Making Over $10K/Month Thanks to “Conscious” Multifamily Investing

This story was originally published at BiggerPockets.com

With the right rental properties, you could not only bring in thousands of dollars in cash flow each month but also build long-term wealth. Just ask today’s guest! Despite her fulfilling career, she came to the realization that she wasn’t on the path to financial independence and decided to take things into her own hands!

Welcome back to the Real Estate Rookie podcast! Yiting Yang is a traveling pediatric neurologist whose multifamily investing portfolio brings in well over $10,000 in monthly cash flow. But that wasn’t always the case. During the early stages of her investing journey, Yiting dealt with difficult lenders, dishonest property managers, delayed renovation projects, and the everyday challenges of out-of-state investing.

In this episode, she gets into the mental side of investing and how practicing mindfulness can help you navigate the ebbs and flows of real estate. A conscious investor, Yiting talks about the importance of choosing an investing strategy that aligns with your core values and long-term goals. She even delves into her struggles with financing and why a low interest rate isn’t the be-all and end-all when vetting a lender!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Ashley :
This is Real estate rookie episode 390. Can you start off investing out of state with commercial properties? What are the big factors to consider when this is your first real estate deal? My name is Ashley Care and I’m here with Tony j Robinson

Tony :
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Now today’s guest is eating yang and she’s a traveling pediatric neurologist that finally realized she’d really needed to take control of her own financial destiny and obviously she chose real estate to do that. So she’s currently house hacking in San Diego and investing in small commercial properties in the Midwest, and she picked an asset class that fits her specific investment goals. We’ll also hear about some of the challenges dealing with larger properties and what she learned from her first deals to help save you from things like an ulcer from your lender. We’ll also learn how to help with the mental battle you’re facing when losing money or dealing with stress on the job or in your business, and she’ll share a horror story about buying a small business, what she learned and lessons you should learn as well. So et welcome to the show. Super excited to have you today.

Yiting:
Thank you so much for having me.

Ashley :
We’d love to hear about your experience diving into real estate and what kind of helped you get clear on where you want to get started.

Yiting:
I think it begins when we’re really young, all the things that we’re taught about how to succeed and whatnot, give contributions back to the world. I really had that intense focus for many years of my life with going into pediatric neurology medicine, which was nine years after college. So when I was in the last year, the chief of pediatric neurology was retiring that year and I saw him about to retire and his sixties and I was really facing my own future as it were, and it wasn’t a future that I wanted to see. So jumping ahead, I was practicing in California as a pediatric neurologist in a not great work environment. I left to become self-employed. Long story short, I really realized that I needed to figure out my financial future. It would be pretty critical for me to figure out how to invest, but I literally knew nothing whatsoever about finances, about money and how it worked.

Ashley :
What timeframe was this?

Yiting:
This was in 2019. I had just quit my job and then the pandemic happened a couple months later.

Ashley :
Okay. So at this point you’ve decided that maybe real estate is the route to go. How did you decide on your asset class and your strategy and what did you end up picking?

Yiting:
I endeavored to learn every single asset class within real estate because that is how my brain works and I like to look at every single option and there are probably thousands of different ways to go about making money in real estate as well as making money in general. I realize now it’s about what is it that the greater power wants to use you to create into the world

Tony :
And et when you think about that, right, because there’s a million different ways to go with real estate investing. You can flip, you can wholesale, you can do short-term, long-term multifamily. How did you specifically land on the niche that you felt spoke to you the most?

Yiting:
I really just got started making offers. I looked at every single asset class for about two months. I started to analyze deals within the first couple of weeks and I started making offers about two to three months in. It was on multifamily house hacking in North San Diego County, and then I made offers in multifamily in Arizona because I saw that I could drive there if I had to. And then I made offers on a short-term rental, huge renovation, almost tear down in Joshua Tree, and I made an offer on residential assisted living facility in Arizona. I came under contract for all of those times, nearly

Tony :
No way. So you were just kind of like whatever property, whatever kind of makes sense. So did you end up actually closing on all those or did you go under contract and lose earnest money? What happens after you go under contract in four or five different properties in different states and asset classes?

