Sheila is in San Diego but flips homes here in the Bay Area. She’ll share her methods of how to run a smooth operation from afar, and how she used mentors to leverage connections to become a successful investor and be able to live the life she wants with her daughter.
This transcript was generated automatically with Otter.ai, there may be some grammatical errors.
Sean 0:32
Sheila is in San Diego but flips homes here in the Bay Area. She’ll share her methods of how to run a smooth operation from afar, and how she used mentors to leverage connections to become a successful investor and be able to live the life she wants with her daughter.If you enjoy this episode, subscribe to the show and leave a review. We release episodes every Wednesday and Sunday. And we release the show notes with the full transcription on our site. Everything Rei com. Enjoy. Thank you so much for being on the show today. Go ahead and introduce yourself and let us know who you are and how you got into real estate investing.
Sheila 1:28
Thank you, Sean, for having me on your show. I’m honored to be on your show. My name is Sheila Wong, and I got into investing about six years ago full time being opening my own business and doing this. And the catalyst behind that was I had I was pregnant, I had my daughter and I didn’t want to do the nine to five. And so I really wanted to start my own business have the flexibility of hours and to be there for her whenever I needed to be or wanting to be in that capacity and still make income.
Sean 2:05
So why did you decide to real estate investing and more specifically, why flipping.
Sheila 2:10
So ironically, my ex husband at the time, was driving in the car, and he heard heard an advertisement for come to our seminar, you can get rich quick, no money down. And my background is architecture. So he had told me about it. And I was starting my own business. And at that point, I wasn’t sure what I wanted to do. You know, and he obviously knew what I my background was. So he came home and told me about this advertisement $200 and will make you a billion dollars and the whole gamut of the advertisements that make you come and they make you want to learn. And so I showed up. And of course, they had the next sale of get to the next level. And I am the best person to sell to because I will buy it all. So thankfully, I went on and learned and got my education. And it’s right up my alley, because I have had so many years of construction knowledge and working in the home building industry before that. And it ended up just being something that I love doing. And it worked out really well because I’m able to still be at home with my daughter for most part, and especially now being divorced, being on my own, you know, it allows me so much flexibility to do what I need when I need to do it.
Sean 3:29
So then how did you get started? Did you started flipping right away? Do you partner with somebody.
Sheila 3:33
So actually, I started flipping in Ohio, because at the time, my husband was from Ohio and was building inroads to Ohio. So I had started and that was also a smaller, much smaller market. Now I have flipped some homes, my own personal homes in the past, where you purchase your home, you do some renovations and you sell it off. And then of course, I’ve also had some rental homes, so had experience doing that part of it. Now, it’s very different coming from a new country because I was Canadian and doing it in Canada. So there’s a lot of different things to learn. But in that capacity, I started in a smaller market with less risk. And then I moved to the Bay Area, because that was my plan originally, and I have friends and I’d started building network. And I met my mentor who lives up in the Bay Area. And so we just managed to build a, you know, a network, he helped me out. He really held my hand through a lot of it. And I’m really thankful to have a mentor to take me through every step of the way. And any questions that I had, I had somebody that had my back and I knew he wasn’t in it for monetary or, you know, he wasn’t in it to for some higher purpose other than he loved teaching, he loved mentorship, and I was a perfect student. So I built an inroad to Silicon Valley, the Bay Area, and it just hasn’t really worked out for me, even though I live in San Diego, and it’s mainly remote.
Sean 5:08
Yeah, it’s amazing, because you’re the only person I know, that is from out of the area investing in the Bay Area, whereas most people are from the Bay Area to try and go out of state for the area. Yeah, he’s pretty unique story.
Sheila 5:20
Yes. So the reason why that really works for me, and ironically, would think it’s a much bigger risk. But I looked at it the opposite way, I looked at it as a much lower risk. Now in San Diego, of course, there’s obviously homes to flip as well, I was competing initially with really big companies. HGTV was filling two shows here, you know, and I was a small fish in this, this bigger, more experienced pond. So a lot of people signed a golf at the million dollar price range and how expensive it is in the Bay Area. But for me, that meant larger profit margin, that means bigger buffer. So if I messed up really, really bad, I had a much bigger buffer of not making money or making a smaller profit, as opposed to being in a smaller market like San Diego where your profit margins 50 $20,000. And I’m sure as many new and experienced investors know, that goes really quick. So with one year open, you start construction, all sudden there’s mold, or there’s flooring that you didn’t anticipate it’s not in your budget. Of course, it You always try to build a 10% contingency, but things happen. And all sudden, now you are more in the red and you’re in the black. So ironically, for me investing in Silicon Valley was actually a safer market.
