Episode 51: Building A Legacy In Real Estate Featuring Anna Kelley

Michelle: Welcome to the “InFLOW Podcast,” I’m your host, Michelle Bosch. Today, I have the pleasure of having as my guest, Anna Kelley, or as she’s commonly known, Anna N’ Ariana. I’ve gotten to know Anna for, I would say, probably a good half a year through Facebook. And it wasn’t until this past summer that I had the pleasure of meeting her in person at a mastermind that we both now belong in the multifamily space. And I was thrilled to see her and probably a good four or five other ladies there this time. We have been part of that mastermind since inception. And I remember it was just me and maybe another gal and now there’s five of us.

Anna: Yay.

Michelle: So, that’s great. So, welcome, Anna, to the show. Welcome to the “InFLOW Podcast.” It is such an honor to have you. And I want to give, you know, our audience a little bit of background, as to, you know, if they don’t know who you are. And so, Anna is a founding partner of the Zenith Capital Group, and Apex Multifamily, and reimom.com. She’s a former top-ranked financial relationship manager for a private bank and began investing in real estate some 20 years ago. Anna has purchased, renovated, and rented millions of dollars in real estate across numerous asset classes while working full-time and raising four children. She recently retired from her corporate career. And after creating financial freedom through rental property investing, she currently owns and manages a portfolio valued at over $16 million. And she is very active in the multifamily space. She’s always looking for opportunities, you know, for her partners and for her investors. And I’m excited to have an Amazon number one bestselling author here today.

Anna: So, [inaudible 00:01:50], yeah.

Michelle: So, Anna, so wow, you know, we were just briefly touching with Anna before we started, you know, to hit record here that I didn’t know she was from the banking industry. But I was telling her that I had bet that probably helped her, you know, in her transition to start investing for herself and recognizing what banks, you know, want to see and how to present properly a financing package, you know, when you’re going after a loan. But tell us, how did you get started? What kind of, like, piqued your interest when it comes to real estate and what made you decide to become an active investor?

Anna: Great. So, first of all, thank you for that amazing introduction. I’m so happy to be here and so excited that we are in the mastermind together and can really start, you know, really putting more women in that space. As you mentioned, I started out my career in private banking and I worked for Bank of America. And basically, we handled the wealth of, like, the top 10% of the clients in our bank. So, I started out in my young 20s, you know, fresh out of college, and went through my securities licenses, and learning how to be a banker, and how to, you know, talk to people about investments. And as I was telling them about the great benefits of these, you know, retail investments, literally, I had a couple of older investors, like, laugh at me at the returns that we were telling them, which at that time were good. They were, like, you know, 10%, 12%. And, you know, they were like, “We make much more on real estate.” So, I knew from that, just having from clients that really wealthy people had a lot of real estate and that one day maybe I could get wealthy enough that I could buy some real estate too. So, it just kind of piqued my interest. But I really didn’t think about real estate too much other than making wise investments.

So, like, I knew it wasn’t wise to rent an apartment so I ended up buying a condo. And, you know, I bought a house in kind of an up-and-coming area that I thought would be a good investment, rather than where I really wanted to live. But that was pretty much it until I had a baby, Michelle. So, 16 years ago, my son just turned 16, all of a sudden my drive and my determination to move up the corporate ladder, like, completely went out the window because I had a preemie, and I just wanted to be home with him. And it broke my heart the thought of having to go back to work, you know, and leave my baby in a daycare. And long story short, I was married to someone that just got out of chiropractic college, six-figure school debt, and made not even half of what I made. So, I had to keep working. And while I was on bed rest for the preemie and then during maternity leave, all the HGTV flip, the South shows started coming on. So, I thought, “Oh my goodness, this is, like, too good to be true. All I have to do is flip a couple of properties here and I’ll be home in no time.” So…

Michelle: Especially because the shows sometimes don’t tell you all the other crock that keep coming up.

Anna: It’s all lies.

Michelle: Sometimes they show a little bit of, like, unexpected surprises. But yeah, there can be horrors.

Anna: Back then it was none of that. It was just, you buy a property, you fix it up, here’s how much you sell it for. It’s an $80,000 profit. And they don’t talk about closing costs, and holding costs, and finance costs, and realtor costs, and all the things that go wrong. And so, with a three-month-old baby in tow, I believed the shows. I bought a property with traditional financing, made all the mistakes that you can make because there were no books. I had no idea what I was doing. I hired a contractor I really didn’t know, bought a property in an area that I shouldn’t have bought it in at a time that I shouldn’t have bought it in. And I lost $10,000 on that first flip. And during that time, my husband lost his job. So, we had a six-figure school loan, a new car and a car payment, two mortgages, a brand new baby, and a house that we couldn’t sell. And it was like, you know, a real wake up call that we thought, “This is much harder than it looks and we can’t afford to lose this much money again.” So, we thought we were done flipping. And fast forward to my desire to be home with my baby. I said to my husband, “You can’t be working for other doctors. You’re never gonna make any money. They keep laying you off because you’re not a marketing guy and bringing them new patients. Let’s just start your own company.”

