Ep #966 - MFRS - From Nursing to Real Estate Investing

[00:00:00] Rod, I'm a nurse. I see, you know, like, unfortunately, I see people pass away. And for me, that is also a motivation for me because I it keeps it's a reminder for me that at the end of the day, we're going to pass on. But what have you done with your life? Have you? What have you done with opportunities that you

[00:00:23] So, you know, that apartment building or complex you drive by every day, someone owns it. And it's probably someone on this podcast. Multifamily Rockstars join the growing numbers of real estate entrepreneurs who have made the jump to buying multifamily properties for lifetime cash flow. Multifamily Rockstars using OPM for an OMG ROI. Now, here are your hosts Rod Khleif and Mark Nagy.

[00:00:50] Welcome back to Multifamily Rockstars. So this is where we dive deep into our guest deals and really give you some practical and actionable items that help you get started and really help you get started in doing your first deal, especially if you're brand new to multifamily, you're going to get a lot of value from this episode and these episodes on our rock stars. And as always, I've got my co host Mark Nagy with me.

[00:01:12] Good to be here, Rod. I think I probably say this every week, but I feel like we've got some some good gold nuggets that are going to pop up today that we haven't heard before. So I'm happy to go.

[00:01:20] No question. So we've got Rochelle Aid and Rochelle and her husband Tarek, I think became warriors in 2022. I think if that's right, and they're now up to about 550 units and four deals. And we're going to drill deep on this, but welcome to the show.

[00:01:39] Thank you so much for having me. Hi, Rod. Hi, Mark. I'm excited to be here. I've come full circle, I feel like because this is how it began for me. And so so excited to be here and to provide value to your listeners.

[00:01:51] Love it. Well, why don't you give them, you know, a much better bio than I just did on who you are and you and your husband and where you came from? Maybe what what you did is your, you know, you're still do as you know, your W two and and and why real estate just give us Yeah, give us some background.

[00:02:08] For sure. So it all began 2004 when I immigrated from the Philippines here to the US with nothing. And so I basically, you know, from from there on found a job did a nine to five. I was a nurse recruiter back then and then I put myself through nursing school and became a nurse essentially, through, you know, grit and hard work.

[00:02:33] And then from there, I did. I became a nurse. And then I found out, well, I'm making good income, but I'm also paying a lot of taxes. And so my husband and I got together and we kind of brainstormed and we research and how to how to save on taxes, and real estate keeps popping up.

[00:02:54] And so 2019 was when we started buying real estate, most single family duplexes and all that out of state. I live in the state of California. So we basically just invested in Florida, Ohio, Texas.

[00:03:11] But then we found out that man single families. Just, it's, it's a lot of work and we had a lot of seminars that like like you said, the term that you use rod seminars. And so we've had a lot of bruises and bumps along the way.

[00:03:25] And so we knew that we wanted to own apartments, which I didn't know how. And then one day I was driving to work and I was and I came across your podcast. And you were also talking about a boot camp that was coming up in Denver.

[00:03:42] And this is not the safest thing and kids do not do this at home. But then when you said text crush to learn more about our warrior program, I was texting crush. And that's how I got into your boot camp in Denver. Then that was in 2022.

[00:03:59] Was that the one with my mom or was that the one after my I think it was after my mom. Yeah, yeah, I did. It was 21. Nevermind. Yeah, yeah, yeah. I the reason I bring that up is, you know, if you know, my story, my mom is the reason I got into this business and lost her last year. And they brought her to a Denver boot camp. It must have been 2021.

[00:04:17] And, you know, I'm behind the curtain crying like a little girl because I you know, she's the reason I got into this business at a hard time even coming on stage. But my brothers were all there. It was really kind of a moment but but so anyway, you came to the boot camp and and what happened after that?

[00:04:35] So I was in boot camp and we were in the process of buying a flip at that time in San Antonio. And we were having a problem because we just found out that that valuation of that single family home was not what we thought it was. And then just like it just so happened that you were explaining the valuation of multifamily. And right, I tell you, it was just like a light bulb went off. Like that was a moment when I can point to that moment when I said, Oh my god, this is a family home.