Sean 6:47
Yeah, it’s kind of like when you invest out of state, I invest in the state Jacksonville, and I have a refrigerator go out or water you to go out. And that’s a whole month’s worth. But sad happens here in the Bay Area, who cares, that’s like a quarter of a month.
Sheila 7:00
That’s exactly it. And that was my mentality going in to my projects. Because, you know, we also had investments in Memphis and that was it, you know, you make 350 take home or whatever a month that it accumulated, even after five years used to renovate the place, now all your cash flow is gone. So it’s a different way of looking at how to invest in the real estate market. And my thought was, you know, I’m a little bit on the older side, I didn’t have a ton of time to, to build, I want to accumulate cash quick. And I want to, you know, being divorced, you know, not having the support, back home with family and so forth. I wanted to hit the ground running when it was just myself and my daughter. So it was a good way for me to start making money quickly.
Sean 7:50
So you mentioned that a big part of success was that you were able to partner with a mentor who helped you and kind of guided you through the process, especially while you’re down there. And he’s up there. Do you want to give a shout out to your mentor real quick?
Sheila 8:01
Yes, absolutely. My mentor is john Piper. And I’m sure many people have heard him speak at Silicon Valley, San Jose, Santa Clara. He’s spoken at many of the events. He’s an incredible man. And to this day, we are still good friends, you know, and I anytime I have anything that I have a question about, I still call him. And now the great thing and wonderful thing is that I’m adding value. So sometimes we’ll have discussions and he’ll say, hey, that’s a great idea. I never thought of that. So it’s really nice to still have somebody that is the bigger fish in the in the pond. And so you’re always having someone to help you in some, some capacity. But now I’m also adding value to his business and to him as a whole. So that’s great. JOHN five as a man, if you haven’t met him, seek him out. He’s amazing.
Sean 8:53
If it’s just a because I think at least two other guests have said the same thing. And it’s all been john Piper, like out of everyone that has mentored. He’s always the guy. Yes. I haven’t met me yet.
Sheila 9:04
Yeah, Elisa admit, and maybe Adam.
Sean 9:07
That’s right. Yeah. He said, I don’t know, Bobby. That’s Yeah, yeah, I haven’t met him personally, yet. I’ve seen him speak before. But you know, I was too scared to talk to him. And I should definitely reach out and have him come on the show.
Sheila 9:17
Yes, he would be an amazing speaker. He’s phenomenal. He’s just so down to earth. So genuine. So kind, like, he just had always said to me when I met him six years ago, plus, that, you know, I don’t want to have anything, you know, I don’t want money back or I don’t want you to pay me. I just love mentoring what he used to do as part of his job. And I love teaching students are willing to learn and you know, you, he and he’s saying this to me, that I’ve been willing to take the risks and, and do and, and follow his lead, which obviously, as a mentor, you get great reward just in that seeing your students succeed. And it doesn’t necessarily have to always be monetary, but he’s like the most down to earth guy. I love that every time I see him, he’s wearing the same, you know, jogging, leisure suit, and he says so casual, but he is the most amazing down to earth person you’ll meet. So I’m very thankful for him. For sure.
Sean 10:18
How did you even approach him? If you’re down in San Diego? How did you get connected with him? And why would he be willing to work with you in the first place?
Sheila 10:24
So ironically, I, again, it’s, it’s bringing this whole world, you know, into a much smaller space, and it’s six degrees of separation. So when I lived in Calgary, Canada, I actually played volleyball with Dennis, and who owns Memphis Realty now. And so he and I, he had moved to Silicon Valley to do tech stuff, way before I did. And somehow we connected again, where I don’t want to age us. But we, you know, at a time when we didn’t have internet and social media. So we ended up connecting ourselves again, and we got in touch and we were talking and he said, Hey, you know, the program you’re taking actually know another guy, another investor who’s doing that, I’d love to introduce you. So he introduced me to john, and john, I hit it off, we just have, you know, really good mentor mentee relationship where, you know, he’s open, and I’m open. And so he just, and I just really asked, I’m of the mindset that if you don’t ask, I think it’s also the Asian mentality. But if you don’t ask, you never will know, the worst they can say is no. So thankfully, he didn’t say no, he said, Yes. What really kept it together is that every time we had a conversation, I was willing to take action. And so he didn’t feel as though he was mentoring, just somebody that was not gonna, you know, do a flip or was ready to, to move forward. And so I think that’s really what kept the momentum is because I was willing to take the risk, and he was happy to help me.
