scaled pretty quickly in the last couple of years. Sorry, just to remind me, so you bought that first single family residence how long ago, a year and a half, two years ago?

Amanda:
Yeah, so it was in fall of 2020.

Tony:
Okay, so we’re coming up on two years, not even a full two years yet. So to go from zero to six units in about a year and a half is pretty impressive. So I think the question that jumps out at me that a lot of rookies are probably thinking is, how the heck are you funding all of these properties? So can you walk us through maybe just a few of the deals here, but how have you been able to finance and fund all of these purchases?

Amanda:
Yeah, so huge mistake on my first one and I really just wanted to get one, but I ended up doing traditional financing in my own name as an investment property and putting, I think it was 20% down at the time, just of money that I had saved, which was fine. I wouldn’t change it because I obviously learned a lot from doing that deal and it’s five minutes away from my house, it’s right down the road and so it’s really convenient. And it’s appreciated a lot even since then. So it’s another one that I want to see how this exchange goes and then maybe turn that into something bigger as well.

Amanda:
So then the second one that was … When I did the first one, it was prior to reading David Greene’s book on the BRRR method. And so I didn’t really understand … Until I read that, I didn’t really understand how people were coming up with all this money and putting 20% down on every single property. And so I didn’t want to lose another 20%, so it was like such an aha moment to find that book. And then I was still hesitant to use a lender or a private lender, so I ended up … I knew that I had to do cash offers to get any deals around here because the market was crazy and it still is. So I ended up getting a home equity loan and it wasn’t enough for the property, the second property, I was trying to buy.

Amanda:
So instead of just use, and you just don’t know what you don’t know, I would do this different as well, but I took out a personal loan to offset the amount. So I was using some cash that I had, a personal loan and then my home equity to buy the property in cash. And then I bought a property that didn’t need a ton of work and so there wasn’t a huge value-add option there. So I did a cash-out refi, and because this is only my second, I wasn’t able to get more than I think it was 70% out, so I ended up leaving a little bit of money in that deal. So the third try around was my golden one and I’ll talk about that when we do the deal deep dive, but I used a private hard money lender on that one and it went much more smoothly.

Ashley:
Amanda, I’ve never used a personal loan before. Can you talk about what the process is for that and how you would get one and maybe what the terms look like?

Amanda:
Yeah. So you obviously have to have good W2 income to be approved and good debt-to-income. That’s the good thing about having a W2 job is it’s going to be really hard for me to one day walk away from this because I can get a loan for anything anytime, anywhere. It’s very easy for me to get loans.

Ashley:
You don’t have to rub it into mine and Tony’s face.

Tony:
I don’t have a problem.

Amanda:
Right. So if anybody wants to partner out there, that is my superpower, is that I can get a loan from anybody. And so it was just a small bank around here. They do a personal loan. I think it was like 9% which in comparison to hard money is a really good rate. I think it was a $50,000 loan and I was just paying … It was amortized maybe over five years. So the payments were high and I just paid the payments for a few months. I think it was three months until I could do the cash-out refi and I did a commercial loan. That was my first commercial doing it under an LLC and took out as much as I could and paid off the loan.

Ashley:
That’s awesome. That’s like using credit cards, I guess, in a sense, but definitely a lower interest rate than if you were to use a credit card. There are the 0% interest credit cards out there too, but the thing I find that’s hard for me with that is a lot of contractors won’t take credit cards, so that you can use your credit card for materials all day long, but for the actual labor, maybe a personal loan is a great way to go to pay contractors.

Amanda:
Yes. And some small banks also have something called a personal line of credit as well where it’s more of a variable rate, just a home equity line of credit, just a little bit higher because it doesn’t have the asset.

Tony:
Before we move off of that, so we talked about the personal loan, but can you just walk through for someone that isn’t familiar with HELOC? What exactly is a HELOC and what was the process for obtaining that loan as well?