Yiting:
I did not do it as a shotgun approach. It was really one and the other in turn, and so I went under contract. I focused on one deal. It didn’t make sense for one rear center or another. I saw that I did not wish to be in the healthcare business in real estate, residential assisted living facilities could be a really quick path to financial independence for some, but I wanted to move away from those aspects of healthcare. I realized that the short-term rental couldn’t work because, well, I was told that the lender could not lend on that property because the A RV was not worth it for them. So that I learned about that. I lost all of the due diligence fees, the inspection fees. I didn’t lose any earnest money.

Ashley :
So after that, where do you kind of take it from now as to there was three deals under contract. You realize these aren’t the strategies for you, what happens next?

Yiting:
I absolutely looked at every single asset class including the commercial, and then I started to go to events. I was always listening to BiggerPockets and you would talk about, okay, it’s really a team sport, and I went to my first real estate event and met my business partner within the first minute of going to that event.

Ashley :
Oh my gosh, wow.

Yiting:
So she was really the start of what became my strategy, which is she was investing in the Midwest in small multifamily duplexes. She was doing really well and I saw that she was living in San Diego. And so once that light bulb went off, I didn’t have to stick to Joshua Tree or Arizona or the markets I felt like I could afford. I was able to really just open up my eyes to anywhere in the country that made sense. And of course it did turn out to be a really wonderful business partnership.

Ashley :
Well, I definitely want to get into that more. We’re going to take a short break right now, but when I come back, let’s talk about that partnership and how you both decided on a market and what that market is. We’ll be right back. Okay. We are back with eating and we just talked about how she has decided that as being self-employed, she needs to get some better tax advantages and one of the ways to do that is through real estate. So she tried out several different strategies that weren’t for her and now has met a partner at a real estate meetup. So there’s hope for all of you out there attend those meetups. So ing, you find this partner, what market do you guys decide on and why do you decide on that market?

Yiting:
Yeah, so she was already investing in this market in the Midwest. It was Indiana, it was a submarket of Indiana. We did not approach Indianapolis whatsoever. I think that is a really big learning that I had through her. Indianapolis is sort of a jungle. They talk about one street being like a D going up right next to an A or B level neighborhood. And so within the submarkets you don’t have as much issues with war zones or lack of safety. And so that really helped us greatly. I started to network in that market. I talked to property managers and realtors and we looked at a few small multifamily. She said, my partner said, let’s keep it to the larger multifamily. It’s all one roof and it’s all a single property that makes it so much easier to manage. I looked at portfolios of single families and she really said, no, that’s not going to work for me. And I realized later why is that was at least for us,

Tony :
And it’s cool that sometimes your partnership can kind of force you outside of your comfort zone to maybe do something that you wouldn’t do by yourself. What market specifically? What city were you guys in? The Midwest out there? 18.

Yiting:
So we were in a submarket of Indiana called Evansville in southern Indiana. And then I talked with the property managers as I was doing the networking as well as just interviewing managers. In that conversation, she said, well, one of our owners is about to sell. We can tell you about that property. And it was 14 units. It did go on the market, but we were already really focused on it. When it did go on the market, we had that slight time advantage or perhaps it just was this timing of looking for deals constantly. And this was by the way, already about one year after I started learning in 2020. And so I was at the point of a significant frustration at times of not having gotten a deal. There’s a lot of identity around investor. And so up until that point I still did not feel like I was an investor. Of course, I really was all along. So if you’re investing in stocks in your retirement funds, you are an investor, you can let go of that. So we did get the 14 units.

