How to Create a Cash-Flowing Airbnb with Partners
While getting started in real estate has a higher barrier to entry (read: price tag) than getting started in the stock market, there are so many creative ways to lower that cost.
In this episode, Allegra interviews three Factora women who have teamed up to create not one, but two cash-flowing Airbnbs in Austin, TX.
Listen to hear:
How the initial partnership came to be
How they used the “sneaky duplex” approach to create 2 Airbnb units in one house
How each woman experienced imposter syndrome as a new real estate investor and how they overcame it
The roles each woman played and how they divided up responsibilities
What it was like for Christine to live in the house during the renovations
Celeste’s response to anyone who tells you you shouldn’t invest with friends
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This is Allegra Moet Brantley and you're listening to the Coffee and Coin podcast where women talk wealth. I'm the founder and CEO of Factora, a company on a mission to lead 1 million women to 1 million in net worth. Because when women have more money, we'll have more power to be the change we want to see in the world. If you're ready to hear real women share their real numbers and investment journeys and have a sneaky feeling you should be doing a little more with your money, you are in the right place. Just sit back, relax and turn me up.
All opinions expressed by Team Factora and podcast guests are solely their own and do not necessarily reflect the opinions of Factorio Incorporated. This podcast is for informational purposes only and should not be used as the basis for investment decisions. Tim Factoria and podcast guests may maintain positions in the securities or investments discussed in this podcast.
Hello, and welcome back to another episode of Coffee and coin. I have three investees on the podcast with me today. Welcome Christine, Celeste and Renee. Hi, hello, hi, you got all those listeners, you know who's who yet, but just as hellos. I'm actually really excited to record this podcast because investees are a term that we coined here at fact, Torah four, a very special relationship. Women who aren't just friends, but are interested in their financial life are interested in supporting other women's financial lives and sometimes actually go beyond accountability partners and become investment partners together. So these are three real life investees. Two of them did an investment deal before they added in Rene for the investi partnership we're going to focus on today. But before we get into it, I would just like it if you guys can introduce yourself. So if we can go ahead and start with you, Celeste.
Yeah, no problem. So I'm Celeste. And I was in the very first well, Silla girl. I was in the very first well, circle of Factoria, back in 2018. It's where I met Christine, she was also in that circle. Back to our lives a lot different back then. But we have both stayed really involved as it's grown. I currently work as a self employed event producer with my company, big dumb fun parties.
Amazing. Christine, tell us about you, and and also where you're living?
I sure well, so I'm Christine. And I am sort of part of this, the main connecting part of this partnership. I own the short term rental that we'll be talking about today. And I split my time between the Pacific Northwest Seattle area, and Austin. And so we use the short term rental to enjoy our time when we are here in Austin, and the rest of the time we rent it out so others can enjoy the beautiful space.
And what do you do for a living.
So I'm also self employed, I run a support business for female entrepreneurs called the wild trust group. And that is a new, a new journey for me. So that's been up and about for about five or six months now.
Love it. And Renee, last but not least, who are you? And what do you do? Hi, everyone.
I'm Renee coming atcha from Austin, Texas. I was in circle number four in April 2019. That's where I met all of these lovely ladies. I spend the majority of my days working for a software company in Channel Sales. But I've also started a side hustle that was born out of my factory circle, doing family and portrait photography called fence key photo.