Sean 12:06
So I guess your educational program was worth it. Because not When did your education but you got connected with a great mentor
Sheila 12:12
indirectly, ironically, the program didn’t connect us, the mutual friend connected us, it just happened, we were in the same program, and it just that we, you know, I mentioned the name, and he’s like, Hey, I know somebody. And so, yeah, it’s definitely a small world. And especially in our investing world, it is a small world, everybody knows somebody, you know, and I’m of the mindset that you want to be ethical, you want to be nice, you want to be kind, you want to help each other, because we’re really a small community of successful investors. And there’s, there’s a wide scope of people who have tried it, who get their foot in and haven’t done, you know, got scared, because they lost a little bit of money or, you know, never took the first step. But really the ones who are standing here today, like yourself, and myself, it’s a small community, and we all tend eventually get to know each other. So it’s important to build those relationships.
Sean 13:05
We’re all just a small group of friends.
Sheila 13:07
Exactly, exactly.
Sean 13:09
So how are you writing your systems from so far away,
Sheila 13:12
so my phone is never further than a foot away from me, I am always communicating via text via phone, via mail. And that’s a great thing with technology nowadays, you know, you are in San Jose on here, we’re still able to have a conversation, we’re still don’t have the interview. Everything can be done remotely. So I have spreadsheets, I have worksheets, I have a very detailed system, you know, how I analyze properties, what to even a spreadsheet of finishes. So you know, depending on the areas, I’m going to pick this color, because it’s a more modern community or this color, because it’s move up neighborhood where the older people are they kind of like, you know, the browns and stuff like that, or maybe the Spanish homes are selling really fast. So it’s all about having systems in place, being able to do everything efficiently, quickly. You know, and building a good team. And as you and I have experienced lately, you know, there’s a lot of bumps, with building a good team. And so it’s just trial and error. And that’s really what has been a hurdle in my own business is meeting the good people that I can trust, that are willing to take my lead, you know, and willing to really work hard and hustle for me as well.
Sean 14:32
Yeah, so interesting. I’m interested about your spreadsheet of finishes, though. So you’re not here, you’re far away. Normally, I have to go walk a property to kind of understand, okay, this thing should go here, this, you should go there. What are you doing to create that spreadsheet of finishes,
Sheila 14:47
I have a little bit of a cheater experience, because I was doing architecture and design and designing homes for million dollar clients for about 15 years. So I can literally have the ability to to look at photos that an agent or my project coordinator has walked and taken photos or videos of, and I can already outline the floor plan in my mind. And because I have had so much experience down to six picking grout colors, I already know. And I’m ahead of the trend, you know, and I always kind of chuckle at this, because what I started doing the greys for quite a time before even my mentor did and he just laughed at me, he’s like, nobody’s going to love that. And then it took off. And you know, a year later, he’s like, Hey, you were onto something. And so what I attribute is obviously, my background, my education that I had in school, my experience before I came as a business owner, and so good gave me the edge to be able to look at pictures, you know, and I brought lots of properties, sight unseen. So I have that little special edge that’s been able to help me be successful on this back end. I don’t think that’s something I can teach everybody or that somebody can learn. I think the biggest part is that you just have to do many homes. And, you know, let’s, let’s hope you’re not wearing socks and sandals,
Sean 16:14
or socks with sandals. Say one of my biggest challenges is that I don’t have the I you know, like I don’t have that interior design, I can say Hmm, I think this paint color will look great here or this Banting look great here. I’m like learning as I go. And the worst thing is I was outsourcing all that work to my contractors. Because like, they were like a basic, okay, these are kind of like what people using their houses, go for it. So I don’t know the prices, I don’t know the types, I don’t know the colors, and I should light on someone else and then see the final product and you’re like, Damn, I wish I chose it because it could.