So, we moved to Pennsylvania, sold all of our stuff in Texas, and kind of took a leap of faith and start a business. And at that time, we were looking at leasing office space and could not find anything that wasn’t a couple thousand dollars a month. And we just thought, “Wow, you know, we’re starting…” Brace yourself, Michelle. Well, we started with $400,000 in business startup debt to start a chiropractic office. And then we thought, “You know, I’m not gonna have my job,” because I didn’t think AIG would let me work from home in a different state. And they had no employees that worked from home. So I thought, “We better just be safe.” We downsized. We moved in with my in-laws and we bought a building for him to practice in that had tenants. And I thought, “You know, if we have tenants, they can kind of help pay this mortgage and at least we won’t have to worry about as big of an expense.” So, we became reluctant landlords. And a year later, we moved out of my in-laws and house hacked by living in a four-unit apartment building with my two babies, at that point, and inherited tenants, again, just to say, “Okay. AIG is giving me another three-month trial. Let’s get a mortgage while we can. And if I get laid off and I can’t find another six-figure job, then at least we have tenants paying for our living expenses.”

So, we were landlords of a commercial space that my husband practiced out of, and eight units, just to get started, just to kind of protect ourselves in case I couldn’t find another job. And things were going really, really well. And then, 2008, 2009 happened. And I worked for AIG, which almost went under, took a $2 billion loan from the government. And I thought I was losing my job. I lost three-quarters of my 401(k) in a week.

Michelle: Oh, my gosh.

Anna: And we were scared to death. And all I knew to do was take what little was left in my 401(k), pull it out as a loan, and buy another four-unit. So I bought another four-unit and I said to my husband, “At least we’ll have a couple, you know, a hundred dollars per unit coming in if and when I lose my job.” And it was a really scary moment. But really, my first 12 units were just that progression of starting a business and in a two-year period almost losing everything. And from there, you know, my journey into real estate kind of started. And then five years ago, I got really serious about being able to buy and started getting serious about replacing my income and growing my business.

Michelle: That is amazing. Now, those were some incredible leaps of faith, you know, that you were taking there in terms of, like, you know, moving to another state, going for that, you know, eight units so that your husband could practice in one of the units, and then, you know… And just in case I lose my job, let’s get this other…you know, those other four properties and so on and so forth. How did you grow up around money and finances? Because that’s a very entrepreneurial way about handling money and finances in crisis because losing a job can be catastrophic at some…you know, for many families. But your way of handling that and so very few people, I think, would go ahead and say, “Well, no, let me, you know, try to hedge that risk with this, you know, which for other people would be incredibly risky.” But for us now, in real estate for a long time, we know that that’s actually the way of, you know, really, you know, taking charge of your life and really taking, you know, the bull by the horns. How did you grow up around money and finances? Like, I’m just curious.

Anna: So, Michelle, I grew up in Section Eight apartment housing. My mom was a single mom. My parents divorced when I was, like, three or four and she was a leasing agent in an apartment complex. And she had several bad marriages, abusive men, had several more children. I’m the oldest of six. And I grew up having just a ton of responsibility, just having to watch my kids, watch my siblings that were like my kids…

Michelle: Kids, yeah.

Anna: …you know, overnight and had to just learn to be responsible. And through the lens of the child, of a single mom who could not take care of us really because of poor choices in men, to be honest with you, really, you know, I had to become resourceful very young. I would buy candy and sell it door to door in my apartment complexes. I learned to crochet so I could sell potholders and doll dresses to all my neighbors and make money so I could buy a pair of Guess jeans because my mom couldn’t afford to buy them for us. And so, it gave me the drive and the determination that I knew that when I got older, number one, I would figure out how to make more money. And number two, I would never, ever depend on a man to take care of me. And not that that’s the right mindset, but from the glasses that I wore as a kid, it was… You know, I spent nights in battered women’s shelters, in cars with my mom and six siblings. And I said, “I will never ever be in a position where I could lose everything because of poor choices.” And it just gave me the drive to learn everything that I could about money and to excel in everything I ever did, to be the best student, to be the best employee. You know, I graduated high school early. I graduated college early while working full-time at Bank of America. I was the number one ranked private banker in all of Texas my first year.

Michelle: I can see that, yeah.

Anna: And just, it’s like, it was just that drive and that determination that whatever it takes, I’m gonna make sure I’m okay and my family’s okay. And so, while I didn’t grow up, you know, with any knowledge of money, I just grew up with a worldview that taught me that I have to do something different so that I have a different type of life. And when I got into Bank of America, that’s when I really learned more about finance. And it just gave me a little more wisdom as to what people with money did with money and how to be safe.

Michelle: Yeah, that makes complete sense. You know, we try to instill the same, you know, values in here, in our house. You know, she sees a very equal partnership going on, but still… You know, even Jack’s, the very first one to say to Sophia, “You know, Sophia, a man is not a plan. So, we need you to figure this out.”

Anna: Yes. Yes. And, you know, I’m grateful. I’ve been married almost 20 years, and my husband and I have a true partnership, you know. And so, I couldn’t do it without him and he couldn’t do it without me, I think, you know. So, you know, my mindset has changed. But at the same time, you know, if something ever happens to your spouse or they die early, you know, you wanna be able to make sure that things are okay and that you can take care of your kids.

