ITF 78 CASEY FRANCHINI | Limiting Beliefs

 

Are limiting beliefs keeping you from achieving your goals? Craig Curelop and Zeona McIntyre sit in with Casey Franchini, Founder of Brick by Brick Wealth. Casey shares how she watched her dad try one business after another and fail each time. Watching her dad created a negative mindset in Casey, which she had to battle to succeed. Today, she wants to tell you that believing you can do it is crucial. Don’t give up; always try hard, and you can achieve whatever you want your life to be. Join in the conversation to know the steps she took to break free and reach her goals. If she can do it, you can too!

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How To Break Free From Your Limiting Beliefs With Casey Franchini

How are you doing, Z?

I’m doing great. I’m wondering where in the world is Craigie because I know you, to not have any art on your walls unless this is a new change for your new house, but you’ve got a cool piece of art back there.

It’s not that good, and you can probably guess where I am because it is where you were at Mr. Michael Brockway’s house. We’ll give him a shout-out. I’ve got to ask what is up with your eyelashes? Is that why your eyes are so heavy?

I don’t know what you’re referring to about my eyes being heavy. It’s maybe because I’m tired. Is that what you’re trying to say? Are you trying to not say I’m freaking beautiful? The story behind my eyelashes is I came from Miami and met my baby half-sister who is sixteen years younger than me. I was doing some work down there. I made it a fun work and play trip. She does lashes in Atlanta. She’s a little bit hood. These are big. These were the smallest lashes that she had and they are ginormous. I’m here for the costume. I’m enjoying and embracing that.

As long as you love it, that’s all that matters. I like you all natural but that’s my taste. Speaking of natural, we’ve got an amazing guest for this episode, Casey Franchini from Brick by Brick Wealth. It’s a cool episode. There are a lot of big takeaways. Pay close attention to the story about her father who was a failed entrepreneur, which you don’t hear too many people talk about and that inspired her to become a successful entrepreneur. She’s unconventionally doing rental properties and you’ll know that in the episode. It’s a different perspective from what many other guests have had so pay close attention to it through the whole thing. It’s a cool story.

There are lots of little nuggets in there. I like that she brings a whole spiritual aspect and challenges us on some of our ideas of paying off properties when we are into leverage and putting 20% down. All these very conservative things are not what you normally hear out there. It’s great for people to know that there’s a range and you can make it work for you. It’s good to find something that makes you feel comfortable.

I love it. Let’s bring her on.

Casey, welcome to the show. How are you doing?

I am doing good. Thank you so much for having me on. I have been so excited to be here.

We are so excited to have you. Tell us when and where you first hear about financial independence.

I first heard about it my whole life because my dad’s nuts like that but he never created financial independence for himself. I first heard about it and started paying attention when we moved to Memphis in September of 2013.

You’re a vet. You’re old school on financial independence.

I knew I didn’t want to work my whole life.

ITF 78 CASEY FRANCHINI | Limiting Beliefs
Limiting Beliefs: “You have to do something different; don’t go with the herd of cows.”

 

What happened in September 2013?

We moved to Memphis that month, and that was the month that we started our journey.

I’m curious because your dad knew about it this whole time. What kept him from being able to achieve it? Most people don’t even know that it’s possible.

It was limiting beliefs and my dad tried so hard as an entrepreneur doing all sorts of different things. I love my dad so much. He just didn’t make it. He does all these different things and had an entrepreneurial spirit. When I lived in SoCal, he kept telling me things like “Do you see all the traffic going that one direction? You want to be going in the other direction. You have to do something different. Don’t go with the herd of cows. Be different.” He would say things like that to me my whole life and I always saw him trying so hard. Honestly, I feel like a little bit of my limiting beliefs with things in my life is that I’m not going to be able to make it like he didn’t so that’s a hurdle of mine.

What were some of the things that he tried and failed?

He had many startup businesses like wastewater treatment plants and so many others but that was the main one that I remembered. It didn’t work out. I was young at the time. I was barely double digits like 10 or 11, even younger. That dream of him died. As I was getting older, he would say things like, “You’re going to have to pay and take care of us one day.”

He was already giving up because he was getting older. I was like, “Don’t count on me yet, dad. I’m eighteen. I don’t know how much money I’m going to make,” but I always knew that I wanted to be different. I didn’t want to have a full-time job and just rely on an employer to pay for me. I didn’t want to have to ask for a vacation. I went to school and got my degree. I wanted to be in public relations.

I got my first job in PR in Newport Beach. I would drive 1.5 hours there and 1.5 hours home and be in the dark. I was like, “Is this life? This can’t be it.” I was also thinking that I don’t want to be like my dad. If I try something on my own and I fail, I’m a failure and then I have nothing, so which is better? Do the 9:00 AM to 5:00 PM job or risk it and try something on my own? What if I don’t have the guts for that? What if I don’t this or that? That’s still something that I feel like I struggle with the things that I’m doing in my life to reach financial independence.

It’s so crucial. The way you were raised those first eighteen years sets the tone for the rest of your life. It seems like what your dad did is super dissimilar to everybody else. You hear the story of, “Work the 9:00 AM to 5:00 PM. Do what I did. Get a steady job and make $50,000, $60,000 or $70,000 a year. Provide for your family,” but your dad took those risks. Can I ask if your mom was around? What did she do?