Sheila 16:54
Yes, and so there is a lot of risk in allowing your contract with an make choices. Because their choices. And typically on a 90% General, people’s choices are based on what they like. And so that’s not necessarily what it’s going to sell. Because I’ve had clients that really love purple, and their cabinets were purple and their wall was purple. And we’re not talking like a light purple. And I’m going to assume that when they were done with that home, it took forever to sell. So I think the biggest thing here for people to learn is that instead of thinking about your own style, you need to really get in tune with things like interior design, magazine, Architectural Digest, you know, on Instagram, now, there’s so many fields with home things, HGTV it, and it’s it’s also part of the flipping business, you have to learn what’s in style, you have to figure out what’s going to sell what people are liking, and not be so specific, all the details and paying it with a broader brushstroke. Because not everyone’s going to like gray or modern or white or clean. Not everyone’s going to like old school tradition, but you kind of have to research the area and see, you know, the homes that have sold in the last six months, which style has sold quickest. And then that’ll give you a lead as to what type of people are buying in that market. And then you can go out and do some more research right then you can type in words like modern farmhouse chic, or mid century, you know, there’s so many social media sites, Instagram, Pinterest, I mean, there’s not a lack of finding information. And that set spending five to 10 minutes maybe before you go to bed, just you know, scrolling through Instagram, home news feeds, right may and it may not be something that you like or would pick for your home. But I think what ends up happening with a lot of investors as they do pick finishes that they like, the 90% of the time, nobody else likes it. So so you just have to look at what’s popular, what you’re seeing on your newsfeed more often is Facebook, Instagram, Pinterest, and then start veering towards that you know and and there’s a lot of good furniture stores that you can look at they’re usually on trend is out as well. West Elm is a good one is there and I I generally get inspiration from their site. But I won’t necessarily get by their product, because it’s pricey. You want to keep your your price and your costs down. So you know, Amazon has the same similar product for half of the product, half of the price. So it’s good to get your inspiration from all these other popular, little more expensive furniture stores, Craig barrels, another good one, where they’re always on top of the trends. And then you kind of know what’s going on and what people are moving towards.
Sean 19:59
Yeah, it makes sense. So I guess you can check out other MLS listings for their pictures and what they have in their homes. You can also look at Instagram or those magazines. And then you can create a spreadsheet, maybe go on, on the Home Depot, or wherever you look at for your, for your vanities, your your finishes, and just put them in a spreadsheet, I want this in my house want this my house, they said your contractors, they buy these things and then put it in,
Sheila 20:22
right and that’s exactly what I have. So I do a scope of work. I have an Excel spreadsheet, nothing rock of rocket science, you put the you know, cabinet countertop, we this color cabinets to be this color. And then you go through your entire home. And so I have finishes for everything. And I pick all of those finishes. So right at the beginning, my contractor has color choices for down to page down to tile, and then he just runs goes to get all the supplies and you know, everything is supposed to be smooth.
Sean 20:56
Yes, good. Because that way, they’re just working. They don’t have to think like what I want to put in this thing.
Sheila 21:01
Right? Right. And then very often, the contractor is not necessarily invested. So he’ll be like, well, this orange countertop is way cheaper than that white one. Let’s just do that. And then you go into your house, and you’re shocked that you’ve orange chapter. So it’s always good to try and make those selections yourself. Because then you’re also not ending up with a surprise of maybe needing to fix it, change it or inhibiting your sale at the end of the day.
Sean 21:34
Yeah. And so real estate investing does take some work. But it’s not that hard. It just takes some work.
Sheila 21:40
Right? Right. And I and that’s how I feel. And that’s what I always say to everybody that I coach and everybody that I talked to at the end of the day, I was never a great student. When I went to school, I got my degree. And you know, I came from an Asian family had two older brothers that were brilliant. And I struggled and I had to study a lot to get good grades. But investing is not necessarily about being the smartest, it’s about doing a lot of putting in a lot of the work because a lot of it comes from experience as you’re getting you’re getting to know I think once you get more experienced and picking finishes, and what to say and how to negotiate your contract at the end of the day, your sale your purchase. All of that comes from experience. There’s no necessary handbook that says here, read this book, and memorize it. And at the end of the day, we’ll have a test and then you’re going to make $300,000. So it’s all based on experience. And I think really, and I always laugh and say that hard work is more key than smarts because you can be the smartest person and have you know, so many accolades, but you may not make the most best decisions investing because you don’t have the experience.
Sean 22:57
I kind of like to say that real estate investing, it truly is a business. I know they say a lot, especially in like Fortune Builders classes, oh, you’re your own business. But now this is a natural business, you need to go in there, keep people accountable, make sure you have your own tasks and inventory planned out and really work it you can’t just, oh, I’m going to work on this part time and assume the best and make a bunch of money. Now this actual business, you know, work on it.
