Episode 109 – Road To Financial Independence: From Investing In Rentals To Being An Agent With Ali Garced

Wealth building can be ten times more exhausting if you measure it against the successes of others. Slaving away to grow that number can take out the feeling of freedom you wanted in the first place. This episode’s guest is light years ahead, maturity-wise, letting her journey simply be for herself and to do the things she loves. Ali Garced joins Craig Curelop and Zeona McIntyre to share her journey to financial independence, from the military to real estate. She tells us about her first property, becoming a landlord, and dealing with bad tenants. Ali eventually upped her real estate game and purchased more properties, going into short-term and medium-term rentals. Moving further, she then shares how she transitioned from investor to agent.

—

Affiliates

www.rentredi.com and use our CODE: INVEST2FI to get 50% off on their first 6 months.

www.rentredi.com — CODE: INVEST2FI

Kaplan Real Estate Education (we have the recording as well)

They can go to the website – https://www.kapre.com/

and use our CODE – Invest2

AirBnB Hosting course

This course is designed to walk you step by step from purchasing a property, setting it up to rent, to becoming an AirBNB SuperHost.

You can register FREE COURSE here: https://www.stepbystepbnb.com/a/2147508384/zG79Sujh

Rocket Dollar – Rocket Dollar is a provider of self-directed retirement accounts for individuals. Through our accounts, our customers are no longer limited to the investments offered by traditional retirement account providers. With a Rocket Dollar account, account holders can invest in anything they want with “checkbook control.” Allowed investments include real estate, private equity, small business and peer to peer lending, and much more.

https://www.kqzyfj.com/click-100586418-13920066

Personal Capital – Financial Software and Wealth Management. You get $20 Dollar when using the link below

https://personalcapital.sjv.io/zaMMqx

Beyond Pricing

Automated dynamic pricing solution

Free 30-day trial

beyond.sjv.io/b3XBN9

—

Watch the episode here

Listen to the podcast here

Road To Financial Independence: From Investing In Rentals To Being An Agent With Ali Garced

Z, how are you doing?

I am doing fantastic. I am here in Maui, Hawaii. I’m sorry. My background is not that glamorous. I should fund something better. I am staying at a friend’s house and they get a lot of stuff. That’s the reality of being a digital nomad everybody.

Are you in a chicken coop?

It feels like it because, throughout this episode, you’re probably hearing lots of roosters in the background. They have somewhere between 60 and 100 chickens around this property. It is a lot.

Are those chickens providing eggs or are they also providing meat?

I think they’re mostly eggs, but there are a lot of roosters about and they just keep them separate. Lots of crowing happening behind me. I try to mute it as much as possible but this is real life.

Z is not a fake digital nomad. She’s a real thing. She is famous. Speaking of famous, we have Ali The Agent on the show. Ali is a friend of our good friend, Shelby Osborne, who was on episode 12 of the show. I think she mentioned that she was one of the first agents to take the Five Pillars nationwide. It’s a big deal.

I don’t know if you guys know this, but if you were interested in working with Craig or me, I have an agent in Houston doing that market for us and then Craig has got another agent out in Seattle. There are a lot of ways to expand and work together, even if we’re not in the same place. Hit us up if you’re interested.

If you’re in any of those places, including Colorado or Seattle or wherever, if you ever need an investor from the agent, hit us up and we’ll get you one, no matter where it is. Ali has an amazing story and I think it’s fun because it’s inspiring in such a relatable way. She is light years ahead maturity-wise than a lot of people in this space who are only chasing after that number and comparing themselves to somebody else who’s got millions and millions of dollars. She’s like, “I don’t care about any of that stuff. Sure, I want to build wealth so I can do the things that I love to do and hang out with my friends, not to just have money.” I think people slave away growing that number.

Dave Ramsey says you buy things you can’t afford to impress people you don’t like. That’s the same thing as building your net worth to impress people you don’t like. It is still a lot of work and a lot of energy going into that to what? Who are you trying to show off for? Figure out what it is that you need and get there. I think she’s a great example of that.

Let’s bring her on. I think people want that episode, Craig. Get out of the way.

I’m going to push myself aside here.

—

Ali The Agent, welcome to the show, my friend. You are the number 1 or number 2 hype woman out there. You and Shelby are competing for hype woman. I always love to see you. I always get pumped after seeing you and I’m excited to hear about your story. How are you?

What’s up, guys? Thanks for having me. I’m super excited to be here with you two.