She was a nurse first, got her Master’s and moved up into nurse education so she was a hospital nurse educator. She would teach all the other nurses in the hospital and keep them up to date on their training. She was the moneymaker. While she did support my dad in his dreams, she was also on the other hand like, “You need to get a steady job. What you’re doing isn’t working. You need to be like me.” I’m hearing on both sides of the fence what to do and it’s hard to choose.

That shows how much of a great team your parents were. Although it sounds like there probably was a little bit of bickering but what relationship doesn’t have that? One factor that I noticed that every entrepreneur has, especially maybe not many years ago or so when your dad was in his prime, is the education piece. Did you ever see your dad learning and reading or was he just out there doing trial by fire?

I can’t remember all the titles but he was reading. A lot of the early mindset books I have are from him. They’re old-school books. The pages are crumbly. He was always about mindset and the spiritual side of things that I wish he would have pounded into me a little bit more. Maybe he thought I would think the spiritual side of life is weird but I’m into that stuff. He’s not dead or anything. I could ask him still but I do wish that he could have talked to me a little bit more about that. Maybe that could have helped me get out of my way.

I’m sorry if I’m hounding the point about your childhood here but it’s so intriguing. Where do you think your dad failed? If you had to point it to one thing so that if you do something differently, you know what it is.

Believing you can do it is crucial. Click To Tweet

He gave up right before he made it. He did other things as I got older but it was not with the same passion that he had when I was younger or the same hope, desire and grit that I saw him have. My mom and dad are still married but probably it’s the tension between them because my mom was carrying everyone financially and my dad was spending money, trying this and that business and almost making it. I remember at one point, it was hard. My mom was not happy with it. She was like, “Is it us or the business?” My dad made a decision and said, “I pick family.” In my memory, that was the point where he gave up.

My mom was very supportive and I’m lucky I have a supporting husband too. He’s like my dad, not in an entrepreneurial way but other ways but I feel like having my dad with that backbone and the whole, “You can do it,” is important. Everyone’s got limiting beliefs. I feel like he blamed others for his failures and I do the same thing. That’s hard to get out of.

I resonate with your story. My father was a serial entrepreneur and I don’t feel like he ever made it. He had his little small sparks. I remember being drilled into me this idea of, “If you go to college, that’s a failure.” I remember when I went to college feeling so guilty like, “I’m not making it.” I love how that spirit has transcended through so I like hearing your story. We should move on. What happened in 2013? What sparked you to do something different?

We moved to Memphis from Southern California on September 13th, 2013 on my mother-in-law’s birthday. I was a real estate agent in California. I helped flippers find deals so I was like a bird dog. I found the deals on the MLS. I would find good flip opportunities, but I didn’t know anyone who did rental properties out there.

The closest person I knew who invested in rentals was my friend Mikey’s grandma who he said owned ten properties. That was the extent of knowledge I had of anyone that owned real estate. This was in 2010, 2011, 2012 and 2013. There were not even social media. I remember Facebook was new. There wasn’t a lot of investing out of state going on or no knowledge on investing out of state.

I tried to buy some properties in California. It didn’t work out. I wasn’t leaping because it was a big financial commitment and I didn’t have anyone to help me or tell me I was doing it right or wrong. We never went through with this but when we moved to Memphis, I was like, “I’m not going to take no for an answer. I’m not going to fail. I’m going to do this and be successful. There is no other option.” We moved here with a cat, a 2-year-old and a 3-week-old baby. We didn’t know anybody. We moved here for my husband’s job and didn’t know a soul.

We bought a fixer-upper. That’s what I was used to. I lived in a fixer my whole life. My dad was always fixing up houses and our house, which seems like 100 houses. We fixed up this house and my husband said, “If you want to buy a rental property, you’re going to have to figure out how to pay for it.” I’m like, “I didn’t move to Memphis to get a job. That was the whole point. I’m going to be a stay-at-home mom. I’m going to figure this out in another way.” I started an Etsy business selling little crafts and handmade or personalized items. You have probably seen people make t-shirts and tumbler cups. I started off doing that and in a year and a half, I saved $20,000. We used that as a down payment for our first rental.

There’s a lot to unpack there but you went from California, a high cost of living, to Memphis, a lower cost of living, at least. Was your intention with this Etsy business to save money or did you enjoy, love and want to have a career making cups and t-shirts?

When I moved here, I knew I was depressed but I didn’t know I was depressed until a bit later because I left my family and friends. I had a 3-week-old baby and a 2-year-old. My mom and dad were like, “You might as well be dead because you’re far away. We’re never going to see you.” That was hard on me to leave everybody that I knew and raise kids all by myself. My husband would drive to work and back so I didn’t know anyone and had no friends.

The first thing was I needed something to make me happy and do something because I was sitting at home all day. Being a stay-at-home mama is great but it’s not the fulfilling life I needed it to be. That entrepreneurial thing was nagging me that I was a failure because I’m not what my dad wanted me to be. “I’m not a success. I’m a failure and a loser,” I would say that to myself. I was like, “I’ve got to do something.”