Sheila 23:20
Yes, absolutely. Absolutely. And I think that is where people then like yourself event decided to take the leap, is you you’ve dipped your toe, you’ve had one or two flips. And you understand that you can’t just do part time. I mean, I mean, you could you work your normal 40 hour job a week and then do this 40 hours a week. I mean, you’d have no life otherwise, and you’d be burnt out. But you know, there’s details Miss. And as you know, there’s many facets to investing in flipping a home. It’s not just cables, let’s sign a contract. Thank you I own a home. Here’s my contract, or here’s, you know, change some some stuff. I don’t know. Yes. So it’s very detail oriented, right. So it all that takes time. And it’s definitely a business that you want to concentrate and focus on because, you know, one slip may cost you 200 hundred $50,000. So it’s important to be on top of the details for sure. And, and be focused.
Sean 24:20
I mean, it’s like there’s no way anyone would ever think to create like a Facebook or LinkedIn. Right side and half acid. No, right.
Sheila 24:28
Although was Facebook created tough.
Sean 24:32
These guys, they quit school. Okay, they dropped on a Harvard.
Sheila 24:34
That’s right.
Sean 24:36
It’s just a movie. So you’re all the way in San Diego, how are you even getting leads up here.
Sheila 24:45
So I network, like a demon. And I talked to people I call people I see when I’m up that way. Essentially, most of my leads come from previous contacts and other investors, agents that I’m working with MLS. So basically calling, doing a lot of calling and talking to agents, and really being loyal to your agents. And that’s what has built my credibility is that when I work with an agent, they bring me home, they have the relisting and I will generally try to work with them until the very end, and get them the sale, you know, and make sure that I close on time, make sure that I have my paperwork on time. So it’s not just them showing you because you’re the big investor for them to bring you. But you also need to show up for them. So it’s it’s a team collaborative, even though they’re technically on their own team, and you’re on your own team. I mean, without them, you don’t have business as well. So everybody’s got to work together and be a well oiled machine.
Sean 25:49
So when I’ve tried calling agents, they say, hey, you’re like the 10th guy that’s called me today? Why would they want to work with you? And that’s assuming you’re just starting out, because I’m sure now Okay, I have this big portfolio Hello, before, they don’t know where you are here from San Diego.
Sheila 26:02
Right. So basically, again, my mentor was gracious enough to give me some of his credibility. So he helped me with some of the agents initially. And so he introduced me to some agents. And he would say, well, this, you know, she’s, this is her background, and so forth. And really, the catalyst that gave me my own credibility was I did one really big project where I tore down a single story and built a two story. So once you have some sort of credibility, you can show that you can perform, you can show that you know what you’re doing, agents will stand up and listen. So you don’t necessarily have a have to have a ton of experience. But you really have to be tenacious, you got to call them all the time, you got to be in front of the agents all the time and be hungry and show them loyalty and show them that, you know, I’m not just going to be here for one, we’re already here be here for a long time. And for myself, I don’t do a high volume. And I really love not doing a high volume, because I really love the work balance thing. Again, and so I make, you know, enough for my daughter and I and then I have so much time to spend with her, I pick her up from school, I dropped her off, you know, we I’m able to do volunteer work at our school. So I have a great work balance that I really love that for so many years in my 30s I was chasing because in your 30s you become ambitious and your, I gotta get my career in life in place, I gotta get the family and two and a half kids and a white picket fence, you know, so you’re very ambitious. And you’re just work oriented. Now that I’ve entered my 40s, I’ve really sort of sat back a little bit and said, You know what, this life that we have is really short. My money, if I were to be hit by a bus tomorrow, I can’t take it with me, I can certainly set up my daughter. But at the end of the day, chasing that dollar and working 40 in 12 hours a day. And not spending time with the people that you love really is at the core of my heart right now is like spending time with them, and having time and having that flexibility. So I think just showing up having integrity, with your agents, with your wholesalers, keeping in touch with everybody, just, you know, being able to take that first risk, and do something big and show everybody that you can do it.
I mean, at that point sky’s the limit.
Sean 28:40
So how often are you following up with these agents that you’re meeting?
Sheila 28:44
So I now have a handful of agents that I they, you know, I don’t necessarily need to follow up with any of them anymore. They will call when they have something or they’ll send me something. But initially, you I would say, you know what, what, once a week, even just an email, a simple five minute email to say, Hey, I’m still here, what do you have, I’d love to be able to meet you, you know, and going to meet people for coffee is a good thing. You know, what I’m finding a lot. And also challenging is that still in this day and age, people want to see you, they want to meet you, they want to touch you, they want to shake your hand. So I’m at a disadvantage there. Because I can’t just go meet them at the corner, Starbucks and little Glen. So very often, you know, when I go up that way, I’ll make a point to meet some of them go for coffee, go have a drink with them, you know, so you’re still doing that interaction thing and being in touch and, and people like that still that human factor of, Hey, I know what Shawn looks like, I know, you know, he’s kind of funny. He’s kind of quirky. You know those things. And they and that’s sort of how you build the connections is that you it’s not just a surface level, then you start knowing about their family, or you start knowing about what’s going on in their life. So you build that connection otherwise, and that people tend to hold tighter to that bond, then Sean or Sheila who just sent me an email, and I don’t know anything about them.