Love it. Well, just to take listeners back a little bit. As you heard Celeste and Christine met in the very first wall circle. There was only eight of us back then at a time. So these are two women from that group who have known each other since 2018. And have been able to co invest on a few deals which is exactly why we wanted to build this type of community because I was sick of the boys groups coming together talking about their investments, doing investing together, getting in on different businesses and real estate deals and I wanted the girls version of that so it is so special for me to be recording this podcast and feel like that is Real life now, that was the desire and the intention. But it takes years to create that reality. And so here we are like, these are three women who know each other well, who have trust and rapport and friendship, and investment deals together. And I'm honored to know all of you and thankful that you were willing to do the damn thing with me back in 2018, and 2019, when factorial was no more than an idea, not even a real concept, like we didn't know what it was going to turn into. But all of you have been so significant, and helping us become what we are today. And I really mean that, like, Celeste has helped us do events, Renee started our workshop series, Christine has been a facilitator and led many circles back when we did the format a little differently. So this business wouldn't be what it is today without women like you who went through it. And we're like, yes, it is actually very fucking important that women don't just talk about money, but they take a lot of autonomy and interest in their financial life. And we're gonna keep doing that. And we're gonna help fact Torah, however they need. So I just want to start off by saying thank you to all three of you. And if you want to know more of their backstories, they've all been on the coffee and coin podcast before. So this isn't their first rendezvous. And we will link up their episodes in the shownotes. But on with today's show, which is not just to introduce the concept of investors to you, but to introduce their actual investments. So who wants to kick it off with telling us the original investment partnership that came about between Christina and Celeste,
I can do that. Um, so Christina and I met like I said, in the first world circle, I remember the I have a terrible memory. So the fact that I like distinctly remember meeting, Christine is very important, but I remember her she was living in San Marcos, Texas at the time. And she told me that she was like sitting waiting on the bench. And I was like, Oh, are you here for the money thing? And she was like, Yeah, I just drove in from St. Marcus. And I was like, Oh, like this is a big we've got a widespread like people are driving in for like, this is okay. Like this is I thought this was grassroots. But I'm so yeah. So Christina and I met back then and have just kind of had an instant connection since then. She even though we've only been friends for a few years, I, because of the way we met, in fact, to her and the discussions we were already having very early in our friendship, she is probably one of the people who knows me best has, like, seen me at my most vulnerable has, like been the person that I've like, opened up to most about, like, what I want and what I'm scared of. And I mean, kind of the thing that brought me back to her in the first place was, as you know, most people can relate my, my fears around money and doing the wrong thing with it, and what like, how do I manage it? And how do I take care of it. So, um, we were kind of just friends and would hang out at Factoria, you know, different events, or, you know, different meetups and things like that. And then I think it was sort of a few months into 2020, like, into the pandemic. I was living alone at the time in an apartment and I am very extroverted. So the pan the quarantine part of pandemic that like heavy quarantine was really difficult for me. And I kind of reached out to Christina saying, like, Hey, I don't really know what the goals are for this, but I really need someone to like, just check in with on a weekly basis, and just like make sure that I'm like, not getting stuck in my head too much. You know, like, I mean, I'm in therapy. And I have other friends that I would see and talk to, but I just needed someone to kind of like, keep me moving forward and what felt like a very, like endless and dark time. And one of those main goals that Christy and I both shared was buying a house buying a buying property here in Austin. And so we kind of did that. She went ahead of me, but we kind of did it simultaneously. And she really helped coach me through that process and help me like work through a lot of those fears. And then we kept up our like sort of weekly accountability meetings, and the conversation came up pretty naturally like pretty organically. But I had purchased my house but I still had some actually this was before I purchased my house. So I still had a little bit of cash savings that I was interested in investing, but I wasn't really sure what to do. And Christine has teased about wanting to live back in Seattle where she's from kind of the whole time we've known each other so I knew that that was like probably in the works at some point but she wanted to test out doing like short term rentals in her house and she had a perfect setup to do kind of a sneaky duplex side unit it. And so I just again, like very casually in the park one day, like you mentioned, like, I have this cash, I'm interested in getting into real estate investing. But I don't know who I would partner with I don't have, you know, I don't want to buy a second house by myself and I just bought this primary. And so we just sort of worked out a deal where I would invest my cash in the renovation of her house to turn it into a short term rental. So we can dive into the numbers here in a little bit. And it's also on our previous episode. Yeah, it was just like cash upfront. And then we figured out a payback structure from the short term rental earning. So once it was up and running and furnished and generating income, we had a payback structure for me to get the money that I loaned her back as well as some like interest. So that when we started that in 2120 21, so we're about two years ish into starting that. And the Airbnb has been up and running for over a year now. And I'm almost I think I'm only like a few months away from being fully paid back interest included. So it's, you know, we base our projections on if we had, you know, like one night a month, booked, you know, just to kind of keep it safe. But it's been such a rewarding, interesting investment that like, has taught me so much about real estate investment has taught me about, you know, short term rental management and that sort of market, but in a way that I'm like, not fully in the throes of it but can be involved in sort of, like, help out a friend in a creative way as well.