Tony :
Congratulations. It took a little while, but you got it. And I think that’s probably the biggest lesson for our rookies to walk away with is that sometimes you can, your first search on Zillow, you’re going to find that perfect deal. I’ll never forget the first time I tried to wholesale, we sent out a bunch of postcards and the very first person that called me, we ended up closing that deal for a 30 K assignment fee and then we didn’t talk to anyone else at any other deal, so like another six months. So sometimes it takes a little bit longer than you think, and I know you’re in Indiana. We just recently interviewed Bailey Kramer on episode 381 and he was in Terre Haute, Indiana, which I think is not too far from Evansville, but we’re starting to see this trend of folks kind of going and it’s been a trend, but folks at least on the podcast are moving towards these Midwestern towns because you are able to get better cashflow then you might be able to get in a San Diego. So let me ask Ying, when you thought about going into this other market, what made you feel that the partnership was necessary? Was it because you just wanted to make sure that you had someone that knew that market already? Was it, Hey, I want to split the down payment costs. What was the true motivation for you? And I guess how did you guys structure that partnership? So it was mutually beneficial.

Yiting:
It was really her that helped me to start with my strategy of out of state multifamily. She had this great sense about where to invest, what kind of asset to buy multifamily versus single family, and she already had properties in Indiana. So I did feel definitely a degree of comfort with getting into especially my first deal. After that I stopped partnering, but she’ll always be my partner. We’ll be holding this for probably many decades. And so once I had that sense of, wow, okay, I am able to learn about the aspects of the investing approach that make the most sense for me and my goals specifically, I was able to set out and do it on my own.

Ashley :
What were some of those goals that multifamily accomplished for you?

Yiting:
So I really had the goal of cashflow. Cashflow is important for me. There is appreciation in general in multifamily, but it wasn’t a market like San Diego, and so I really wanted to get a sense of I could reach financial freedom because I was working as a traveling physician and the assignments could be ire. So once I let go of that sense of, well, I have to have financial freedom, it really helped me to enjoy the journey so much more. It helped me to develop the approach of conscious investing, so investing with presence and mindfulness. I had been a travel physician for all of these different locations and yet I didn’t think until just recently about how to make that a more permanent job. So I am about to accept a permanent position essentially as an acting chief of pediatric neurology in a out of town location, part-time, which is the sustainable approach for me. And so before I had only blinders on with grim determination to attain that 10,000, 15,000 a month, I since realized that I want to be able to share about conscious healing, conscious investing as my business goal. And so this whole journey has been made so much more enjoyable because I’m able to bring in the mindfulness and presence to my everyday life.

Tony :
So eating. One of the things you said that I want on or drill down on a bit here was the failures that you talked about. So I guess, did the process go smoothly as you actually started buying the real estate once you found the deal that all the pieces aligned or I don’t know, I guess what maybe challenges your obstacles did you bump up against as you set out to start buying these initial properties?

Yiting:
Yeah, so the process of escrow for that 14 units was really ulcer inducing and it lasted five months.

Tony :
Wow. It sounds like buying a property in New York,

Yiting:
It was literally my first property. I’d never owned a house, a primary home before that. I was renting at that time in San Diego because of how difficult it is to get into the market here. And so that was a big learning about really you need to ask your lender, your mortgage broker a little bit more about these lenders. What is the process like working with them? We would’ve so much rather gone with a slightly higher interest rate. Those are fantastic interest rates still at that time it was 4.2, something like that. I would’ve happily done 4.5, 4.7. Had I been able to work with a lender that was much more reasonable.

Tony :
What were some of those challenges? 18, why did it stretch out for five months? We

Yiting:
Still don’t fully know it’s part of how that lender works. And so then they would ask us to provide proof of funds at the third month and then again at the fourth and fifth month because it had stressed out to that timeframe. And maybe it was around the interest rates being so low in general, everyone was doing refinancing. It wasn’t clear to us,

Ashley :
What’s some advice you can give to someone else who’s maybe going to get their first loan right now? What advice would you give to find a good lender? Even if you are paying a little bit higher interest rate, how do they even know that the lender is going to be reasonable?

