258 – How To Leave Your Fulltime W-2 With Real Estate With Ali Boone

Synopsis

Ali went from being an aerospace engineer and corporate dropout to a successful real estate investor and lifestyle entrepreneur. In this episode, she will share how she successfully changed careers and the steps to follow for people interested in investing in real estate.

Key points

How She Started

Ali grew up with the famous mindset of going to school to get good grades, finding a job after graduation, and retiring at the age of 65. Many of her loved ones worked in aviation, so she chose to follow in their footsteps. Since she mistakenly believed that piloting and engineering were the same things, she pursued a career in aerospace engineering. Even though she enjoyed her corporate job, she felt unfulfilled as time passed. She ended up leaving her corporate career in 2012 and focusing on real estate investment soon after.

Leaving One’s Full-time Job

While starting, flipping did not appeal to her because she was looking for a source of passive income. It is for this reason that she ended up dealing with turnkey properties. People were intrigued about how she managed to purchase rental homes without too much work, so she decided to help them by providing information about the purchasing process. After doing so for a while, she found herself in the midst of running a business. She has been assisting customers in purchasing turnkey properties for the past decade.

When asked about the perfect time to quit a full-time job, Ali said it depends on the amount of money in your bank account and the number of months you can go without generating income. Everyone’s comfort level will vary; for example, some individuals will be terrified of being bankrupt in their first year; therefore, it’s critical to have even a small amount of money in the bank. Preparation before leaving a job is crucial since stress may hinder creativity, which means you’ll find it more challenging to transition to your new career path if you don’t plan ahead of time.

In Ali’s case, she enjoyed reading, so she took inspiration from Robert Kiyosaki’s books to plan her next steps. Contrary to common belief, she said that one should not limit their spending if they do not have extra money but rather strive to increase their means.

First Real Estate Investment

Ali opted to purchase properties during a crash because she is not afraid of failure since she views it as an opportunity to learn something new and improve. She ignored the naysayers and instead concentrated on her goal, thanks to the lessons she learned from Robert Kiyosaki. Investing during the crash was not risky for her because she knows that real estate usually recovers, no matter how deep the dip.

Her first investment was her Atlanta home, which she converted into a rental property after moving to California. Her second investment, which is her first intentional investment, was memorable because she lost $40,000 in the process. She shared that she nearly lost faith because of the enormity of her loss but soon realized that everything was a matter of perspective, so she kept going.

First Big Loss

While Ali was working at her previous job, she got an email advertising beach bungalows for as little as $99,000. She had previously searched for properties in Orange County, and the lowest one was valued at $270,000, so she was intrigued by the details in the email since the price is far lower than those in Orange County. Since the pricing was too good to be true, she communicated with the sender in the hopes of proving it was a scam. After some time, she felt confident that the properties were legitimate since the sender had provided her with extensive information about the properties. Hence, she paid a total of $40,000 for them. Unfortunately, the properties were not turned over to her, and she ended up losing all the money she invested.  Instead of being discouraged by the situation, Ali opted not to be too harsh on herself, reasoning that it’s typical for investors to lose money, and $40,000 is a drop in the bucket compared to the multimillion-dollar losses of major investors.

Airbnb in the Pandemic

According to Ali, people who are thinking of investing in short-term rentals should always have a backup plan in place, particularly because anything may happen during a pandemic.

Real Estate Industry in 2022

Ali is expecting inventory to begin to recover in 2022 since it has been the biggest challenge over the past year, with some of her favorite turnkey suppliers just running out of inventory. She even learned a few months back that the United States now has more licensed real estate agents than available properties.

Before diving into real estate investing, she recommends aspiring real estate investors first take the time to educate themselves. Second, keep an eye out for the inventory. And third, don’t wait too long before making their first move. Remember that the greater the inflation rate, the greater the profit. Since inflation is now at an all-time high, if you haven’t determined where you’re going to invest yet, you’re losing out on a great deal of money.

Turnkey Properties

Turnkey Properties appealed to Ali because she was looking for a source of passive income. She also said that managing contractors is not in her skill set; thus, she likes to have others do that job for her. On the other hand, turnkeys have certain drawbacks, one of which is that they are more expensive.

When asked who she would suggest turnkeys to, she said they are ideal for those who live in a really expensive area and can’t buy for cash flow. In this case, they would need to purchase long-distance turnkeys, unless they have the money, time, and availability to oversee the rehab process.

Turnkeys can also be fantastic for first-time investors. Since they’re so occupied with the advanced stuff, like rehab and negotiations, as rookie investors, they’re practically forced to skip over learning the fundamentals of investing; with turnkeys, the hard part of the learning process is done for them, giving them the chance to study the essentials.

This type of investment might also appeal to investors who manage many properties yet have some spare cash on hand. Turnkeys will not use too much of their resources or time, so their money will be working hard for them while they work on other projects.

References

Books

NOT Your How-To Guide To Real Estate Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet

More from our guest

You can learn more about Ali by reading her book, “NOT Your How-To Guide To Real Estate Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet.” She interviewed several successful investors for this book so that readers could learn more about their strategies. Ali said she attempted to be humorous in this book since she finds most real estate books dull and wants the readers to have fun while learning.

To get a free digital copy of the book, you can visit www.hipsterinvestments.com/everythingrealestate. If you’d rather have a paperback, there’s an Amazon link accessible there as well.