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Women in the Arena
Women in the Arena is the celebration of everyday women living extraordinary lives in plain sight. We seek to inspire, encourage and challenge you to reach for the great heights you're made for.
Women in the Arena
Part 3 of 3: Real Estate Investing for Beginners - Debunking Myths and Market Predictions with Sandra Holtmeyer
Can real estate investing be accessible to everyone, even if you're not a millionaire? In our series finale, Sandra, a seasoned expert, debunks common myths about real estate investing. Discover creative financing options like private money and home equity lines of credit, and learn why hiring professionals for renovations can be a game-changer. Sandra reveals strategies to make real estate investing attainable for everyday people, emphasizing the benefits of starting now despite fluctuating interest rates.
In This Episode:
💡 Myth-Busting: Sandra debunks common real estate investing myths.
💰 Creative Financing: Explore private money and home equity lines of credit.
🏡 Professional Help: Understand the importance of hiring experts for renovations.
📈 Market Predictions: Learn how election years impact mortgage rates and get Sandra’s market forecasts.
🤝 Responsible Landlording: Tips on maintaining affordable rents and being a responsible landlord.
Key Takeaways:
- Empower yourself with knowledge and confidence.
- Take advantage of current market conditions.
- Start your real estate investing journey today!
This episode is packed with insights and practical advice to set you on the right path in your real estate journey. Empower yourself with the knowledge and confidence to start investing in real estate today!
Thank you for all of your support.
If you like what you hear, please go check out more episodes at https://womeninthearena.net/
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***Last thing- This is my WISH LIST of interviews:
• Joan Jett
• Dolly Parton
• Viola Davis
• Ina Garten
Maybe you can help a girl out...***
Go check out all of our episodes on our website at: https://womeninthearena.net/
If you'd like to connect, reach out to me at audra@womeninthearena.net
***One last thing...I have an interview wish list because a girl's gotta dream
- Viola Davis
- Dolly Parton
- Ina Garten
- Joan Jett
Maybe one of you can help me out!
Thank you all for supporting this show and all Women in the Arena!
Welcome in everyone and thank you so much for joining me again this week. This week we are finishing and she has been joining us for the last two weeks and giving us all the information on what you need to know, on how to do it, the steps to do it and the ins and outs to get you started. So you don't have to go and take those classes that everybody wants to sell you something. She's not here to do that. She's here to give you the basics of information so you can be educated and informed to get you started. So it is my pleasure and my honor to once again introduce to you Sandra. Sandra, thank you so much for being here and welcome back to the show.
Sandra :Thank you. Thank you, audra, I've really enjoyed it so far. It's been a lot of fun. Thank you for having me.
Audra :And before we get started with the last part of this, I want to give you my sincere congratulations. Since the last time we spoke, you have become a married lady. So congratulations, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you. And home buying and all of that. So tell us some of the misconceptions that we often hear about this industry.
Sandra :Absolutely. I think the first one and the scariest one for people is they think they have to have a lot of their own money, and I thought that too Before I started. I thought real estate investors were these rich guys Dale Carnegie, rockefeller, those kind of guys but the reality is a lot of them are like us. I started as a single mom, working families, people just looking to add income residual income plan for their retirement differently, not counting solely on social security. So you don't need a lot of your own money and in many cases you don't need any of your own money. So there's creative ways to finance this and we've talked a little bit about it in the other episodes. But just briefly, you can borrow private money. You can use a home equity line of credit. If you own a home or property, you can. Many banks will let you squeeze out some of that equity and use that as a loan For some things. You can use credit cards. You know a lot of the rehabs I put on the credit card. I may have money to buy the house from another source and then the credit cards are funding the rehab. I love when I get an offer for 0% financing or 0% balance transfer. I haven't gotten as many of those since COVID, but so you can be creative. That way, you may have a family member that has money they want to lend. Two of my private lenders told me they were only making like four and a half percent in their IRA or their 401k or whatever, and they can pull money out and loan it to me and I've been paying 9% and they're happy to do that. And there has to be a level of trust. And that could be a whole other episode. But there's ways you can get other money and not have any of your own. So I think that's the first common misconception. So do your homework. There's lots of ideas out there on the internet. There's lots of real estate investing clubs and many of the towns and cities across the country that have people there that speak on the topics and probably some private lenders there in the room. So ask around.