Ali, why don’t you kick us off and tell us how you first heard about financial independence?

It’s a twofold story. Starting off super young, my parents had my sister and I read Rich Kid Poor Kid. Everyone says Rich Dad Poor Dad. There is the kid version that no one knows about. I was eleven or something like that. Maybe even eight or younger. My parents got us Robert Kiyosaki’s board game for kids, Cashflow for Kids. That started a little seed in our brains, me and my sister. I thought nothing of it.

I went to college at Elon University. I graduated in 2012. I joined the military to pay for college and I had been happy renting. My parents were like, “Why don’t you buy properties?” I only purchased the property because I had a dispute with the apartment complex I was in. I heard about it after I purchased it in 2018 when I stumbled across The Mad Scientist Podcast, which then brought me down BiggerPockets and all the other things.

I always am curious about women who go into the military. I love Shelby and I’ve heard her story, but tell me how do you get your brain into that mode of being like, “There are going to be all these like big scary guys. I have to learn about combat and guns.” Are you just into that?

Yeah, and also what’s different is I’m from New York and or at least Downstate New York, near New York City. No one joins the military. All my friends are like, “You’ll die.” I was like, “Yeah, but at least it’s going to pay for college.” I do it to pay for college. I was scared of being yelled at. I was scared of all these little unknowns and the whole big thing of signing my life away. Who knows how long I’m going to be in, but my parents sacrificed a lot for my sister and me growing up. Getting an ROTC scholarship was my way of saying thank you and helping them out for helping me out.

Did you go into the military first and then you went to college like with the GI Bill or does it work backwards?

It’s the other way. On the officer side, I went to college. I did my freshman year like normal. In the middle of my sophomore year is when I joined ROTC. They were giving away scholarships at that point. It didn’t cover all of the tuition, room and board. It covered a lot. To pay for the rest, I also became an RA, which then covered room and board.

I just got this realization that becoming an RA is the earliest form of house-hacking. You get a stipend to manage everybody in the dorms which is great.

Also, my career within the Air Force is I’m a Federal agent. I’m a special agent for the Air Force. It was almost like both. It was foreshadowing my future and my career path within the Air Force.

From Rich Kid Poor Kid to tabling that because you were like eight. You went to college. You wanted to pay for college so you went the ROTC/RA route. You graduated from Elon with zero debt, I imagine, and you said that was in 2012. Are you going back into the military at that point?

At that point, I had been doing ROTC, so I was never in. I did my regular college-age years with the contract of having or doing four years of active duty once I graduate. I owe four years to the military. I did that, plus another six. I’ll separate in one month after I hit a decade. I’m a Major in the Air Force now. I will be separating as a millionaire. I’m super excited.

Congratulations. You gave us the SparkNotes version of your story, but we want to get a little deeper. You graduate and you do the military for four years. Where did you go? When does real estate come into the picture here?

Real estate came in 2016. That’s only because I had a fight with my apartment complex. Someone was stalking me. I went to court. There was a whole thing and the apartment wanted nothing to do with it. I wanted more autonomy. My parents had been telling me and been in my ear saying, “Buy a property.” I was like, “I’m going to buy a property.” I purchased with a VA loan with zero down. I think I paid $5,000 or $6,000 in closing costs altogether. I purchased a two-bed, two-bath condo in Colorado Springs. This was my third assignment at that point. I purchased it with all intent to move in because it’s an owner-occupied loan and I will never suggest any sort of mortgage fraud.

I then get short-order deployment orders to Afghanistan. I was like, “I don’t want to go to jail.” I’m supposed to move into this property but that’s what the VA loan is for because they know that people are military. That’s why they allowed two loans out at the same time, which a lot of people don’t know about. You can take out two VA loans at the same time. Without ever having moved in, with all intent to move in, I had to go to Afghanistan. I rented out the property.

I super quickly became a landlord. I hired the first property manager that I found on Google, which happened to be okay, good enough. I hadn’t run any numbers prior to that because this was just going to be owner-occupied. Luckily, it ended up cashflowing. It’s not a lot. It was $98 a month, but where it helped me tremendously was in the appreciation because it has doubled in value. I purchased it at $158,000 and now it’s $330,000 or something.

Craig is chomping at the bit because he wants to say what kind of deal this was, right?

No. Ali, this is your real deal. This is your first deal, whether it is intentional or not. Let’s get into it. It was a two-bed two-bath condo in Colorado Springs. You were not going to buy it as an investment property. You were going to just live there. Before we get into it too much, I want to ask, “What made you decide to rent it versus sell it because a lot of people would’ve said, “I’m not going to live there. Let’s turn around and sell it. I’ll keep my money back.”