Michelle: Which is what happened to my mother. You know, she was a widow. I was nine months old. She became, you know, a widow after just almost, you know, just two years of marriage. And all of a sudden, you know, she found herself not knowing what to do. Thank goodness, it wasn’t his profession that kept us afloat, but it was an investment in real estate that afforded us, you know…

Anna: Wow.

Michelle: …some freedom for her to, you know, even dream of sending me to a private school where I could learn, you know, how to speak English and so on, which has been an incredible opportunity for me to, eventually, come here to the U.S. having known the language. Not that you can come here without knowing it, you can still learn it. You know what I mean? But I had such a tremendous advantage because of that. And it’s from real estate as well.

Anna: Exactly. And that’s why I’m so passionate. And I love what you’re doing with your podcast too, just teaching women to be empowered, to be able to make wise financial decisions that…

Michelle: Absolutely.

Anna: …truly can change your life and your future for generations.

Michelle: Yeah. I’ve had, you know, many ladies that I asked them, you know, that are successful or, you know, powerhouses. I remember having one in particular and she’s like, “You know, Michelle, until I had a divorce, you know, a few years back, I never took care of my finances. You know, it’s something that…where I abdicated my power to someone else and only now I’m starting. I wish I would’ve, you know, known it sooner.” And yeah, you’re right. And there are so many opportunities out there, Anna, in terms of, you know, investing in real estate or in anything in general, at this day and age. And it seems like our courage has not caught up with the opportunities. You know what I mean?

Anna: Right.

Michelle: So, part of the podcast is also bringing, you know, that courage. And so, you started, you know, with an eight-unit, with a four-unit, then another four-unit. Now, what is your current focus now, in terms of asset class and why? For example, for us, we started with land. You know, we flipped over 4,000 properties that gave us, you know, the money, and the cash flow to go in 2008 go and buy quite a bit of single-family homes. Then, you know, four years ago, we started looking into apartment investing because we’re like, “Okay. We have these, you know, rentals in three markets. But it’s like we’re looking at a door at a time.” And so, we went from a door at a time to a hundred-plus units because we didn’t wanna deal anymore with being a landlord, you know.

Anna: Yes.

Michelle: And so, that a hundred-plus unit gave us that scalability to be able to have a first in class property management company, people on the ground there that can, you know, take care of a broken toilet, whatever is going, you know, in the unit. And so, what is your current focus right now, in terms of the asset class and why and size?

Anna: Okay. Sure. So, fast forward from where we left off. Basically, you know, I had wanted to keep growing and I had this idea of scale. And I had learned about larger multifamily. And I thought, “Oh, if I just had some money or I had more time, I’d love to buy bigger.” And I went to a seminar that ended up being put on by a woman who was a complete fraud that later went to prison. But it jaded me from the world of multifamily and doing other things with other people. And so, I really didn’t continue to look at that. So, we just continued to slowly grow our own portfolio. And primarily, we focused on four-unit apartment buildings because, in my area, there was way too much competition for the singles because everybody wanted to flip them. And on the big stuff, you know, you really had to have money and experience or whatnot. So I said, “There isn’t a whole lot of people chasing the four units. They’re close enough to us that we can work on them at lunch, and at night, and on weekends.” And basically, I read a lot of books on how to grow with larger multifamily. And I just applied the exact same financial principles to the four-unit buildings. And so, I bought them really cheap. I rehabbed them. I raised the values, forced the appreciation, you know, cashed out, and kept doing it.

So, basically, that was my plan five years ago when I set out, you know, with a five-year plan to replace my six-figure income and stay home with my kids and then, you know, do whatever I wanted to during the day. So, I grew with four-unit buildings, a couple of singles, a couple of duplexes, flipped a few properties, bought some vacation rentals. And then four years ago is when I said, “Okay. I’ve replaced my six-figure income with a nice slush.” And I knew I could retire really soon, but I needed to pay off a lot of debt from refinancing and rehabbing those units. And I wanted a year’s salary saved and six months’ expenses for all of my properties so that I could become bankable when I retired. I wasn’t just gonna retire and say, “Okay. Now, I’m gonna quit and we’ll see.” Like, I’m a planner, so I was like, very methodical in what I bought and why. And so, basically last August, it’s been almost a year, I said, “Okay. Now, I’m at the point where I need to scale to larger. I have 12 years of experience under my belt, you know, buying and renovating smaller ones.” I’ve done everything myself other than the rehab stuff, which my husband did and the maintenance. But I knew that I could go through life cycles.

Michelle: So, he’s no longer doing chiropractic then?

Anna: He is, but probably not for long.

Michelle: I like that.

Anna: Real estate is just too good. I know. So, you know, I made it my mission to start working on finding a larger multifamily property off-market that I could then, you know, bring partners. And I knew that if I could find the deal, I could find the partners that would trust me because of my experience and what I had done on the small stuff. So, I found a larger deal for me. It was a 73 unit in Hershey, Pennsylvania, Class A market, Class B building. And I found it. I locked it up literally two days before it was being listed with a broker and contacted two partners. And we took it down as a JV, just the three of us. I was gonna syndicate it, but we just decided we’re going to buy it together. And it was my first attempt to raise money, so I needed $2 million. And the investor liked the deal and me, and my partner so much, he funded the whole thing. So, we got the 73 unit. And the acquisition fee, Michelle, was enough for me to have that year savings set aside that I needed. And then I did it again. And so, I found a 31 unit and brought it to the same investor, and he funded the same thing. So, I had two JV multifamily units. And when I had those under my belt, I knew now is the time to retire. I can do it safely and wisely. And if I never worked another day in my life or bought another property in my life, I knew we would be sustained for a long time. So, I retired in May of this year.