Sandra :And then another common misconception is you have to do all the work yourself or it'll take a long time to rehab a house, which it would. If I did this myself, it would never get done. I can paint and I can landscape and I could probably do a little bit of tiling, but I recommend you hire that work done. The people I know that have tried it on their own are honestly the ones that have failed because they have a full-time job and they're trying to do this on the side or they run into things they can't fix or whatnot. So in my experience and my suggestion is plan ahead, find contractors, hire trusted individuals, let them do the work. The project will go faster. The professionals are doing it. If you need permits, you're going to need that anyway. So budget that in and plan for that and you manage the project. You manage them. Don't do all the work yourself. Maybe do a little bit if you want. You know, if that's in your wheelhouse, my sons for years helped me do a little bit of light landscaping. We can definitely run over with some shovels and buy some shrubs at Lowe's or Home Depot and plant those ourselves and put the mulch out. So I think that's another one too. It's just the mulch out. So I think that's another one too is just you don't have to do the work yourself, because people ask me all the time oh, are you doing this yourself? No, it would take me forever. I could paint a house, but it would take me three weeks to paint the interior, or I can pay the professionals and it's done in a week. I think those are the two biggest ones.
Sandra :When it comes to the market, I hear people saying, oh, we're up for a market crash or estate prices are going to come down. I'm going to wait to buy until prices come down. Well, if you've been paying attention on Facebook, I see memes flying around all the time. If you would have waited in the 70s for rates to come down, when interest rates were at 16, 18% when my parents bought one of their homes years ago when I was a kid, you would have waited until the 90s for that to come down, or in the early 2000s. So home prices aren't going to come down. Rates will change and you may see a little variability in home prices. But think about where you're living right now. Is that really going to be worth less really? So people are losing out on the equity they could be gaining in real estate right now, waiting for those interest rates to drop. 1%, 2%, 3%, 4%. They're never going to drop down to the twos again. They're just not.
Sandra :That was historic when it happened. The threes were historic. It was great, but everybody got really spoiled really quick. So take advantage of what real estate is best at, and that is appreciation. So jump in now. They always say the best time to buy real estate was yesterday, and that's so true. I've made more money in real estate on buying and holding a property and selling it. So my rentals that I thought I was keeping as rentals ended up selling. I've made more money on that than even most of my rehabs. So holding real estate is really where it's at, and Dale Carnegie and all the big gurus out there, they're going to say the same thing Single family homes, holding real estate, equity appreciation that's where you're going to profit the most.
Audra :Well, let's talk about the market. Let's talk about where we think it's heading and we'll talk about. Recently the Fed came out and made some comments, because there's been lots of speculation about where we think the market is heading and we've been holding our breath for months on the Fed lowering rates. We've been thinking that they were going to lower rates three times already this year and they haven't. And they still haven't. And finally, just I think it was a week ago, maybe a week and a half ago, and by the time this recording happens, in July, they will have met a month prior they finally came out and said we're only going to lower rates once this year, we don't know how much. We don't know when Quit asking I don't think that they're going to lower it so significantly that suddenly everybody's going to be able to come out of the woodwork and buy these big, fantastical homes. What do you think is going to happen and how will that impact the market and what should we do about it?
Sandra :Well, you're exactly right. They did say they were going to lower the rates three times. They were going to do it throughout phases. They're only going to do it once and we'll see what they really do. It is an election year, so that always adds a very interesting dynamic. I believe the prevailing party you know who's in office now they're going to want to be reelected, so they're going to do something before election time to make Americans happy, and I think if they lower rates, it will be probably in October. I'm just guessing based on looking back at history and what my financial experts are telling me they're predicting.
Sandra :I checked today. Mortgage rates are 6.8%. They've been dancing around the high sixes 7% most of the year and that's been the historical average for the last over 30 years. When I bought my first house, I paid 7.6% interest, you know. So it's not unheard of. We just got used to those twos and threes. So I think it will be before the election probably fall, and I think the most they would go down is maybe a percent and a half. I just really can't see them getting down below five. I really can't. I mean there's too many other economic factors that play into that. I mean we've got worldwide factors happening right now the war in the Mideast and things like that so I predict they'll come down to probably around 6%, maybe high fives in October. So let's see if I'm right.
Audra :Anybody's betting out there background what I do for a living. You cannot lower rates too quickly because then you have the reverse effect you have a market crash. I know that people think, oh, let's just lower rates, and you cannot do that because it just makes the market sink and that's a problem too. It's just. This is a tricky time. It's a very tricky time. I will bring to people's attention that I don't think that many people are aware that there is a ton, a ton of grant money out there, A lot of it, and it's not all for first time homebuyers. There's a lot of grant money out there that's been brought to my attention. That is for investment properties. That is just sitting there. All they have to do is dig. Have you used any grant money to buy investment properties?