Amanda:
Yeah, so HELOC is … And this is where my banking expertise comes into play, I used to be a manager of a bank when I first started in banking, so I had done a lot of HELOCs. So basically, it’s a line of credit using the equity in your primary residence. And small banks tend to have really good rates. There’s barely any closing costs. So whatever your house is appraised for, in some cases, you can do up to 90% loan to value. So depending on how much you owe on your mortgage, you’re able to take that equity. And it’s just like a credit card like Ashley said, so if you don’t use it, it just sits there. And then if you do use, it’s interest-only payments, usually for the first 10 years.

Amanda:
Some of them are different, so really small payments. And so it’s really nice to be able to fund your own cash deals, pay interest only for however long you’re doing the rehab and then pay it off when you do the refinance after the project’s done. So really good tool. Not a lot of people are comfortable using their personal asset and I get that, but in our case, we’ve never seen the risk because we have so much equity in our home that we’re comfortable doing it.

Tony:
Yeah, so I love, Amanda, that you use a collection of different funding sources to try and get all this done. I think for a lot of rookies, when they think about financing and funding that first deal, they’re just thinking, “How much money do I have and 20% down?” but there’s so many other options out there. And as you start to do more deals, you get a broader exposure to the types of options that are available to you. For us in our flips, right now we use 100% private money for all of our flips, right? So we do all the work. The investor gets a really good return on their private money and then we get to participate in the upside as well. So as you do more deals, you get more comfortable, more confident with the different options that are out there to you, so we appreciate you sharing that.

Tony:
I want to talk a little bit about your spouse before we do the Rookie Deal Review. So I invest with my wife. She’s my actual business partner. We talk business all day every day and Ashley shared her experience, right? Where her husband is supportive of her investing in real estate, but he’s not involved in the day-to-day running of the business. And you mentioned that your husband was maybe somewhat opposed to investing in real estate to begin with. So what was your process for getting your spouse on board? I think that’s a question a lot of new rookies have because you’re drinking the Kool-Aid, you’re listening to the podcast and they’re off living their own world. So what was that process like for you?

Amanda:
Yeah, so fortunately for me, my husband trusts me very much, and so if I tell him that it’s a good deal and we’re going to buy it, he will eventually get on board even if he puts up his hands, tries to stop me, he has many times, he’ll eventually come around. So he just needs to feel like he understands it. So I always have to go through like the numbers with him. And not only that, but I’ve sent him so many podcasts. He’ll listen to podcasts while he’s at his corporate job and I’ve had him … He’s read books. He actually read Rich Dad, Poor Dad. And then just from experience, he’s started to understand how it works.

Amanda:
And I think his biggest fear going into this was he didn’t want to get those calls in the middle of the night, right? Like, “There’s water coming through the ceiling,” or whatever the horror stories are that you hear. And so having had a couple of rentals for over a year now, we’ve never really had anything crazy happen where we get calls in the middle of the night. We did have one incidence happen recently, but it was during the day and it’s like there’s always a solution. So you can always just find the person that you need to find to help you through that. So in this case, the furnace was leaking water. We were able to quickly get somebody over there. They needed to put an expansion tank, add an expansion tank and it was a few hundred dollars.

Amanda:
And so it wasn’t the end of the world. It was taken care of really quickly. And so the more times you go through that, I think you just start to build your confidence. So another quick story, I actually partner with my sister on the tree house property and she’s the one who operates the property. We haven’t talked about this yet, but it’s more than just tree house rentals. It’s like a little business because there’s an 18-hole disc golf course and there’s a little store there and multiple income streams. And so she’s the one who’s on site dealing with that.

Amanda:
And the first, so we closed April 19th, we started accepting bookings for Memorial Day weekend. So the first weekend that we had somebody staying there, I don’t know how my number got involved, but I actually got a call at 10:00 PM and the people staying in, our biggest tree house, said that the fridge is no longer working. And so my sister was super stressed out. She was so worried and I was like, “Listen, bring a cooler over there, get their food on ice and we’ll have a fridge there in the morning and we’ll replace it. It is what it is. This is no big deal. I had just replaced a stove at another property that I have. We’re going to take care of it.”

Amanda:
And so once she went through that, she was like, “Oh, wow, no big deal,” and we actually got a really good review. Our first review was from them and they were super happy with how we handled it. So it just takes time for some people and just to live through it.

