Buying ONE Rental Changed My Life: 4 Years Later, I Quit My Job

Just buy ONE rental property and watch your life change. Today’s guest was working multiple jobs, and a single property purchase allowed her to finally free up her weekends and regain some freedom in her life. The best part? She did it with just around $4,000, then repeated the process again and again, leading her to quit her demanding teaching job in just four years! Today, she’s describing exactly how she did it! Deandra McDonald called a lender, expecting to get a preapproval for a home. What actually happened? They told her, “No. Come back when you have more money, better credit, and less debt.” She hustled for two years, saving, working more, and paying off debt. She finally secured a loan for her first property, a two-bedroom townhouse that would change her life forever. Now, she’s a financially independent real estate investor, no longer tied to her teaching job, and investing in completely overlooked “rental properties” that produce killer returns and allow her to live job-free. These properties are still largely ignored, but Deandra says it’s not too late to take advantage of them and escape your W2 job, too! In This Episode We Cover: How getting just one rental property can lead you to financial freedom in under a decade Why you CAN NOT give up when a lender tells you “no” for a home purchase The overlooked rental properties that you can buy at a MAJOR discount Why Deandra wants to pay off her mortgages instead of scaling to a huge unit count The easiest way to start investing in real estate that requires the least money possible And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Real Estate Guest Try REsimpli, The Only All-In-One Real Estate Investor CRM Software That Helps You Manage Data, Marketing, Sales, and Operations Grab the Personal Finance Classic, “Rich Dad Poor Dad” Sign Up for the BiggerPockets Real Estate Newsletter Find Investor-Friendly Lenders A Better Retirement After Buying Just ONE Rental (and Never FOMO-ing) Connect with Deandra Connect with Dave Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1105 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  Just buy one house. That's really all it takes to start your real estate investing journey and potentially change your entire life. Today's guest bought her first home with just $4,000 in cash and she lived there with roommates to offset her mortgage costs. Then, within five years, she had acquired a 10-unit apartment building and had left her teaching job to pursue real estate full-time.

• 0:28Dave Meyer?

  What's up, everyone? It's Dave Meyer, Head of Real Estate Investing here at BiggerPockets. And today, on the BiggerPockets podcast, we have an investor story featuring Deondra McDonald. Deondra is going to tell us about her real estate investing career in central Virginia, which started with just a single $85,000 house and has grown steadily into a truly life-changing portfolio. We're going to talk about the steps she took to get her finances in order after she got a hard no from the first lender she approached, how she leveled up to larger properties by converting a motel, and why she's not actually looking to grow her portfolio any larger than its current size. This conversation is, to me

• 1:11Dave Meyer?

  at least, a great example of the persistence and patience it takes to build a great real estate portfolio, and how your first step towards financial freedom is often the most important one. Let's bring on Deondra. Deondra, welcome to the BiggerPockets podcast. Thanks so much for being here.

• 1:28Speaker 01

  Absolutely. This is really, really exciting. As someone who, for their first property 12 years ago, signed up for BiggerPockets, hoping to learn, this is like, this full circle moment is truly crazy.

• 1:39Dave Meyer?

  Was that, what, 2013 you got started? So what were you doing back then?

• 1:44Speaker 01

  Probably about 2014. Oh, I was dreaming. This is what I was doing. I said, well, let me get ahead of the game. I'm ready to buy a house tomorrow. Let me get on this platform so I can learn. Was subsequently shut down by my lender, like, hey, you are in no way qualified to buy a property. So I was still on BiggerPockets. I said, well, I'm still going to read the books. I'm still going to read the forums as much as I can, as I prep to be an investor maybe a year or two from then.

• 2:08Dave Meyer?

  Oh, wow. So how far? Or in the process, did you get before contacting a lender?

• 2:13Speaker 01

  All I had truly was a dream. I think I had finished, maybe as I was closing Rich Dad, Poor Dad for the first time, I said, understood, I will do it. I'm ready to go. Next day called the lender. Big fan of talking to professionals who are being paid by somebody else. Uh, can't get enough of it. I am going to get up immediately. That lender is being paid by the bank, right? That's why they sit in that seat. So I'm happy to go talk to them because they don't get paid based on me closing. Um, and I sent them a bigger pockets because it didn't even cross my mind that they would say no. I was like, oh, it might not be a high amount.

• 2:44Dave Meyer?

  Yeah.

• 2:45Speaker 01

  Right? It might not be extensive, but they're not going to say no. They're just going to say a little less, but.

• 2:51Dave Meyer?

  They said no.

• 2:52Speaker 01

  Yeah.

• 2:52Dave Meyer?