I didn’t want to be a real estate agent again. I didn’t enjoy it all that much driving around hundreds of miles looking for properties. I like looking at the property part but I didn’t want to do that again out here. I love crafts. What girl doesn’t like glitter and a hot glue gun? I do so I was like, “What can I do that’s fun that I can make money at?” I’m also not very creative so I thought, “I can’t make designs. I can’t draw.” I can probably draw a stick figure, a swing set and a house with a tree. That’s what I would draw when I had a piece of white paper and a pencil. That’s the most of my creative abilities on that.

I bought a Cricut Machine with those dye cutters and silhouettes. I started making those things. It was fun and I enjoyed it but when you do the same thing over and over again, it can get a little boring. I was like, “This is fun but I’m selling things for $5 and $10. My time is worth more than this.” That’s when I started to think a little bit bigger. I knew I was saving for my down payment for my property because that was the only way I was going to get one but I needed to think bigger and making $5 items all day wasn’t going to cut it.

You had a little bit of experience and saw people doing flips so you knew there was money there but why rental properties?

ITF 78 CASEY FRANCHINI | Limiting Beliefs
Limiting Beliefs: Don’t wait two more years just to save an extra hundred dollars a month. That’s not smart.

 

My dad always said that the fastest way to build wealth is by owning real estate. It’s expensive in California. They bought their house in California with a VA loan for $100,000 and sold it for $700,000 when they left and moved to Mexico but that’s another story.

Z, do you know what time it is?

It’s time for The Real Deal.

The Real Deal is the first deal you’ve ever done making you a true real estate investor. It sounds like it was in Memphis, Tennessee so tell us a little bit more about it. What was it? How much did you purchase for it, what kind of loan and all the other goody goods?

We were scared. It was our first deal. Even though I had real estate experience as an agent in California, it’s always different when it’s your own money. Since I worked so hard with my Etsy shop for years to save up for this down payment, I wanted to make sure I didn’t make a mistake and buy a property that wasn’t going to rent what I thought and was in a good area because if anyone has been to Memphis, it’s one of the highest crime rates in the nation and some areas you don’t drive or let alone walkthrough.

The first property was in a B Class neighborhood. We bought it in 2016 for $92,500. We’re risk-averse. We don’t want to pay any extra fees. I don’t keep credit card balances in that so I didn’t want any PMI, which doesn’t matter when it’s an investor loan. There’s no choice anyway. We put 20% down and opted for the 20-year loan because, at the time, it wasn’t a big difference in interest rate from the 20 to 30. I wouldn’t do that even if the rate was better but then, it was our first one and we thought, “We’ll pay it off sooner. It’s not a big deal.”

Why would you not pick the 20 over the 30 if you had the option?

The rates are not that big of a difference.

If the rates are the same, would you go for 30 or 20?

I would go 30 because I want a higher cashflow. If I went twenty years, my payment would be higher. I’m looking for appreciation too but I’m looking for cashflow so I would want the cashflow.

Extend that puppy out longest. The longer the loan, the better. I’m with you there.

I’ve heard of a 40-year loan. I’m like, “Where are those at?” I don’t think I’d want one because that’s pushing it. We did a twenty-year loan on that one. Remember, it was a twenty-year loan so our principal, interest, taxes and insurance were $618 a month. When we first bought it, it needed some work but it was more of a cosmetic fixer. I didn’t want to get into anything too deep even though Blake and I had rehabbed a couple of houses before.

We have the one we lived in California and rehabbed another house out here that my mother-in-law ended up buying. We redid the whole thing for her so we knew what we were doing. We’ve had more experience since then but we didn’t want to get into anything too difficult or overwhelming. We have two small kids and he works full-time. I can help and do things but I’m not the main one doing the rehab. He is.

When making decisions, you have to know what you’re getting at and why.  Click To Tweet

We bought one that needed a little bit of work. We painted the interiors and the floors were hardwood. They were great. We scraped the ceilings, which I wouldn’t do now. I don’t advise anyone to scrape ceilings unless it’s going to make a big difference. We did something stupid like that but we didn’t need to do that.

How much did you put into the rehab total?

We’ve had this probably for a few years. At first, it was probably $2,000. You need a few five gallons of paint. I did some landscaping. We also put in a new toilet and things like that so that can add up even though we did it all ourselves but since then, we had a tree fall in the house so we had to get it underneath the storm. We had to get a new roof and that was about $3,500. This property is up for rent again. We’re in a turnover with this property. We also put in new air conditioners since then and updated the kitchen as well.

The whole tree thing on the roof, does the insurance not cover that?

They did cover it but not everything. Since the tree fell on the roof, they would pay for the roof but they did not pay for the tree so we had to get tree removal, which was a very large tree. Also, there was some damage on the inside that they weren’t going to cover so we did some of that ourselves.

Insurance companies are such scoundrels. They’re like, “The whole thing is it’s the tree’s fault.” We won’t go down that rabbit hole.

I was out of town too. I was in California for a wedding and Blake was supposed to fly out the next day. It was a big storm. I was trying to deal with this claim while I was in California for my friend’s wedding.

It’s always when you’re out of town. That’s what I’ve noticed. The first property that I bought, my dad and I were in New York celebrating something. We were at a Red Sox Yankees game. I got a call from my tenant at the time saying that the basement was flooding and the sewer had backed up. You can imagine what sewer backup is like. I was like, “No.” I was so stressed out. It’s always when you’re away. What did you rent that house out for when it was all said and done?

Initially, our first tenant was running it for $1,075 a month. They were great tenants. One of them was in the military and the other one was a manager for Panera Bread. They were good, high-quality tenants. We do two-year leases but since he was in the military, he got transferred. They were almost at the end of their two years and had to move out.

Why do you do two years?

Turnovers cost a lot. You’re always having to clean something, have a couple of weeks at least of vacancy, might have to paint, fill holes from TV mounts or this is the time to upgrade since it’s vacant. When you’re a landlord and you’re not a property management company, you do all that stuff yourself. That’s time. Plus, the energy that it takes to show it, list it and take calls.

I want people that want to stay forever. If people already say they’re only going to be there for a year, then they’re not for me. I don’t want to be turning over a place every year. I’d be like, “This isn’t an apartment. This is a house. If your plan already is to move out in a year, no thanks.” If they can at least agree to two years, it’s like, “You plan on being here for a while so okay.” Most of my tenants stay for at least three years.

Is that $1,075 the market rate? Most leases are one-year leases. Are you able to charge more or less based on the two years?

ITF 78 CASEY FRANCHINI | Limiting Beliefs
Limiting Beliefs: The only thing holding you back is you. No one can kill your dreams, take away your group, grind, and desire. Only you can. So, it’s up to you to move forward, not fail, and not give up.

 

I leave at the market rate because it still has to be competitive. Everyone’s still searching on Zillow or wherever to find a place for rent. I still have to compete with regular prices but sometimes, depending on the property, I’ll offer an incentive if they pay early and early means before the first. I’ll give them $25 off rent if they can pay it before the first. A lot of tenants take advantage of that and that does help them get property. I’ll be like, “It’s $1,075 but if you pay early, it’s only $1,050.” They’re like, “Sweet,” and make it a win-win.

How does that benefit you? Do you want it that early? Do you care or is it to give you peace of mind?

Yes, peace of mind. It’s the anxiety of like, “Are they going to pay?” In Memphis, they get a grace period. If it’s rented through the 1st, they have until the 5th to pay and it’s considered on-time. After the fifth, then late fees are imposed. If I don’t know the tenant very well, we don’t communicate all the time and it’s getting the 4th and 5th and I haven’t heard from them, I’ll start to freak out. If they pay before the first, it’s like, “I’ll pay that all day long to not have to worry for that week. Are they going to pay me or not?”

A quick, brief recap of that property, you bought it for $92,500. You put about $2,000 into it or so. You’re about $95,000 or so all in. The mortgage payment is $620. You’re getting $1,075 for it so you’re cashflowing probably $200 or $300 a month after reserves and all that other stuff. That’s a great first property in that market and a great return on investment. What happens after that first one?

Even with this first one, it’s going to be for rent for $1,400 so if you take out fixed costs, principal, interest, taxes, insurance, no property management and there’s no HOA, we’ll cashflow $780. To me, that’s the power of investing in a B Class neighborhood. You’ll get appreciation and rents go up. Since then, we buy a property every year.

In 2018, we bought two but we didn’t get anything in 2021. It’s a long story. I was going to buy a lake house and Airbnb. It was going to be our second home. It was going to be $700,000. We don’t like PMI so we were going to put 20% down. That was a lot of savings to save up for so we didn’t end up getting one. In 2020, there was COVID and the election. I said, “I’m not buying anything in 2020.”

What is your first house worth now?

It’ll probably get $2 million to $4 million for it.

You keep saying you don’t like PMI. I love PMI so we would have to chat about this. Why don’t you like PMI?

It’s for only owner-occupiers anyway but I don’t like paying extra if I have the money. If I don’t have the money, then yes. I coach people on buying their first property. Those people that are house hacking or buying a short-term rental and they’re tight on cash, then something’s better than nothing. Don’t wait two more years to save up to save an extra $100 a month. That’s not smart in my opinion. Everyone’s got their opinion but if you have the money, then I would not do PMI. I would put the 20% down.

You get my perspective. In Denver, the numbers are inflated. For $20,000 or $30,000, we’ll get you a 3% to 5% down payment here and if you want to do 20% down, you’re talking $100,000. It’s going to take someone maybe 1 year or 2 to save that first $20,000 or $30,000 and in 4 or 5 years to save up the next $80,000. That’s hundreds of thousands of dollars you’re losing in appreciation because you want to save $1,000 a month. You’re tripping over dollars to pick up pennies.

It all comes down to risk too. The most efficient way to use your money would be to put the least amount down and get the highest return but some people don’t care about the efficiency or that’s not their number one value. They want low risk and have the most cashflow on one property so they have fewer properties to worry about. It all depends on your goals.

My husband and I have different opinions on strategies and goals, especially because I’m more in this world than he is. I’m the one with Instagram, the coaching clients and the one that goes to the investor group meetings. He does his job and fixes things that I tell him to fix. We have different risk levels. I’m willing to risk a bit more than him but since it’s both of us, I say, “Let’s refinance all of our houses into portfolio loans. We could buy several more.” He’s saying, “No. I want to pay off these and then we can do more.” In that way, he doesn’t have to work if he doesn’t want to but he wouldn’t have to work if we pay these off that we have so he’s like, “I want to pay them off.”