Sean 30:18
Hmm, good point. So this might be kind of a scarcity mindset kind of thing. But why would john share his Asia connections with you? Because if they have an off market deal, shouldn’t john want to see that first?
Sheila 30:30
Yes, yeah. And absolutely. And john likely does see them first. But I also have a I also have a other agents. And sometimes, you know, if we share the same agent, John’s maybe has at his capacity. So he passes it on to me, or vice versa, right. It’s not something up my alley. And now I and I think that is the kind of community that you want. You want to build a community where there’s not a scarcity mentality that everybody’s here to share. And, you know, there there is a certain, I think, an unspoken thing where, if it’s his agent, he and they bring it to him, he’s certainly going to get the first dibs, but maybe he’s full, maybe he’s too capacity, he’ll pass it over, here’s a great deal. I can’t do it right now. I’m whatever the case is. And vice versa, right? If I am at capacity, I’m going to share a lead to someone else that I know for sure that is going to close that is going to show up for this agent, so that you’re all building credibility together at the end of the day.
Sean 31:35
So what is your current Buying Criteria.
Sheila 31:38
So I don’t have a Buying Criteria, per se, I know, essentially, agents will send me the deal, they’ll send me the house, generally, they’ll send a couple of comps, but I run a desktop analysis. And if there’s enough money and spread in the project, I’ll take it. So that often varies, ideally, big rehab, you want to have my sort of bottom line is six figures. And then from there depends, if you’re just doing a simple page, you’re coming in cleaning at doing a paint job, you know, if I make 30 grand in one month, hey, that’s great. If I’m making 60 grand, in two months, and it’s requires a little bit more, you know, then the ratio goes up. So I think how I analyze my deals is based on the risk, how long it’ll take, the longer it takes a big The more I want to make because then you’re having more costs, you’re also a lot more risk, because you don’t know if the market is going to shift. If it’s a quick, dirty deal that can be done with, you know, one week of painting, bring a painter in, and you put it back on the market and you make $30,000 like you I can’t, I’m not going to pass that up, as well. So there’s no set criteria. I think it just took hands on the house, it depends on the project depends on the agent, you know, all those factors.
Sean 33:07
So I mean, it seems kind of broad, because imagine giving a $5 million project, but you can make 30 grand in one month, you probably wouldn’t take that one. Because it’s too much money for 30 grand. I don’t know how to ask this question, but is there kind of like a more defined criteria that you look for?
Sheila 33:23
Right, so that’s a good point, because obviously at $5 million price point, that’s so the more expensive the project is, the higher the profit you want to make. So if you’re in a 300 $400, price range, 400,000, sorry, price range, 30 $40,000 should be a good margin in one month. So I typically gauge it on the purchase price. So obviously, if it’s a million dollar home, a $2 million home Plus, you want to make at least six figures. So you want to have your profit in line with how much the house actually costs.
Sean 33:59
And do you have any particular city that you like working in, or some cities you have to stay away from,
Sheila 34:04
um, there aren’t necessarily any whole areas I stay away from, I do tend not to go into San Francisco, just because there’s a lot of codes, there’s a lot of regulations, there’s a lot of red tape in San Francisco, so and I myself just don’t have experience with all the red tape. And what I really am finding that I’m loving is, is I’ve done a couple of four or five bedroom units, five, they’re sort of condos, I guess. And I really have found a solution on how to get some tenants out how to turn those over how to get them with a decent contractor to turn over quickly, and then get tenancy in at a much higher rate. And generally, I know a lot of investors don’t like section eight tenants. But I feel like the modern day Robinhood when I work with section eight tenants, because you know they’re low income people that are never going to be able to afford new or brand new or even, you know, a couple years new and so to be able to renovate something, I mean, they go in and they love it, hands down, they love it, and they will take care of your place. Because the caveat here is as they don’t take care of your place, their voucher gets taken away. And as we all know, it’s ridiculously expensive to rent, or buy in the Bay Area. And I mean, these people, unfortunately, and I don’t view it as people who have less money than yourself and I or anybody else, that they’re worse, they’re just people who have had a worst break in their life. You know, maybe they were veterans that fought for the US, and now came back and are injured, and they, you know, the kids are on disability, and they don’t have the means to make money otherwise. So to me, that, you know, I love being able to help people like that, because it’s not as if they don’t, they’re not trying, or they’re they didn’t do something. Or they’re lazy, you know that that whole stigma of you know, homeless people or people who don’t have money are lazy, it’s just that maybe they didn’t, you know, mental illness or their physical disabilities or things like that. And so they’re very thankful that they’re able to rent your units, and they want to keep housing, they need to have a place to stay. And section eight really has a good program where if they’re not taking care of the home, or they’re missing their payments, then they get taken off the system. And that you mean is a big deal. So you get paid from section eight, every single month on the first, you know, your tenants want to keep the home clean, and so forth. So I kind of liked that, that system, and I would love to be able to do more and just feel like I’m also helping the community because I know a lot of the mindset with investors is let’s just make as much money as I can. And I you know, buy all the Lamborghinis and all that good stuff. But at the end of the day, for me myself, I’d like to be able to have some element of helping other people in this whole scheme of my career in my my business and and I don’t necessarily believe that we are coming in and beautifying the neighborhood, we are definitely adding value, but I don’t feel as though to myself, that’s like a added value, extra added value to my values.