Okay, that was such a good recap, I have to comment on a few things. One that I I loved your story about meeting Christine. First of all, no one doesn't remember when they hurt me first meet Christine, because she's sneaky, super funny, very funny, and somehow always redirects the conversation to talk about trash and recycling and like, what we can do better in the world. And you're just like, Oh, that is interesting. And the way you present it is hilarious. So I remember at one point, we were trying to push her to launch like a trash talk channel where she was sharing all of these goodies. But Celeste, the fact that you thought that this was a bigger event, because she was driving in from San Marcos just warms my heart. Because now we have women who do this internationally and the states and you know, we walked into a, I always call it a dark conference from that day, because I feel like we couldn't really figure out the lighting. There was an issue with the air conditioning. Like we were really just trying and I was flying by the seat of my pants with the first of all circle that they both participated in. But you know, from eight women to now last week, we just launched the screen 2023 wall circle with 250 women, it's just wild to see where we've gone. And it's all because eight original women were like okay, libre, I'll say to come listen, you talk about this money thing. Are you here for the money thing?
I'm like, exactly what I said like the money meetup situation, are
we you're here, we're gonna do we're gonna do something we don't know if we're gonna like it, but we're gonna try it.
I appreciate sir, for the complimentary hot tea.
I think about that so much when people start a business, you know, those first customers, Rene, I'm sure you've experienced this with your photography business, those first people who throw their hands up and they're like, I don't really know what you're doing. Because it's clear, you don't really know what you're doing. But I am going to try it. And that is how something starts. So just a lot of appreciation there. And really cool that you all became accountability partners. Accountability is something we talked about so much, in fact, why because, look, there are so many money courses, or just websites where you can go learn about all the concepts we teach, in fact, Torah, I am so forthright about that I'm not, I'm not teaching anything that doesn't exist. We're just putting it together in a way that's streamlined and effective, because it has community and conversation around it. Like if you don't discuss it, then you can't eventually have an organic conversation of I have some cash, I want to invest in real estate and someone else say I've got some real estate that needs some cash invested in it to increase its profitability. So the last thing I'll say before I turn it back over to you all is that in the wealth circle, we constantly talk about how millionaires have multiple streams of income and the stream of income that Christina and Celeste went in on for their first deal is really interest income, like Celeste loan, Christine a certain amount of money. It happened to go into real estate, but really there's just loan payback terms and she gets interest from that cash advancement. So if you guys don't mind kind of talking us through how much money it was what the payback terms were, and what the interest was. Yeah, I'm
gonna pass that to Christine because she is the master of the spreadsheet, and she knows about it.
Yes, I hold all the spreadsheets. So the initial investment, so we have two sides of the house that we're talking about today. The side that we're talking about with Celeste is the sweet, this is the smaller side of the house. This includes one bedroom, one bath, a working area, kitchenette, and seating area. So the total renovation costs for that guy were about $40,000 Plus invested $18,000. And she's going to earn $4,500. In interest, I'm excited to share that we are about two months away from having paid back that original $18,000. And just about to start the interest payments. So this is a big win for us going from thinking like maybe we'll have one night booked to actually having paid back about $17,000 already. And the terms for that agreement, I'll just jump into those here now are 50% of the net profit each month. So that means after we pay out the property management company, which was an addition that we had to add to the property, after we decided to split our time between Seattle and Austin, we needed to make sure someone could clean up and prepare for the guests and make take over the messaging piece. That's what we split with her. So the terms are 50% of that per month. So some months that lead early on in our partnership, that was $250 a month. But now we're at an average closer to 750 per month for the sweet side.
Okay, and so just to clarify, she got paid back through the profits
through the profits. Yep, the net profits 50% of the net profit.
Okay, up until she got her full 18,000 back plus the is it 25% interest for that loan?