Probably the timing. I’m rewinding back to my 2016 brain. It’s still now but never sells. My 2016 brain was I just spent $6,000 on closing costs, which to me was a lot at that point. I was like, “I’m not going to sell it right away.” I’m at least going to rent it out. I did general numbers. I didn’t have the BP calculator with me then, but the general numbers of mortgage, property manager, taxes, and insurance. I was like, “That’s it,” which is not, as you know. It worked out then so I was like, “Let me rent it out and see how it goes. I can always sell later.” I liked how it went.

You bought it for $158,000. You put zero down and the $6,000 in closing costs. What were you getting in rent? What were your mortgage payment and all that good stuff?

I purchased a 30-year fixed. I don’t have the numbers right now because I went through a couple of tenants so the rents were higher and lower and then higher. I almost had to evict somebody. I struggled a little bit there, but overall I was cashflowing an actual cashflow after everything like PITI, all expenses and everything. The cashflow was $98 a month, but every two years there would be a major snowstorm, which the HOA would not cover. It would blow out all my windows every single year or every two years. That would wipe out all the cashflow. On paper, it’s negative. In real life, it’s zero right on the line.

I get a lot of questions here. The first question is you mentioned that you’re having some problems with tenants. As someone that is on the other side of the world, how do you handle this? I know you had a property manager, but oftentimes they just keep asking you questions. What did you do?

The biggest issue that I had was somebody that had brought in pets when I had a no-pet policy. They claimed emotional support animals. My property manager was conservative and didn’t want to be on the wrong side of emotional support animals, that it would be too big of a hassle to handle in court. We broke the contract. We let her out and luckily, she didn’t damage anything. The only reason that came to my knowledge was because she let those animals take a shit everywhere and people were complaining. They complained to the HOA and then find me the owner, not the tenant. I thought, “It’s a super easy fix. I’m not paying for it.” It’s the tenant’s issue so I’ll just have the tenant pay it, but that’s not how it works in reality.

We let the contract break and there were a couple of months in vacancy, but it ended up working out to where we ended up becoming a little bit more strict. I spoke a lot to the property manager, which is all via email. I don’t even have a way to call over my cell phone to the property manager when I’m in Afghanistan. It was staying on top of the property manager and making sure that he knows that I am on top of it so that way it doesn’t happen. I’m not paying $100 a day per animal because somebody’s breaking the contract.

You said something that’s important there. It’s that just because a contract says something does not mean that’s the way it works. I’ve dealt with this many times too. It’s like you’re not going to take somebody to court for $300, $500 or $1,000. That threshold to take somebody to court is extremely high. You need to make sure tenant screening is on point because a bad tenant will cost you lots of money. Going through an eviction is not fun. That’s a big thing. People are like, “It says it the lease this.” It’s like, “Yeah, tell that to the tenant.” Let’s see if they send you the money. Probably not.

Even if you go to small claims court, the chances of you getting paid are very low. Even if you win the judgment, you win the case, you still might not see that money so it was a waste of effort.

When you go to small claims court, the chances of you getting paid are very low. Even if you win the judgment or the case, you still might not see that money. It is a waste of effort. Share on X

I had a contractor in Florida screw me over. He owed me $30,000. It was enough worth it to take it to court. I took him to court and he lost. The judgment that he owes is now $90,000. It was a 3X judgment. I’m like, “I’m getting $90,000.” I haven’t seen a dollar of that yet because he doesn’t have it. He has someone else ahead of him he has to pay. Unless this guy could make $150,000, I’m not seeing a dollar of this. That’s how judgments work oftentimes so it’s not so easy. Make sure you don’t make mistakes on the front end. Z, do you have anything to add to that?

I haven’t had to deal with judgments. I had somebody wreck a place of mine that’s in Colorado Springs and it was about $15,000 of damage in furniture, time out of rent, and so on. We went through the same thing. Do we take them to small claims? Do we not? It was the same idea that I know this guy doesn’t have the money so what’s the point? We took a loss on our taxes and called it a day. Unfortunately, that does happen occasionally.

That’s what rents are for.

Ali, you’ve got this first property. It’s cashflowing you $100 a month that ends up breaking even but the thing that’s great about this is the appreciation that you mentioned. You said it’s worth $350,000 now. It’s over doubled.

Yeah, $330,000.