Ashley:
Amanda, I think that what you did there was you communicated with the guests and I think that goes a long way instead of panicking and being like, “Oh, my gosh, what are we going to do?” and avoiding the guests, you figure it out and you took action. Even though it wasn’t bringing in a brand new fridge right away, it was at least something. And I think that when I did my own property management, that went such a long way, is making an effort in the communication, opposed to just like, “Okay, sorry, we can’t get a fridge there until tomorrow or something,” but doing every little thing you can do.

Ashley:
And Tony, I think I’ve seen you and Sara make videos how even just refunding some money can show that you’re making an effort and you like understand that this is a huge convenience and it’s actually turned around to be into your favor too. So I think that’s a great tidbit on the property management side, whether short-term or a long-term rental too.

Tony:
Yeah.

Ashley:
So Amanda, are you going to do the tree house for your deal that we go over or are you going to do a different one? Because hearing multiple income streams, that just gets me turned on in general, so we can do both if you want.

Amanda:
We can do both because that one’s not as exciting because we don’t have a lot of the finances where we just started. This is our first full month is June. So I have a little bit of information on that one, but I wanted to do another one that was-

Ashley:
Okay. Since we’re on the tree house one, just give us a little backstory on how did you even come about this. Yeah, and then we can go into the … We don’t have to go into the numbers on. We can do that on the other one if you want.

Amanda:
Yeah. So my sister, who’s the realtor, actually found the deal. So I have two sisters. The one that’s the realtor found the deal. The other one is the one that I partner with. So she knew that I’m always investing in real estate and she knows I wanted to do vacation rentals. I wasn’t thinking of tree houses, I was thinking more of on the coast of Maine like the beach, but this one came up and my older sister had expressed that she had been in a career for 15 years where she sits at a computer all day long and she had been talking for like the year before about how she wants to do something different. She wants to figure something else out. There’s more to life than just staring at a computer for nine hours a day.

Tony:
You don’t say.

Amanda:
Yeah, right? And so my little sister who found it text to us. She’s like, “You guys, you have to see this.” And so the three of us ended up going out there to look at it and it was … So just a little information on it. It was owned by a family and they had shut down when COVID happened. I think the family had a falling out and they were never able to really get it back up and running. And it had only been running since 2015. And so what the owners did was they turned it into their primary residence and waited two years. And then so we went under contract last fall, but we weren’t able to close until this April because they wanted to not have to pay capital gains which was actually really smart when they sold it.

Amanda:
So that’s great for them, but what was difficult about this is people were passing it up and banks were passing it up because there’s no financials for the past two years, because they’ve been living there. And so it made it really difficult. They did have some old tax returns, but they had very creative tax strategies. It just wasn’t looking good. However, I knew that the numbers were good. I knew what we could rent it for and there are actually a couple other treehouse rental properties in Maine that I had used and they work a 100% booked for a couple years out. And so I knew that these would book and I knew that we could make it work somehow because there was more than just the rentals.

Amanda:
The rentals are the big moneymaker, but there’s also other ways to make money there. And for us, we made a bunch of apparel that we’re selling and just the options are endless. It’s really cool. So it was on the market for 725 and we got it under contract for 710. And I had talked to a commercial lender prior to that and I was like, “Do you think I would be approved for something like this? I know I can usually get loans.” And he’s like, “Oh, yeah, this shouldn’t be a big deal.” So I knew we couldn’t close until April, so I didn’t start the application process until January. And so when I actually did it and we didn’t have the financials because it was more of a business, it was making the financing really difficult and actually made me question a few times if we were even going to be able to get a loan on it.

Amanda:
We looked down the SBA route, which is very expensive and so I talked to my … This is where networking comes into play. I randomly talked to my CPA about it who’s awesome and he recommended a smaller bank. And so I went through this smaller bank and we got pretty far down the application process and they just decided they weren’t interested. So it was a little bit risky for them. We were having a hard time getting insurance. They just thought it was too risky and we didn’t have a relationship with that bank. So we were a couple months out at this point and I started to get super nervous. We had put a lot of money into it. We had already started the branding.

Amanda:
So we were in deep and I ended up going with … So my friend, Matt, who was my mentor, who I’ve used to work with, he got me in touch with a smaller bank. And he’s like, “If these guys can’t do it, just go to them.” And so it’s a smaller bank here in Maine and they had some common sense because all four of us, my sister, her husband, my husband, we all had full-time jobs. We can afford a $3,300 mortgage or whatever it was and so they really looked at it objectively and they’re the type of bank where they can just make those decisions. We’re talking to the decision maker which is really nice. And so he was like, “Yeah, we’re going to do it. This makes total sense. I know you guys can do it. We had to do a business plan for him.”

Amanda:
And then the next hurdle was that nobody would go out there to appraise it. So this is in Stoneham, Maine. It’s like Western Maine, wintertime, snow. You’d have to hike to the treehouses. Nobody would do it. So we found one man who would do it a couple weeks out from the closing and he cost $5,000 out of pocket. And so we had to pay that …

Ashley:
What?

Amanda:
… knowing that there’s an opportunity that this might … There’s not a lot of comps. What are they going to use? They ended up using some campgrounds and stuff, but if it came in really low and the sellers wanted to pull out, we’re out the five grand for the appraisal and the money that we’ve put in to start our branding and all of that and all the time and we had been in this for nine months at this point. So there was a lot on the line. And anyway, it ended up working out just fine. It appraised at what it needed to. We actually got it for a little bit less, but then we were on a time crunch because the busy season in Maine was starting right away. We closed on April 19th. We started booking them on Airbnb the very next day. Got it right up. And then we knew we were going to have guests on the 27th of May, so we had a little over a month.

Amanda:
And in Maine right now, one of the huge challenges is getting people to work. You can’t find anybody. Everybody is booked out for everything, painting, contractors, everything. And so especially in this location with a property like tree houses, it’s just impossible. So we had to bust our butts to clean these places out. They had been dormant for two years, so they’re really dirty, lot of stuff, a lot … We wanted to upgrade the furnishing. So we got a dumpster and me and my sister were out there every day, just throwing things out of tree houses, getting them all cleaned up, doing it all ourselves. And not only like getting the rentals ready, but we had to learn how to set up our business.

Amanda:
Everything costs money when you start a business. So a lot of things we tried to do ourselves. I built a website. We had to get merchant services and QuickBooks and all of these things set up. So it’s a huge learning curve, but it’s at the point where we can breathe now. We’ve had some guests, we’re operating and I feel like I could buy another business. I was talking to my husband like, “Do you need a website? I know how to build a website now. Let’s do it,” so-

Tony:
Yeah, it reminds me of a Heather Blankenship story where she bought her first RV park and she was building the plane while she was flying it, right? And I think she said she literally lived at the campground. She was sleeping in the back office.

Amanda:
My sister lives there, yeah.

Tony:
Yeah, I love the grind, but like you said, when you do it one time, it really builds that confidence to move on to the next piece. Well, thank you for sharing that story, Amanda. We got to keep in touch, so you can share how this turns out for you once you guys are up and running.

Amanda:
Yeah, if anybody wants to see or rent a place or see what we have, our website goes to our social media too and it’s inthetreesmaine.com. So the name of the property is In The Trees.

Ashley:
Tony, rookie road trip, let’s do it.

Tony:
There we go. Stoneham, Maine, I’ve never been before, but I’m down.

Amanda:
Yes, play some disc golf.

Tony:
Yeah.

Ashley:
Okay. So let’s check out your other deal. We’ll just give you some rapid fire questions real quick about it, if you just want to give us some short answers and then we can just go through the numbers through it. So what strategy is this property?

Amanda:
This is a BRRRR.

Ashley:
Okay, and where is it located?

Amanda:
So it’s actually in Waterboro, Maine which is a very random small town.

Ashley:
And how much did you purchase it for?

Amanda:
So I purchased it for 159.

Ashley:
And how did you find the deal?

Amanda:
So it was actually on the MLS, and at the time, I was putting a lot of offers in. I put in an asking price offer thinking I would never get it and I didn’t. And I kept putting other offers in and then they actually came back to me. So I’m not sure what happened, but weeks later they came back and said, “Well, accept your offer.” But just so you know, this is a short sale, which is very rare right now. Who has a short sale? So the downside of a short sale is that it takes a few months to close. They’re slow.

Tony:
Ever.

Amanda:
Yeah, and so I think that’s why some other people may have walked away from it and not only that, but there was a lien on the property. So it was in an association and they hadn’t paid in a couple years, so there’s a couple thousand dollars that needed to be paid off at closing. It still worked for my numbers, so I was willing to pay that and wait the three months just because I wasn’t getting any other deals at the time. And so, yeah, MLS.

Ashley:
How did you finance the deal then?

Amanda:
So then this is my first time using a hard money lender and this was actually a guy that my husband worked with and he had done it before. And so it was really off the side of his desk. He had just signed it and gave me a check. It was very informal and it also made me nervous how informal it was and the deal … It was really good terms. So he gave us the 159. We were going to fund the rehab on our own. It was 10% amortized over six months. So it ended up being less than $8,000 that we paid him in the end. And there was no fees and we didn’t have to pay him any interest or any payments as we went. We just paid in the one lump sum at the end, so it was really, really easy.

Ashley:
That’s awesome. And then for the rehab, how much did the rehab cost you?

Amanda:
So the rehab only cost us $15,000. We did a lot of the work ourselves, because like I said, it’s really hard to get contractors right now. And this was one of those properties that was a gem. It was like a hoarder house, so it just looked really bad, but once we cleaned it up and did fresh paint and stuff, it was really just, what did they say, cosmetic.

Ashley:
You get all the junk out and you-

Amanda:
Yeah, there was some things-

Ashley:
[inaudible 00:53:28].

Amanda:
Yeah, we subbed out a few things. There was a couple electric issues that we subbed out and I couldn’t get a painter to save my life and I was nine months pregnant when we closed on this. And I do paint and I enjoy it and I think I’m good at it, but I was pregnant and I did not want to do it. So I was begging people. I ended up finding an old school teacher that does it in the summer and he’s like, “Well, I can do it, but I only have X amount of time.” And so I had to prioritize having him do the exterior. So I actually painted the entire interior myself. My husband did the wallpaper removal with me which is a nightmare.

Amanda:
And so I also gave birth during this rehab and then had to go back … So then I had time off of my job and my husband was working and we had to get it done, so he could get it rented. So two weeks post having my baby, I brought him with me to the property and finished it. And so I had to set him up by the door with fans so that he wasn’t breathing the fumes. It was this whole setup. Fortunately, he was a really chill baby and he would just sleep and I was able to finish it and get it rented out really quickly.

Tony:
I love that resilience.

Amanda:
Yeah.

Ashley:
So what did the property end up as? So what did it appraise for and what did it rent for?

Amanda:
Yeah, so like I said, we hadn’t put a ton of money into it, but I knew we got a really good deal. So I was so nervous when the appraiser came. I was like, “Hi, how are you? Do you want to do all the work we’ve done here?” and I was like spilling all the work. And it ended up appraising at 265 which was awesome because we could easily pay back the lender and ourselves for the rehab. I wanted to take out even more so that I could use those funds on another property. However, because I was still new with this bank, they wouldn’t let me take more than, I think it was like 70% or 75%, which was unfortunate, but it kept my mortgage really low. And the place rents for $2,000 a month and my mortgage is less than $1,000. So we cash full almost $800 a month on that one random property.

Tony:
That is absolutely amazing, Amanda, and love hearing … These are the stories that people don’t always hear, right? They see the unit count. They see you went from zero to six in less than two years, but they don’t hear the stories of you taking a two-week-old baby with you to paint this new unit, right?

Amanda:
I don’t recommend that by the way.

Tony:
But it worked out. So all right, as we wrap things up, Amanda, I want to take you to our rookie exam. These will be the three most important questions you have ever been asked in your entire life. So are you ready for the exam?

Amanda:
I guess I’m ready, celebrity.

Tony:
All right, so first question, what is one actionable thing rookie should do after listening to your episode?