Yiting:
So I think speaking with your mortgage broker, if that’s how you found it, speaking with local banks especially would’ve been a good idea. And so yeah, as a rookie, I’m still really learning about the financing aspect. That’s one of the huge levers in real estate. And so learning about how to manage financing but also even doing arbitrage with financing, I’m just starting to learn about buying notes for example, because I got tired of the management of renovations. So there are so many ways to do that once you learn, I would say the key principles within business and investing itself, which is leveraged, how do you leverage appropriately and managing debt, how can you manage debt in a way that it’s really the good debt? Understanding that the debt on a primary home, getting as big a house as you can is not good. That’s actually a liability, not an asset. So those are some of the critical ways and I’m definitely still learning all the time about how to approach lenders as well as learning about private money, hard money and different approaches like that.

Ashley :
What was the purchase price on the 14 unit and this is the one that you had the struggle with or was this a different property where you had the struggle with the lender?

Yiting:
This was 14 units that was purchased for $525,000 and it was a five month struggle with the lender. We did close and it performed incredibly well for us and now we are transitioning it to about four units of furnished rentals, both short term and medium term hybrid. And it really was one of those deals that could not have been better in so many ways. We would have this very consistent cashflow of $6,000 every single month. So that was split 50 50 of course with my business partner. And then we transitioned to this furnished rental approach that started to give me more ulcers, but also it completely wiped out or cashflow for over six months now

Ashley :
Of just paying for furnishings, paying

Yiting:
For the renovations. That started to get a little bit mismanaged. And so we have just approached our property manager about our concerns with that and so we’re very hopeful that things are going to get better with that. Again, it was definitely key to find a great property manager that is everything when you’re out of state investing is also maintaining communication and going back to them when there is an issue like we’re dealing with the renovations.

Ashley :
We’re going to take a short break, real quick eating and when we come back I want to dig into what were some of the things that happened with the property manager and what are some the lessons you learned that we could all do differently when communicating and working with a property manager? We’ll be right back after this short break. Okay. Welcome back. We are here with ING and she’s going to tell us about her experience with a property manager and renovating some units to turn them into furnished rentals. So what were some of the things that went wrong that you weren’t happy with and how did you handle it?

Yiting:
This renovation for a single unit was supposed to take about two to four weeks. It took more in the realm of six months. It was some of just my not being able to manage it. My business partner had a baby, different things and then it was finished. It’s renting now for three times what we’re getting about maybe four times close to what we were getting for long-term rentals. It’s a property that is right across the street from hospital and I mean literally you cross one street and that is the hospital across from it. And so it’s really a tremendous property. We definitely want to keep it mainly long-term rentals, but with these four to six medium term furnished rentals, we are hoping to potentially triple our cashflow because the long-term rentals will be covering the PITI. So when we started to approach how to manage the management of these rentals, I really was benefiting from Jesse Vasquez and his approach to furnish rentals, making it like a business.

Yiting:
We knew that we didn’t want to be managers, and so we found someone on BiggerPockets to help us manage that did not work out. And then we were referred to a property manager to specifically manage the furnished medium term and short term rentals, and he’s been a rockstar. So he works in conjunction with our long-term manager and we worked it out so that they would still have income, a straight fee for those units that we are doing furnish rentals so that they know we really cherish their relationship as well as all the work that they do for us.

Ashley :
I think that is so important to clarify that there is a difference because somebody has experience managing a long-term rental does not mean that they are qualified or capable of managing a short-term rental. And Tony, I’d love to get your opinion on this as you own a short-term rental property management company as to do you think you could be equipped to run a long-term rental property and what your advice is on this if you should hire a long-term property manager for your short-term rental?