You bought that six years ago. You double your money in six years. I think everybody would do that. What happens next?

I’m assuming now you’re renting it for more and you’re cashflowing.

Yes. I still have those blizzards every two years that wipe out the windows. That has been very consistent but every year, the rent does go up.

What are you getting for it now?

It’s in the $1,600s. That one is up in May 2023, and then it will increase after that. After I struggled with some tenants, I’ve had the same couple in there for the last four years who have taken care of the property well. It’s below market but for a reason, because I want to keep them around. They’re good.

How much are you cashflowing these days?

Now, it’s $200. It’s still not much. Every year, the HOA increases and it evens it out, but that one is more of an appreciation play. The other ones that I have now are more in the cashflow play.

Let’s get into these other ones. Tell us what happens after this condo in 2016.

After that, I moved around some more. I spent some time in California. I didn’t buy there and moved here to Tucson. I purchased another single-family. I purchased that one for $163,000. I moved into it. That was my other VA loan because you can have two out at a time. I moved into it and then I got married and then I moved out. That one turned into a rental, short-term and medium-term. I turned that one from a short-term to a medium because, in that specific area of Tucson, I found that Airbnb, the market just wasn’t demanding that. It was doing well in the first three years that I’ve had it, and then a couple of months ago, I turned it into an eight-month rental.

Let’s get into that one a little bit more. I want to hear about that dynamic of the change too. What year is this now you’re buying the second one? Is that 2019?

Yes, ’19.

In 2019, you’re buying this one. Is it $168,000 you said?

$163,000.

How much did you put down? What’s the mortgage payment? What was the house like and all that good stuff?

It was two-story, which is actually not that common in Tucson. It’s a two-bedroom, three-bath home, and also in an HOA, which since then I’ve learned my lesson. I’m not going to purchase in HOAs anymore, but it is what it is. I purchased that one on a fifteen-year loan. My mortgage is higher, but I also only now have ten years left. I’ve been putting a little bit extra into it. It was cashflowing. The cashflow varies whether it’s short-term rental season or back to medium term.

Tucson, Arizona has something that we call The Gem Show. People come from all over the world to look at rocks and minerals. It’s such a big deal. I’ve never heard of it because I’m not into rocks, but people come from all over the world for this and it’s during the winter seasons. That’s when the demand is the highest for all properties in Tucson because no one wants to come here in July or August. It’s way too hot. It’s like 110. No one wants to do that.

Zeona was first in line with the rock and mineral show, I’m pretty sure.

No, but he’s calling me a hippie. That’s what he is saying.

I know she likes her rock and crystals.

I do. At home, they’re everywhere, so I can’t say anything.

I’m sorry if I offended you then.

No, it’s okay. You can offend Zeona. Just don’t offend me.

It’s kind of a roller coaster in any property in Tucson because it’s so seasonal. No one wants to come in the summer. Everyone only comes in the winter, snowbirds and all of that. The reason I changed that one from a short-term rental to a medium-term is pretty interesting. My wife has another property that wouldn’t do nearly as good medium-term so she keeps it as a short-term. It’s the difference in location even all within the small pocket of Tucson. This is how real estate is so hyper-local where my cookie cutter two-bed, three-bath home in an HOA community, no one wants to go to anymore. Unlike her property, which is a three-bed, two-bath home, completely remodeled with a backyard, pool and super safe area. That one is always in demand. It’s interesting having different peace settings within Tucson.

Real estate is so hyper-local. Share on X

You didn’t want both to do short-term rentals. That wasn’t on the table.

They both were short-term rentals. For the first couple of years, my property did well, but then it since has died down so I switched it.

What the difference was between what you were getting monthly from a short-term rental and a medium-term?

For my cookie-cutter house, I was getting in the peak in the summer $150 a night. In the winter, it was $55 a night. Meanwhile, my wife’s property in the peak, the Gem Show, when it’s cold, she can rent it out for $360 a night. In the summer, it’s $160 a night.

That’s the pool effect. Pools are really popular.

What do you think you’ll get for medium-term rental?

Medium-term rental, I am renting my property out now for $2,500 a month. In the medium-term for my wife’s property, it would be around the same amount. I think that is because even though her property’s so much nicer and so much more luxurious than mine, it’s so far from the Air Force base. Mine is a lot closer to the Air Force base.

Do you remember what the mortgage is on this place and then what you were getting per month? Maybe the average as a short-term rental, just so we have a difference there because it’s hard to know without knowing the occupancy.