Sean 37:42
So are you doing buy and hold in the Bay Area as well?
Sheila 37:45
I don’t buy and hold. So I just buy and flip. So I’ll take I’ll buy those units. I’ll have them renovated, put all the tenancy in, and then sell it at, you know, make it a 767 8% cap rate and sell it to other investors.
Sean 37:59
Yep, got it? Yeah, yeah, I’m just I’m just saying because when you just flip a home, it’s kind of like stock trading, where you buy low sell high, you didn’t really add value per se, you know, you made money.
Sheila 38:10
Right?
Sean 38:11
You know, you don’t really feel like good about yourself. It’s like I cured cancer. Oh, my God, yeah. Cancer. Pretty, I’m selling this house, I bought cheap from someone who kind of had to sell to someone who has money, you know,
Sheila 38:25
right. Yes. Precisely. And it you know, you very often we’re buying from people and we are helping them if they’re in a distressful situation, but, you know, sometimes it feels not great, because they’re getting a divorce. So they’re in a situation where they have to sell, maybe they don’t want to sell things like that. So for myself, and my own integrity and my own values, it’s nice to be able to do these units and, and help people and bring that other side of it to my business. And like you said, you know, Bry bring actual value to the community, whether I live they’re not, it’s still where my business is. And I still like helping the community in general people.
Sean 39:06
Yep, totally buy into that. So you’re talking about how you look for, I guess, teams, contractors from afar? What is your process for working with people from far away, or even vetting teams.
Sheila 39:20
So I do end up flying to the Bay Area when I do need to find contractors. And I generally will have one or two days where I have five or six contractors lined up, and they come and they’ll bid on the home, and I’ll meet them and there’s not really obviously price is one of the indications. What I do is I also ask them to provide photos or I go and tour any jobs that they’re currently working on. So I can see their craftsmanship. And, you know, the general things is check their contractors license, I generally like to work with licensed contractors, because I do work remotely, I’m not able to be there on site every day. So it gives me a little added extra security, because you know, they are linked to contractor site license for people with licenses generally have more pride of ownership, you know, they’re they’re willing to go above and beyond and not need to be spoon fed and handheld, the whole entire process. So I will come up and I’ll meet all my contractors in that sense when I’m working with them on a first time basis. And then it really is, you know, intuition as well. Do you like this guy? Does he or girl for that matter? Does? Do they know what they’re talking about? Do you get a good feeling from them? Are they pointing out things that maybe you’re not seeing during your walk through? You know, things like that, that are important when choosing a contractor? For sure?
Sean 40:54
And do you find them on like Yelp and thumbtack? or How are you finding your contractors?