Tony :
Yeah, I would not be the person to hire for long-term property management because I would just kick everyone out. I don’t care what your lease says, I’m calling the cops like you’re leaving tomorrow. So no, I agree with you Ashley. I think there’s definitely a big difference between the skillset that’s required to be an effective and efficient long-term rental property manager and what it takes to be an effective short-term or medium-term rental. So the fact et that you made, the very smart decision to hire separately for those two disciplines, I think is really going to allow you to maximize the revenue on this property. So kudos you for making that call. It sounds like overall, obviously some bumps in the road on the closings, some of the issues getting the property renovated for the furnish piece, but sounds now that it’s stabilized, you’ve done well with it. So now that that property is kind of off and running, what was your next step in terms of investing in real estate? Where did you go for that second investment

Yiting:
That was finding a home? So I really still had the sense of not quite being fully an investor because I never owned my primary home. It’s a little painful to think back, so I definitely don’t focus on things in the past. But I was in Florida, I was in Texas, I was in literally every single state that blew up during the pandemic in terms of their housing market. And I didn’t own any of those rentals that I had stayed in for my pediatric neurology training. So then in San Diego, it was an incredibly hot market in 2022, and it was really the peak of the market. I was able to buy a duplex where I am living now, and that was probably more difficult steal to get than my 14 units just because there were 20 offers or so on this property. And it is definitely changed. San Diego is a wonderful appreciating market and it is now where I’m focused on because my strategy, as I mentioned, has changed a bit from the cash flow, very intense focus on cashflow to appreciation and wealth building.

Ashley :
With that house hack, were you able to cover part of your mortgage, all of your mortgage? Did you cashflow off of that? What was the outcome of that house hack?

Yiting:
So it’s a single family home technically with an A DU. I am a single person. I live in the A DU and the four bedroom house rented for $4,000. And then I was really wise finally to get a property manager after months of trying to manage it myself. And that is the best money that I can spend. And especially in California where there are very challenging regulations for owning property for landlords and mismanaging can be disastrous. So even though yes, they are someone that lives right across from me, it actually is so much better and I cannot recommend it enough for people who are able to do so to get a property manager. That’s some of the best money that I have ever spent. And then I acquired the 12 units after that and that’s what I have

Ashley :
Now. And that was in San Diego also?

Yiting:
So the 12 units was in Terre Haute, Indiana actually.

Ashley :
Oh, okay. Okay. So we went 14 units in Indiana, then we went to San Diego for your house hack and then back to Indiana. And this time you didn’t have your partner, correct. This one was all on your own. So tell us about that. How did the numbers end up working out on that deal? What did you purchase it for?

Yiting:
Yeah, so that deal was purchased at around 412 15,000. I then saw that there were really massive renovations that were needed and so I requested cash back from the seller and so we increased the purchase price to 465,000 for the 12 units in. And so that closing was fine and that was when I had a really unfortunate learning about real estate investing out of state because I was with the property manager that was grossly mismanaging the property. And he was really siphoning off so much money from really probably all of his landlords,

Ashley :
Like overcharging for things. He was

Yiting:
Overcharging and he would use the cheapest of materials as well as labor. And then he would simply not do many of the maintenance items were not done. And so there were some nightmare aspects that I needed to address when I first went physically to the property was to turn a unit furnished, furnish a unit into a short-term, medium-term hybrid. And that’s when I discovered what was happening. And so this was a property manager that had been, I suppose grooming this working relationship with me for about two years. He was helping me analyze every deal in that market and when I came across this deal, it was the seller that he was managing for. And so it was relatively, it was really natural of course for me to continue working with him because I had really felt like he was the dependable person in that town for me.

Yiting:
And it turns out when you’re not having different checks, having a realtor check or on your property manager, those are the core recommendations that David Green talks about that I failed to do because I have been working with this person for so long. And so essentially I did speak with him about that, confronted him, he returned a portion of the renovations that he had charged me for, and then the portion that I asked for, he did fully return to me and it’s a small town. And so he knew that his reputation was critical. And then of course I founded a good property manager and also I again negotiated with that property manager to work with my furnished rental property manager on two of those 12 units as well. And so similarly, we had to negotiate with the manager of our 14 units in southern Indiana to really bring him to the idea of co-managing. He did not want to do that at all for some time we didn’t push and we just continued to learn more about the furnish mental approach. And then we re-approached it and we realized that there were certain things that he was concerned about that he would mention in conversations, and we made sure to address those. And of course, making sure to give them the fee for managing the overall property as well.