The occupancy for my property on average was about 75%. That’s because I would have to do last-minute deals. I’ve significantly reduced one of the days of the week. That way that’s what viewers see like, “$34 a day,” but on the others, the other days are not as cheap. The cashflow for my cookie-cutter home in general was about $300 a month as a short-term rental. That’s with the peaks and with the valleys.

As a medium-term rental, what does that cashflow look like?

Now it’s $400

You cashflow more because it’s higher rents or less expenses.

Yes. There were some services that I kept in my name such as the internet. I’m not going to break my internet just to have to purchase internet again if I choose to turn it back to a short-term rental when they’re only going to stay there for eight months. Little things like that, I’ve eaten the cost of. I’ve incorporated it into their rent. I ran the numbers. I was like, “I’ve never seen this.” I only have seven doors and six properties but I thought it was interesting that in that specific area of Tucson, which might be similar to other areas of the country, if you own a short-term rental, you might want to look at medium-term rentals because they might pay more medium-term as opposed to short-term.

Is it because the rent is higher or is it because the expenses are lower or is it the combination of the two?

I think it’s demand. In that area, no one wants to vacation in a cookie-cutter home. People want a vacation with a luxurious and nice backyard that my wife completely redecorated and rehabbed. The medium-term is higher because it’s so close to the base. I get a lot of people that come in for graduations or whatever is happening at Davis-Monthan Air Force Base and it’s closer to the airport unlike my wife’s property, which is over an hour away from the airport. It’s still in Tucson. Tucson is huge, by the way. You might not think of this if you’ve never been. You might think, “Tucson is super small compared to Phoenix. It takes more than one hour to get from one side to the other, so there are so many different pockets and different types of neighborhoods in Tucson.

Z, do you have anything you want to add?

I want to hear what we had next. It doesn’t seem like you’ve had a ton of huge wins in cashflow. Has that made you feel like, “I’m an investor and I want to collect a lot of properties,” or were you feeling discouraged about where you are at that point?

When I first rediscovered FI and then I dug into Mr. Money Mustache and BiggerPockets and everything. Everyone had these requirements like the 1% rule and $200 cashflow per door per month. I was like, “My properties don’t meet that,” but I ended up realizing how much appreciation can help you. If you hold your properties long enough, your properties are going to go up to the right. They always do, just like the stock market and everything. My assets are 60/40 real estate to index funds. Before real estate, I was investing a lot more into index funds because I had no idea what else to do with my money.

Having the buy-and-hold mentality has helped me a lot. Coach Carson says this a lot, “You don’t need a lot.” I’m not trying to build this huge 100-door portfolio. Twenty is more than enough. What I have now, once I paid them all off, that’s more than enough. There’s no need to go as fast as you can. I’ve seen a lot of people go as fast as they can and they get hurt. Going nice and steady. What my plan is and my wife is, wherever we chance up stationed, later on, we’re going to purchase, move in, and then rent it when we move out. Slow and steady wins the race, but there is no race.

You’re not even house-hacking. You’re buying a house in each place that you move to and eventually renting it out. You’re building your portfolio that way. It’s so easy to compare yourself to other people that are crushing it. You’re in GoBundance Women, right?

I am.

I don’t know if you go to those events and you have that same feeling of like, “She’s crushing it or he’s crushing it and all this stuff. I’m doing so little. I need to go out there,” but then you come home and you reflect. You’re like, “I’m going to work my butt off all year so I can go once a year to show off my one sheet in my network to some people that I only see once a year that I don’t care about.” Once you get over that and you’re like, “What is your why and why do you want to achieve financial independence and what is this all about,” that drives you much further than only increasing that number.

I agree. You can spend your entire life comparing yourself to others and then you’re not truly happy. That’s when gratitude comes into play. I’m so grateful for what my parents have done for me and my sister, and for the life that I have. Every day I wake up healthy and that’s a good day.

You can spend your entire life comparing yourself to others without being truly happy. That's where gratitude comes into play. Share on X

I wanted to add something to this. I had been on this treadmill thing of being like, “Do I have enough money and security?” Feeling FI and having everything set up. Mr. Money Mustache came out with what’s called Why You’ll Probably Never Run Out of Money. There was a cool spreadsheet in there that I was able to fill out and it showed me what my assets are going to look like way down the road.