Amanda:
Yeah. So I am in a business coaching group here in Maine. It’s actually called Success Doesn’t Come to Chicken … So really interesting type of coaching group, very aggressive, but the guy who runs it had us do this really cool activity where basically you write down, you just start going, you write every single thing about your perfect day like, “Where are you? What time do you wake up? How much do you work? What are you doing for work? Where’s your family?” and you just make this perfect day and then you work backwards from there. And so every day when you’re making decisions on what you’re going to do, you have that vision in your head of what you want to do, so you take small action towards getting to that goal. And so it’s been pretty lifechanging for me and I recommend it to anybody who maybe wants to do something different with their life.

Ashley:
That’s great. I really like that. It’s taking it one step further from just like, “Okay, what’s your goal?” is like, “Okay, I want to cash flow $10,000 a month,” but actually taking that vision and it’s like having a vision board and then building it backwards. So our next question is what is one tool, software app or system in your business that you use?

Amanda:
A couple. So I do use apartments.com for my long-term rentals, but I did just start using, for my short-term rentals, syncing like books, the different, or it syncs the different booking systems. I know there’s a bunch of them. The one I use is called Lodgify. And the reason why I really like using them is because their customer service is really good. And when I was trying to get started, they were just having Zoom calls with me. I’ve had a few different hour-long Zoom calls that they recorded and sent back to me that I was able to share with my sister. And they really walked me through exactly how it works.

Amanda:
And not only that, but I had set up Airbnb because I just wanted to get it going right away. And then I set up Lodgify and Lodgify set me up on Vrbo and booking.com. And so I didn’t have to do any of that. They took the information and set those up for me, which was really cool and took … It was a ton of work that I didn’t have to do, setting those up on those other systems. And they also have really good auto messages. They don’t take a fee. I pay a one-time, once-a-year annual fee, but then they don’t take a percentage out of what we make which is really cool too. So I found it to be a good deal.

Tony:
Awesome.

Amanda:
I haven’t tried any others though, so I’m not totally sure. And then the other thing that I really like that I use is MileIQ. So that tracks my mileage and then I can also categorize it because I have mileage for a few different businesses now. So if I’m going to the tree houses, it’s different than if I’m going to realtor showings. And so I need to be able to categorize and then my husband’s on there as well, so-

Tony:
Awesome. Cool. Last question, where do you plan on being in five years?

Amanda:
I love this question. Like I said, I just talked about that vision thing, but in five years, well, first of all, I’ll be on the Bigger Pockets Real Estate Podcast.

Tony:
Very good.

Amanda:
I’m just going to say that right now.

Tony:
I love it.

Amanda:
My husband and I won’t be working our corporate jobs. We’ll be waking up, deciding what we’re going to do with our day, maybe working a couple of hours, homeschooling our children and having that time freedom to just up and go anywhere, anytime whenever we feel like it.

Ashley:
That’s great. I love to hear that. Before we wrap up, I just want to give a shout out to this week’s Rookie Rockstar which is Ian Wilson. So in January 2021, he went full-time real estate investor and now he has two deals under contract and is going to net their company $91,000 this month. And he said, “Don’t give up, your big breakthrough is coming.” And we had just had James Danaird on couple months ago where he talked about it took him one whole year to get his first wholesale deal done. So this is another great example of this that Ian has, is to just keep going and don’t give up.

Ashley:
So he had a mobile home. The purchase price was around 15,000. The rehab 34,550 is total investment, his total investment 179,000 and the sale price 205,000. And that’s an example of one of the properties that added to their company’s profit this month and that was for $25,000. So great job Ian and keep it up. Let’s have Ian on the show too. Well, Amanda, thank you so much for joining us. Can you tell everyone where they can find out some more information about you and reach out to you?

Amanda:
Yeah, so I’m trying to build my social media and try to post as much as I can. You can just find me, my name, it’s Amanda Salovitch, S-A-L-O-V-I-T-C-H on Facebook and Instagram. And then if you’re interested in the tree houses, it’s just inthetreesmaine.com.

Ashley:
Well, thank you so much for coming on. Loved your story, loved hearing about your investing and the tree houses was really cool. We never had anybody come on and talk about that yet. So thank you so much for joining us. I’m Ashley @wealthfromrentals and he’s Tony @TonyJRobinson and we will be back on Saturday with our Rookie Reply.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.




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