  So do you mind sharing with us why they said no? Why, like, why the just hard no?

• 2:57Speaker 01

  It was a no for so many reasons. And sometimes people like, oh, it was a conditional. Mm hmm. This was not a conditional. If you just do these things, it was a no. It was a no because I did not have a full-time job. I had just graduated college. I had not gotten a job in my field quite yet. And I was stringing together a bunch of part-time gigs. So my income was just too low. It was a no because my debt was too high. When I graduated, my net worth was super negative.

• 3:23Dave Meyer?

  Oh, right.

• 3:24Speaker 01

  I owned no assets. I had a car that I was underwater on because I rolled all the fees into the loan and I had student loan debt. So I came out of college, negative $35,000, negative $40,000. That also should lead you to know my credit wasn't great.

• 3:42Dave Meyer?

  Yeah.

• 3:43Speaker 01

  So I mean, like every single part of the application, I didn't have the money. I didn't have the savings. I had terrible credit. I had a low net worth. There was nothing she could do. There was no small tweak, which meant the overall answer was no. But I am lucky because she did give me like, this is what you need to do if you want to get qualified.

• 4:01Dave Meyer?

  I think that is a really common place for people to start. Just so you know, like having a negative net worth is actually pretty common, especially if you have student loans or, you know, car debt or something like that. You can, if you have positive cash flow, if you're saving a lot more money than you're spending. Every single month, you could still get started in real estate, but you have, if you don't have either, that's a tough spot. Like it sounds like that's where you were, where you didn't have a positive savings rate or a positive net worth. And that means you sort of have to take a step back and build sort of a stronger financial foundation before you can take out a loan. So how did you go about that? What did they tell you you needed to do? And how long did it take?

• 4:44Speaker 01

  It took two years. It took two years of continuously buying those bigger pockets books. So keeping it fresh in my brain. I mean, truly like I have to read this because I have to feel like there is something worth fighting for because this is really hard. It's not just like, oh, I didn't get a job just because I wasn't getting a job because I wasn't as qualified as the other applicants, for, for example. And so for one of the things I had to fix being my income, that was really difficult. It still took me, after I applied, it took me another four months to get my first full-time salary job. And even that wasn't enough for the area I was trying to live in. She said, if you want, if you want to live here, you need to keep your part-time job.

• 5:26Speaker 01

  Cause we can count that income because you've been doing lifeguarding for so long, it still counts, but only if you keep it. So now I'm working Monday through Friday at the lab and I'm teaching or lifeguarding Saturday or Sunday at the pool, hoping that I could close so I could finally quit one of these jobs. But that's what it took. It took me having to pay off my credit card debt. So taking or keeping that second job. Also, that's where the money went, right? Just every month, paying a little extra to the credit cards, even if it was $30, even if it was $40, it brought it down. My score would come up a point or two. And I was that much closer to getting to that minimum threshold to get the loan that I wanted. And I had to save.

• 6:06Dave Meyer?

  It is hard and two years does, it is a long time and it's a long time. I think in the grand scheme of things, it's actually not, but to keep up that motivation level, like you were saying, it's, it's a lot to have to sacrifice and put in all that work without that tangible benefit for so long. But honestly, this is a really common way of doing it. I know a lot of people look for private money. Or sub two or no money down ways to do it. And those are fine. Those are totally acceptable ways to do it. But what you did is just kind of the old school way of going about it is just, you know, earning more and saving more and just sort of chipping away at it over time. And it sounds like eventually you got there after two years. So yeah, congratulations. That's

• 6:51Dave Meyer?

  awesome. Tell us, what did you buy? Because you said you wanted to live in it. Were you looking for a house hack kind of situation?

• 6:57Speaker 01

  Exactly. Because that's all I had with all that savings, the extra two years, I still could come up with about $5,000 because I had to pay down the credit card debt and just live. Like that was also a necessity. But my first purchase was a two bedroom townhouse, just half a duplex where the plan was just to lower my rent. But what actually happened was I moved in, I took the smaller room and I rented out the second room to a roommate, which covered my mortgage. And that started the full addiction to this whole process of like, oh, I see. Okay. Yeah.

• 7:28Dave Meyer?

  Yeah, I would imagine that generating that income or saving that money was a lot easier than lifeguarding part. Yeah. So like you didn't get to quit your job fully, right? I imagine you were still working full time, but like, sounds like at least improve your quality of life just off that first deal, right?

• 7:45Speaker 01

  Yeah, even just I got to stop lifeguarding. Yeah, even just that, like I had weekends. Again, I had a day off that I wasn't thinking about how can I pick up an extra shift? How can I make an extra $20 this weekend? Because that adds to the pot, I could rest. So even if it was just that, my goodness.