It's 4500 total. So I think it's like 20 to 25. I can't remember exactly,
I did it in 18,002. Just to make sure that my 5%. Okay. The reason that I wanted to share the percentage is because that is a really, really good deal for Celeste, you can't really put cash anywhere and get a 25% return. If you know what your high yield savings account is sitting out right now, it's probably 2%. But it's a really good deal for Christine as well, because she needed that capital to get the renovations started right away so that she could have an additional income stream. And notice she didn't create payback terms that were flat rate that she had to come up with no matter what they structured a deal that allowed the property as it got managed better and became more effective to increase its payment to Celeste to get her fully paid back with her interest. So I really, really love this deal. And I love that it's creative. I love that it worked for you all because I think that that is how the basis for every investment partnership should be. It shouldn't just work one sided, it needs to work for all parties involved.
Yeah, I think that it like truly was a partnership and that we were you know, like, there was a little bit of hesitancy from Christina at the time to like, take that money. But I think like when we kind of just like talk through all the scenarios of like, I was like I'm learning about you're like, you're gonna have to project manage this renovation, I'm gonna be able to, like, learn through that experience without like, having to live through it, you know, like, I can kind of get experience from the sidelines. You're right, like, I'm not gonna get that return on that money anywhere else. But it was like flexible to her, like payments don't start until the renovation is done. And the listing is up and running. And so there's like, motivation to get it running really quickly. But it can be variable and it's not, you know, so like the month where she's like, we're going to be in town and it's, you know, where we booked off for the holidays, you know, so family can say that doesn't really affect the terms and it doesn't really change that much for me. So
I love it. I also love that you brought up the point of you getting exposure to a renovation without living in the renovation. Christine lived in the house while the side house was being worked on. And I can tell you firsthand from someone who's done a live in renovation who thought that it would be Nbd I ended up with a 15 foot trench diagonally across my living room. So Christine, what was your experience like living in the renovation?
Yeah, I would say that I still have concrete dust in my soul. It was her. It was wild. So I think Nbd is the wrong word to be like some other shorter term for like all the time every day while you're going through it, but you know we learned a lot on the first renovation. So then when we did the second renovation, which we'll talk about with Rene it was like, okay, we can we can handle this.
And that's actually another good point. You know, I think a lot of women take stock Torah and Maybe they weren't interested in creative real estate investing before they come into the course. And that's something that a lot of people seem really excited about. Upon leaving it. If I were to guess it's because real estate's sexy like you see it, it's beautiful. We love to look at a CB two magazine, or maybe that's just me, but like, I absolutely love space, and beautiful space, because we live in it, which is so different than our investment portfolio full of stocks and bonds, like it's just charts that is not sexy or appealing, in a lot of ways. But real estate is also really hard. And I think it's hard to explain that when people are getting started. But the benefit of getting started and trying it especially on not your forever home is that you don't wait until your forever home to try and do a renovation, you get to actually get experience and get better as you go. So I know for for myself and my husband, we'd like to build a house one day, but if we never did any renovations before we got to a bill, I'm sure I'd spend the next 30 years being like, Why did I put this sink right here? Like, because you don't know if you haven't tried it?
Yeah, totally. I mean, yeah. And it's, I think you're you're right, like real estate investment is very on trend. It's very, it is very cool. It is very sexy. But for every like, Yeah, it sounds nice to be like I you know, have an investment in this door. Like I have an Airbnb, I can get, you know, send friends to or have books, but like it is a lot of like panicked calls of like, we think there's a sinkhole, like what do we do? You know, like, how do we deal with a sinkhole, and even in that, like, we were already had that built in friendship and have that accountability. And a lot of the times it was just me being like, I have no idea but like, we'll figure it out together or like if this needs to add on another month to this renovation, like, it's not a bank loan breathing that, like, we'll be fine, we'll figure it out. You know, it's not. So I think like just even having another partner to just like, talk through the hard stuff in the same way that she did it for me when I was buying my house. And I was like, I have to show the lender everything like I don't know how to do this. Like, it's just good to have another person that just sort of like vent to and talk it out.