It’s not about quantity, but quality. Go for high cash flow, appreciating neighborhoods, and high-quality tenants. Click To Tweet

Some of them have low balances of $40,000 or $50,000. That would be pretty easy to pay a one-off. In an essence, it’s like getting another set of cashflow. If we’re paying the bank $350 a month in interest and principal but we paid that $40,000 off, that’s the same as putting another down payment and getting that as cashflow. The only thing we’d be missing is appreciation from having another asset.

I’m a big fan of having fewer places. Craig, I don’t know how many places you have. It’s probably too many but there are people out there that are like, “I want 100 doors.” I have never wanted 100 doors. That’s a bunch of pain. There are so many things that could go wrong in all of these places. When I got started, I was thinking, “Can I have ten places and have them paid off?”

I have since gone over to the side of appreciating leverage more but I’m still in that space of, “Can I have ten or so places but each time that I want something more, I’m leveling up?” I’m trading that cheaper house for something bigger and nicer but keeping a small portfolio. We all have different strategies. It’s important to talk to different people and find out what’s good for you.

There are all these unicorn stories out there. Everyone’s looking at me like, “I did this and I’m five years old.” You look at those inspirational stories and you’re like, “I want to do that,” but sometimes, you don’t realize the risks and work level involved and how much effort is going to take long-term to sustain that or keep doing that. There’s not one strategy.

I talked to so many people that are like, “What’s the best and fastest way? What’s this way?” It’s like, “Let’s find out what’s best for you because what’s good for Joe is not good for Jane. What are your goals in life? How much money do you have?” Everyone’s stories are so great but that doesn’t mean that they’re the best. That’s all.

Let’s move into your next deal. When you got this one rolling, it sounds like you waited a year but did you feel like you had the confidence or that second home was as hard as the first?

It was pretty easy. Back then, which was 2016, 2017 and 2018, it was still a little buyer’s market. You could get deals and offer less than asking so it didn’t take us too many offers. I don’t remember how many offers we made but it wasn’t like we were out there being discouraged because we made so many offers and never got anything. We got what we wanted. I knew my market inside and out. I knew plenty of markets in Southern California. I knew how to research that already so this was about making sure I meet my criteria that I have a low crime rate, school ratings are high and cashflow is good.

It’s mostly an owner-owned neighborhood and all the things that I wanted for long-term success. There are a lot of neighborhoods that are good for short-term and cashflow but the neighborhoods are going downhill and they are not going to net you what you think or appreciate what you want 5 or 10 years down the road so I want to make sure I was buying in high-quality neighborhoods. Once I got to know those, it was pretty easy. I bought on the MLS and still do. I could open up my Realtor.com app and by scrolling, know exactly how much each house was worth and what it would rent for. I feel like to make quick decisions and get what you want, you have to know what you’re getting and why.

I love that you’re saying that because it’s showing the power of focus. I talk to a lot of investors all over the country and they get distracted. They’re looking at nine markets and trying to figure out which one’s best. If you don’t know the market and you’re not watching one, you’re going to miss them. I see deals on the MLS all the time. I also buy off the MLS. I still think there’s opportunity in this crazy market. People need to learn to focus and then you’ll be able to recognize your unicorns.

You’ll find these on the MLS if you’re looking at it with a one-track mind of, “Can this thing rent out as a single-family house? Does the rent cover the mortgage?” You may not find a deal in your market but can you be creative? Can you rent by-the-room? Can you Airbnb a portion of it? Can you do a medium-term rental? What’s a way that you can get creative to make it work in your market? There are so many strategies out there. Pick what works.

We’re all in those medium-term rentals, Casey. That’s what’s up.

Honestly, this house that I’m in contract with, I had thought, “We can do the midterm and short-term rental.” They’re allowed but that’s my nightmare, to be honest. I have already talked to my tenants enough. Imagine if I had a new one every week, I would die. I’d be like, “No, thank you.” For midterm rental, I was like, “We could turn this house and make a couple of grand a month.” There are extended stays and stuff around so you know that the market is there, especially in Memphis. There are a lot of hospitals so there are traveling nurses.

We haven’t ruled it out. I even signed up for AirDNA and paid for the subscription for that ZIP code to see what the market was doing to keep an eye on that. Once it closes, we have to decide our strategy because that will depend on how we fix it up. Is this going to be a long-term rental or are we fully renovating it as if we’re a top ARV to get a great short/midterm rental out of it?

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Let’s dive semi-deep into a 5-foot pool here into your deal before we head into the Final Four. We did some in the beginning with how you got started but it’s interesting to see what you’re doing. You’re under a contract with this house. Tell us a little bit about it. What’s the price of it and all that good stuff?

It’s a three-bedroom and in East Memphis. The very first house we talked about, it’s the street behind it. The backyards almost line up to each other. It’s close. An old lady lived there forever. It’s got green carpet and original everything. It’s $175,000 but if we rent, we’d probably get around $1,400 for it.

You’re almost hitting the 1% rule, which is almost impossible to hit. It would work immediately so that’s great. It sounds like you’re going to do a rehab though. Do you have an estimate as to how much it’s going to cost to do that rehab?

Not offhand. We look at houses and know how much it’s going to cost because the houses that we buy are all the same. They’re all 3-bedroom, 1-bath or maybe 1.5 and all under 1,400 square feet. It’s a specific type of house that we buy. It’s a brick home, single-story, not on a major street and no big trees hanging over. We learned our lesson with that one. In that neighborhood, we would likely put in granite countertops. In other neighborhoods, we wouldn’t. We would do like the granite look with Formica but we know what this one would probably cost because we do it all ourselves. There are hardwoods under the green carpet. Also, the landscaping.

The thing why I thought midterm is because backyards in Memphis don’t exist. They’re there but nasty. No one wants to go outside in the summer because it’s buggy. Everyone leaves the weeds to grow but this old lady loved her house. This is like a Pinterest backyard. It would be perfect for pictures for an Airbnb. That’s what got me thinking about it. It’s landscaping. There’s landscape lighting and sprinklers. No one has sprinklers out here unless your house is $1 million because it rains so much.

This lady worked hard with her property. It depends. If we do a regular long-term rental fix on it, we can probably get away with $6,000 or $7,000. Most of that would probably be spent in the kitchen and the bathroom. If we took out all the cabinets, put new ones in, did granite soft-close doors, redid the whole bathroom with a new bathtub instead of refinishing it and doing tile instead of ceramic, it’d probably be closer to $15,000 for us to do that. It depends on what we’re wanting to do with the property. Plus, I’d consider it if the market’s still going up.

If we rehab it to the best potential, we could do a cash-out refinance, which I’m trying to push him to do. I’m like, “We can do these things. I know how to do it.” He doesn’t want to take all the risks but we could cash out refinance and get a lot of our money back once this house is renovated because my first property behind it would sell for $225,000 and if we fix this one up, it would probably be $250,000. There are a lot of options there.

What it sounds like is that you have a lot of options with this house, which is my number one criteria when I buy rental properties. You need to have multiple exit strategies. You can do nothing and rent and it will cashflow. You can fix it up a little bit and it will cashflow probably a little bit more or you can dress it to the nines, do trooper cash-out refi and maybe buy the property next door, which may be your backyard.

Not to mention you can do Airbnb, your medium-term rentals. There are 5 or 6 different things that you can do with this property so no matter what happens with the economy or the interest rates, this seems like a great buy for you so congrats on being under contract. We’ll look forward to hearing about it on your Instagram.

You will. I’m excited about it.

I want to hear an overview of your portfolio because we didn’t have a lot of time to go into too many of your deals. How many do you have? What has been working for you?

Once this one closes, we’ll have seven properties and that includes my primary. That’s not a lot and I don’t always say that out loud all the time because honestly, everyone is like, “I’ve got 1,000 doors.” You feel so insignificant when it’s not one zillion properties that you have but I’m not about the quantity. For me, it is quality. I want properties that are going to cashflow high in appreciating neighborhoods with A quality tenants. Those cost more.

I want to put 20% down. My husband doesn’t want to refinance all of them. We’ll pull it off if we wanted to as well but we like getting single-families that are in good neighborhoods that cashflow high. All of our properties at least cashflow $450 a month after fixed expenses and they go all the way up to almost $900. I’m happy with that. To me, it’s quality over quantity.

ITF 78 CASEY FRANCHINI | Limiting Beliefs
THE DYNAMIC LAWS OF PROSPERITY: Forces that bring riches to you

Do you target $450 a month?

My minimum is $300. That’s what I teach but mine has always been over $450. I’d be fine with something in threes.

What would you say is your cashflow? What are you averaging?

We bring in about $45,000 a year with all the loans we have on the properties. Once those are paid off, it will almost double.

That’s a full-time job for some people. That’s financial dependence right there.

I manage them myself. I hardly spend any time managing them. Once in a while, you get the troubled tenant but to make that much money a year and not have to work for it is freaking cool. The fact that these are so close to paid off if I wanted to. We could pay them off if we wanted but we don’t. We want to move and buy a better house for ourselves and more real estate. We could pay them off. The choice is always there.

My husband always reminds me of this. He’s like, “Our original goal was only to buy 10 houses and make $100,000 a year. That was it.” Your goals change over time. When your initial goal is something and then you’re close to meeting it, you’re like, “We have that.” You can have that so easily so then your goals go up. One thing that I struggle with as well is never being satisfied. Are you ever going to be happy with what you got? Are you ever going to be satisfied with your goals?

My sister makes a lot of money. She doesn’t do real estate but she’s always wanting the next best, bigger thing. She’s much younger and wealthier than I am. I see her wealth and I’m like, “Are you ever going to be happy? Is there such thing as too much money? Is happiness internal?” I don’t want to keep chasing it forever. I also don’t always want to leverage forever. I want to be satisfied at some point.

That’s such an interesting point and I’d love to bring it up because so many people have different answers of when is enough enough. I’ve talked to a lot of people who have a lot of money. It’s not just about the money. It’s about the impact and fulfillment. They wake up and if they have nothing to do, they sit at home, chop wood or throw some glitter on some glue.

That’s not fulfilling to them. What fulfills them is growing the business. Money is the byproduct. Unfortunately, in most cases, money is like a scorecard, which I don’t think is the healthiest way to think about it. You’ve got a great point. When is enough enough? When I started, I was like, “$3,000 a month is all I need,” and then I hit that and my goals change. It’s fun.

We’re too old to give up. We still have time to reach higher and make better goals. Blake reminded me of the day. He was like, “Having the life that we have was a dream. We work optional. You have the pool. You are a stay-at-home mom and make income without working for it daily by the hour. Remember that this was your dream.”

That’s so powerful to look back at those times and see we are living the dream and also, to be in the present a little bit too and be grateful. That’s what gratitude is. We’re about to head into our Final Four but before we do, do you have any last bits of knowledge for everybody?

Since I’m all about real estate and it has been my passion since I was little going to open houses and all those sorts of things as fun, I would tell people to not give up and always try hard. Whatever you want your life to be, it can be there. The only thing holding you back is you. No one can tell you no. No one can kill your dreams and take away your grind and desire. Only you can so it’s up to you to move forward, not fail and give up.

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Let’s get into the Final Four.

Casey, what are you reading?

I used to never read books. After I graduated college, I was like, “I’m not reading.” I would read a couple of Stephen King’s but they’d be like, “I’m reading this and that book.” I’m like, “I don’t have time to read when you have time to read.” It wasn’t until the past couple of years when I started getting more into self-development that I started reading. I wanted to learn more. I’m listening to a lot of books. Since I have three kids, I don’t even have time to read them in daylight so I have to lay in bed with my audiobook with my headphones on.

I am reading with a Kindle The Dynamic Laws of Prosperity by Catherine Ponder. I don’t read a lot of real estate books. I’ve never read a real estate book. I did buy Brandon Turner’s book, The Book on Rental Property Investing. I have it. I started reading it but when you know everything and you’re reading, you’re like, “I’ll finish it later.” I haven’t finished that.

I read a lot of spiritual books, The Dynamic Laws of Prosperity talks a lot about the law of attraction and belief. I’m not religious but I love all of this stuff. I feel like opening your eyes to the possibilities that you have within you is empowering. A lot of my friends blame external circumstances on the way that their life is. This book and other books teach you that it’s not anybody but you. It reminds me that I do have the power to change my life and make it whatever I want. It’s all within me. That’s one of the books that I’m reading.

What is the best piece of advice you’ve ever received?

It’s not that I don’t listen to people but when my husband talks, I’d be like, “Were you saying something?” He always reminds me I’m never listening to him but there’s this one thing that stuck with me. When we first started buying real estate, I had a mentor. He was a local guy who owned over twenty properties. I wanted to be like him. He wasn’t some gazillionaire but he works optional. They sent their kids to very expensive private schools. I called him up and asked him if he would help me because I did not want to chicken out and in California, I was making 40 offers but never pulling the trigger.

One day, when we were in contract for our second property and I was nickel and diming the seller, this was the best advice I’ve ever gotten. He was like, “Go for it. Don’t let a couple of thousand dollars price difference get in the way of buying a cashflowing rental property because those couple of thousand dollars are not going to matter in the long run. They won’t even matter next year. You won’t even remember that you paid an extra $2,000. Get over yourself. Let the seller have his win and buy the dang property.” That’s how I look at life in general, not just buying real estate. Pay for it and get it.

I love that point so much. I say it all the time. I’m like, “Don’t worry about the small things. Buy real estate. Your first property appreciated $150,000 in 5 years and you were nickel and diming over $1,000. That’s less than 1% of what your wealth built not even including your tax benefits and your cashflow.” Speaking for all of us here who have had rental properties for multiple years, you will not remember the $5,000, $10,000, $15,000 or $20,000 difference.

It’s great. We talk about this all the time with our clients. We’re like, “Are you going to lose that deal over $5,000?” It’s great to jump in and make it happen. Question number three is what is your why? What keeps you going in this business?

First of all, I love houses. Even being in all houses is a passion of mine. I’ve been in tons of houses. Knowing markets and what I love is helping my students around the country buy-in different markets, it’s so fun to learn new markets and be able to go on the MLS or Realtor.com and be like, “That house is overpriced. That house is underpriced.”

Feeling successful in that that I know something is what I love about real estate but why this? Why do I love it? What am I doing this for? It’s fun but also because the power of passive income with long-term rentals is undeniable. It’s the safest, most secure way to build wealth and be a millionaire without high risk.

Buying American land can go down in a crash for a few years and be right back up. As long as you’re cashflowing, it doesn’t matter if it went down in the first place. You’re going to get appreciation, tax benefits and income that you can use. Many people put it in their 401(k)s and IRAs, which we do that too but you’re saving that for later.

You don’t get to use your savings. You’re not benefiting from your 401(k) now but guess what I’m benefiting from? It’s the cashflow that my tenant gave me because I make money every month. It’s income. It’s like I work at Starbucks but I don’t have to work for it. Plus, I’m getting appreciation. My net worth is growing while I’m sleeping.

We’re very risk-averse. I’m not going to go do NFTs. I don’t even know what that is. Those sorts of things scare me because it’s the unknown and you’re always scared of what you don’t know. I understand that but I know real estate. It has been in my blood forever. I love it. It’s so safe and comforting to know that you’re paying for something that other people are enjoying, you’re making other lives better and your life is immediately better in the form of cashflow and will be even better later on when you sell them off.

Here’s the last question. If you had to start a secret society, what would it be?

It’d probably be Conspiracy Theory Society.

What’s your favorite conspiracy theory?

That we did not land on the moon.

I’ve heard of that one. I watched this show one time with conspiracy theories and that was the one episode that I watched. It’s an interesting take for sure.

There’s a lot of them that I’m into. My father-in-law got us started down that track.

Where can people find out more about you? You’ve got a popular Instagram but where else?

You can find me on Instagram @BrickByBrickWealth. I also have a website. It’s BrickByBrickWealth.com. I’m mostly on Instagram. I have a YouTube channel but I don’t think I published anything in the past couple of years there but I’m going to do that again soon. I also have a Facebook group called Create Passive Income with Rental Properties!. It’s free and it’s for anyone that wants to get free advice on investing in your first rental property.

Give Casey a follow @BrickByBrickWealth on IG and all of her other stations. Thank you so much for coming on. It was so amazing to hear about your story. To the moon. You’ll be the first one to land on the moon.

ITF 78 CASEY FRANCHINI | Limiting Beliefs
Limiting Beliefs: The power of passive income with long-term rentals is just undeniable. It’s the safest, most secure way to build wealth.

 

That was Casey Franchini. Z, what do you think of Casey?

I thought it was a great show. She is so peppy and excited. It sounds like she’s so encouraging for her clients that are learning how to get into real estate investing. She has a great formula. We didn’t get to go into it too much but I like when I hear that investors are like, “This is the square footage, the neighborhood and the very specific way that I invest.” As soon as something like that matches that profile that comes up, you’re like, “That’s mine.” That’s a great way to focus.

I love that aspect and that she’s super resilient. I love that she and her husband seemed to have a little bit of a different perspective so they can help balance each other out. That’s super valuable in a partner. We didn’t talk about that too much but I can tell they have a strong relationship because of that difference and that balance. She’s got her eyes set on a goal. She’s going to very much hit that goal and is perfectly content with not exceeding it to the max. She wants to live her life rather than work to become the next billionaire. It’s a super inspiring story. If there was a world full of Casey, it would be a very nice world.

I love how she keeps it simple. I am leaning in that direction myself. More power to her.

If you like this episode or our show, please leave us a rating and a review on iTunes. We super appreciate it. Shoot us a DM on Instagram. I’m @TheFiGuy and Z is @ZeonaMcIntyre. Leave us some feedback. We’d love to hear it and interact with everybody. With that being said, we will see you all in the next episode.

 

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About Casey Franchini

ITF 78 CASEY FRANCHINI | Limiting Beliefs

Hey there! My name is Casey Franchini. I live in Memphis, TN. I have a husband and 3 kids aged 10, 8 and 4.
 
Technically, I am a stay home mom but I also manage our rental properties. Passive income from single family rentals has allowed me the time-freedom to live life on my own terms while creating generational wealth one brick at a time.
 
I grew up in Southern California and lived there for 30 years. I went to college at California State University, Fullerton and studied Public Relations, Marketing and Business. After working for a Public Relations Firm in Newport Beach, CA and making the 1.5 hr drive home in bumper-to-bumper traffic, I realized that there must be more to life. My dad had always taught me to not be a part of the herd and go my own way.
 
I earned my California Real Estate Broker license in 2007, which I still have today. As a young real estate agent, it was hard to get a lot of real estate listings for million dollar houses, which was the norm in Orange County. I found my niche with real estate investors during the Great Recession and became the investor’s “bird dog” and buyer’s agent finding them amazing investment flips through short sales, expired listings and REOs.
 
I saw the power in real estate so my new husband and I started looking for rental houses ourselves with no luck in the California market at our price point. We moved to Memphis in 2013 for a great job opportunity for my husband. Moving with us was our newborn, 2 year old daughter and cat. We knew no one. I created a community around me by volunteering in the neighborhood and city and made friends. I thought Memphis was a gold mine of cheap houses and an investor’s dream. But we had just put a large chunk of money down on our primary first residence and without me bringing in a second income, saving money was slow. I wanted a rental house and with no excuses, I turned my crafting hobby into an Etsy business. In less than 2 years I had saved up over $20k from selling $5 personalized stuffed bunnies, personalized wedding hangers and bridesmaid gifts, etc…
 
With all of my real estate knowledge working with investors, and my passion for real estate, we bought our first rental property. We rehabbed it ourselves, as we had done with a few other properties owned by family and started seeing cashflow. Now, I earn a second income from our rental property business bringing in over $69,000 per year. I no longer have the mom guilt of not working a 9-5 job. By making smart investments, picking quality tenants, and doing quality repairs, I spend almost zero hours managing our rental properties.
 
There are no excuses not to make it in real estate. No excuses not to take the first step. On one house, I was 8 months pregnant pulling up damaged hardwood floors with a crowbar and then a month later nursing my newborn on the hard floor in a bedroom while my husband was gutting the kitchen.
 
The best thing about real estate is that you don’t have to wait to see the benefits and realize hard cash in your hand. The very first property, if you do it right, will make a big difference in your life. It’s addicting and a new way of life is easily found by just starting with one rental property.
 
Now, through my Success with Rental Properties 1:1 Program, I teach aspiring real estate investors how to change the course of their future by guiding them on a successful journey to cashing their FIRST rental property rent check. I provide daily real estate investing advice and knowledge on my Instagram page @brickbybrickwealth and offer a Free 7-Day mini course for those who want to know what to expect when investing in rental properties.