What you realize in real estate is that even if you’re trying to hit a certain cashflow now if you try to race to that, you’re going to end up with way more than you need on the other side. As of now where I stand buying nothing else, it was saying, “I would die with $10 million. I couldn’t even spend all the money I would make.” If you look at yourself now before all those homes are paid off, it’s easy to be like, “Scarcity. I don’t have enough.” I like the idea of people going into this coast FI knowing that in ten years, so much of it will be paid off and you’ll have so much more in appreciation in twenty years, rather than feeling like you’ve need it all now.

If it were up to me, I would be living Craig Curelop style. I would be sleeping on the chair. I would rent out every square foot that I could. I have my wife to balance me out though. She’s like, “No, we’re adults. Let’s sleep on a bed.” I have that mentality of “go, go, go” but it’s a good balance that I have with my wife. It’s like, “We can live for today too.”

Now that you’ve used up your two VA loans. What do you do beyond that? What have you done?

I’ve used up my two VA. My wife has used up her two VA loans, so that’s four. The other two, one of them was completely saved up. One was out of state in Oklahoma City which was a turnkey property. The other one is a duplex here in Tucson, Arizona. For that one, I used money from the index funds that I had been investing in prior to real estate. I sold those and went more into real estate.

Before we go into your out-of-state properties because I am curious how you jumped from buying right where you live, what you were going to live into, and then making that leap. Let’s jump into a little ad. As you guys know, we’ve been doing these ads live. I think they’re more enjoyable to listen to. I’m going to talk about my Airbnb investing group. I have a Facebook group. If you guys are interested in learning how to invest in Airbnbs or medium-term rentals. I do specific content on those every week. I’m doing lives that you can’t get anywhere else. You can find it by searching Airbnb Investing or finding me on Instagram. I post about it every week. Come check it out and talk to other investors and learn how to be an Airbnb investor. Now, back to Craig because I know he has a question waiting.

Ali, you mentioned that you had six total doors, seven units. Is that right?

Seven doors, six units.

How does that work?

Six properties. All single-family and one duplex.

Are you guys talking about the same thing, but you were confusing each other?

I got it. Z knew what was going on. She’s got us. What does that portfolio spit off for you now in terms of cashflow and appreciation? You mentioned that you became a millionaire through seven properties or six properties, seven units, which is more than the average person without a doubt but it’s not. You systematically get there, which I think is amazing. Tell us about that a little.

I’m not a millionaire yet. I’m about $12,000 away. In a few weeks, I will be. Previously, when I joined the military, I thought I was going to do four years. A year or two into it, I was like, “I might as well finish the entire career. Once I retire twenty years later down the road, I can get my pension every single month until the day I die.” Now that I’m halfway, I’m separating. I’m not doing that. Prior to that, I had been purchasing with the intent of more so appreciation. I didn’t need the cashflow, but now I’m at a point where I separate in a month and I had invested more so for appreciation instead of cashflow. Now, what do I do?

Because altogether, we get around $1,000 in low season, and $1,500, $1,700 in high season, the winter months. That is not enough for my wife and me to live off of. She is going to be staying in until she retires from the Air Force, then she’ll get that pension every month and I’m going to be a full-time realtor. I have some options because I have properties. I can sell one or I can 1031 one of them or a couple of them into something that cashflows more. I have been looking here and there, but I haven’t gone too far with that. Those are options that I have because of what I have done in the last ten years. That’s something that I might do later on. I might pull a HELOC off of one of them and purchase more cashflowing properties to at least meet me halfway as to what I was making as a major in the Air Force.

I love that strategy and I say this on almost every episode, but cashflow makes you financially independent. Appreciation makes you rich. If you didn’t cashflow a single thing and you bought in areas like California or all the high-appreciating places, you are going to be extremely wealthy, but cashflow is what gives you that freedom. What you did is it sounds like you did buy in appreciating areas. You are now able to leverage that appreciation by taking HELOCs or by selling and then redeploying in higher cashflowing assets so that you can have that independence, and then when you separate, you feel a little bit more comfortable.

I love that and it shows you that there are so many ways to build wealth from real estate. Buy it and figure out how to make it work for you later because life changes, but real estate definitely molds your life. You use real estate in any way that adheres to your life. I think you’ve illustrated that perfectly.

I want to hear how you went from buying locally to buying out of state. For a lot of people, they live in a market that’s maybe too expensive or it’s not going to cashflow so it doesn’t meet their needs, but they’re held back by this idea that a lot of people say, “You should buy your first couple places within driving distance or within four hours.” I remember hearing that when I got started and I think it’s ridiculous. Tell us how you feel.