• 8:03Dave Meyer?

  I think this is so important because I think of this industry, a lot of the focus has been turned to just like quitting your job. But I love hearing stories like yours where you show that every incremental deal can improve your financial situation and can improve, like you're saying, your quality of life, like you actually had this tangible benefit to your life just by buying a single real estate deal. And I really encourage everyone, maybe if you haven't gotten that first deal yet, to think about that because it's a lot less daunting to think about, how do I replace my full W two job? It's like, well, just think about how, you know, can you work a little bit less? We'll give you a little bit more peace of mind just to get that first deal.

• 8:46Dave Meyer?

  It sounds like you did that, but then you got the bug. So what did you do after your first house hack?

• 8:52Speaker 01

  I kept house hacking for a while, right? I got a better job where I was making more money, but didn't change my lifestyle. And so every year on the dot, we used to have a joke that I have boxes I didn't even bother unpacking because it was like, I'm gonna, I'm gonna be gone in a year. Because now I have the system and like, oh, I live here for a year. I rent it while I'm here, I rent it when I leave. All that extra money goes into the next property. So every property is bigger, better, uh, more efficient than the last one. I can fix stuff up as I go for years is just what I focused on.

• 9:21Dave Meyer?

  What area of the country is this?

• 9:22Speaker 01

  I'm in central Virginia, specifically Charlottesville.

• 9:25Dave Meyer?

  Okay, and it sounds like that first deal, did you just put in five grand? Was that all you had to come up with?

• 9:31Speaker 01

  I think we looked at the numbers and wound up being like $3,800. Yeah.

• 9:35Dave Meyer?

  Oh, my God, that's amazing. And so everyone listening to this is jealous. But I just as a reminder, back then it was a lot harder to get a loan to, as Deondra mentioned, you know, there are trade offs to every time. So was that sort of the amount you were shooting to save every single year? Like, could you repeat the strategy you were using, just saving up $3,800, $5,000 a year and buying something new?

• 10:01Speaker 01

  Exactly. It was like, hey, there is an abundance of properties here under $150,000, right? I remember now, times are different, like Dave was saying. I remember having a $200,000 budget and being picky.

• 10:14Dave Meyer?

  Yeah.

• 10:14Speaker 01

  Right? Going in and say like, I don't like those cabinets, show me something else. I don't like the wall colors. And that was okay because you had other options. And I want to say this, in certain parts of my state, that is still very true. Right? My, my area has gotten very, very popular. It got very, very popular after the world kind of shut down in 2020. But it wasn't that popular six years ago, where it was still like you had options. And there are surrounding counties and surrounding cities where there are still plenty of options. If you were to walk in right now with $200,000 and a desire to live there. But yeah, what happened was I was paying 700 a month in rent. So I went from paying 700 a month of rent to nothing. So all I did was save that money.

• 10:59Dave Meyer?

  Yeah.

• 11:00Speaker 01

  So now instead of saving 3,000, I can Save a lot more per month. I took out HELOCs as I would shift from place to place. I got my Airbnbs would do well. All that money just kept being saved and going to the next property.

• 11:11Dave Meyer?

  And how long were you doing house hacking? When did you start doing something else?

• 11:15Speaker 01

  I was house hacking exclusively for about three years. On year four is when I started experimenting with midterm and short term. Because I had duplexes or I had quads that sometimes I would have two or three months between when this tenant ended and the next tenant who wants to come starts. So what do I do in this timeframe? Oh, I could rent you a traveling nurse for two months or put it on short term rentals because I had some extra furniture. And they're like, oh, this is great. I can play with all of these whenever I meet them instead of sticking to one thing.

• 11:45Dave Meyer?

  All right. Well, I want to hear more about your foray into other strategies, but we do have to take a quick break. We'll be right back. Do you ever notice how every passive investment somehow turns into a very active lifestyle? Active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes 10% below market value in the best markets across the country without making real estate your second job? That's exactly what rent to retirement does. They're a full service turnkey investment company handling everything for you. In some cases, investors get 50 to 75% of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter.

• 12:30Dave Meyer?

  If you want to do the same, visit biggerpockets.com/retirement to learn more. Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows, the deal makes sense. But then the lender looks at your personal income, your tax returns, your debt to income ratio, and suddenly the deal doesn't qualify. That's the disconnect because as investors, we're not buying based on our W2. We're buying based on the asset. That's why Host Financial offers DSCR loans designed for real estate investors. Where qualification is based primarily on the property's income, not your personal finances.

