Tessa Can Now Retire Early, Give To Important Causes And Help Others.
Tessa jumped into real estate investing just to get a new stream of income to pay bills…
…Now she is considering flipping more houses so she can retire early, help others and even donate to important causes.
With her work schedule and other responsibilities, it wasn’t easy adding a side hustle. But she found a way to get the deal quickly AND on budget.
She also found a way to finance the deal with almost no interest.
Finding a good contractor was the toughest part of the process, but she was so creative and found a method that worked for her.
Listen to our conversation with Tessa to hear more about her strategy in this first deal, the deal she found on MyHouseDeals and her tips for new investors plus…
MyHouseDeals.com Success Stories
- Best strategies for managing real estate investing with a full-time job
- Simple tools for newbies that help with budgeting
- Benefits of in-depth research before getting into a deal
NOTE: Tessa is a premium member, he received a FULL refund of their upfront membership fee for simply doing a deal! Find out more about our premium membership here.
Tell me about yourself…
What made you interested in real estate investing?
I guess just the fact that bills are expensive, and I wanted a way to use my creative energy to make more money. So, this was my outlet.
How did you manage to do investing alongside your full-time job?
My house was for sale and I needed to buy a house quickly to live in. I looked for houses on the weekend, and after work. I built my own equity so I wouldn’t pay for someone else’s. Yeah, things like that.
So, when I found a new house, I made it my investment property since I plan to live there and rent out my old house.
How did you learn about real estate investing as a way to make money?
I learned from my mom. She was into renting property and being a landlord, so I knew about real estate investing from a young age. But for flipping houses? I saw a lot of shows on TV about flipping houses, and that got me interested.
How do you think your accounting career has helped you with your investing so far?
I wouldn’t say I’m good at math, but I’m good with numbers, budgeting and staying on budget, so that’s helping a lot with this project.
If you aren’t good with numbers, I suggest finding spreadsheets online to help you. You can easily find budgeting spreadsheets online for flipping houses.
What I do is just to put in what I think everything would cost, and then from there I will try and stay within that price range. I’d keep track of if I spent over or if I spent under. So, I know fully how much I’m over budget or under budget, to the cent.
What were you were looking for when searching for this property?
Location was my number one; I wanted to be in Frederick, Maryland. I also wanted a good neighborhood because of my daughter and a property with a backyard for my dog.
In terms of return on investment, I wanted something with a good enough price where after I put in the renovation and I resell in a few years, I will be able to make a profit off of it. Hopefully, $50K.
How did you project how much you would make when you sell it in a few years?
Well, I looked on Zillow to check how real estate values for properties in that neighborhood increase every year. Then, I calculated that number for three years subtracted from the renovation budget, and how much I would’ve paid into my loan by then.
What are the biggest challenges you’ve had so far?
Finding a good contractor. Yeah, that’s the hardest part. But, I use Facebook yard-sale sites, and I get a ton of estimates. I do a background search on them. And, also get references and pictures of past jobs. It’s hard finding someone in my price range who is quality.
How did you finance this deal?
I did a regular home mortgage. I used some of my own personal funds, and a 401K loan, which is good because any interest that I pay on the loan will be right back to myself. I’ll also be putting some on a credit card but at 0% APR.
Why did you decide to go that route instead of doing a hard money loan?
The interest rate for that is really high. And honestly, that seemed like something I would need to research a lot. Besides I had my home for rent and I needed to buy something pretty quickly. So, I went with the familiar route.
What are your plans after this deal is done?
I hope to be done in a few months as long as I find a contractor who can do it in my price range. But, I would like to live there for at least three years to avoid the capital gain tax. This is the first deal; I hope to do more after this.
With your schedule and strategy, how do you manage everything?
It’s not easy at all. But honestly, I take it day by day. It’s not something that I have a plan for.
Some days I can do a little bit more because it’s a slow work day, or my daughter’s letting me put her down for a nap. And other days, I just can’t do anything.
What tips do you have for people who have never done any deal?
I would strongly recommend reading up a lot about good investment deals, how to find them and the formulas to use to calculate if it’s a good deal or not.
I also think if someone plans to get into flipping houses and doing a lot of them, it’s not a bad idea to consider getting a real estate license, which I plan on doing too.
It’ll definitely save on commission, so if you buy a house maybe you can negotiate like, “Hey, you don’t have to pay my buyer’s agent, so maybe you can take down the price a little bit.” Things like that.
Tessa gave us some really great practical advice on managing a side hustle with a full-time job. She also shared how she used her skills in budgeting to manage her first investment property deal.
Tessa gave some tips for investment newbies, how she finds contractors and how people who aren’t awesome at budgeting can apply some of her tools and techniques for themselves to make it easier.
Traditional financing worked for this first deal. She also talked to us about how she was able to subsidize that with her 401K, and a 0% APR credit card.
She has been quite creative! Tessa is also considering getting a real estate license which she believes will help her to do a lot of house flipping.