My first purchase was within driving distance. I was stationary. It was an owner-occupied loan, but it then quickly became an out-of-state investment or out-of-country investment. I got used to that early on. I got used to managing the manager via email and via statements that I’m reading. I was okay at that point. Fast forward five years later when I purchased my first completely out-of-state, sight-unseen property. That was through a lot of research to find a good turnkey company. I purchased that through Chris Clothier’s company REI Nation. I had spoken to a lot of people that had done business with them and I didn’t hear any bad reviews. I was like, “Let me go for it,” and since then it has been doing pretty well.

How did that whole process work? Do you come in with 20% down and they take care of the rest? Do you have to analyze the deals? How do you know which one to act on?

How the process worked for me and I’ve only done it once. I don’t know if other people have the same exact process, but they purchase properties and they’re rehabbing them. That is when I got in the mix of it. They send you properties depending on what state you want to purchase, and depending on whatever your requirements are. This one did not meet the 1% rule. It was like 0.8%, 0.85% or something like that in Midwest City. It was outside of Oklahoma City.

When I got involved, when I chose that property, they had already been done. They finished the rehab. I got to look at the scope of work. I had my own appraisal come out and inspection come out, just the normal due diligence. We used their property management company. So far, it has been good. It doesn’t cashflow a ton and it’s because Oklahoma doesn’t appreciate a ton compared to Colorado and Arizona, but it’s a good middle-of-the-road property and I liked the way they do their property management.

I like that you said that you got the normal due diligence stuff. You went and got the inspection and whatever. A lot of people say, “I have to walk through it,” but truth be told, most of us are completely untrained. Like me, I’ve bought and sold probably twenty places of my own and I don’t know what’s an indication of bad settling or whatever. There are a couple of things I’ve learned to sniff out at this point, but it’s not going to beat the inspector. I don’t have to be there and buying sight unseen is totally fine. It’s good to realize that if it’s not a property you’re going to live in yourself, you probably don’t need to see it ahead of time.

You’re exactly right. Why? Unless you are a contractor or an inspector, you don’t know what the fuck you’re looking at. Why even pay for a flight out there? Maybe to meet the property manager in person or the rehabbers in person, but I wouldn’t be able to call anything out. I agree and I did have the intent to go out there before closing, but that’s when COVID happened.

It was right before May or June 2020 and the military restricted all movement. I was like, “I’m going to have to purchase this complete sight-unseen,” and to this day, I haven’t seen it. I haven’t seen the inside. I have driven outside on a very long cross country. I was like, “We’re driving through Oklahoma. I might as well see this property.” The property is there because the bank was able to lend to it. The appraisal came in. There’s no real need to see the inside.

I wanted to hear now what made you transition into being an agent and how does that look as an investor being an agent? I think we have a lot of ins as agents, but how are you seeing it?

First, why I became an agent. It took me a while to become an agent. My wife had been telling me, “If you love real estate, you might as well be an agent.” I was against it in the beginning and the more I realized that being an agent is owning your own business. I was not just putting the two together. I was like, “Maybe I should.” I didn’t know what I want to do after I left the military. I only knew that I wanted to leave the military. I was a little bit unhappy. I’ve been a realtor for thirteen months. I finished my first year and when I realized that I made more as a realtor than I did as a then Captain, now Major in the Air Force and I liked it.

Being an agent is owning your own business. Share on X

Also, I wouldn’t have to deploy for year-long trips to Africa. I was like, “I’ll have more autonomy over my life, the schedule of my day, where I live and anything and everything.” I was like, “I’m going to go through with this.” Originally, I was going to work specifically with investors, but in Tucson, it’s very hard to find a property that cashflows long-term.

Whenever I do have investors come to me looking to invest in a long-term rental, I tell them straight out of the gate. It’s a 99.9% chance you will not find a property unless you do your own driving for dollars and your own off-market thing. I haven’t worked with a lot of investors. My niche is military members because I’m in the military. My wife is in the military. I have access to the MLS, but the numbers don’t always work. Even myself, I’m starting to look elsewhere.

Maybe medium-term rentals will be your new niche for investors because it looks like you can cashflow with that. If you guys are looking for a medium-term rental in Tucson so that you can retire there in twenty years, hit up Ali.

Short-term rentals work there too. What’s nice about Arizona and Tucson is it’s like the Wild, Wild West. The only restrictions are the HOA communities, which there are a lot of, but some HOA does allow short-term rentals and medium terms.