Sandra :I've not used grant money. I have worked with some tax abated properties. I'm in the St Louis market and the city of St Louis does have quite a few initiatives going trying to revitalize a lot of these areas and even some of the older areas, not just the city of St Louis. But there's abatement money that's available and that's usually a really good deal. But no, I've not used grant money, so we'll have to connect on that because I'm looking for more investment properties, so I would love to learn more about the grants myself.
Audra :Yeah, I was just brought to my attention on a whole new program on how to get access to grant money, and so that's for all different types of property. So it's out there and a lot of it goes unused because people don't know how to access it, because it's all over the place. So there is access to funds. So, once again, the whole reason that we started this series to begin with is because real estate is still the pathway to financial freedom. It still is, regardless of interest rates, regardless of the rising cost of housing, because rent isn't getting any cheaper, it just isn't. I'm still stunned that both of my children pay more in rent than what our mortgage is right now.
Sandra :I know it still stuns me.
Sandra :Yeah, I mean the whole time. I've been a landlord so now for almost eight years. That's almost always been the case and you know a lot of people criticize landlords for that. But I personally, when I'm setting my rent prices, I keep them below market rate. So I don't, you know, charge top dollar and whatnot Landlords have. You know, repair costs and taxes and things like that. They're paying that the homeowner would pay their mortgage plus those items. So you know, if I have my mortgage payment, say, it's $2,000 a month, I also have HOA dues and taxes and repairs and things like that. That really, if you average that out, that I'm paying more than $2,000 a month. So you know it just depends on how you slice and dice it.
Sandra :And I'm not saying there's not greedy landlords out there, there absolutely are. Yeah, rent you know you're paying for a service, you're paying for the ability to live in a place you didn't have to finance or mortgage or repair or pay taxes on. Someone else is keeping it up. So I believe in the American dream of home ownership and building that equity. But that's not possible for everyone. Throughout their entire life we go through different phases in our lives. Things happen to people. You lose your job and whatnot. So I think rentals serve a purpose and I just personally try not to be a greedy landlord or slumlord for that matter so.
Sandra :But you're right, rent is not cheap and the rents have gone up more than they should. I've not kept up with market rate because I I think it's too high. You know, I have some properties that I could probably. The average is two to $300 more a month than I charge, but I don't need to charge that, you know. So I can still cashflow and give someone a good home to live in and not rake them over the coals.
Audra :What I would say to everybody is go back, listen to the beginning of this series, take notes. You can start in this industry. You can do it with little to no money and a lot of it is going to be learning sweat equity and connecting with the people in your area that are already doing it. Go and learn from them. The reality is is that there aren't a ton of investors that are doing this work. There aren't because this isn't for the faint of heart. This is not something that a ton of people sign up to do, because this is hard work, and I have found that the reputable investors don't have enough of them to go around, and a lot of them are willing to teach you on how to do this work, because if you can go out and help them find deals, you're doing them a service. So that's from my conversations with Sandra. That's where I would start.
Sandra :Yeah, that's how I started and I've helped other people start that way too. Bring me a deal and if it's a deal, yeah, I'll do it with you. Did a deal with someone. She found a vacant house in her neighborhood, helped the family get through the legal issues, just really putting her in touch with the right people to jump through the hurdles they were afraid of and didn't know how to do, and we partnered on it and we both did very well.
Sandra :She was thrilled I could teach her how to do it and I had the financing to buy it and teach her the process. And it was a win for everybody. It was a win for the family that was able to get rid of a legal burden and it was a win for us and it was a win for the neighborhood to get a vacant house in a nice area, get a family back in there again. So, absolutely, there's deals like that out there and there's investors that are willing to help you. There's agents willing to help you. There's a lot of agents that are investors also. Not all of them are and not all understand the process, but call around, ask around. There's a lot of real estate agents that can really be a great partner.
Audra :So I encourage you all take a leap, because this still is a pathway, this still is a way for your financial freedom, because we started this entire series saying we want you to have freedom, financial freedom from a toxic career, a toxic boss, a toxic relationship, whatever it is. There is a way, and Sandra has been gracious enough to spend the time with us to lay a groundwork, some education, some teachings, and give you just some foundational information to build upon so you can go out and do some additional research, and you know that she's not going to steer you wrong, because she did this out of the kindness of her heart so you wouldn't get false information. So, sandra, I want to thank you for spending the time with us to do this, to give us some of this foundational information so we can build upon it and go out and see what we can do. So thank you for spending this time with us this month and kicking off our season seven and getting us on, stepping us into the right direction. So thanks so much.
Sandra :You are very welcome and good luck everybody. You definitely can do this. I wish you all the best of luck.
Audra :Thank you so much and good luck out there, everybody. I know you can do it and thank you so much for listening on this series. I hope that everybody has learned something and I'm rooting for all of you and we'll see you again next time.
