My Real Estate Story: How Josh and Jess Started Real Estate Investing Out of State
My Real Estate story is a OneSavvyDollar series where we interview people who have successfully invested in real estate.
The aim is to inspire, encourage, and motivate you to start investing for your financial future because “financial fitness is not a pipe dream or a state of mind. It is a reality if you’re willing to pursue it and embrace it.” – Will Robinson
Can you tell us a bit about you?
We are Jess and Josh. Born and raised in Pittsburgh Pennsylvania most of our lives before relocating to St. Petersburg Florida in 2013.
We love to travel, see new places, and mix in with different cultures. When we’re home, we both live pretty simple lives and spend most of our days working on our business and staying active.
We paid off $147,000 worth of debt in just over 3 years on mediocre income, allowing Josh to leave his 9-5 to grow our financial coaching business, Mindful Money Habits.
Jess kept her job with Microsoft because she LOVES it and wouldn’t want to leave right now.
When did you decide to get into real estate? What was the aha moment for you?
We decided to get into real estate because when we had moved to Florida, we ended up around some people in our community that had retired early through investing in real estate.
We had very little financial knowledge at that moment.
However, through educating ourselves and getting involved in the stock market, eventually, our desire to diversify and invest in something more hands-on grew to the point we couldn’t ignore real estate as an option anymore.
Our aha moment came when we started listening to some podcasts in addition to the knowledge our neighbors were sharing with us.
We realized that the average person can invest in real estate. So we started educating ourselves.
To build wealth, you can either start a business, invest in the stock market or real estate. Why real estate?
Well funny you should mention those investing options because we currently are active in all three.
We became particularly interested in real estate because it was an asset that we could control the value of to some extent, but also see it as a long-term income plan.
Our goal is to have 10-15 houses that are paid off and cash flowing us money each month. We’re currently on NO 2.
Most people think you have to quit your job to invest. Did you keep your job or are you involved in real estate full time? How has the experience been (either way?)
We kept our jobs while starting our real estate investing career. Jess currently still has her job as I mentioned and I left my job to pursue growing a business in addition to real estate investing.
The experience has been great on both sides. I truly feel like you can make real estate investing as hands-off or as hands-on as you would like.
Tell us about your first home/deal. How did you find it? How much did it cost and do you still own it?
We found our first deal on the Multiple Listing Service (MLS).
We started investing out of state right away; spending a lot of time searching through and analyzing properties. In addition to that, we worked with an agent that came recommended to us.
Because we were targeting a specific area that we knew pretty well, once a house came on the market that we knew was a deal, we went after it and acted quickly.
It was a 3 bedroom and one bathroom that was rented at $1100. It was listed for $55,000 but needed some work. We got it for $47,000 and forced equity into through repairs and then we cash out refinanced it.
What are some mistakes you made during your real estate journey?
Getting emotionally attached in the beginning. Buying a rental property seems like such a large investment when you’re first getting into real estate.
So it was hard to emotionally separate ourselves from the numbers when going through the buying process.
I would find that our emotions would go up and down as things went well or if we found something that went wrong. Now I can look at a house without having emotion attached to it.
Was there any time during your journey where your friends and or family challenged your plans to get involved in real estate?
Yes. People still challenge us about our processes. Generally, we find that it comes from people that don’t own real estate or have never owned a cash-flowing asset.
So we’re pretty good at laughing it off and letting it roll off our backs and realizing the audience that it’s coming from. We can take judgment from people we don’t aspire to be like pretty well.
Do you invest instate or out of state and which would you consider to be harder?
Were any resources such as blogs, books, podcasts particularly helpful to you to get started? How did you find the inspiration to get started?
There are so many podcasts and books that have been helpful. Bigger Pockets podcast was our go-to! We listened to tons of their episodes and read a lot of Brandon Turner’s books.
The Millionaire Real Estate Investor by Gary Keller was a book that absolutely changed everything on my perspective of real estate investing.
That book broke everything down in the most simple terms and made me really realize how achievable becoming financially free through real estate was, and it kept freedom at the forefront of my mind as inspiration.
I knew if we didn’t get involved in real estate that I was likely going to be working my 9-to-5 job until I was 65.
That’s all the inspiration I needed.
What markets do you primarily invest in and which do you avoid completely?
I generally like to invest in C class neighborhoods that are just on the outside of A and B class neighborhoods.
We enjoy C class neighborhoods because we have a landlording principle centered around a humanity first approach.
It’s amazing how much your tenants care for you and your property when they feel understood and heard; they don’t have to feel like an income source.
Make them feel like a human that’s cared about with a safe place to sleep and you’ll have a tenant that pays and takes care of your property.
Let’s talk about leverage: would you advise reinvesting your profit to pay down the loan or acquiring more using your profits?
We definitely use leverage at the moment, but we have a firm rule of never allowing our leverage to reach 70% of the asset’s market value.
Currently, we are reinvesting our profits to reach our goal of 10-15 rental properties, and then we will be focusing the profits on paying down the debt on all of those properties.
We don’t use any of the cash flow for our personal lifestyle.
If you could go back in time and advice your 18-year-old self, what advice would you give him and her?
Start now!! I would tell my 18-year-old self that you are 5-10 years away from anything that you want.
Time is on your side and if you can stay out of consumer debt, you can achieve financial freedom and cash flow in a relatively short amount of time; but start now.
If you could do it all over again, what would you do differently?
I would’ve started 10 years sooner. Another thing I would’ve done differently is I would’ve not spent so much time in the education phase.
You really only start to know that kind of stuff as you work through the process.
What advice would you give anyone who is trying to buy their first home or become a real estate investor?
You don’t have to hit a home run or make $1 million on your first deal. Your first deal is so that you can really understand the process and learn some of what you don’t know.
It’s OK if your first deal is an average deal; get the nerves out and realize this process works!
Another piece of advice I would give is to make sure you know your numbers.
Practice analyzing deals; you can be unsure about everything else, but if you know your numbers are fairly accurate, chances are you’ll have a profitable deal.
How can our readers keep in touch with you?
You can find and follow us on Instagram: @mindfulmoneyhab
Congratulations Josh and Jess!