Totally. Okay, so that's the backstory of the initial investi deal. Talk me through how this new investi partnership came together and what it is,
I can take that So Christine and I you know, it's funny as I don't remember exactly when we met Christine, but I do remember having those same feelings as Celeste and Allegra, I just remember this bubbly, infectious positive energy. And I wanted to be in that all the time. So I think I met Christine right after my initial circle. And maybe it was at a book club or some sort of meetup and we had stayed really in touch ever since then. And you know, I both of us had the experience of becoming circle facilitators and getting to meet with other women and so we kept talking about our goals and after I graduated my first well circle you know, we we talked about our short mid and long term goals. And on my somewhere between my short and my mid I always had real estate investment on on my goal sheet. But I had never to your point Allegra it that always felt like something that was being discussed in these circles that I didn't really have access to. And to hear myself talk through actually participating in a real estate deal. I had, you know, that was huge for me and I I'm not gonna lie, I had a little bit of impostor syndrome as we were going through it, but I definitely want to, we'll talk about that when we get there. But I Christina and I had met kind of on an ongoing basis. And I told her one of my goals was to have to build up a certain amount of cash in order to participate in some sort of deal. And so fast forward a couple years later, I had just had my baby son, and we were going out to coffee, and just kind of catching each other up on on what's new. I was in the phase of maternity leave. So I was really sort of brainstorming what's my return to work going to look like? And I knew I would go back to working full time at the software company I currently work out and I would also want to continue my photography business. And I knew I had this goal but I couldn't really, you know, materialize what that was going to look like but I let her know I want to get into real estate at some point. So we're sitting out at coffee and and I want Christine to explain kind of the backstory But she said, You know what I actually put together a proposal. And I think I wasn't even thinking of you initially. But now that we're sitting here at coffee, I think this could be something really great that we could work on together. And I'm not gonna lie, she's like, I have my laptop, let me pull out this proposal put together. And I said, Christine, that's good. I don't need to look at it. I'll look at it later. Just Just talk to me about it. And one of the things that was really exciting to me was that Christine already had a model of what good looks like when she did this with Celeste. And so when she came to the table, she was super knowledgeable, and just very optimistic that this is something she'd done before and it could work again. And she was very crystal clear in what the benefits would be for all parties involved. And something for me, you know, I'm a little risk averse. And any decision I make financially, my husband also needs to be on board. And so we took the time to kind of look through the materials and lots of texts and facetimes with Christine and ultimately decided that this was a great thing that we wanted to be a part of. And Allegra, I think in the past, you've said, if it's not a Hell, yes, then it should be a no. And took that to heart just thinking like an opportunity. Like this doesn't come around very often. And I've had this money earmarked for a deal that Secretly, I wasn't sure I would ever get access to. So it all kind of came together. And I was really excited when she approached me about it.
Do tell the deal. I want to know this amazing off the edge of my seat, y'all.
It'll look a little bit familiar. I think you might have heard parts of it before a few minutes ago. But when, when I was thinking about this, I knew we already had commitment to Celeste on the sweet side. So I didn't want to take too much money from a partner. But I knew I started to put this deck together. And I remember 10 minutes left my accountability partner about it and being like, Ah, okay, ha, like this is so I've never done something like this before. It was so natural before like, Oh, my goodness, oh, what will happen? And I remember like, her looking at it giving me feedback taking my laptop. And I had remembered like, oh, yeah, Renee and I kind of had talked about this in the past. Like, she was kind of like, Oh, that's so cool. What you did this last, maybe there's opportunity in future. I don't know that I was thinking about going to that coffee drill. I was just so excited to meet her tiny event and like, spend quality time together. But when it came up naturally in conversation, yes, that is so embarrassing. I was like, here's my laptop. Here's how the details. So the the deal on this side. So just to give context about the house is it includes two bedrooms, one and a half bathrooms, an office kitchen, small dining room and living room. And the total remodel costs on this side of the house for $50,000. Renee and her partner invested $20,000. And what we did differently in this deal, instead of only during the terms of splitting the nonprofits, we also did a minimum amount. So I didn't know how this side of the house would go. And I also knew when John and I came to town, John is my partner who I have not hyped up before. But he is my main be. He and I when we come to town, we knew we were going to stay on this site. So I didn't want Rene and Taylor to lose out on profits when we came to town. So we set the minimum amount repayment per month at $1,000. But if we make enough to where the split of the profits 50% would be higher than $1,000, and then they get more than $1,000. Yeah,
so okay, this is this is great. I just want to zoom out one second for audience members who maybe I didn't set the tone well enough on your house. So Christie bought a house that they purchased with the intention of turning it into a sneaky duplex. We mentioned that term once before, but what that is, is it means taking a single family home and making it a multifamily living environment meaning there can be one person or group of people staying in one side and then you do that again with a unit that's cut off from that original side. So they bought a specific property so that they could have this side unit spent 40,000 renovating that side and that was the deal Celeste did with them. And then when they decided to move back to the Pacific Northwest Northwest, which is where they're from, and want to be able to have access to come back They chose to flip the main side that they had been living in into another short term unit that needed a $50,000 renovation. And that's what Renee came in on for 20 grand.
