In case you need the reminder, there’s no such thing as retroactive asset protection so the best (and frankly cheapest) way to tackle the legal stuff is as early as possible. This week’s podcast guest, Amelia McGee ran into trouble in the FIRST week of owning her FIRST investment property.
This week’s episode of House of Horrors is all about:
1️⃣ Tenants doing the wildest and craziest things
2️⃣ The trials and tribulations of being a single, female investor
3️⃣ Evictions beyond nonpayment of rent
Bonnie Galam 0:11
Welcome to the House of Horrors Podcast where each week we dissect problems real estate investors have faced, how they navigated, and of course what you can do to avoid ending up in their shoes. Guys This week I am so pumped to be connecting with my Instagram buddy. Real Estate like — master. Like when you hear like where she started from where she’s going and in what time frame your mind is going to be blown because Amelia McGee is joining us this week, better known as @ameliajoREI on Instagram, not Amelia Jorei, as I thought it was. I thought, you know, she was at some quarter of, you know, cool middle name or something. And that’s not her name. It’s @ameliajoREI on Instagram, and she has accumulated a portfolio of over 30 units across the state of Iowa since October of 2020. Guys, we’re talking like less than 18 months at this point. They’re a mix of what does it multis short and long term, Amelia?
Amelia McGee 1:15
Yep, yep, a mix of multis some single families, some short term, mid-term long term? Done it all at this point, I think.
Bonnie Galam 1:23
And through that time, you’ve built up your own you know, real estate community called WIRE. What does WIRE exactly stand for?
Amelia McGee 1:31
Women Investing in Real Estate and my friend Grace and I whom I also met through Instagram started that in January of 2021. And we just hosted our first retreat in Gatlinburg, Tennessee. So it’s been a great community to be a part of.
Bonnie Galam 1:45
I love it, I’ve been, I had serious FOMO that I was–
Amelia McGee 1:49
You need to come to one of our next ones!
Bonnie Galam 1:51
I would love to I’m gonna, I’ll put that on my like to-do-list this year one retreat with, yeah, that was a good crew of people who went. And I mean, you’re 30 I don’t mean to like date, you are like a single woman doing the thing.
Amelia McGee 2:09
Yup, there’s even like we were chatting really quickly before the episode, there wasn’t another option for me, other than to succeed in real estate because I wanted to be self-employed. And once I got started, I realized that this was going to be my ticket to, you know, financial freedom. So after that, it was just like full force ahead with real estate investing.
Bonnie Galam 2:32
I love that – in full force ahead you went indeed, but even though you’ve only been in real estate for, let’s call it 18 months, we’ll say there’s probably some like learning and shopping before you got that first purchase. You’ve already had a horror story, or some are funny, we have to go through some of these funny stories, but you’ve already got horror stories on your about I feel like a lot of people think that like, you know, the bad stuff will happen like way, way down the line. Like let’s just focus on like, growth, and you know, the fun part, the renovations, all that kind of stuff. And you know, I don’t have to worry about the scary stuff till down the line. But here we are talking to each other in the first week of March of 2021.
Amelia McGee 3:12
Yeah, so I along with owning over 30, you know, doors, I self manage all of them as well. So, a lot of the stories that I have to share deal with tenant management and tenant horror stories. And actually, about a week, after I purchased my very first property, was when the first shit hit the fan, essentially. So we can, basically, yeah, so basically, it was a small thing. But like, honestly, when you first start investing, every little thing that goes wrong feels like the biggest deal in the world, so basically what had happened was, there were some pretty scummy tenants that had lived in this triplex before I purchased it, but they were gone by the time that we closed on the property. So I had really great new tenants who had moved in and they texted me one day and said, hey, the washing machine is like, all messed up. And I did happen to see a guy in there the other day with a mask on which I didn’t think anything of because it was you know, COVID So I was like, Oh, that’s really strange. And come to find out it was a previous tenant who had lived there who had robbed me who had robbed the washing machine took the coin box, you know, I was like What an idiot if you wanted to keep robbing me like leave the coin box and then just like keep coming and taking money out like I never had —
Bonnie Galam 4:37
I guess these guys don’t do laundry.
Amelia McGee 4:39
Exactly. That’s what the old owner said. He’s like, I never made any money off of these machines. And I’m like, “Well, I made great money off of them. So I can tell you right now why you weren’t making any money off of that.”
Bonnie Galam 4:50
I love coin-operated laundry.
Amelia McGee 4:52
Yes. So do I. It’s like, honestly like Christmas morning every month when I go and empty the machines as we have like my parents and I have a guessing game on like how many coins are in like the bag?
Bonnie Galam 5:04
I know, and the banks hate it when we come in they absolutely they’re like seriously there’s a small bank near us it’s called Republic Bank and they’ve got like the coin machine that you drop it in and it like makes all the lights and a lot of fun and but like they look at us like how long are you going to be here for I’m like, “It’s gonna be a while guys.”
Amelia McGee 5:21
No, I have like one teller that I really like and I always go to her because all the other tellers like acts so annoyed when I come in, and I’m just like, “Sorry guys, like whatever.” But essentially it was so stressful because I was like “Oh my god,” these new tenants that I have are now she was like a single mom with a new baby. And so I’m like oh, now she’s scared that there’s someone like breaking into the property to like rob me. So I obviously filed a police report and the town police knew of this guy so I think they went and had a talk with him because I never had any issues with him in the future.