Michelle: Congrats.

Anna: Yes. I’m so, so thankful. I’m, like, pinching myself. It took 16 years longer than I thought to stay home with my kids. And, you know…

Michelle: And perseverance always pays off.

Anna: Absolutely. And now, they’re in school. So, being a stay-at-home mom is totally different, you know. Now, during the day, it just gives me the opportunity to have the freedom to take care of me and to grow in multifamily, and helping other women because I’m passionate about it. And then at night, you know, I can have total freedom and be with, you know, just wife and mom at night, and do what I love during the day. So, now, my focus is primarily just larger multifamily buildings. I’m doing my first syndication right now, a 250-unit in Atlanta…

Michelle: Very nice.

Anna: …and getting ready to partner on another one. So, you know, that’s really my focus is just like you said, you know, for scalability to be able to not be the one that’s called handling tenant calls, and showing apartments, and handling the maintenance. But now, I can just be an asset manager and use my business sense to handle a business rather than buying my own, you know, small units.

Michelle: Yeah. It totally makes sense. Now, in terms of…you just mentioned something and in case someone is listening, and they have no idea what an acquisition fee, can you explain, you know, break it down. Like, if you had a project of X amount and you needed to come up with let’s say a million, just to make math very easy, a million, and then you needed to come up with maybe 20% of equity, you know, that equity, a syndication, means that that equity, you go out there, you know, to private individuals that you want to. help, you know, grow their money, and have their money work for them, and have them, you know, help you with that 20%. Yet, the other 80% might be coming from traditional financing. But you just mentioned what would be…? Can you explain, you know, for anyone listening, what is an acquisition fee in the context of that example, for example?

Anna: Sure. So, when you’re putting together a multifamily syndication, which is basically like you said, you’re raising money for multiple other investors. It could be one investor. It could be a whole bunch of investors, but you are basically compensating yourself for finding the deal, for putting the deal together, for bringing the investors on board, for signing on the loan, for handling all the due diligence, and for, you know, working with a seller, and getting all their financials, and getting it to the banks. And so, it’s basically a fee for putting a deal together and all the hard work that it takes for months, you know, of day in, day out work to get the deal to close. And so, typically that’s somewhere in the 1% to 3%. And I think it’s usually 2% to 3%. So, on a million-dollar deal, you might charge a $30,000 one-time fee just for putting the deal together. And then in addition to that, you would get, you know, the cash flow while you owned it, a certain percentage of that in a general partnership. And then, in my case, I do the asset management as well because of my financial…

Michelle: Your background.

Anna: …background and knowledge. And so then I, you know, get compensation on that as well.

Michelle: Yeah. And I always say, you know, that there are so many ways…like, if you are actively doing the investing, you know, there’s several types of money that you can make especially in multifamily, the acquisition, the asset management fee, the cash flow, you know, from the operations of the property, and at the end, you know, at exit, profits, you know, because [inaudible 00:22:54] appreciation. So, almost, like, four types of cash, you know. So then…

Anna: And the other thing that’s amazing is the depreciation.

Michelle: Yeah, absolutely.

Anna: So, with the new tax laws, the bonus depreciation. The one deal that we closed, we closed December 5th. So I owned the property, you know, less than a full month. And I had a couple hundred thousand dollar bonus depreciation that offset all of the acquisition fee and my capital gains from some properties that I sold. So, just the tax benefit and the tax savings from that is another tremendous source of, you know, cash that people don’t really factor into their investments, but that’s really powerful with larger multifamily.

Michelle: Absolutely. And that, you know, also, if you’re not doing this actively, but investing passively, you know, your cash flow, when you’re investing passively is also protected, you know, by that appreciation…

Anna: Yes.

Michelle: …which is absolutely, you know, beautiful.

Anna: Right.

Michelle: So, I know there’s a lot of talk from investors, you know, that they have lately, in this kind of market, you know, two problems. Either they don’t have enough, you know, deal flow or they don’t have enough money. But it seems lately, actually, that everyone is having enough access to money, but not enough, you know, deals. What would you attribute your success to even in this very competitive market being able to continue to find great deals?

Anna: I think a couple full of things. For me, personally, because I basically am in a fairly small market… I’m right outside of Hershey, Pennsylvania. It’s a very nice affluent market, but it’s not a large market. So I don’t have significant competition with people looking at Hershey, Pennsylvania like they’re looking at Philadelphia or Pittsburgh…

Michelle: Texas.