Did I get that? Right cap that great.
Okay, and then so what was the interest that Renee will be getting for her? $20,000 investment?
Silvernail getting $5,000 interest? Okay.
All right. So it's pretty close, it's probably pretty similar. Okay, awesome. And how's it going so far, like, talk us through the timeline of getting the money, doing the rent, know what it included and where you're at today.
So I can talk about both sides in the context of time. So Celeste, the sweet side took us about four months, it was a bit of a longer timeline. And it's going to take about 29 months to pay that off. Like I said, we're about to jump into the interest window. So we think we'll be paid off around June, July based on past trends, but who knows what the short term markets, so we're keeping all flexible. And then with Rene, we, we renovated over June and July. And I should clarify, when we renovated this suite, we had a project management partner, but when we did the large side or the House side, I project managed that effort. And that one took us about two months. And in total, it will take about 24 months to pay off. And that is a shorter timeline because it has that minimum threshold of $1,000 in the repayment plan.
So what I'm hearing here is you've gotten more efficient with your rent owes and your payback terms from one year to a second deal. And like
Yeah, yeah, that's what it's all about. Yeah, we've learned a lot about I've learned a lot about what type of deals make sense for me if I'm in the time side, I know we've you've talked a lot about this before about you know, when partners come together, they have money or they have time, I think there's maybe a third option, but
I'm tell and money and like you don't have to have all three, but you need to find what you're missing.
So on the the sweet side that there's the time, talent and money the time was the one that we gave the biggest space to we didn't know how long it would take the talent we hired out for and the money the last, you know, added to the to the deal. And then on the sweet side. We did not have time we were in a rush. We had talent, but I was managing the talent so I could control the time. And then birthday was the money in that deal.
Got it. So then what all did you do for this 50,000 right now.
So the 50,000 on the Renault side, we did some upgrades in Central Texas. As everyone knows, there are some wild weather adventures. So we wanted to make sure that we had a really well insulated house. In addition, we took out the flooring and put in sort of a concrete style floor. We added some new appliances did painting the whole house furniture, upgraded some fixtures, so a lot of stuff in just a two month window.
I love it. Rene, I feel like you were going to add something before did we cover it? Or yeah,
what I wanted to add was, I think, Christine having the experience of going through this with Celeste previously. You know, my partner and I were a little bit more risk averse when we when we came into it. Because on our goal horizon, we we were earmarking that money. I was sort of ephemerally dreaming about this real estate investment. But we were also starting to actually materialize on potentially moving into a second home. So I live we have one primary residence today. And at some point we want to grow our family and move into a new primary residence. And so there were there were a few things that Christine was able to do. And that was shorten the time horizon for me to get paid back. Because we knew that that $20,000 I had earmarked for a new home for us. I was moving to Christine. So she was able to say okay, well I can return this back to you in a guaranteed timeframe by setting that minimum. And so not only does that get you paid back, but it also allows for us to kind of it gives Christine incentive to get the renovation up and running and to get people into the house as quickly as possible. And as fast as she gets me paid back, the better that is for her in the long run because she gets the full profits. So she and what I loved was her just clarity in vision you In, in her communication she every single month, she gives me an update on what she's doing. And it gives me that front row seat. Like Celeste said, she wants to Celeste wanted that experience to know what it would look like to do a renovation or to do a short term rental. And so I'm sort of getting to learn and see all of the pitfalls, sort of up close and personal, but not being the one in the trenches every day. Because in this equation, I didn't have any time to contribute to this partnership, just simply the money. But now I have so much understanding of what goes into converting your home into a short term rental, and just all of the things I would have never thought about previously. So yeah, so that, you know, when you are looking at a partnership with people, whether it be friends or whoever, just that clarity of vision in the communication and structuring a deal that you have experienced doing, it makes it so much more comfortable for someone to jump in and say hell yes, I want to do that with you.