Bonnie Galam 6:01
How did he get it in the first place?
Amelia McGee 6:04
So the laundry rooms in a shared common space so there’s an exterior door that wasn’t locked before because you would go in and then you would go up to the apartments and unlock those so it was unlocked and he just broke in I mean not broken but he got in and so now we keep that door locked all the time.
Bonnie Galam 6:26
Gotcha. So yeah, I was thinking I when I was was undergrad cuz I went to the same school for law school and undergrad, so it blurs together. But this apartment I lived in undergrad, and it was in Philadelphia and you would have to go outside to do your laundry like in the basement there was a separate door that was always unlocked but it was just like the basement I’m just saying then I’m like that’s probably free for all over there and that’s Philadelphia.
Amelia McGee 6:48
Seriously and I knew it was the guy the old tenant too because if you had never lived at that property you never would have known that there was a washer, a coin-operated washer-dryer inside. Like, what an idiot. Criminals, I mean, they’re not the smartest.
Bonnie Galam 7:02
There’s a reason yes to these tactics. But I mean laundry money can be decent money I mean I love people who love having laundromats as businesses but good Lord, you can have it right there in your real estate as well.
Amelia McGee 7:16
Absolutely, I would totally recommend putting in coin-operated in multifamily.
Bonnie Galam 7:22
Especially at like certain price points. And if you’re not in like an A, B+ market, you totally don’t need it in there. I mean, for us, we largely have you know student rentals or things that are in like C class neighborhoods, and they’re totally fine with that half those people are bringing their laundry home all weekend.
Amelia McGee 7:37
That’s what I used to do. But yeah, I know I agreed my rentals are mostly in like B-, C areas as well. So I mean they’re totally fine just having even the option of a washing machine.
Bonnie Galam 7:49
Yeah, the fact that it’s in the building like that’s the point.
Amelia McGee 7:52
Yeah, exactly. So that was my first like a week of owning a property of course it seemed like the end of the world but you know, got to figure it out got it taken care of that same unit later I had some plumbing issues there was some leaking happening from the top unit into the bottom unit and my plumber came over and I love my plumber to death he has dealt with so many creepy crawlies. Properties that I’ve purchased but this one he was fixing some plumbing in the ceiling in the drop ceiling and he sent me a picture of I shoot you not like a seven or eight-foot snakeskin that he had found. He had found it in the ceiling. And my first question was, you didn’t show the tenant Did you like he’s like no, I but I did just leave it up there. So I think that what why it was up there again this scummy tenant that had lived there before. They had a mouse problem and they had a pet snake. I think they were letting the pet snake out to catch the mice. And so…
Bonnie Galam 9:08
What was this like a pet-like boa constrictor?
Amelia McGee 9:11
Yeah, it was I think some sort of a constrictor snake but like…
Bonnie Galam 9:17
This is not like your average garden snake size. I don’t know about things there at Iowa. But that’s not how we roll here in New Jersey.
Amelia McGee 9:27
And you could tell like the markings on it. I mean, we have like what are they called? Like rat snakes and like garter snakes. This was like some sort of a pet boa snake.
Bonnie Galam 9:36
So something that belonged in a zoo or a rainforest.
Amelia McGee 9:39
Yes. What an ingenious idea. I guess though.
Bonnie Galam 9:44
I think people buy cats to deal with mice. What happened to that ingenious idea?
Amelia McGee 9:47
They had all sorts of pets in that house. That was a freakin shit show when I got it, literally. Oh, yeah. Oh, yes. And they have since contacted me because now They need another place to live because they’re the tenants that hop around getting evicted everywhere. I don’t think they know that I know who they are. But she keeps applying for my rentals. And so I just sent her a message and I say, stop applying, you’re not gonna qualify, I bought the property that you used to live in, and it was a mess. Also, you keep lying on your application saying your husband hasn’t been convicted of a crime, and he has many times. So you’re disqualified? Just have no time on?
Bonnie Galam 10:30
Yes, guys, although I will say for the listeners here, the criminal history checks, that is something that is really kind of changing across the country in terms of laws and policies affecting like, when you can ask those kinds of questions, some you can still ask and pre-screen usually can still ask about like sex offender type of status in pre-screen. But a lot of states I know here in New Jersey, Philadelphia has implemented some things like that as well, you actually can’t run like a full-blown criminal record check until after the conditional offer has been extended to the tenant for you know, the hopes that you know, people who are you know, have served their time or on probation, or whatever the case may be that they still need somewhere to live. And that was an actual housing crisis in that these people had nowhere to live. And so has that gone into effect near you in the Midwest?
Amelia McGee 11:18
No, it hasn’t. But it’s funny that you say that because my boyfriend’s actually an attorney as well. And when I was telling him about this, he’s like, well make sure he’s like, they’re not just traffic violations, right? So because you can’t, that doesn’t count as like a criminal offense, like a traffic violation. So in case, you didn’t know that, like, you can’t discriminate against that. But no, these were more serious charges, domestic and some other things. So yeah, it hasn’t gone into effect here yet that I know of.
Bonnie Galam 11:48
The thing is, they start on the coasts, and they work their way in. Yes, we come up with all these convoluted ideas, well, perhaps well-intentioned, but it’s actually causing a little bit of a problem for some of the people around here, because some, I’ll say quite a few of the like credit, and background check providers for landlords, they’re no longer offering it for the state of New Jersey, they’re just like, we don’t know how to like, make sure it’s compliant, to get, you know, verification from you that you’re only doing this post conditional offer. And so we’re just not going to offer it anymore. And I’m like, well, that’s a little bit of a problem.
Amelia McGee 12:26
Wow. Oh, my gosh, I mean, I totally get both sides of it. You know, I know that. felons are discriminated against even if they’ve served their time, and it’s been 20 years, you know, but at the same time as a landlord, we have to protect ourselves.
Bonnie Galam 12:42
Yeah, definitely in the also have to see like, what’s in it for, you know, is it you know, some pot-smoking, you know, when they were in exactly? Or is this you know, someone who is, you know, committing assaults, multiple. Yeah. And you’re like, well, good, Lord, I don’t need that to be me when I go to, you know, find out where the rent is. Absolutely. And just having to deal with the police at the property. It’s just, that’s fun. That’s, you know when you get that first like, 2 am, phone call, you’re like, oh, man, this is for real. I traded in this nine to five for 24/7. If it was easy, everyone would do it. That’s what I always say. I’m like, that’s there’s a reason why landlords sell people offload portfolios, because this if it was it was easy, everyone would do it. Absolutely. And so tell me more. So we’ve got this robbery on like, day seven of being a real estate investor, and where do things go from there? I know they went up, but there were some bumps along the way.
Amelia McGee 13:38
Yeah, so there have just been, you know, issues along the way with inherited tenants, I do not love inherited tenants, the cash flow immediately is great, but I found that they are more headache than they’re worth. Because you don’t get to set the ground rules right away. So coming in as a new person and trying to set new rules can be very difficult. One of the most recent horror stories, which is I think one of the best happened a few months ago at a property that I own with a partner. It’s 11 units, my biggest property, and the city requires rental inspections. So I sent out an email to all of my tenants and let them know that I would be at the property on X date at x time and that they needed to have their unit available for showing it at that time. And I’ve emailed all the tenants and gotten responses before from this email address that I sent it from. So like I know it’s my business address. So I know that they all get that email. Well, we show up. I show up on the day of the inspection with the city inspector. Everything’s going well we get to literally the last unit so we have been there for a while parked in the parking lot. And this tenant is a 65 to a 70-year-old man. I would say he’s a little bit strange. Um, he had his door cracked open. And so I knocked and no answer. And so we waited for a little bit and then I knocked again and no answer. But his door was cracked open. And I’ve talked to him plenty of times. So I peek my head in the door. And I say, hey, so and so are you home? I knew he was because his car was in the parking lot. And I see a pantsless, underwearless man walk out of the kitchen into the main living area. He did not see me. So I quickly like we’re basically running outside. These are studio apartments. So like, I mean, there’s not a lot of places. Oh, no. So I ran back outside. I tell the inspector what had happened. He’s like, Oh my God, this guy’s so weird. I’ve had to deal with him in the past. Like, make sure that whenever you’re here like, you bring somebody with you. I’m like, I think he’s harmless. He’s just weird. But anyways, about, about I saw everything. About two minutes later. Maybe a minute later, he pops his head out the door. He goes, “Oh, hi. I didn’t think I heard somebody knock on the door.” Still pay Atlas. Enough in there. I’m like, “Oh, yeah, we’re here for the city inspection that I emailed you about?” He goes, “Oh, I never got that email.” It must have been lost in like, I don’t even know he said some weird response because he’s just strange. And I was like, “No, you fucking did not miss that email. You knew I was going to be here with the city inspector and you purposely answered the door without pants or underwear on because he thrives on drama and like we are getting the reaction.” Yes, he wanted the reaction would have which I was not going to give him I acted as if nothing had ever acted like I didn’t see a damn thing. I just, oh my god. You never know what you’re gonna get with tenants. I mean, just any had his door open and he was walking around in there with no pants or underwear on that was another thing like his door was cracked open like anybody walking by so I looked in.
Bonnie Galam 17:37
Yeah, that’s an experience I can say I have not yet had. However. I’ll hope that that lasts for a very long time.
Amelia McGee 17:51
Oh, good lord. What, uh, that the worst part was like the city inspector was with me. He’s probably he’s like, What is going on here?
Bonnie Galam 18:02
Like, embarrassed for him, you’re embarrassed for yourself. It’s just like, what do you ever do have no control? Did the inspection take place? Like, did you get it done?
Amelia McGee 18:11
Oh, yeah. He went in the inspector was like, pretty rude to the guy after that, just because I think he realized too, that like, This guy had done that on purpose. And he was just like, I’m not like dealing with that. Like, this is unacceptable. So yeah, but we got it done. It passed, but it was just…
Bonnie Galam 18:30
it’s never sometimes like, man to man, like, people can like kind of put like the stake in the ground like Yo, you’re being a tool. What are you doing? But like for us as like younger women? I feel like people just try to toe the line a little bit. Yes, more than a little bit. That was like telling the whole hands.
Amelia McGee 18:52
It really was it was like, Yeah, he did it on purpose. I mean, there’s no other way around it. So and he did it. Yeah. Because I’m a woman I think like a younger woman and he was just trying to see what he could get away with. So rose. Yeah, that same property. I also think this is also because I’m a woman I have a really aggressive tenant that I inherited there who’s like, very rude to me like, he is disrespectful and I’ve never been anything but kind to him. And he messaged me the other day that he kicked his own door in because his key got bent and it wouldn’t work in the lock. And that I needed to have my handyman over there the next day to fix it
Bonnie Galam 19:41
Their own apartment and then they’re like the place is not secure. And you’re like, Well, that’s because that’s not how you do things.