Sheila 40:58
Yes, so generally yellow thumbtack angie’s list is a good one as well. And I generally have used a lot of my contacts like my stager and and I am of the mindset that I’m happy to share all my contacts at the end of the day, because if we can all make money together, whether I’m using this contractor or you’re using that stager, then let’s do it. Because there is more than enough money for all of us every single investor to be millionaires, you know, hand 10 times over. So I’m not necessarily have the mindset that I need to hide and, you know, my people are my people, if I’m able to keep them busy and on a consistent basis, then, you know, obviously you might not want to share because then it distracts your your contractor. But for myself, I don’t do a high volume, you know, and then also collectively, we’re able to to maybe get better pricing from the contractor and maybe get better pricing from the stager. We’re all collectively keeping them busy for throughout the year. So you know, I on a regular basis, maybe do three or four homes a year. So it’s hard for me to keep one contractor busy. You know, all year long, maybe because sometimes I have gaps in my projects or truth be told in December, I love Christmas. So it’s my favorite holiday and you know, my daughter and I bake 500 cookies. And on Christmas day we deliver them to the police station to the fire station to the mailman, you know, to all the service people that do stuff for us on Christmas day that, you know, we’re all enjoying, they still have to work. So it’s a tradition I’ve had with my daughter and you know, December I shut down. So I’m able to have that flexibility if I’m also able to keep my contractor busy, you know, with Sean’s projects like, hey, Sean has a house and I’m taking December off. Can you help him out? Let’s all continue making money and being happy, right?
Sean 43:00
Yep, that’s right. By the way, Christmas is my favorite holiday to my birthday.
Sheila 43:04
Oh, right. Even better now.
Sean 43:07
Never had to work it on my birthday ever in my life. It’s great.
Sheila 43:11
But did you get ripped out of presence? Because you brought a Christmas baby? Do your parents ever be like?
Sean 43:18
The short answer? The short answer is yes. The longer answer is no one forgets my birthday. So I Oh.
Sheila 43:26
I like that by side, right.
Sean 43:29
The flip side. So you’ve been working on this full time for six years or so now. If you can go back in time and kind of start over and say 10 years ago, or even 20 years ago? What would you tell yourself
Sheila 43:45
10 years ago, I think I would tell myself right now to go with the flow a little bit more than I have. So because I am a detail oriented person, I’m very meticulous. So it’s been hard for me to veer off the system. So I will give, I will have all my systems set in place, my spreadsheet set in place. And sometimes things as we know, not sometimes all the time, things go awry in construction, in all parts of construction, negotiating the deals on the front and the back end. So I think the advice I give myself is relax, just go with the flow. And it’ll all work out in the end. And keep learning from that. Because I think a lot of my rigidity, with contractors with you know, if I went over the 10% contingency, I’d be really hyper conscious about that, you know, like, Oh, my gosh, I’m going over budget, this is crazy. What can I do to to cut? And where can I cut corners? Or where can I cut this budget? Or how am I get it. So I’ve stressed out a lot in the beginning process of being over budget or not on time, or you you know, things like that, that didn’t just go always as smoothly as HGTV presents it. So my advice is, you know, go with the flow, make sure you have a good mentor in place for all the bumps in the road, because there’s going to be a lot and just trust that with your experience and with your mentors experience or whomever you have on your team that you’re going to make it.
Sean 45:25
Well said. So what’s next for you?
Sheila 45:27
Um, I am venturing into coaching. So I started as my mentor john Paya had said to me, when you’re ready to coach, all I ask is that you pass the pass it forward. And so I have been coaching already for about three years, and I’ve coached many people. And I actually had before Bobby and and Adam became really, really famous and awesome. Adam helped me on one of my first projects and got his feet wet. So I’m in again, for me, I love that part. I’m a, you know, anagram type two I love to help people. That’s my thing. And as you my close friends will attest like I I always just kind of bend over backwards for people because I love I love helping people, I just think that in this world of so much not good things that you know, we should try and be kind to each other and, and lift each other up as opposed to like step on everybody along the way. So I am trying to move towards coaching and being mentorship full time because I love being able to inspire people, I love being able to see that spark in people’s eyes. And, you know, all of this was really born of mentoring people in real estate. You know, john was busy. So he he tells all the people that approached him at any of his conferences that he spoke and said, You know, I have a really good mentee, I’ve been coaching her for three, four or five, six years. She may have some time, here’s her number contact information. And so I started coaching people in that in that respect, and just even flying back up to San Jose all the time, I talked to people on the plane, I’m very chatty, and just myself, I you know, in the best shape of my life. Now I start my CrossFit four times a week, I eat very healthy, you know, I can deadlift, twice my weight, things like that. So even just helping other people dial in their nutrition or you know, give them one tip today, if you just stop eating sugar or doing this, like the one thing that helps them improve their health, or you know, anything of that nature, just really, I love seeing that spark in people’s eyes. Thank you, you’ve inspired me, I’m going to go take that information and do better get healthy, you know, get better at my job get better at my relationships or do better for my children. And it’s not to say I have all the answers for everything, which I certainly did. But I just love being able to share the info that I do have and you know, I find in collectively if you’re able to meet other people who
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