Anna: …or, you know, major markets. I’ve been looking for an awesome deal in Texas for a year because I’m from Texas. I believe in the Texas market. I’ve not found anything that pencils out, that makes sense to be able to pay investors what they need to make at the purchase prices that they’re there. I’m still looking, but it’s hard. So I think, you know, in anything and especially in multifamily, from every aspect, from the purchase to the sell to, you know, your partners that you’re working with, it’s a relationship business. And so, if you are not, you know, planted in a certain market, and have boots on the ground, and partners that are there that can be knocking on the doors, and building relationships with brokers, it’s not likely that you’re gonna be the people that the brokers call with pocket listings, which is, like, pre-market listings, where because I have more property in my town and in my area than any single investor, I’ve gotten to build relationships with a lot of brokers and attorneys, estate attorneys. Like, I just bought a 10 unit on May 2, and while some people would say, “Oh, it’s 10 units. It’s too small,” because I already had 60 other smaller ones, you know, a 10 unit in a really nice market, you know, I’m making good double-digit returns on with a really solid property. And that came to me through an estate attorney that said, “You know, before you list it, call Anna Kelley. She buys properties in this area.” And so, just having that, being the subject market expert in your area and building relationships has allowed me to find three off-market deals, you know, since last August that I’ve been able to take down and be really happy with.

Michelle: Yeah, absolutely. Now, in order to manage your property, so you have quite a bit of experience, you know, doing a lot of the property management, you know, the asset management. But now, as you are growing into larger properties, you know, you must have a great team around you. What is that superpower that you have that allows you to assemble a great team? Is it the experience? Is it you really being careful of, you know, are your core values aligned with the people that you’re bringing on board? Like, what do you think is the superpower that makes it like, “Wow, you know, if I wanted to invest with Anna, I know that Anna has this superpower. And therefore because of that, I know that the team, anything that she brings together, you know, is going to be first-class.” Yeah?

Anna: Sure. I think because number one, I do have a background in business and finance my whole career. So, even though I started in private banking, I’ve worked for AIG for 20 years in a group where we did private custom insurance for very high net worth individuals wrapped around private placement investments that they wanted to invest in, similar to apartments syndications. And so, I have a background of working with very complex, complicated investments. I’ve seen a lot of risk-taking and I’ve seen a lot of conservative planning from financial planners. And so, I really understand finances and mitigating risk and, you know, the balance of things that you can and can’t control. I’ve lived through a downturn and survived it. You know, I’ve learned from debt and I’m very, very, very conservative on what I buy and how I underwrite, and only buy things where I absolutely know the market really well, where I know for sure that I can force that appreciation, and raise rents, and cut expenses.

And because of my background, the way that I think being a conservative thinker, and really being able to look at different uncontrollables, like not only the local market but global market, you know, international market, market cycles, recessions, and, you know, expansions, I understand those things. So, I’m able to talk intelligently about them with my investors and tell them why, you know, this I feel like is a very safe investment, as safe as they can be, even though you can never say something’s totally safe. But I really think of investing… More so than just as a real estate investor, I think of myself as someone who wants to make sure that in every type of investment that there is out there, that you are being diversified and finding assets that can both grow wealth, preserve wealth, and create income, and in the best possible way. And so, I think that that’s a superpower for me is that I’m just able to help people to understand investments and make wise decisions in what they buy and when.

Michelle: Yeah. Just because of, you know, your background and your experience, absolutely. Now, I wanted to ask you something about market cycle because you just mentioned it. And I’m like, “Okay. That’s something that wasn’t on my list, but let’s talk about that.” So, what do you think is going on and should we be on the sidelines? Should we continue to, you know, very conservatively and very wisely in the areas where we know very, very well continue to…? You know, like, what’s your take on that?

Anna: Sure. So, what I do know is that we are in the largest expansion period or growth period in the economy, the longest since President Abraham Lincoln was in office. So, I mean, a long time. And so, we know that based on the fact that, you know, history does tend to go in cycles, that most likely we’re gonna have a downturn and a recession, at some point. And there’s a lot of different economic indicators, in terms of hyper supply in many major markets, in terms of building costs going up, and in terms of rates, you know, really started to go up and they started to slow the economy. So the government had to take drastic measures to cut rates again right after they raised them. So, all indicators, the yield curve for people that wanna study, that is the number one projector…

Michelle: I had an episode just on that back in April because I do watch that too. Yeah.

Anna: Yeah. And it’s one of the most predictable indicators that a recession is coming. So, you know, it’s inverted and we believe that there is a recession coming. You know, no one has a crystal ball. How long will it be? I would say, you know, historically, it’s like 12 to 18 months from the time that the yield curve inverts. So we know that it’s gonna happen. It’s just a matter of when.

Michelle: That’s right, yeah.

Anna: With that said, with one of the indicators is that properties are so overpriced because big money rates and hedge funds, they’re liquidating out of equities. And they’re starting to park their money in safe assets like multifamily apartment buildings, especially in Class A to B areas, newer assets. And they’re happy to make 4% or 5% on their money. So, when people like us say, “Oh, it’s crazy prices. These people don’t know what they’re doing,” really smart people know what they’re doing. But they look at it as a place to preserve cash. Rather than getting risky and doing these heavy value ads and hope that they can make a whole lot of cash in upside, they’re focusing much more on preservation and stable income than they are risk and growth right now.

Michelle: Yeah. And I just wanted to point that out, you know, for anyone listening that, you know, Anna just mentioned on something very, very important. You know, you have these bigger institutional, more sophisticated investors which we, you know, in the real estate space, call yield investors. You know, and then there’s value-add investors where we’re trying to improve a property, you know, bring NOI up, and we’re having to produce a return for our investors. And so, there’s a difference. You know, one is a value-add investor. And for us, we think, you know, it’s crazy, you know, to be paying that kind of money that they’re paying, but they’re, you know, yield investors. And they’re just wanting to preserve, you know, their capital. And, so, they’re okay with a 3% to 4% or whatever it is.

Anna: Right. And I think the temptation is for value-add investors to say, “Things are gonna keep going great. I’m gonna be able to get these big rent increases and I’m gonna make these big rent bumps.” And they show their investors these numbers that maybe are not realistic because they’re not taking into account what likely will happen. They’re not necessarily knowing market by market which markets are in hyper supply and aren’t gonna be able to stabilize, you know, keep and sustain a certain occupancy rate as well as rents. And, so, I think in this type of a market, my investor half says, “I want to preserve and make income. So, I’m willing to buy a property, maybe not as much upside, but that I can make a nice stable, you know, 7% to 9% cash on cash. And even though my IRR might be a little lower and I might have to hold the property more than three to five years, it’s gonna be a nice stable income-producing place to safely park my cash because I’m investing in places where there is a lot of economic diversity, lots of employers, really good school districts, and not hyper supply where there’s more demand than there is supply.” And those types of investments are just gonna be much more safe when we’re heading into a downturn. So one of the things I’m thankful for being retired is my finances are covered. I truly have financial freedom. And so, I don’t feel that, like, pressure that I’ve got to do a deal. Like, sure, I’d love to buy another multifamily asset or two and we are aggressively pursuing off-market deals and in many creative ways.

Michelle: The same here. We need the depreciation.

Anna: Yes, I know. Me too. I’m converting my 401 trying to convert as much to Roth as I can this year. So, you know, we’re gonna buy a truck so that we can depreciate the whole thing and, you know, one of my assets. But I’m not gonna get desperate because I don’t have to. And so, I’m very thankful for that. So, I think, you know, desperation makes you make a lot of really stupid decisions as well as competition. You know, trying to keep up with, “Oh these guys are doing all these deals.” Well, do you know what kind of deals they’re doing? Are they really in strong markets? Do they really know what they’re doing? Are they gonna lose their shirt? I don’t care. I’m not gonna lose mine. So I think you just have to be really, really careful, at this point, in what you buy, and to be really wise, and to really know your markets and have good partners on the ground if it’s not local to you.

Michelle: Yeah. Now that you’ve mentioned partners, so what do you look for in a person when you decide, “Okay. This person is a great partner?” Because a great deal can go south because of a bad partner.

Anna: Yes.

Michelle: So, what do you look for when you are wanting to partner with someone? Like, what are some of the, you know, prerequisites or the checklist that you go through in deciding, “Okay. This is a person, you know, that is definitely, you know, me going in?” Because it’s almost like being in a marriage, you know.

Anna: Absolutely.

Michelle: For the length of, you know, the term that you decide to hold that property, you’re gonna be stuck with this person. So, what do you look for in a partner?

Anna: Exactly. Number one, bar none, the most important thing to me is that I know that they have integrity, that no matter what happens, no matter what happens to a deal, that they’re going to care more about their partners than they are themselves and their own self-preservation. That they are gonna be honest in the little things, in everything. If I find that somebody is being dishonest about anything, I don’t wanna work with them. You know, I talked about going to a multifamily conference and being jaded by a woman who turned out to be a fraud, and she checked all the boxes. She had all these press releases. She, you know, seemed to have credentials. And many people did, you know, Google searches on her and she looked incredible. And I found out that she faked the credentials. She made up the blog. She made up the articles. So, you know, people can be real sneaky and shady. And so, I feel like you have to kind of get to know people and watch them for a while, and not just kinda, you know, jump in a marriage and a deal because someone says, “I’ve got a great deal. I wanna partner with you. I wanna bring you on.” You know, I’m really looking at what’s their track record? What’s their reputation? Are they honest in the little things? And do they care? Do they really care about their investors?

And then, for me, personally, I want someone that’s very conservative and risk-averse like I am because even though we talked about the fact that you have to be willing to take risks, and I took a lot of risks, you know, starting a business, but I made mistakes through risk too. And so, people that understand mitigated risks and that do a lot of research upfront, and we have a plan to say, “These are the things that we’re gonna do if things go bad,” and that we’re on the same page. And I think people that are givers and that don’t have a sense of pride or a God complex. You know, I’ve learned with the JV, the two JVs that I’ve had, you know, I don’t want, like, “I have more money than you, and I’ve been doing this longer than you, and you need to listen to me.” It’s like, “Okay. We’re gonna have hiccups. We’re gonna have disagreements. Our attorneys are gonna have disagreements and fight with each other on what an operating agreement should look like or, you know, different things.” And we have to be able to say, “Listen, we’re in this to win-win. Let’s support each other. Let’s make this great for ourselves and our investors, and be people that really care about other people more than they care about their own pride and getting what they want.” You have to be willing to give to get. So, I think those are really important things to me.

Michelle: Yeah, absolutely. And, you know, us women tend to be much more on the collaboration side, you know, if you’ve found a great partner. But there’s a lot of, like, enlightened men out there also that are very collaboration-oriented and are willing to put egos aside, and, like you said, really the first priority is to be a good fiduciary of whoever has given you their lives’ savings to invest. Absolutely. Yeah. So, I wanna transition a little bit. And I wanna ask you, Anna, because this podcast is not only about creating inflows of cash, but it’s also about creating inflows of grace and ease in your life. And how do you incorporate grace and ease in your life? Especially, how did you do it when you were in the trenches having four children being in Corporate America, investing in real estate? Like, what are some actual things you did to keep you sane?

Anna: I’ve had ups and downs, Michelle. I’ve had days where I’m like, “I am crazy. What am I doing? I cannot do this anymore. It’s too hard.” And then I realized, “You know what? I’m strong. I’ve gotten through this. I can continue to get through this. I just have to have confidence that it’s all gonna be okay.” So, you know, number one, I have a very strong faith. And I truly believe that when you live your life to be a blessing to other people, and when you live your life to do things the right way, that God’s going to bless it. And I’ve been through really, really, really tough things as a kid and things that God got me through. And even from the time of being a small child, you know, we had, like, bus ministries come in and take us to church and, you know, give us school supplies, and do different kinds of things. And I just always saw that there were people that were givers and that I just had the sense that everything was gonna be okay. And so, having that strong spiritual foundation, just truly believing that if I keep doing the right things, God’s gonna take care of me and He’s faithful to work all things out for my good. That’s truly the thing that’s kept me the most grounded because emotionally and mentally, there are many times when I’m like, “I can’t do this. I’m not strong enough. I don’t know what else to do.” And I just have to say, “You know what? I just have to have faith it’s gonna go okay.,” and every day pushed toward getting creative and figuring out a way to get through obstacles. And that’s helped me a lot, giving myself grace.

Michelle: I mean, creativity, you know, that is like, I couldn’t think of a better way to really plug to source than to, you know, being, you know, in that space of co-creation because I…

Anna: Yes. Yeah. And, you know, there are so many problems that come up. So, you have to develop grit and you have to develop resilience, and get creative and say, “How am I gonna get myself out of this?” And just take some time to be able to really think, and have quiet time, and figure things out. I have had to learn to give myself a lot of grace. I haven’t always graciously handled everything. You know, I have not always been, you know, the super sweet, calm, you know, wife or mom or landlord and…

Michelle: What? You haven’t ever lost your shit?

Anna: More than I wish, you know, but I’ve learned that I have been given so much grace that I’ve learned to start giving myself grace and to give other people grace and to just do the best that I can, and know that if I do the best that I can, you know, everything’s gonna be okay.

Michelle: Yeah. And this giving yourself grace, I mean, I love that. I’m even writing that because, you know, we are always measuring against where we’re at in the ideal. And I always call that being, like, in the gap, you know, versus looking at where I’m at. And I know you got very vulnerable a little bit ago where you were somewhat in the gap and you recognized that you were in the gap, but where you were measuring, you know, I’m falling short in so many things compared to my ideal, but look at where I’m at right now, and where I came from, and look how far I’ve come. And basically, that assessment instead of forward but, you know, backward for inspiration, you know, has been invaluable to you guys. I could sense that it was for something very personal that you were sharing it, you know, but that’s something that you probably do and you’re professional, you know, in your career as well.

Anna: Yeah. And I think, you know, really, the last 12 years of my life until May, truly, I’ve worked like 70 to 80 hours a week while trying to raise kids, while having surprise babies during, like, the worst possible time that, you know, now I’m so thankful for. But, you know, just hard things and working, you know, 70, 80 hours a week between my husband’s business and trying to keep it afloat, and my stuff that, you know, I haven’t always taken care of myself the way I wanted to. I haven’t been able to, you know, stay at the weight that I want to or be the great mom. I didn’t get to stay home. So, there were a lot of those, like, I just can’t be the best at everything. And I finally came to a point where I realized, you know, it’s better to do it all a little bit than to just give up and really, you know, just throw in the towel. And so, you know, learning to give myself grace.

And the other thing is, even though I was very driven and I had a five-year plan to retire, I also opened myself up to, you know, the number isn’t in stone and this isn’t a race, and even though I want it all now and I want it today, to not force it. So, I’ve learned to really focus more on growth in every area than a certain goal that I have to hit by a certain time. So whether it’s, you know, being a better mom and having some intentional time every night with my kids, or making a healthy dinner, or having some physical time for myself, or growing in my knowledge of syndication, or whatever it is, now, I kind of time block my schedule where I give myself 30 minutes a day for everything that’s important to me where I wanna grow. And I just do something for 30 minutes a day that helps me grow in that area. And it allows me to feel like I’m accomplishing something. Even though it’s very slow, it’s giving me much more balance. And it’s giving me much more ease to be able to say, you know, “Good is good enough. As long as I continue to move forward in every area, the growth will come and the results will come.” And it’s much less stressful because I’m focusing on growth instead of perfection.

Michelle: Absolutely. Now, in terms of ease and support, you know, sometimes as entrepreneurial women, we do not hesitate in bringing support, you know, into our businesses. But we hesitate in getting support at home. What’s your take on that? What do you do to get support at home?