• 13:12Dave Meyer?

  So no W2s, no tax returns, and no DTI requirements. And with loan to value options up to 80 or even 85% on eligible deals, you can keep more capital available as you grow. If you're buying rentals, refinancing, or scaling your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for. A lot of insurance companies compete on one thing: speed. But if you're protecting an investment property worth hundreds of thousands of dollars, should speed really be the priority? Enreg believes strong coverage starts with understanding the property, the risks, and the realities of ownership. That's why they don't rush the process.

• 13:54Dave Meyer?

  Their policies are designed for real-world claims, not just quick quotes. If you want insurance built to protect your investment when it matters most, visit nreg.com/bpllc and learn more today. Buying real estate has a funny way of making the future feel very real. You start thinking about mortgages, cash flow, tenants, and suddenly you realize, if something happened to me, would the people I love be okay? That's why life insurance is one of those things that's easy to put off, but is super important to actually deal with. Ethos makes getting life insurance fast and easy, 100% online. You can get a quote in seconds, apply in minutes, and potentially get same-day coverage. There's no medical exam.

• 14:37Dave Meyer?

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• 15:10Dave Meyer?

  Hey everyone, welcome back to the BiggerPockets Podcast. We're here with Deondra McDonald talking about how she house hacked what, three or four times it sounds like?

• 15:19Speaker 01

  Yeah.

• 15:19Dave Meyer?

  And then started branching out. So tell us a little bit about just the strategy for branching out, because I think this is one of the sort of the critical points where people struggle to try and figure out, you know, you've done this owner occupied strategy. There's a lot of benefits to that. But then when you start doing other things, you need a little bit more capital, you need a little bit more time. So how were you thinking about scaling your portfolio?

• 15:43Speaker 01

  It's not that I'm ashamed to say it, but I will say there was a big external factor that made me stop house hacking and that was my husband. He was over it, right? It was like, I don't want to do this anymore. Because I tell you what, it was working for what I knew. I was making or bringing home $3,000 per month when I finally switched to teaching full time. And so to me, I'm like, that's five or six house hacks. And he said he was done, right? He did not want to have roommates anymore.

• 16:10Dave Meyer?

  Yeah.

• 16:10Speaker 01

  He wanted to be more stable. He wanted to think about a family. And I said, okay, I guess that makes sense.

• 16:16Dave Meyer?

  Did you do it together for all four years, like when you were moving all those times?

• 16:20Speaker 01

  Um, he came in year three.

• 16:22Dave Meyer?

  Oh, he got it easy.

• 16:24Speaker 01

  That's what I'm saying. That's what I'm trying to say, Dave. Two years in, he was ready to pop out.

• 16:28Dave Meyer?

  Yeah, yeah, you did all the work. No, but understandable. House hacking works time and place. With the right property, I think you could do it in almost every phase of life. But the roommate thing, I get that there's sort of like, there's like a limit to how long people want to do that.

• 16:43Speaker 01

  Yes. But that shift, like, because I wasn't retired yet, right? I wasn't able to step away full time from teaching. That was something I wanted the option to if we decided to have children, right? As a teacher, you're already playing that game of like, I'm trying to give birth the day the students go home. So I could be home for like paid maternity leave for the entire summer. But I wanted the option to stay home if that felt right. But we weren't there financially quite yet. So that turned my eyes to multifamily, right? If I can make more money and not live there, then we can do this in the next year or two, which is why I considered mid. Term rentals and why I considered short term rentals because the profit margin was higher. I had the time. I was willing to put the effort in. I just needed something to make a little more money, a little faster,

• 17:29Speaker 01

  which is why I went to short term rentals and then started flipping properties.

• 17:32Dave Meyer?

  Oh, wow. Cool. So tell us about it because you said multifamily and short term rental. Did you do those at the same time?

• 17:37Speaker 01

  Yes. So I had bought a duplex as a primary residence. I used my FHA loan.

• 17:41Dave Meyer?

  Okay.

• 17:41Speaker 01

  And when that tenant moved out, it was this push and pull between, so what do we do with this property? Right? I have all of this furniture that has been moving like house to house. Right? This is the Craigslist. We're like booming. You can get all this stuff. So I said, okay, well, what if we just rent it furnished? That gives us the flexibility for a family to be like, hey, we're almost fully furnished unless you want to just bring in a couple mattresses. And if not, we can dump our mattress in there for a short term rental if that's what we get. And by playing with that, I realized short term rentals do super well. A little difficult for three or four bedrooms as a full teacher who had to clean all that stuff. So I shifted my short term rentals to my condos and kept the townhouses, the big homes, long term rentals because it was a little easier.

• 18:26Dave Meyer?

  Because you were doing it all yourself.

• 18:27Speaker 01

  I was doing it all myself. I sometimes I look back. So that first property we're talking about was 10 years ago this May. And I look back and say, Deandre, you would wake up at 5:00 AM to clean the Airbnb. Go teach from eight to four, come back to deal with a clogged toilet at a long term rental. But truly, when now I can't go four hours without a nap, I'm like, oh, my gosh. Sit down.

• 18:51Dave Meyer?

  You've gotten soft.

• 18:53Speaker 01

  Oh, so soft, the way it used to be. But that's what that that energy partly fostered by Y'all platform. People are retiring, man. Like, people are getting what they want if I can stay with it long enough.

• 19:07Dave Meyer?

  That must have been super hard to have that really rigid schedule and stressful job. And doing it at night. How long did you do that for?

• 19:18Speaker 01

  That was my entire teaching career. So four years.

• 19:21Dave Meyer?

  Oh, wow.

• 19:21Speaker 01

  Yeah. And it was stressful even getting phone calls from tenants while I'm like proctoring. Test, right? Cause they have means in the middle of the day, you're doing something else. You know what else is stressful is the Airbnb person's showing up regardless if you're ready or not.

• 19:37Dave Meyer?

  Yeah, right.

• 19:38Speaker 01

  Right? And then you can't delay the opening because you got caught up helping us soon after school, which is why I had to do it at the crack of dawn because that was the only time I had extra.

• 19:46Dave Meyer?

  Right.

• 19:47Speaker 01

  It was wild.

• 19:49Dave Meyer?

  Yeah, but it sounds like worth it.

• 19:51Speaker 01

  Oh, for sure.

• 19:52Dave Meyer?

  Yeah. I mean, I think this is, this is just the reality of hustling your way. If you're not starting in a place where you have a ton of money or you have systems set out, like you kind of just have to hustle your way into it or go slower. I guess those are kind of the trade offs. Like you can scale a little bit slower or you're putting a lot of time and effort and are able to, it sounds like you quit your job in just four years. Is that right?

• 20:15Speaker 01

  Yeah, well, five with the first year working somewhere else, but five years total.

• 20:19Dave Meyer?

  All right. Well, we'll round down to four because I think that is pretty impressive either way. So like, how many, how many units did you have at that point?

• 20:26Speaker 01

  Uh, 15.

• 20:27Dave Meyer?

  Wow. Okay. And so you had done a couple of time at home. Sounds like condos duplex. At some point, did you just buy one bigger unit or anything like that?

• 20:37Speaker 01

  Yes. So that was the big shift is when my husband said, no, we have to get to multifamily. So I looked at my portfolio. I saw what was performing well. I saw what had a lot of equity and I said, I want to go big. I want to do my first big property. I don't want to do quads anymore. We're not house hacking, so I'm not restricted to that one to four unit world that I used to be in. And I had big goals. My budget is $200,000 and I want a 10 unit and I want it to make $2,000 a month. Oh, I said, full confidence. Remember?

• 21:08Dave Meyer?

  Wait, the building was going to cost 200?

• 21:11Speaker 01

  Yep.

• 21:12Dave Meyer?

  You're not on your down payment. Okay. All right. Let's hear how this went.

• 21:16Speaker 01

  It was that same confidence that had me showing up to a lender's office with no full time job and no savings and terrible credit and no positive savings goals, right? But that's what I said and I could not invest in Central Virginia anymore. Surprise, surprise. Not at that price point. And so it expanded my search to about three hours from my front door and said, I'm open to whatever shows up. And for months I looked and looked, my realtor looked and looked and we didn't find anything. And so one day this like motel on the side of the interstate showed up and I was like, well, what's this?

• 21:48Dave Meyer?

  I don't know where this story is going, but I would have had the exact opposite reaction. I would have been like, absolutely not. Why are you sending me a motel on the side of the highway?

• 21:56Speaker 01

  But so it pops up, it's listed for like $200,000 and I say, well, it's under budget or it's in budget. It's operating. Could these be apartments? Can I do something with this? What does this look like? And I showed up and they were suite style.

• 22:12Dave Meyer?

  Oh.

• 22:12Speaker 01

  So they already had the kitchen inside or they had the plumbing for it. Some needed some work, but there were 10 units and an office, parking, a meter. Like I was like, oh.

• 22:25Dave Meyer?

  And under 200 grand.

• 22:26Speaker 01

  And under $200,000. So I went to my lender. They said, no.

• 22:33Speaker 01

  More money. I get told to know a lot.

• 22:35Dave Meyer?

  This is a theme. Yeah.

• 22:37Speaker 01

  That's right. That's right. Um, so I wound up selling a couple of my short-term rentals because they were doing super well. So I was able to sell them like as a business and not just as a property, which made me look really good to the other investors buying them. And I went back four months later. No one else had bought it and I placed an offer and I got that property, that first one for 160 grand.

• 22:56Dave Meyer?

  Wow.

• 22:57Speaker 01

  10 units with the commercial space. And that's when I said, oh, I can leave.

• 23:01Dave Meyer?

  Yeah, that was enough. That one deal. Wow.

• 23:04Speaker 01

  Yeah. Between that and the other rentals I had, I'm, I'm good. Now, didn't know about renovations.

• 23:10Dave Meyer?

  Yeah. I, I was just going to say, you don't just have a motel that magically becomes rental units. Tell us a little bit about it. Actually, let, let's just start with how big of a scope of renovations did you have to do? And were you able to get any funding for that? Or did you have to come out of pocket for it?

• 23:26Speaker 01

  I didn't know how to get funding, right? Cause I'm a big, just you show up and start trying stuff. Didn't even know that was an option to get funding. Should have.

• 23:34Dave Meyer?

  Right.

• 23:35Speaker 01

  But I just started paying for it myself. Me and YouTube also got to be real good friends because they were already suite style. And the zoning, the change was easy enough to make with the going to the lady and asking like, how do I make this change? And so a lot of it was, how do I just make this prettier? How do I install cabinets by myself? How do I put down flooring? What does drywall look like? And the ones I could do on my own, I did and got rented and the money from those helped me pay for a contract to do the ones I couldn't.

• 24:04Dave Meyer?

  Okay. Nice. Wow. And so how long did that wind up taking?

• 24:08Speaker 01

  About nine months all in all.

• 24:10Dave Meyer?

  All right, well, I want to catch up on what you've been up to since COVID and what your portfolio looks like today, but we're gonna take a quick break. Stick with us. For my wife's birthday, I wanted to make her a new website for her landscape design business. So I researched a lot of different options. I tried out a couple, but honestly, it was really overwhelming. It was pretty time consuming and still, the site wasn't coming out the way I wanted it to. Then I tried HostingGur and everything was super simple. I asked HostingGur's AI to build a clean site for her business, and it had a working version up in minutes. No coding or designer needed. Plus, its AI agent helps with SEO, website copy, and email marketing after launch. You get domain,

• 24:54Dave Meyer?

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• 29:37Dave Meyer?

  Everyone, welcome back to the bigger pockets podcast. We're here with Deondra McDonald talking about her motel conversion, which is pretty cool. What's happened since then? Are you doing some more of these sort of creative projects or what have you been up to since?

• 29:53Speaker 01

  Oh, I love a motel.

• 29:54Dave Meyer?

  Oh, really?

• 29:55Speaker 01

  Oh, yeah. So I kind of stuck with that for the next couple of years. You'd be surprised at how many motels are looking for buyers. And now that I know it's actually better to just raise the money to fix it first. Don't try to be the drywall yourself, Deondra. The process goes a lot faster when everything is planned out from the beginning.

• 30:13Dave Meyer?

  Yeah.

• 30:14Speaker 01

  So for the last about four years, that has been my primary focus. Buy motels, keeping some, selling some, that kind of thing.

• 30:19Dave Meyer?

  How many have you done?

• 30:21Speaker 01

  I have done three in total.

• 30:22Dave Meyer?

  Oh, that's awesome. And so what is your process? Tell me a little bit about this. I don't even know where I would start if I was looking for a hotel, a motel, excuse me, like, does your agent look for them? Do you find these yourself? Are you going off market?

• 30:36Speaker 01

  A little bit of both. So something I have learned. Is most motel owners own multiple motels? And so getting in with a person or two who is looking to downsize or get rid of them has been really, really helpful to get multiple deals done either for myself or for some of my clients. But looking at some regular MLS sites, they'll post them there, any commercial sites, but it is highly, highly county specific, unfortunately.

• 31:03Dave Meyer?

  Okay.

• 31:04Speaker 01

  There's no like centralized space. Also just making some blind offers. You can look at motels and just see how they're doing. Step in and say, hey, I want to buy it from you. What would you be willing to do? Those are nicer because they're already operating and their only difficulty is the zoning. Sometimes they even come with the furniture or come with the stuff in place. I just have to make sure I'm legally allowed to rent it for longer than 30 days at a given time. If it needs work, if it needs conversion, I like to try to find sweet style if possible. If not, the rooms just have to be large enough that a kitchenette could fit.

• 31:36Dave Meyer?

  Okay. So sweet style just means you have kitchen?

• 31:38Speaker 01

  Yeah.

• 31:39Dave Meyer?

  Yeah.

• 31:39Speaker 01

  Typically, you have the one bedrooms and that conversion is not that difficult when you already have the water or already have the setup.

• 31:45Dave Meyer?

  And what do you look for in, in a motel? Like, you know, the layout sounds super important, but beyond that, is it really all that different than updating, renovating an existing multifamily?

• 31:56Speaker 01

  No, I think the biggest is the zoning, which is going to be different from a multifamily that exists already. There might be some confusion with splitting utilities because that's not already done, or you just have to eat it. And sometimes it's like, it's cheaper for me to just pay electric. It's just not worth the separation of it, um, or the separation of water per unit. But I think it's just a market that people weren't thinking about long-term because they're often priced as a business and not a property. The hardest part is convincing the seller that I'm just buying your property. I'm not buying the business. You have to just sell me the asset, not the corporation behind it.

• 32:33Dave Meyer?

  And I guess, so the benefit then is what? Is it just you get a better price point?

• 32:37Speaker 01

  Often, yeah.

• 32:38Dave Meyer?

  That's awesome. Wow.

• 32:41Dave Meyer?

  It's just that easy, I guess.

• 32:42Speaker 01

  Yeah. And some of it, there is a layout aspect of like the commercial space, the offices that come with it. I mean, I have built in storage, I mean, I have a built in space. For laundry, if it's large enough, I can have the handyman. The design makes it a lot easier for my handyman or my contractors to do work on the entire building because that's how they were designed. It was that design as a bunch of smaller condos trying to work together. It has one heartbeat, right? It has one central space to control that. That has been fantastic to use.

• 33:10Dave Meyer?

  Oh, that's really cool. Awesome. I really like that. So you said that you're doing this still. You're keeping some, you're selling some. What, you know, you talked a little bit about your, your strategy and how sort of family and your husband's personal preferences sort of changed your strategy. What's your strategy now? Like, what are you trying to accomplish these days?

• 33:29Speaker 01

  I am trying to be debt free by 40.

• 33:32Dave Meyer?

  Oh, I like that.

• 33:34Speaker 01

  I don't want personal debt. I would like to be done.

• 33:37Dave Meyer?

  Does that include mortgage debt?

• 33:39Speaker 01

  Yes, that includes all of that.

• 33:40Dave Meyer?

  I like that.

• 33:41Speaker 01

  So right now I'm sitting at about 30 units and I'll probably stay here. This is about as tapped as me and my team want to do. So everything else will be just a flip to pay down the debt on what we have so far.

• 33:53Dave Meyer?

  That's a very cool goal. I like that a lot.

• 33:55Speaker 01

  Thank you.

• 33:56Dave Meyer?

  So it sounds like, you know, I don't know if you know Chad Carson. Coach Carson, yeah. He talks a lot about sort of like shifting from this growth mentality to sort of like, you know, reaping what you've sown over the last, it sounds like 10, 10 or so years. So do you feel like you're sort of in that, like you're still flipping houses and, you know, flipping motels, it sounds like in doing stuff, but sort of trying to transition to more of a passive and probably it sounds like lower risk type of portfolio.

• 34:22Speaker 01

  Exactly. And one of the things my husband and I have been really good about is making sure our lifestyles don't bloom too much past a comfortable salary that we could both still make if this all went away or something happened along those lomons. But that's even more comfortable when there's no debt.

• 34:36Dave Meyer?

  Yeah.

• 34:37Speaker 01

  Right? When things are a little more unstable, having 20, 25 units is plenty when you don't have any bills. So that's what I'm transitioning to.

• 34:46Dave Meyer?

  And I would imagine flipping these motels is probably pretty lucrative because you're doing the creative part and then there's probably a ton of investors like me. I would want to buy something like that once you did all the hard work.

• 34:58Speaker 01

  Some of them I'm saving in the portfolio with seller financing deals because I have time.

• 35:01Dave Meyer?

  Oh, cool.

• 35:02Speaker 01

  Well, I'm happy to do a 20 year note because we already pay for it, right? Where the down payment needs to cover my initial investment, which is really nice. But I've done a few of those as well of like, hey, I'm happy to finance $500,000 for you over 20 years because that adds to our portfolio without me having tenants and I know the property. So if something happens, I'm getting the asset I worked on back.

• 35:24Dave Meyer?

  Yes, that's a really good point, for sure. So I mean, this is a really cool, interesting niche because it, you know, it sounds sort of complicated at first. At least that was my initial reaction when you were like, I found a motel on the side of the freeway. I was like, where is this going? But then it just makes total sense. I'm curious, do you think that there's a certain type of investor that this strategy or niche works better for? Is this something most anyone could consider?

• 35:52Speaker 01

  I think it's something anyone could consider. I do think it could work best for the person who wants to be a little more hands on, right? If you've ever changed zoning, if you've ever even walked into a zoning office, this is not the vast part of the county office building. These are, we are still pulling out paper blueprints. We are still like getting original maps of the county. This is a slow process to get all the paperwork in order, especially if you have to pull permits. It can take six to eight months of planning to even get started.

• 36:24Dave Meyer?

  Okay.

• 36:24Speaker 01

  I like to put as much of that possible in survey and not in my ownership portion of it. But someone who's willing to do that, to do a little slow at the beginning, but then once you're going, you're going. Because just like any other apartment building, these are not complicated or niche like fixes. You just need permission from the right people.

• 36:43Dave Meyer?

  Absolutely. Okay, that's, that's a really good standout because you need to have the time and sort of, it sounds like a bit of project management expertise and discipline to see this through and sort of just like stay on time, keep a schedule and try and push the project through sort of continuously.

• 37:01Speaker 01

  Almost like if you feel comfortable building, then this will be something that is right up your alley.

• 37:05Dave Meyer?

  Yeah.

• 37:05Speaker 01

  Right? But if you've never built a property and those skill sets will be really helpful here.

• 37:11Dave Meyer?

  Well, this has been a very fun conversation, Deandra. I'm curious, before we leave, what are you looking forward to? Like what, are there any projects that you have coming up or any ideas or things that are getting you excited these days?

• 37:23Speaker 01

  So as much as I'm trying to be debt free in the next like six to seven years, I am very, very In assisted living. Um, I also think the larger motels are perfect for that. I have stayed away from the big guys.

• 37:39Dave Meyer?

  How big is a big motel?

• 37:40Speaker 01

  To me, the big motel is the 50, 80 unit properties.

• 37:44Dave Meyer?

  Oh, okay. Yeah, that's big.

• 37:45Speaker 01

  I tend to stick that 10 to 20, 25 range, but in my mind, it's just the perfect setup. You have these individual spaces. A lot of them are one level. They're already ADA accessible. You have the central grounds, even if you wanted the upstairs people, that could be for staff or people visiting. It just feels like it's an easy lift.

• 38:05Dave Meyer?

  I like that.

• 38:06Speaker 01

  Right? And so I think I'm trying to make sure all my stuff is super good, but I could see if I am not debt free by 40, it's because I bought.

• 38:16Dave Meyer?

  You lost your discipline. You just went, yeah, yeah, for sure. I get that. I know that makes a lot of sense just from like a trend perspective. So many people come on the show and say assisted living and it makes so much sense.

• 38:29Speaker 01

  Yeah.

• 38:30Dave Meyer?

  I haven't really heard anyone who's like nailed it yet. Uh, it just seems the operations are tough to scale and rightfully so. It's an important service that you're providing and you know, you need to be thoughtful about how you do it. But I, I think that it is ripe for opportunity to provide a valuable service and to earn, you know, a solid profit at the same time. So, uh, if, if you figure it out, let me know.

• 38:54Speaker 01

  Yeah. And for me, part of it is like, I'm not trying to run the facility.

• 38:57Dave Meyer?

  Right.

• 38:57Speaker 01

  Right. My job is to get the property. There's got to be some company out here who just wants to lease the space. I don't want to run it.

• 39:05Dave Meyer?

  True. Yeah. You could do the flipping strategy. You could just prep it basically do all the entitlement and all that. Yeah, that'd be cool. Well, thank you so much for joining us. Uh, we really appreciate your time. This has been a lot of fun.

• 39:17Speaker 01

  Thank you so much, Dave. And again, I am just so humbled and honored as a resource that BiggerPockets was for me 10, 12 years ago. To be able to now be on y'all's platform is just so crazy.

• 39:29Dave Meyer?

  Awesome. We love that full circle story and thank you for being a member of the BiggerPockets community for so long. We really appreciate. So thanks again, Deondra, for joining the show and just. This is a reminder, if you think your story would be relevant to the BiggerPockets audience and you're a member of the BiggerPockets community, you can apply to share your story here on the show as well. Go to biggerpockets.com/guest. You can fill out the whole thing there. We'll be back with another episode of the BiggerPockets podcast in just a few days, so make sure that you're subscribed on YouTube so you don't miss our next show. Thanks for listening.

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