What's nice about Tucson, Arizona, is it’s like the wild, wild west. The only restrictions are the HOA communities. Share on X

I think it’s about time to head into our Final Four, but before we do, one last question to Ali The Agent. What parting wisdom do you have for everybody?

Go slow and steady. There’s no need to compare yourself to others and remember that everything in life is negotiable.

That’s a lot all at once. Slow is smooth. Smooth is fast. I heard that from a military guy. That always stuck with me. Let’s head into the Final Four. Z, kick us off.

Ali, question number one, what are you reading right now?

I read seven books at a time.

Just give us a highlight.

I’m reading Think and Grow Rich for Women and The 4-Hour Body. I’m rereading Traction.

Question number two, what is the best advice you have ever received?

Probably that everything in life is negotiable.

I love that too. I remember. I’m going to tell a quickie story. I have a friend whose husband was in the military and she’s the only person that I’ve ever met that will negotiate in a regular store. She’ll go in there and be like, “Do you have a military discount?” Why not? She gets discounts everywhere and it’s ridiculous. I love that. Everything is negotiable even when you think it’s not. Question number three, what is your why?

Time freedom. To be able to live on the beach and fucking sip a piña colada for the rest of my life every day, and give back to my parents that did so much for me.

The last question is what is one thing that you think differently than most everybody else thinks?

To repeat it the third time. Everything in life is negotiable. Even though it might be black and white on a contract, there are human factors.

I do love that everything is negotiable. Why don’t you give us a story of when you thought of that and when you negotiated something that maybe other people wouldn’t have?

Something as small and not real estate-related, but related to what Zeona was talking about. It was like when you’re checking something out at a retail store, if it has a little bit of a rip in it, ask for a discount. They will give you one. The same thing with over-ripe vegetables in a supermarket. Sometimes they will. Going to a little bit more real estate-related, even though something is black and white in a contract, cash-for-keys is an example of how everything in life is negotiable even though it’s not written in the contract, there are human factors that come into play. Tug at those emotions and you will come to a nice compromise.

Cash-for-keys is my favorite way to evict somebody because it’s a lot easier than going through the eviction. Ali, where can people find out more about you?

I am @Ali_The_Agent on all social media. I respond to all comments and all messages. I’m on Instagram and TikTok. I just started YouTube and you can hit me up there.

Hit up Ali The Agent, especially if you’re in the Tucson, Arizona area looking for any type of property, whether it’s an investment. Maybe it’s a twenty-year retirement home or whatever it is. Ali’s your gal. Thanks so much, Ali. We’ll see you next time.

See you. Thanks for having me.

—

That was Ali “The Agent.” Z, what did you think of Ali?

I thought this was a great FI story. I think that the difference between FI people and real estate people is the real estate people get into these braggadocious numbers, like how many doors and how much cashflow, but she was in this pace of, “Will I have enough later? How much do I need now to get by?” It’s that slow and steady thing that she was talking about. I think that’s a healthy way to look at it. You don’t want to burn yourself out 10X-ing again and again. It’s not possible.

I guess I would argue that it is possible. It’s just a lot of work, time and energy. It may not necessarily be what you truly want to do. I always say that anytime you find yourself in a rut, always take a step back. See that forest to the trees and say, “Are you taking the steps to get to the goal that you want?” Not what your friend wants, not what your parents want, not what that guy you see once a month that you want to impress wants. What do you want? At the end of the day, that’s all that matters.

I thought this was a good story for that and she’s inspiring. She has such a great attitude about it. She’s not flaunting tons of cashflow, but she’s keeping on. It seems like she’s going to have a nice portfolio.

It will grow with time. Do you know what else I think should probably grow with time?

You. I don’t know.

I was going to say our ratings and reviews would grow with time. I don’t know where Zeona’s head is.

Everything you’ve said to me now sounds creepy, Craig. I feel creeped out.

Maybe because you’re in a chicken coop with your back to the door. Who knows what’s coming up behind you? If you guys would please leave us a rating and review. Show us some love on iTunes. It helps the show and helps us grow. We just hit our 100,000 downloads so that’s super exciting. We’d like to get it to 200,000. Thank you guys so much for the rating and review. We’ll see you all next week.

Tagged agent, financial independence, investor, real estate, Rental Property, tenants

Episode 109 – Road To Financial Independence: From Investing In Rentals To Being An Agent With Ali Garced

Watch the episode here

Listen to the podcast here

Road To Financial Independence: From Investing In Rentals To Being An Agent With Ali Garced

Important Links