I love that. One thing I want to touch on, because I heard you all say it in your own way is imposter syndrome. It seems like Celeste had a little bit of it with just getting into real estate. It's like it's something she knew she wanted to do. But it felt like a big jump to get started. And Celeste, I know you bought a property on your own, which can be even harder than going in on it with a partner that you automatically kind of have someone there in the trenches with you. And then Renee talking about, you know, this official idea of real estate investing, but secretly like, How the hell am I going to do real estate investing? Like how does that work? And then even Christine with becoming a dealmaker, like putting a deck together? And then thinking, like, I'm gonna shop this around? Like, is someone going to take me up on it? Um, I guess I just wanted to put it out there, because I think a lot of women experience impostor syndrome, and it's important to share that you all three experiences, and still went on with the deal. So maybe, how do you feel about your imposter syndrome? When it comes to real estate today? Or just any tips for someone who's battling that as well?
Yeah, I mean, I would say like, everything is less scary with someone else by your side, you know, and whether that's like I said, like, Christine was really helpful to me, when I was buying my primary by myself, just the whole process, like, I was familiar with it, I had seen other friends go through it, I was working for a real estate brokerage at the time. So I was like, very familiar with all the steps, but I just needed, like, the extra encouragement of like, you can do this. So I think just like having someone on the other side, and is also kind of one of those things, I feel this, I say this about event producing a lot where it's like, you can plan all day, and then when you get on site, and there's gonna be something that goes wrong, there's gonna be a vendor to those that doesn't show up, or it rained the night before. And everything's wet, and you just kind of have to pivot and figure it out. And I think the more you put yourself in those situations where you're like, I just have to figure this out, the stronger that muscle grows, and the more confident you are going into other things. So I think it goes out of existence, like seeing Christine going through, even like, I mean, she gave me a full view of like, the panic attacks, the freak outs, the, you know, the midnight Googling, like, ice, you didn't hide anything from me in an effort to, like, soothe me as an investor, I really did see the whole thing. But it just like, reinforced that message of like, everything is you can figure it out, everything is a you can figure out anything, you know, and like, if you can't, then there's like other options to explore, to make it work. But there's not really anything that is impossible, or like impossible to deal with.
I would agree with that. I think as I was going through this deal with Christine i, i got i solicited advice from very close friends and family and was not shy at sharing my concerns with Christina and she took every single one of them. And we worked through each question I had, you know, what happens if the freeze hits and a pipe bursts? What happens if, you know one of you gets laid off? What happens if, you know we just kind of went through every scenario. And what we started to realize, and I love that Celeste said you just build that muscle for realizing you can get scrappy, and you can figure it out. So even if worst case scenario was to hit, what would happen and let's just really talk about that. And then we actually got it documented in an agreement and we updated a legally binding contract to say you know what would happen and what how do we get Out of this partnership, if something goes wrong in, you know, 99% of the time, nothing's gonna happen. But we at least had that there. And so it made both of us really comfortable. And it takes a lot of vulnerability to say I don't, I don't know, but I'm going to figure it out with you because I want to, and I trust you. And I want success for both of us in this.
Sorry, just to add, I think that's a good thing too. Like, a lot of times when you tell people that you're invested with friends or with family, or you know, like, in a non traditional way, you do get a lot of like, Oh, that's so scary, or like, how could you trust someone like that, but like, working through those conversations and like, diving through those scenarios, and seeing how the other person responds to that is like, so comforting? And like, yeah, we have no idea what can happen. But like, I like the way that you're like, Okay, well, we could try this or we could try, like just seeing how they operate in a hypothetical gives you a lot of comfort and like, Okay, I we don't know what the problem will be or how we will fix it. But like, we communicate well, and we're both equally invested. And we'll figure it out.
I have something to say, as a response to anyone who comes along and tells you you shouldn't invest with friends or family. And that response would be actually, why do you think that? And why do you say that? Because I think a lot of times some of the things that we say is just a regurgitation of what we heard, and we don't actually have experience with it. I have a lot of investment partnerships, and I've had no problems. Like Renee, it's also very important for me to document these and it's the same thing we say in the wall circle, like there should be an operations agreement, this isn't. Investing isn't a joke, like you're putting capital at risk for hope of reward. So there should be structure and when there's a correct structure in place, likely things don't go wrong, because we know what's gonna happen if it does, like we know what the next steps are. So you all know this. But for listeners, one of factors values is question the quo, just like you should question when people tell you that you shouldn't talk about money or share your salary, or any of those things we've kind of heard and then we abide by like, why I just want people to ask why and follow through there. Because here's three women who've done some deals together. And they're all really good friends and primed to do future deals. So I guess before we wrap up, I just want to know, are there any deals on the horizon or ideas you have either as a group or individually for your next foray into real estate deals,
not as a group, but this has really all these conversations have got us thinking about finally making that move into a second home. So my partner and I actually just closed on a HELOC this afternoon, which is a home equity line of credit. And that gives us access to capital from the equity of our of our current home. So that frees up some some capital in case we want to make any sort of serious investment moving forward.
And you quickly give us the numbers on that. How much is the HELOC and what's the rate at? Yep,
so our HELOC is it's basically the amount of your house that it gets appraised for minus 20% minus how much you owe on it. So for us, we'll get access to right around $300,000. Yes, it's a fixed rate. So, you know, right now we're looking at 8%, which is higher than what we've seen. But you know, it is sorry, it is not fixed. It's variable, right.
Got it. So it's at 8%. Right now, if you were to draw on it, but that will go up and down as the Fed rate changes. Yes, exactly. Got it. Okay, Christine, what's next for you real estate wise.
Right now, we're just focused on getting through this time, I think of making sure we can keep our partners happy and paid on time and all that great stuff. But John and I are also thinking about potentially buying another property in the Pacific Northwest so we can do the same model there as well in the future.
I love it and not to toot your horn for you, Celeste but can you maybe just share how many real estate deals you're in? Because you're in more than this one?
I am. Um, so I it's funny that you asked like what's next because I have no future plans. I bought or with partners and on my own bought three houses within the span of like 14 months because that's I am not risk averse. Apparently. That's how I operate. So I have my primary house. I'm invested in Christine's house. I also partnered with two other friends on a short term rental in Leander outside of Austin. And then I'm also partnered with four other former co workers and friends on a house in East Austin that serves as there's a tiny house in the back that we short To Rent and then we use the front for commercial office space. So yeah, so I mean, again, this my the the first one was the pristine I don't think if I had gone through that I would have been as open to those other partnerships by just kind of getting that experience and learning, like what scenarios to think through and how you might because that's the thing you can structure any way you want. And all those deals are structured very differently, as far as you know, like I have 0% ownership of Christine's house. But I got a much better return than I will. I mean, I have a great return on that one. So I think just like being creative and seeing how there's different ways to structure that just made me so much more comfortable to go through that. And then yeah, I mean, really I experimented with renting out my main house I spent a few weeks back in my home state of Colorado over the summer and rented out Airbnb there and rented out my house here in Austin. So I think just kind of like flexing the different opportunities that owning a house allows you to have just kind of like stretching those and seeing how that works for me and how I can kind of play that into my into my lifestyle.
Well, thank you all so much for coming and sharing your investing partnership. If you enjoyed this episode, come join us in a while circle. It's our live online 12 week course and community where we teach you how to create a personalized financial plan alongside hundreds of other women building wealth. It will change your life and your money for good. You can apply at factorial wealth.com forward slash wealth circle. That's factorial wealth.com forward slash wealth circle. See you in the next episode.
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