[00:05:05] This is what makes sense. This is what we need to do. And so we went on break and I called my husband who was in Egypt, he was overseas at that time. And I said, this is what we're doing. We're going full in. And then yeah, during that break, we got a chance to speak to one of your coaches. My husband got on a zoom call with him. And my husband's like, Are you sure this is what we you want to do? And I said, Yes.

[00:05:32] And, and so we yeah, just put it just committed right there. And then

[00:06:02] So, let me ask you this. You know, I know and I'm going to let you talk about it because I think it's wonderful what you're doing for the healthcare professionals. But maybe I'm answering my own question. You know, what type of listener do you think would relate to you the most? You know, be it, you know, type of job, personality, skill sets, family, the familial status, just give me an idea of who you think would relate to you the most.

[00:06:32] One of the reasons why, you know, I went into this, my husband and I doing multifamily. And I told him, you know what, I feel like I need to do something for the healthcare community. Now around this time, it was COVID just happened, you know. And, you know, if you remember the healthcare, the healthcare community took the brunt of that. And then where I live here in the Bay Area, our hospital where I work at, we went on strike because the hospitals that we work, that we work, they were

[00:07:02] not giving us what we needed, right? And so I was seeing all these nurses, you know, fighting for what we believe that we deserve. But then in my mind, I said, why do we wait for somebody to give it to us? Why don't we make that opportunity for us? And so we were already multifamily in real estate investing. And I told my husband, I feel like I need to give back to this community. And so that's when I had the idea to create a platform for nurses.

[00:07:29] Now, again, it was during a warrior event that I had this epiphany of creating this platform called the Cashflow Nurse. And I feel like, you know, this is how I would be reaching a lot of nurses and medical professionals and to teach them about real estate investing. And so every Sunday, I actually have a podcast and this is free, although I'm on break now because I just had a newborn.

[00:07:56] I talk about real estate investing and I talk about the benefits of it and why we need to create that opportunity for us, because nobody's going to give it to us.

[00:08:05] And that's the name of the podcast, the Cashflow Nurse?

[00:08:08] Yes, that's the name of the podcast.

[00:08:10] Is that the website as well? CashflowNurse.com?

[00:08:13] Correct. Yep.

[00:08:15] Love it. Love it. Love it. Love it. Well, you know, listen, power moves to those who serve and I know you don't charge anything for what you do. And so, you know, it's wonderful. And again, I, you know, at the warrior events that you've been to, you've seen we've recognized people in our Hall of Fame and warriors that are exemplary warriors that have just made a real difference out there.

[00:08:40] And, you know, you start to see a pattern. They all, they all get back in some fashion. So, you know, you're just a shining example of that as well.

[00:08:47] So I know we're going to get into, you know, your most recent deal and how far you've come and everything you've done. But I want to jump back a little bit because one of the most common questions I get all the time is, hey, I'm new into multifamily. I've never done any deals. I don't have any experience.

[00:09:03] And what can I, what can I do to get into my first deal? Bring us into your first deal, what you did, how you kind of use your superpower and, and just kind of bring us, bring us the story of how you got into your first deal with no multifamily experience.

[00:09:17] This is a story I tell newer warriors as well when I get to connect with them. So coming into the bootcamp, know nothing about multifamily. I thought I knew some stuff because we did some single family, but I was mistaken because this is a total different animal.

[00:09:33] And so, you know, going through the bootcamp and the warrior events, I connected with people. And, and when I was doing this, my husband and I, we had that fear. I think everybody has fear of starting something that they haven't done before, obviously, but we worked through that fear and we just, we just did it.

[00:09:54] We just went in and started connecting with people. Did I know what to say to people at the time? No, but you know, I started to create conversation and, and from there learn some stuff.

[00:10:07] So now we joined in July, 2022. We've invested in our first deal as LP in November, again, connecting with warriors. It was with warrior. And then we learned some stuff through that. And then we connected with them.

[00:10:23] And then the next time that they had a deal, they called us and say, Hey, do you want to, to join us on this deal? But then prior to that, obviously we were committed. We showed them, I'm talking about, you know, Mike Bailey.

[00:10:37] He gave us a chance and it was because we kept showing up, showed our commitment to, to, to the space and we showed them what, what we can do. And we, you know, like we made sure that what we said we were going to do, we did.

[00:10:53] And so one deal led to another and to another, and then fast forward, we're on our fourth, I think actually fifth deal now. So, so that's how we, what we feel like worked for us.

[00:11:07] That's a great way to get started. I will tell you. And, and, you know, you invested some of your money in a deal and then, you know, showed them your work ethic and that's, that's kind of, that's a, that's a, that's a very good pathway.

[00:11:18] You know, you don't have to start by investing in someone else's deal. You can just go do it yourself. But that is a, that's a fast track way for sure to do it if you want to do that, because you learn kind of the behind the scenes stuff.

[00:11:29] So let me ask you this, what, you know, we've got so many people listening that haven't done anything with this yet. They know they need to do something and guys I'm shouting from the rooftops, deals are coming.

[00:11:40] I know they're coming. Just wait till after the election. You'll see. I mean, when people like Jamie Dimon say economically it could get as bad as World War II, I think opportunity, you know, the head of Citibank said that it's going to be a hard landing.

[00:11:53] I mean, these are, these are big players talking about, you know, some economic uncertainty and some challenges we're facing. And so there's incredible opportunities. So those of you sitting on the sidelines, I want you to speak to them, tell them one thing they should do to get started in this, whatever it is.

[00:12:07] If you have any thoughts on that.

[00:12:09] To those who are sitting on the sidelines, let me tell you, let me tell you, you're going to two years from now, you're going to regret that you didn't jump in when there's an opportunity. And it's always that I feel like for me, it's the fear of regret of having regret is what drives me because you want at the end of the day, right?

[00:12:28] I'm a nurse. I see, you know, like, unfortunately I see people pass away. And for me, that is also a motivation for me because it keeps, it's a reminder for me that at the end of the day, we're going to pass on. But what have you done with your life? Have you, what have you done with opportunities that you have? You know, like did you jump on that or did you just let it pass by?

[00:12:52] So, like I said, you know, there's uncertainties that's coming. We don't know what's going to happen, but if you look at it, it's not rocket science, but I feel like this is 2008 happening all over again because after 2008, 2010 was when real estate opportunities came and that is when millionaires were made.

[00:13:18] Yeah, we've got a deal right now that we just closed on a hundred thousand a unit. The one next door sold for 137,000 a unit. I mean, almost a 40% discount. That's what's going to start popping up here soon. And you know, they've been propping it up, but you know, not to fear, make you fearful, get excited because with crisis comes opportunity and there'll be incredible opportunities.

[00:13:39] No, I totally agree with you guys. An investor mentioned in this stuff with me is invest on the smile curve, which means at the bottom when the curve is starting to go down and then it hits the bottom and then it's right going back up when you're in that curve on the smile, you're buying at the right time over the long period. Now, I know Rochelle, you mentioned you just bought a deal. Let's get into your most recent one a few months ago, obviously during quote unquote these tough times.

[00:14:04] Tell us about this deal, how you found it, how you funded it, the team you brought together and why this was a good deal for you guys. And then we can deep dive on it a little bit.

[00:14:13] Yeah, so this deal we found through, we learned about it through another warrior, like I said, you know, Mike Bailey who has been phenomenal, just very giving and that is also what I love. I have to segue, I'm sorry. What I love about the warrior community is that everybody just build everybody up. And so, and this is how we found this deal.

[00:14:33] So it's a 40 unit out in Pittsburgh, North Carolina, which is about 40 minutes outside of Raleigh. It's a 40 unit, but part of the business plan is that we're going to turn it into a 41 unit. So that's a value add right there. We were buying it or we bought it for 4.1 million. It is in a suburb of, so it's in Pittsburgh.

[00:14:58] So we're seeing significant growth in this area. We're super excited because where it's located, it's in between two job sites or two manufacturing plants that's going to open in 2025.

[00:15:13] So we're going to see about 9,000 jobs that's going to get into the market. And one is VinFast, which is an electric car manufacturing plant. And then the other is Wolfspeed, which is a semiconductor plant, not to mention, you know, the whole triangle area where Google and Apple has come and then the Toyota battery plant. So we're very excited about this asset.

[00:15:40] So guys, the most important thing in multifamily real estate investing is jobs. And so she's learned well and she's highlighting the most important factor as it relates to that asset, which is new jobs. That's fantastic. If you've got two plants going in right next door, holy cow, please continue.

[00:15:56] And so our asset is actually a C-class asset that we're turning into a B-class.

[00:16:03] So you've got a C-class asset that you're going to turn into a B-asset. So guys, what we love to see is a C-asset in an A or B area or a B-asset in an A area. And so that's the case here. You've got a C-asset that's obviously in a B area. Otherwise, you couldn't upgrade the class. So that's the case there, correct?

[00:16:21] Correct. Actually, we say it's a B neighborhood in an A market. And the reason I'm saying this is because we are seeing a lot of new developments coming into this area. All A-class, you know, like shops and apartments. So in this immediate neighborhood where we're at, it's all A-class that's coming into the market.

[00:16:46] And so there is a need for a B-class apartment for the workforce. And so that is what the opportunity is. And so our rent, for example, the closest comp that we have to the same class of our asset is 17 miles away. And so there is definitely a need for this. And this is one of the reasons we jumped in on this opportunity.

[00:17:12] Perfect. And you paid about basically $100,000 a door. What sort of CapEx improvements are you going to make to this? CapEx, by the way, is capital expenditures, guys. These are remodels and things of that nature. Interior, external renovations, things like landscaping, painting, siding. Interior would be flooring, painting, fixtures, so on and so forth. So what are you guys, are you doing any CapEx? Let me ask you that to start.

[00:17:42] We're doing some interior and exterior renovations. Exterior would be to, it's in a wooded area, so we're clearing that up, bringing more sun into the asset. We're putting in dog park as well, as well as like a trail for our tenants.

[00:18:01] And as far as interior upgrades, we're putting luxury vinyl planks in there. Some not quite granite, but granite-like. Countertops? Yes. Painting, just brightening up the room. How it is right now, it's brown cabinets, so we're going to paint that white just to make it more modern and more clean.

[00:18:28] And to bring this good-looking product for the tenants.

[00:18:34] Like that exterior work? That's not super expensive. I mean, putting a dog park is a fence and maybe a bench and maybe a couple of toys for the dogs in there, but that's it. And vinyl plank flooring is pretty much the standard for interiors these days. You can get countertops that look just like granite and feel like granite, and they're a fantastic way to really dress up an asset. Please continue.

[00:18:59] So those are the improvements that we're going to make, but also, well not quite CapEx, but also we have an opportunity to reduce our expenses. And so that's how we're going to increase our NOI.

[00:19:09] How are you getting another unit, by the way?

[00:19:11] So there's an office that we can convert into a one-bedroom. So we're taking that instead of having an on-site property management, we are doing off-site and then turning that into a unit.

[00:19:26] That's actually really smart. I know some people that exclusively do that, buy assets that have offices and they manage everything on-site and they turn that into an extra unit. It just goes straight to the bottom line of the NOI. And it's a great value add to just bring it in right immediately. It's something you can just create another rent, another tenant.

[00:19:45] What's the rent you're going to get on that unit?

[00:19:47] $1050 would be the rent on a renovated unit. And currently the current rents are $950.

[00:19:55] What's it going to cost you to convert that unit?

[00:19:57] I want to say $12,000.

[00:19:59] Just so you know guys, what she just described, if you take that $1050 and you annualize it and you divide it by a five cap, that's a $252,000 value increase for a $12,000 budget.

[00:20:11] Yep.

[00:20:12] That's a pretty freaking good return. Okay. So that's why we love this business guys, because any improvement to that bottom line is an exponential improvement to the value. This is an example of that. That thousand a month in income is a $250,000 freaking increase in value, quarter million dollars. It's incredible.

[00:20:29] All right. So you said you're getting...

[00:20:32] Go ahead.

[00:20:34] I was going to say, this is exactly like you said. We love this business because I remember one example that you gave us before in one of your events was when you started charging $20 for a parking fee and you...

[00:20:51] It was 25. It was 25. Let me tell the story. You guys probably heard it before. Sorry if you have, but yeah, we did it. The San Antonio asset, which is a mile away from the one I was just telling you, we closed on at a 40% discount.

[00:21:02] We charged $25 a month to have your own parking spot right in front of your unit. It's reserved. It's yours forever. And we had 100 people take it and that was a $750,000 instant increase in value because you take it, you annualize it, and you divide it.

[00:21:19] In this case, it's a four cap because it's a beautiful asset. You divide it by the cap rate and that's how you come up with that value. By the way, you've brought up the Warrior Program numerous times.

[00:21:29] If you are interested in applying to our Warrior Program, I mean, we were seeing deals literally almost every day now in the Facebook group. It's incredible the deals that people are buying and the volume of deals.

[00:21:42] But if you're interested in applying, text the word CRUSH to 72345 so we can help you crush it in this business like we've helped Rochelle here and the ecosystem has helped Rochelle here as well and Tarek. Again, text CRUSH to 72345 to apply.

[00:21:59] Tell me about how you took that deal down. What was the financing like and what was the capital raise?

[00:22:07] It's a $4.1 million asset financing. We got a fixed rate of 7.75 interest rate. I know it's not the best interest rate out there, especially coming from a 3% interest rate.

[00:22:23] However, we were able to negotiate 24 months of interest only and no prepayment penalty. If there's an opportunity to refinance, then we will go ahead and do that.

[00:22:39] During this whole while we are securing the loan, the bank actually went and got a third party appraiser. With our business plan, the appraiser found that our value of property at 6.1 after it's down.

[00:22:57] Holy cow.

[00:22:58] So we've increased the value 50% already.

[00:23:03] That's what I love hearing. If it makes sense at 7.7 interest rates, just imagine in a few years with no prepayment penalty if you can refinance and get it a lower. I just invested with other warriors at a 9% interest rate and it still made sense cash flow wise.

[00:23:17] We're getting great returns. So I can just imagine if it hits 5 or 6 in a few years, we're going to be rolling in it.

[00:23:24] I was just going to say, to give you some context, I was 18 in 1978. At that time, the interest rates were 18%. I know the dinosaurs roamed the earth back then too. At that time, interest rates were 18%.

[00:23:40] I remember getting super excited when they hit 7.75%. Like you just got on that deal. Super excited. Holy cow, this is insane. But we've had deals make sense at 18% interest. It's all numbers, guys. This business is empirical.

[00:23:54] It's all about numbers and cash flow. The subtitle of my book is The New Rules of Real Estate Investing. The book is How to Create Lifetime Cash Flow through Multifamily Properties. But the subtitle, The New Rules of Real Estate Investing, is focus on freaking cash flow. It's all about cash flow.

[00:24:11] It doesn't matter what you're paying in interest if the cash flow is there.

[00:24:15] One thing I think we skipped over on this deal that I think is super important for right now. I know you mentioned Mike Bailey brought the deal, but how did you guys find this? Was it on market, off market? What was that process like that you even got this deal to begin with?

[00:24:30] Our local partners in North Carolina who lives in Cary and Apex, they had a relationship with brokers. It was an off market deal. I think they started negotiating early on in the year. But because of their relationship with the broker, they were able to secure this asset.

[00:24:48] They also had relationship with the seller as well and found out what number he was looking for. They came into terms with numbers that made sense for both sides.

[00:25:03] Let me ask you this. I know the answer just by talking to you, but is Tarek actively involved as well?

[00:25:12] He is, yes.

[00:25:15] What role do you play and what role does he play? What's your superpower? What's his?

[00:25:19] We are both people persons.

[00:25:25] Close enough. I knew that was the answer, but I just wanted to hear you say it.

[00:25:31] The roles that we did in this project, we brought in investors. We talked about it. We're also part of the asset management part of it as well. But his superpower, he's good with numbers. He's an engineer by trade. He's the one who looks over the underwriting. I gloss over that stuff.

[00:25:55] I admit it. I'm not a numbers girl, but I love talking to people. That is my superpower. After all, I am a nurse and I have that relationship. I know the pain points of people, I should say. We both have our separate skill set that we use for this space. That's how we do it.

[00:26:20] You each have a separate superpower. He's analytical, you're outgoing. He's also outgoing, which a lot of analytical people aren't. When you get that match up, it's a match made in heaven for you romantically as well as business.

[00:26:34] You can say that again.

[00:26:36] Project us out here. Most people's goal listening to this podcast is they want to quit their job, create financial freedom, do something for their kids. All those things are very common. I know you mentioned you've done, I think you said, correct me if I'm wrong, five deals now, over 500 units. If you were to project this out moving forward, what would that look like for you to reach your version of financial freedom here through multifamily?

[00:27:03] What would that look like?

[00:27:05] Our goal is to have, obviously, I love my job. I'm not looking to quit being a nurse, honestly. A lot of people say they want to quit their 9-5 and just have passive income. For me, what freedom looks like is I go to work because I want to, because I enjoy it, and not having the need to work overtime or worrying about whether I have enough for retirement.

[00:27:32] Our short-term goal is to have 2,500 units by 2025. Hopefully, by then we reach that, I would still be working as a nurse, but just doing that part-time. I love doing the multifamily deal, so I would still be doing that. Again, it's because I enjoy it, but not because I have to. That's how I'm looking at it in the future.

[00:27:58] Would I want passive income? Absolutely. But honestly, do I want to? No, because as you know in the medical field, we know that keeping an active brain will keep you from having a lot of diseases and keeping you healthy. That's what I look forward to.

[00:28:17] Good point. Love it, love it. Let me ask you this. Share some more wisdom with aspiring real estate investors, people that know they need to do something, haven't done it yet. Just share a little more wisdom. Any other words of encouragement or advice you would give them?

[00:28:33] For me, a lot of the things that I've gone through in life is not to brag about anything, but it's the opportunities that I've had, I've kind of created, recreated, because we went after it. If you feel like you're in the rut, you feel like you need to be doing something else, you just have to go and really just do it.

[00:28:58] What does Nike say?

[00:28:59] Just do it.

[00:29:00] Just do it.

[00:29:31] That's how I look at it.

[00:29:33] Nice, nice. Listen, if any of our listeners would like to reach out to you and maybe find out a little bit more about who you are, besides the Cash Flow Nurse, is there a way they can contact you if you're okay with that?

[00:29:46] Yes, I'm very active on our Facebook group, the Warrior Facebook group, so they can look me up there, Rachelle Assange-Naive. My email is rachelle at thecashflownurse.com.

[00:30:01] Perfect, perfect. R-O-U-S-H-E-L at thecashflownurse.com. Love it. No, that's perfect. That's perfect. Well, thank you so much for coming on today, Rachelle, and say hi to your husband for me. It's so great to see your smiling face, and I appreciate you talking a little bit about your deal and sharing a little bit of your journey, and let's just plan to have you on at the end of 25, or you can tell me you're in 2,500 units. Okay?

[00:30:26] Thank you so much.

[00:30:27] Thanks, guys.

[00:30:29] All right. It's great to see you. Thanks. All right. Bye now.