Amelia McGee 19:48
I know So, needless to say, he’s going to be gone very soon. Yes, good.
Bonnie Galam 19:55
That is good. moratoriums are all up there in Iowa.
Amelia McGee 19:59
Yeah, yeah. So everything’s, you know, good to go. Even. So I was talking to my attorney about it. And he was like, Well, if he’s like, being destructive towards the property, like that’s different than an eviction for nonpayment, so even if it wasn’t, he was like, you would still be able to get him out. So we served him three notices concurrently, a three day notice a seven-day notice, and a 30-day notice,
Bonnie Galam 20:25
I’ve definitely I’ve done that for people. Well, you’re just like every possible basis, I’m going to evict you under all of them and give you all of the notices.
Amelia McGee 20:33
Yes. So yeah, we’re doing that process right now.
Bonnie Galam 20:37
I’m glad that I’m not the only attorney who takes the like, literal shotgun approach, because like, there’s no time like, you don’t have time to like, reset the clock and be like, well, that basis didn’t work. Let’s go back and refile under this one. Like, you’ve got to just file them all at once.
Amelia McGee 20:52
Exactly. And that’s why, like, I totally recommend, I know, you’re like a real estate attorney, but like, find one that’s like, specifically practices in real estate, because they’re gonna have like that no-nonsense approach, they’ve done this 1000 times, it’s like, Okay, we’re gonna just go in and serve all these notices at once and get it done and move on.
Bonnie Galam 21:12
Yeah, and I even say like, sub-specialize even more like within real estate. It’s such a huge area of law. There’s like land use, and there’s landlord-tenant, and there’s real estate finance, and there’s transactional, and there’s it litigation there. There are all kinds of areas that you could just spend a lifetime, like perfecting and going really deep into, and that all also like are just different times, like people like who do evictions for example. They’re in court, like, all day, every day, and they just go to different courthouses and just do evictions all day. Whereas like the land use guys there, that’s night games, where they’re, you know, in front of the planning and zoning boards to be able to do those things. And unless you’re working 24/7, you can’t be doing all of them. Or at least not doing all of it really well. Do you have like different attorneys who use them for different things?
Amelia McGee 21:59
So, um, yes, kind of so because my boyfriend’s an attorney, I will use his firm he works at like one of the largest firms in Iowa. So I use all of their attorneys for different Yeah, yeah. So um, but this specific attorney I’ve used for like all of my I use them for my closings, and then also for like, my tenant issues that come? Yeah. So I’m speaking of I have another story from this property. Yes.
Bonnie Galam 22:31
I’ve only problems.
Amelia McGee 22:36
For real. So I’ve only owned this property since August of 2021. And this should not scare you out of real estate investing. But it should just like to open your eyes to the fact that like, stuff can and will go wrong. And like Do you have the stomach for this kind of stuff? Like are you able to work through problems? I think that’s one of the biggest things about being an investor like your ability to handle issues and work through problems. Everyone’s a good property manager until there’s conflict.
Bonnie Galam 23:05
Cashing the rent checks.
Amelia McGee 23:07
Yeah, exactly. So this was another inherited tenant at this property. And I call them an inherited tenant very loosely because I actually never did meet them or see them. Shortly after we closed on the property. I had never, I never been able to get a hold of this tenant. I noticed I put a notice on their door, I did all the things and I noticed that they had some cats in the unit. Also, the unit stunk to high heaven. It was I could smell it from the outside, smelled like cats. So after I don’t know, like a, let’s say a week, maybe of me like never seeing her and never seeing any movement. I call the non-emergency police line and have them do a welfare check. So that I could basically get into the unit. And the premise was like there are live animals in there and no one has like been at the property. So they went in and the cats had been in there. So as you can imagine the apartment was an absolute disaster. Yeah, smelled terrible. They called the ASPCA and took the cats out and basically, they had known of this person she had been called. I mean, the police have been called multiple times for animal neglect and things from her but that was I eventually got the unit. It was filed as abandoned. So we went through that whole process to do the abandonment notice and all of that, so we could legally like remove her items and things which there wasn’t much in there. But that was a fun renovation.
Bonnie Galam 24:51
Removing cat pee is really hard. Like what you have on the floors there was carpet or hardwood.
Amelia McGee 24:56
So they had actually right before that tenant moved in new luxury vinyl plank, which I ended up obviously tape tearing out. And it was like completely soiled underneath which LVP is technically waterproof, but if it’s like, so there’s the yeah standing water. So it was like still wet underneath, then I just like I did all this myself to it’s disgusting, but scrub the floor very, very well with like multiple different things like whatever then vinegar bleach like whatever. And then I ended up using as kills paint and I just like primed everything and kills even the floors like I prime to those.
Bonnie Galam 25:41
That works really well. We’ve done that in some properties that had like, like smoke odor in them, and it does a really good job. I’ve used it multiple
Amelia McGee 25:49
times, it is it’s like the tried and true method of getting rid of nasty odors. And then I put new LDP down over the top. So that got rid of the smell. But God it was terrible.
Bonnie Galam 26:01
That does sound awful. Now, how long was it from when you closed on the property to when you realize that like she wasn’t there?
Amelia McGee 26:11
So like, because I hadn’t been able to get a hold of her. I had already served her. Oh, oh. And the sellers didn’t tell me that she was a year behind on rent until after we’d already closed, which was just like, because at the closing table, they’re like, Oh, she’s supposed to be getting like a $5,000 check from the government to like pay us and that money needs to come to us, not you which I’m like, whatever, I don’t care, like just get out of my face. But um, so because I hadn’t been able to get a hold of her, we basically put a notice on her door like the day that we closed. That was like, we’re not renewing your lease, like you have however long to respond like blah, blah, blah. And then I think it was like a week after that when I called the police because I was worried about the animals inside. Like at that point, I didn’t really care about her. Like I knew she wasn’t there like I knew we were going to be able to go through with the abandonment situation. But yeah, I think I gave it like five to seven days, I would say which I mean, maybe it was too long, but at the same time, like I had other things going on and like you just don’t know like I wasn’t monitoring the property all the time to know like if she was coming and going…
Bonnie Galam 27:26
That was almost even a little fast. Not like inappropriately fast. But I think you had a sense that there was something off with this unit just because you’re around yourself managing and whatnot.
Amelia McGee 27:35
Yeah, and like the tenant above her head said, I haven’t seen her in weeks. Like I’m actually a little bit worried that maybe something did happen to her. So that was like, okay, like, I’m gonna call the police now because what if she’s in there like, you know, not alive anymore?
Bonnie Galam 27:52
Right, right. Yeah. I mean, that’s happened.
Amelia McGee 27:55
It did smell absolutely terrible from the outside. So like, yeah, that was absolutely a possibility at that point.
Bonnie Galam 27:59
That yeah, I’ve had that happen to actually a family member who was renting to someone and the tenant was like, they hadn’t seen her. It was only a few days. And they’re like, maybe she went on vacation. No, she would have told us no, she like had a heart attack in the bed. never woke up was just like an older single woman. And no one had checked on her.
Amelia McGee 28:22
Yeah, I’ve just that’s like an absolute nightmare situation like that is a House of Horrors at that point.
Bonnie Galam 28:34
At least that was a natural death. Yes, it’s worse when you have non-natural deaths than we’ve had a homicide in one of our units before. And maybe I’ll bring my husband on one time. And we’ll talk about that situation. Because that is it’s it’s not fun. I mean, it really comes down to like, clean up.
Amelia McGee 28:52
No, you absolutely should. Yeah, should talk about that. Talk about too. I’ve heard like, make sure your insurance policy covers like, that type of cleanup. Because it can be hella expensive if not.
Bonnie Galam 29:07
it Yeah, it depends on what happens. It can because it’s like a biohazard. Yeah. But it’s not just like a, you know, the deep clean that you get with your regular cleaning crew during a turnover or something like that. It’s definitely different. I mean, and even things like there’s, you know, we’ll talk about it in another episode. But I will say there are considerations with like the police and all that because that’s also a crime scene. And you don’t always get to do like the cleanup and turnover, like when you want to, you’re kind of operating on someone else’s timeframe. But I wanted to, you know, before we wrap up today, kind of goes through a little bit more of like, who you are, how you are, you know, here as you know, a 30 year old with 30 doors and less than 18 months. I mean, you’ve had the ups and the downs, you know, the experiences, and I know you said at the beginning that you were like, you know, it’s not the typical horror story. It’s the tenant stuff and that’s the stuff I have found for me and I’ve always referred to it as this like drip, drip, drip drip, where it’s like when you think about legal a lot of times you’re thinking about, you know, the catastrophic like slip and fall or this like explosive lawsuit that like decimates you, but you’re like, Well, what about like when the tenant leaves a dozen cats behind and you know, it’s another 10,000 out of pocket that I wasn’t planning on doing or in the, you know, the tenant who doesn’t leave when they’re supposed to, or the tenant who steal stuff, and we’ve had tenants who still, you know, copper piping, and it’s just how you sell that stuff because no LLC is going to protect you. Right, and it’s just, you either gotta have, you know, the right insurances, the right kind of policies, the lease terms, all that kind of stuff to, to protect yourself, and I don’t think it’s something you can do even all at once. And even for us, like we change our leases every single year, every single year.
Amelia McGee 30:56
I agree. 100%. I think that I honestly feel like the tenant aspect of real estate investing is the hardest aspect because, you know, things go wrong, and properties and flips and things like that, but they’re like, much more solvable than when you’re dealing with another human being that has like thoughts and feelings and like, all of that kind of stuff. And it’s ever-changing, like one day, they could be, you know, act a certain way. And the next day, it could be completely different. So that part is the hardest part, in my opinion.
Bonnie Galam 31:29
Oh, I couldn’t agree more, I think dealing with, you know, the tenant relationship is by far the hardest, and in some ways, the riskiest part of being a landlord, because like you said, it’s also about controlling access to like, what is technically your building, but like not really something you have possession to. And so it can get really messy, it can get really naked, apparently. And it’s just one of those things were and it’s, it’s also emotional like you said, it’s something where it’s like, it’s someone’s house, like whether they respect it, whether they respect themselves is like a different story. But like, at the end of the day, it’s the place where like, is a roof over their heads and the winds, the winds have taught, you know, their emotions may take them one direction or another. I mean, I do maybe laugh here, when you had said that, because I’ve had that where it’s like, we really tried not to evict I don’t think it’s good for landlords, I don’t think it’s good for tenants, sometimes you just have to, especially here in the Northeast, where like the eviction process can be, you know, very lengthy. We have often tried to do Cash for Keys with pretty good success, and you have people who you’re like, offering cash to keys to and they’re basically like, Go screw yourself, not leaving, not leaving till the sheriff. And then the next day, there’s like, hey, I’ll be out by Friday, you’re like, What the heck happened? Like, what, like, the money hasn’t changed. It’s just, it’s something like their, you know, their buddies that they can move in with them. It has nothing to do with me, it has nothing, it has something to them, but had nothing to do with like the two of us in the relationship. And it’s just something else in their life change, they got a new job, or they’re just like, you know, I guess I can move out?
Amelia McGee 32:58
Absolutely. And that happens all the time. Like, all the time, I would say like, their feelings are, you know, it’s something one day and the next day, it’s completely different. So I just Yeah, I think one piece of advice would be like, try not to get so stressed out about stuff like that, because it always ends up working out in the end, like–
Bonnie Galam 33:17
And it’s not like you as like a person that took me some time where I was just like, cuz I’m a fixer. And I think that’s probably a big reason why I’m a lawyer is that, like, I wanted to fix the problems. And I realized I couldn’t always do that. And that wasn’t like necessary or flexion of me as a person, it was just like, I can’t control this other human being. I just, I would love to I went to like, a lot of therapy for this, but like, the reality of it, as you know, otherwise, you know, borderline control freak. Like, once that, you know, have all the boxes checked off. Now, what do you use for self-management to use as software?
Amelia McGee 33:55
So I currently use apartments.com, because I wasn’t planning on expanding as rapidly as I did. So, um, it was it’s very basic like it worked when I only had, you know, a couple of units. But at this point, I’m looking for some sort of different tenant management software. I do use Stessa as well, like for bookkeeping and things like that, but I’m looking to outsource that very soon. But yeah, I don’t what do you use for your tenant management?
Bonnie Galam 34:26
We use AppFolio. Okay. Yeah. Which is good. We still separately use QuickBooks. I know that AppFolio has like in-house bookkeeping, but just due to the way that we have multiple houses, it’s just easier for us to kind of separate the two.
Amelia McGee 34:42
The one thing I don’t like the most about apartments.com is their maintenance request system is pretty awful. Like it doesn’t really function. So I yeah, I’m looking to do No, I’m looking for basically a platform that is gonna have payments, leases, maintenance request messaging like all of that in one. And I know there are lots. Yeah, there are quite a few out there. Yeah, I just need to look into it more. So apartments.com seems to be like the starter one that like everyone goes with it isn’t free or it is free. Yeah, it’s free. And I feel like it’s fairly user-friendly. Does it function how I want it to function for most things?
Bonnie Galam 35:26
For the maintenance repair.
Amelia McGee 35:27
Yeah. So I’m on the lookout for that. But, you know, you have to prioritize what’s important. And finding a new software hasn’t been one of the most important things.
Bonnie Galam 35:41
Yeah. It’s a thing like, switching over like we only started using AppFolio, maybe like three or four years ago. And like, just the thought of like, moving into it was like so overwhelming, which is why I think it took us so long to do it. Because it’s, it’s a thing. So I totally get that. So what are you focusing on right now? In your real estate business?
Amelia McGee 36:02
Yeah. So right now I’m focusing on one, I’m hiring an assistant, first of all, to do some of the tasks that I don’t enjoy doing. Is that like the bookkeeping, or bookkeeping, some like tenant onboarding, so not acting as a property manager, because that’s technically not legal here? But just like, putting documents together and things like that. Police things like yeah, organizing contractors, just lots of different tasks that I don’t love that are up in the air. Yeah, I’m, I’m actually shifting and I want to buy a few short-term rentals this next year, like solely for Airbnb, in locations that I also want to travel to. So that is what I’m mainly focusing on right now. And always looking for like mid-size multifamily, which I consider anything from like 10 to 20 units. That’s kind of the sweet spot here in iOS. So just be on the lookout for those.
Bonnie Galam 37:04
That’s awesome. I love that you’re kind of dabbling and that you’ve already actually purchased a short-term rental already, right?
Amelia McGee 37:09
Yes. So I have one right now that’s currently under construction, it should be open. It’s a lake. It’s in a lake town. So it’ll be open for the busy season starting in May, which I’m really, really excited about. So that’s an I want to that’s and yep, it’s about two hours away from me, which I also really liked, because I like going to that town anyway. And now we have our own place there so… that would be fun.
Bonnie Galam 37:33
At least to go now. What other towns? What are there I don’t want to say towns or cities? But where else? Are you looking for short-term rentals? Like, do you want a beach house? A Mountain House? Like how are we doing this?
Amelia McGee 37:43
Yeah, so Colorado, for sure. Definitely a Mountain House. I also have been looking kind of in North Carolina, because I like that there are beaches and mountains. They’re not you know, you can drive to the beach and drive to the mountains, Utah, and Minnesota because it’s close to Iowa. And they have a lot of nice lake towns there as well. So, yeah, that’s kind of where I’m looking right now.
Bonnie Galam 38:10
Oh, that’s, that’s so cool. I would really love a short-term rental for myself. I know we’re looking to pivot kind of right now. We always like you said, I guess we are more of like a small multi-space we love like the four to like 10 unit, we’d like to do a little bit bigger, I think. But the commercial space, the short-term rental space for one, it’s just that landlord-tenant laws are easier in those areas. And so you have a lot more like leeway and control over the properties and just the way things were just so completely shut down here with the moratoriums for the pandemic. And I’m just like, Oh, I know that I want to go deeper into this hole that like, there would be no way for me to do anything about.
Amelia McGee 38:49
Absolutely. Yeah. So I’m really trying to niche down a little bit on like, what I’m purchasing because I’m really moving out of single-family homes and only into like mid-size, multifamily and short term rentals.
Bonnie Galam 39:04
Did you recently sell one of your single families?
Amelia McGee 39:07
So I did sell one of them. It was never a rental though it was always going to be a flip. And it was just a small flip. Like really cosmetic. It was a four-month project from Close to close. So that was a pretty quick, little quick. Yeah, yeah, I don’t love flips anymore. I mean, I love the money from them. But like the management of them is almost not worth it to me at this point. Because it’s just so time-consuming. Even managing contractors. If they’re doing you know, they’re doing all the work. It’s still time-consuming.
Bonnie Galam 39:41
And if you’re not only on the job every day, then like things aren’t going right.
Amelia McGee 39:43
Yes, exactly. So I’m transitioning out of stuff like that. That’s very time-consuming. I started investing in real estate because I wanted time freedom and financial freedom. So I’m really trying to like, stick with it. Yeah, that’s I’m free for me.
Bonnie Galam 40:01
So it’s hard to do that when you’re flipping. There’s definitely people out there who do it. But I think it takes it takes a lot to really get there. And it’s hard, especially right now, I don’t know about how things are in Iowa, it’s so hard to find like the contractors here. They’re just like, Yeah, I’ll be happy to do this for you in nine months at triple the rate, you would have paid me in 2019.
Amelia McGee 40:23
Absolutely. And I just had like a plumber ghost me this weekend, which I’ve never had happen before. I was just like, What is going on? How can you be so incompetent at your job and still, like make money, but you see it all the time in the trades industry? Because they’re just so in such high demand that they can get away with doing stuff like that?
Bonnie Galam 40:44
Yeah, must be nice. I know. But no, I mean, yeah, they’re definitely like, technicians. And there’s not enough of them. And so like you said, it all comes down to supply and demand. And if you don’t like it, then that’s fine. They’ve got you to know, 15 waiting to take your spot.
Amelia McGee 41:03
Bonnie Galam 41:04
So based on like your experiences, what do you wish real estate investors understood better about the legal stuff?
Amelia McGee 41:13
Oh, okay. Here’s my top advice for that, because I’m dating an attorney. And I, you know, I get to see some of the ins and outs of I know you should be a tax attorney. I think one of the biggest mistakes that I see real estate investors make is not wanting to pay for legal advice. Right away, or when a problem comes up, or even prior to a problem happening. And I will tell you right now that it is much more expensive to fix a problem after the fact or pay for legal advice after the fact, rather than just biting the bullet and doing it right away.
Bonnie Galam 41:55
Hands down. And I will say that as someone who would be better served collecting you know, the fee, after the mess already happens, but you’re totally right. It’s one of those things where it’s like, you could pay a little bit now, or you could pay a lot later.
Amelia McGee 42:08
Absolutely. And I think attorneys are worth their weight in gold and finding a good one I would highly recommend, um, people are like, how do you find an attorney? I’m like, just start. I don’t know, start with a Google search like I do. I Google everything. I mean, everything.
Bonnie Galam 42:23
I Yelp everything.
Amelia McGee 42:24
So yeah, it’s just like, I don’t know, just get out there and cold call and find one that you like, I don’t. Yeah, that’s hard.
Bonnie Galam 42:34
You gotta kiss some frogs. And sometimes I think, you know, talking to like, in the investing groups, I think is the best way. Because if people have other investing clients, and that’s probably a good deal. There are a lot of real estate attorneys out there. As I had mentioned earlier, where there are a lot of different subspecialties. But even within that, I feel like this niche of being like a mom and pop kind of landlord is is a niche in and of itself. There’s just there are people who do you know, landlord-tenant law, but people who do that for like, shopping centers don’t always get the ins and outs of like, the residential stuff. And so just figuring out and meeting other investors and seeing who they use is I find a really good starting point, or just date one.
Amelia McGee 43:17
I know I don’t really recommend that.
Bonnie Galam 43:19
That’s, I don’t recommend dating whatever.
Amelia McGee 43:24
No, um, yeah, I This isn’t really like legal advice. But I would say a little disclaimer, yeah, no, I would say that also. Um, sometimes it’s worth it to just like, I see people post all the time. Let me give an example. That’s like, my tenant wants me to pay $50 To fix this drain that they’ve broken or like, Whatever, whatever. And I think they should have to pay it’s like, is that really worth your time to, like, argue over $50? Like, I get that it can be like the principle of the matter. But at the same time, I’m like, that is not worth my time. I’m just gonna pay it and move on with my day. Like, right?
Bonnie Galam 44:06
I did. And that’s how we tend to approach things as we pay it we move on with their day, we give them like a stern like Yo, dude, like, this was your problem. Don’t do it again. And then that’s it. But I feel like there’s this there’s such this fear of the tenant, where it’s like landlord versus tenant, we’re just like, just get it done. Just it’s not like the tenant is not thinking, Well, I’m going to test and I’m going to break this train. And then when that happens, I’m gonna break everything and like, no one thinks that way. No one thinks that way.
Amelia McGee 44:35
No. And sometimes it’s for things that aren’t isn’t even like the tenants fault. Or just like I just I’m like, why are you wasting your time over a couple $100 Like, you can’t afford a couple $100 Fix then like maybe this isn’t for you. Like maybe?
Bonnie Galam 44:50
In some of this, I think honestly has to do with like, I’ve seen it. I’ve seen it with clients and it’s not my job to kind of step in and be like, Hey, this is a good deal or not a good deal, because I don’t, I don’t know people’s business. I don’t know their risk tolerance I, that’s not my job I see if anything, it’s their realtors job to tell them that they have a cash flowing deal or not, but sometimes where it’s like, like their cash flow like $200 a door, I’m like, it’s gonna take like, one HVAC. And there’s your profit for the next three years.
Amelia McGee 45:17
Absolutely. I had somebody. So I posted about that most recent flip that I did. And I explained like why I didn’t do a burr on it. And because like after I would have burned out of it, it would have been $85 a month in cash flow. And we made a quick 20 grand profit and some guy in common and was like, I would have kept it as a bur for $85 a month because then you have you know, unlimited cash flow. Yeah. And appreciation. I said, first of all, it’s in a low appreciating markets and rural Iowa, it’s not appreciating, we sold it at top dollar. And two, what happens in 10 years, when the roof goes out, the H back needs your place, then you’re you’ve gotten zero profit. You’ve lost money on that, like get out of my comment section.
Bonnie Galam 46:06
No, I couldn’t agree more. I think there’s a lot of people here and I realize it’s been a tougher market. You really have to hunt for like, good deals right now. A lot of people you’ve got to go off market. Have you found most of your deals on market or off market?
Amelia McGee 46:17
I think it’s like 50-50, to be honest. So a lot of it’s been word of mouth off market deals.
Bonnie Galam 46:23
Yeah. People just know that you’re looking. Yes, exactly. And because it can be hard. I mean, I had an agent come to me the other day because I have a few agents, you know that we buy stuff. They’re like, hey, what do you think of this deal? I said I think it cashflows $115 A month as a duplex And that’s interesting. Yeah, I’m like, I’m not interested. And he was like, Well, we think it’s priced fine. I said go ahead. I’m not buying like someone can buy that maybe for house hackers. Exactly. Yeah. Well, like it doesn’t make sense to me.
Amelia McGee 46:52
Yeah, I know. People always asked me, what’s your What are you looking at per door? Like, what do you want for cash flow? Which is so hard, because it’s obviously very personal. But like, for me, it’s like a minimum of 300? Like, minimum 300 per door? Yeah, yeah. So just I know, it’s hard to find deals right now. But at the same time, like you have to think about it more long term to like, okay, if I’m only making 150 per door, like, yeah, what happens when the water heater the H back? Do they all go out? Like then you’re sunk?
Bonnie Galam 47:23
Yeah, yeah, you’ve got to have that, like wiggle room. And then and then. So I’d rather be like pleasantly surprised that I made more money, than like put like less let pleasantly surprised that I’ve made zero money. And the last question that I have for you is what has been your like, favorite business real estate investing book?
Amelia McGee 47:45
That’s a good question. I think my favorite has been raising private capital by math fair cloth. That’s a good one. I have that one. Because I’ve been able to expand by obtaining partners and raising private capital, I know some people that are not for them, which is totally, totally fine. And I think in the future as I have more of my own capital like I won’t, partners much, but like getting started that’s really helped me be able to expand to 30 doors in 18 months.
Bonnie Galam 48:17
Yeah, no, that’s, that’s…
Amelia McGee 48:20
That’s my secret. That’s my little secret is that I partnered on probably 50% of my doors, so.
Bonnie Galam 48:27
That’s, it’s not a secret. It’s like, learning to like, leverage that. And so good for you. And so that is all I have for you, Miss Amelia, thank you so much for joining me on the House of Horrors podcast telling us all about these like, wonky tenant lows that you’ve been dealing with over the past few months. I can’t even say a few years. Yeah, we’re coming up on two years. And it’s, it’s just incredible to see your growth. She is such a fun follow guys to follow on Instagram. She also does some coaching for people for at least for the time being and does retreats and whatnot with grace, she’s also a wonderful investor, a wonderful human being and so definitely go give her a follow. I’ll link all of her contact info and everything in the show notes. You can connect with her there as well.
Amelia McGee 49:15
Yeah, and thank you so much for having me. This was so fun. As soon as I saw that you had changed your podcast, I was like, Oh, I’ve got some good stories to share. So I can’t wait to listen more to it because it’s just like the real-life drama of landlords like the House of Horrors. So I just am looking forward to the
Bonnie Galam 49:33
series. And then that’s why I wanted to do it because I’m like, Look, I’m not looking to scare anyone out of it. But like the reality is, I feel like sometimes people talk about real estate investing. Like we’re just like, holding hands like with unicorns, you know, over the, you know, tax deduction, Rainbow there’s just actually a lot more to it. And if we can, you know, learn from each other and even if it’s just like silly things where you’re like, hey, I never thought to put a lock on the front door because they have The you know, individual apartment doors now you’re just like, hey, maybe I’m gonna go drop 100 bucks at Home Depot today and do that.
Amelia McGee 50:05
Bonnie Galam 50:08
Awesome. All right, well, thanks again.
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