Anna: I agree, and I haven’t done enough, you know, because sometimes, we have to wear so many hats, you can’t even take time to say, “I need support.” Like, I should get together with my girlfriends, but I have to work all day. I have these five appointments over lunch. I have my kids at night. I’m not gonna be able to make time. And so, we tend to not make time for self-care and support, and reaching out to people that, you know, we need support from. And so, I would say that I haven’t done a great job of it, even though I’ve realized it needed to be there until I got to the point that I could retire. And, you know, since May, now I’m very much more intentional that the things that I didn’t do as well that I know are suffering, I need to spend more time on now that I truly have control of my day. And so, I’ve been purposeful now about, you know, setting lunch dates and breakfast dates with my friends, and getting together with people that have wanted me to help them for a long time and saying, “Okay. Now, I’m free. How can I help you?” And not only feeding myself and getting that support, but being able to support others in a way that I wasn’t able to as much is something that I’m really focused on because I know I’ve suffered in that area while I was so driven to get everything else done.

Michelle: Yeah, totally. I totally get it. Yeah. I’m at the point where I’m like, “Jack, you know, we need for us to go shop. I don’t wanna have to think about dinner, you know, I’d have to prepare.” So, maybe, I’m a few steps ahead. I’m like, I even want support there, you know, because sometimes it’s yet one more thing that you have to think about as a busy woman. You know what I mean? So, I’m like, if I could, you know, get at least that support may be on the two most difficult days of the week, for me, it would be fantastic, you know, and so on and so forth. But, yeah.

Michelle: Yeah, for sure.

Anna: So, to wrap things up, what are the three top things or pieces of advice that you would have for either, you know, a woman starting out or already successful in order for them to be able to create inflows of cash, of ease, and grace?

Anna: I would say develop a true sense of resilience and grit and really learn that obstacles are gonna come and life is gonna get hard. And every time you come over something challenge and you think that you have periods of ease, you’re gonna have periods of stress. And so, you know, just to keep pushing through and to realize that, as you develop buoyancy, which is the ability to pop… You know, it’s like that buoy when you’re water skiing and, you know, it goes down and it pops back up. And I think of myself as a buoy. I’m like, “Okay. I’m pulled down…

Michelle: I like that.

Anna: …but if I just let go, I’m gonna pop back up.” And, you know, as you get used to making yourself rise back up… You know, in Texas, we say, “Put on your big girl panties and ride.

Michelle: Put on your lipstick.

Anna: Like, no excuses. Don’t wallow in it. You just get back up and you just go. And so, developing that sense of resilience and the attitude that, “No matter what, I’m not gonna let this bring me down. I’m gonna pop back up and I’m gonna be stronger,” has really been, I think, my key to success, that I’m just not gonna let anything get me down, and I am gonna push forward, and I am gonna grow, and I am gonna get better.

Michelle: So that.

Anna: Also, just what we were talking about, being able to be creative. You know, get creative. Reach out. I did a lot on my own where I didn’t reach out to networks because of being jaded from working with other people for a while, which was a mistake. And I’ve learned to not only get creative but to start really working with other people and leveraging other people’s skills, and passions, and mindset.

Michelle: Ingenius, yeah.

Anna: Yeah. And not trying to do it all on your own. And I tried to do it all on my own for a long time and thank God I had some success in doing that, but it would have been much easier to develop more ease while developing cashflow if I had reached out and worked with other people earlier. So, I think, you know, developing a strong network of people with integrity, people that are gonna support you, people that are gonna help you to get creative when you’re stuck in a rut, I think, is really important and valuable.

Michelle: Awesome. Thank you so much. Now, what is the best way, if somebody wanted to learn, you know, more about what you do? I know you’re passionate about educating others in anything real estate and in possibly even opportunities, you know, of investing with you. Where can people find you? Where can they reach you?

Anna: Sure. So the best two places are I have a website, which is www.reimom.com, where you can talk about, you know, coaching, consulting, mentoring. I have a local real estate meetup group. And then I have a Facebook group that’s called Creating Real Estate Wealth that Lasts with Anna REI Mom. And that’s a good place to connect because my Facebook page tends to keep not letting anybody else join. So, the group is a good place to find me.

Michelle: Yes. And she’s, you know, beautiful and so generous with her time. She [00:50:01] and that’s, you know, wonderful lives, incredibly instructive. I’m part of that group too.

Anna: Oh, thank you. Awesome.

Michelle: I’m so sorry. I tune in. I may not be commenting, but I’m watching.

Anna: Thank you. I love to give back. I’m just really excited to really motivate and inspire other women like you…

Michelle: Yeah, I know.

Anna: …to just get in there, and just do it, and take control of your life.

Michelle: And so genuine, so authentic. Yeah. So, thank you so much for your time and for, you know, gracing us with your presence, and with all the, you know, advice, and knowledge. Thank you so much, Anna. We really appreciate it.

Anna: Thank you. Thank you so much for having me. It’s been a blessing.

Michelle: I hope this episode left you feeling inspired and ready to get inflows of cash, inflows of light, and inflows of faith in your life. I welcome your reviews on iTunes. Please leave me a review and help me create an amazing community of women in flow. Thank you, as always, for sharing your voice by going to michellebosch.com and joining the conversation about this show. And while you’re there, grab a copy of my “Ten Commandments to Living a Life Inflow.” You can also follow me on Facebook at Michelle Bosch and on Instagram at Michelle Bosch official. Thank you very much. And until the next one.