Ashley :
So altogether eating what is the total cashflow or you can even state the income and then maybe the cashflow that is coming off of these three properties for you.

Yiting:
So I just sold my duplex and I was making the 4,000 per month on that previously. And then I also sold four units of my 12 units that required renovations that I was not wanting to do. And so the cashflow from that was really minimal because of how mismanaged it was for so long. And so right now I have the eight units on my own and that brings in maybe around two a month and we’re about to finally get the furnished units rented out. And so those should be renting out for about 2000 a month each.

Ashley :
So when you say you sold out the four units, was this, they were in a separate building and you parceled off those units or did you sell them condo style where now you have maybe an HOA together? How did that work?

Yiting:
So it was three separate buildings that were one single purchase and each building was four units. And there was one building that I felt needed more renovations that I did not want to do. And then from the 14 units we get the 7,000 per month from the typical long-term rentals. Then we transitioned and then we went to zero income for a long time because that manager was managing those renovations. And now we are getting in about 1700 for the two units that are furnished that are renting out each and so about 3,400 plus the 5,000 that we’re gaining from the nine units that are rented out long-term

Ashley :
Ing. Before we wrap up here, I want to ask one last question. What are some, or how do you handle the mental aspects of some of the things you’ve had to deal with throughout your journey? The frustration of the lender, the property manager, all these different things that have come up. Do you have any advice for rookies on how to build that mental toughness? Yeah,

Yiting:
So I really would have that physical pain that literally seemed to create an ulcer in me and all of these frustrations with not knowing what is happening out of state with your property, which really is your livelihood at some times. And I deal with the most intensive situations on a day-to-day basis because it’s your baby’s brain that has an issue in pediatric neurology when you have to see the neurologist. And the only thing that is anything close to that is money and losing money. So these are two topics that really are benefit, especially from the approach of presence and mindfulness. And I was meditating many years ago for decades, and yet I never really applied it in everyday life. And so I would say that in everyday practice it can be really a fun thing to apply. This being in your body is a practice one portion being the sensing of your physical body and what is the degree of tension or ease?

Yiting:
The number two thing would be the breath. The breath is able to cut through that loop of mind. And whenever you bring attention and awareness to your breath, it only takes one single conscious breath to bring you to presence. So that ego when it arises and you worry about failing in an investment and so you are incapable of action, you can smile at it and you can be that depth of presence that sees the ego and the mind being concerned about action or loss, and you can be in acceptance of that. The more you practice that acceptance of your own thoughts, the more you practice being the watcher of those thoughts, the more you can overcome them.

Ashley :
Well ing, thank you so much for coming on today and sharing your real estate journey with everyone. We really appreciate it. If you would like to learn more about ing, we’re going to put her information into the show notes, and if you’re watching us on YouTube, we’ll be in the description. So we hope you guys learned a lot today and took away some great advice from eating. Make sure you follow the podcast on YouTube. You like, you subscribe, you join the real estate rookie Facebook group and you leave an honest rating and review on your favorite podcast platform. I’m Ashley, and he’s Tony. Thank you so much for listening and we’ll see you guys on the next episode.

Watch the Episode Here

https://youtube.com/watch?v=fuSWY4iKjeA123

Help Us Out!

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here. Thanks! We really appreciate it!

In This Episode We Cover:

  • How this traveling neurologist took control of her financial future with real estate
  • Choosing a strategy that aligns with your real estate investing goals
  • When you shouldn’t choose the lender with the lowest mortgage rates
  • The common challenges of managing small multifamily properties
  • Fast-tracking your investing journey through the power of partnerships
  • Why you NEED a top property manager for out-of-state investing
  • How to navigate the mental side of investing in real estate
  • And So Much More!

Links from the Show

Connect with Yiting:

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident
Lexie Ayers
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

The most complete solution for web publishing

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Tags

Share this post: