From Burnout to Abundance: The Inspiring Real Estate Journey of Deba Douglas

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent. I’ve got to say it, we have Erica with us.

[Erica]
Hallelujah. Hello.

[Mattias]
It’s always better when you’re here. We have been trying our best to get caught up with, you know, so that if we have reschedules, if we have things happen, that we’re not scrambling last minute to make sure we have a guest to air. Now we have a few in the backlog.

So we’re hoping we’re going to have our normal recording slots. And that will mean that Erica can be with us for more of the episodes.

[Erica]
Yeah, I hope so too. We’ve had some sick kids. So the last couple of recordings, I’ve been home with them.

But hopefully that is over with forever.

[Mattias]
Yeah. We’ve got three kids, two, almost five and seven. We’re in it.

We’re going to get sick every… And we’re going into winter. So…

[Erica]
I know. I was rocking our youngest last night. And he sat up and put his face like an inch in front of mine.

And looked at me so sweetly with his big blue eyes. So lovingly. And then he opened his mouth and coughed right in my mouth.

And snot went everywhere.

[Mattias]
That is the joy of parenting. Yeah, yeah. It’s every year the open comes around with CrossFit.

And that’s kind of like early spring, late winter. And I am like, why didn’t I train more? Why didn’t I get better shape and preparation for this?

I’ve been working all year and I don’t feel like I’m any better. But then I realized it’s winter and I’m just sick constantly.

[Erica]
Right, you’re just a parent.

[Mattias]
Yeah. Well, speaking of CrossFit, I did… I think I just talked about this in the last intro.

We talked about CrossFit in the last intro. We’re trying not to make this a CrossFit show. But it is a part of our lives.

So we will talk about it a little bit today. And the recording is Veterans Day. And we did the Chad Hero WOD, which is doing a thousand box step ups.

RX, or the way that you’re supposed to do it, is a 45-pound weight vest for guys. And a 30-pound weight vest for girls on a 20-inch box. There was a weight vest available for me.

And I started with that. But I have not trained with a weight vest at all. So I did 250.

I was like, you know what? I just want to finish this. I don’t need to.

[Erica]
That’s a lot to do with a weighted vest, though.

[Mattias]
Yeah, it was… It’s heavy. It was…

We wear whoops here. And they tell you, based on your recovery, kind of your optimal amount of strain you’re supposed to do for the day. And if you hit the optimal amount, it vibrates.

And I think we were about 16 minutes into the workout. And my whoop vibrated, saying, okay, that’s enough. And I was at it for 54 minutes, I think.

[Erica]
Yeah. It’s an interesting workout, because it’s… I mean, it’s a thousand reps.

I did it unweighted. And that was still hard. But I don’t…

I was trying to figure out what the hardest part of this workout was. Because it’s not physically difficult, necessarily. But mentally, it’s really tough.

Because you got to hang in there. I mean, I think I finished around like 44 minutes or so. It’s a long time.

You have to make sure you’re counting. And you’re not… Because if you daydream too much, you’re going to lose reps.

So it makes you stay focused and present. And then you also have to make sure you’re not like falling on the corner of the box, which I did once. And you can really kind of mess up your shins.

[Mattias]
Yeah, people have had some gnarly shin injuries on those boxes. The shins bleed a lot.

[Erica]
Yeah, yeah. But it was… Yeah, I can’t even say it was fun.

But I’m glad I did it.

[Mattias]
Well, it’s one of those things with… I think that I have really gotten out of CrossFit. And that’s something that I’ve always regretted not doing organized sports in high school or much earlier either.

Because I feel like I just didn’t have that discipline, that getting through hard things, and working hard and seeing the progress and seeing… And just you kind of could connect. Okay, well, if I go out and I shoot 100 free throws a day for six months, I’m going to get a lot better at free throws.

And just kind of understanding that if you had a discipline, you will… You can achieve whatever you want, really. But just quick side tangent, I think I was in the peak heart rate zone five in the whoop world for like 45 minutes.

So, that’s probably not good. But yeah, no, mental toughness is something that I think you definitely get. And that cold plunge too.

I mean, we’re talking about all these things that people might roll their eyes on. But that’s another really hard thing sometimes. Sometimes it’s not as hard as others.

But sometimes to sit in that… You get to the minute mark, to get to the three-minute mark, it’s just grueling.

[Erica]
Mm-hmm.

[Mattias]
And to really push yourself to get past those mental barriers. Anybody that’s ran a half marathon or marathons understand what we’re talking about too. It’s just you have to…

You want to quit, you want to stop, but you don’t yourself.

[Erica]
Yeah, I’ve often… Somebody, I think a coach maybe had told me this at one point at one gym or another. But sometimes for me, often, it’s not really a matter of whether my body can do it.

It’s more of whether my mind can. And I remember that came up for me when I think I hit like 400 reps. And I was feeling really good about that.

And then it was really depressing to think I had 600 more to go. That wasn’t even halfway. And for me to just talk to myself, a little pep talk, your body does not have a problem doing this.

Your mind does. And so you just have to keep your body moving. And that got me through.

[Mattias]
Yeah, I always played a ton of mental gymnastics with counting and that kind of stuff. I had a whiteboard that had 10 lines on it. So I had to get 100 reps in each line.

And I think the first one, I just counted to 50. So I would get off and mark through the line once. And then once I got the next 50, I would just erase it all together.

But then I was like, I need to do more. 50 is too much to count to. So I started going to 20.

And at one point, I think the coach came over and looked at my board. And then another guy that was in the middle of it came over, looked at my board to try to figure out where I was. And I was like, I barely know.

Like you asked me how many it was. I don’t know because I just know I have to do 20, 20, 20, 20. And then I can move to the next one.

But yeah, no, but I think that mental toughness to keep going, even when you want to stop, that’s such a fundamental thing in life in general. And I think that it’s a key for being your own boss. You really have to be self-motivated.

I think that it’s probably not for everybody being a realtor or being an investor. You have to do things that you may not always want to. And then eventually, maybe you can delegate some of those things that you don’t enjoy.

But there are just certain reps. If you reach out to your sphere this many times or whatever, door knock, whatever it might be that you want to do to establish business, that you will see results from it. And it’s a matter of discipline to get yourself there.

Does that translate in the therapy world?

[Erica]
Yeah. I think I would just say it’s so much easier said than done.

[Mattias]
Yes.

[Erica]
It can be really hard to keep going sometimes when you’re feeling pretty defeated. So that is why I think we work so hard at it because it’s something you have to work at. It’s just not something that comes naturally to anyone.

I don’t think you get used to discomfort, sure. But when you’re in the height of it, it can be as small as just like, okay, I’m just going to put one foot in front of the other today. Or I’m just going to breathe for a second.

But it can be really tough.

[Mattias]
Yeah, it’s kind of which habit are you feeding? Are you feeding your giving in habit? Are you feeding the working towards something?

And that doesn’t mean you have to come from zero. And I’ve never ran a day in my life. I’m going to go out and run 26 miles.

But if you’re kind of working towards progressing towards that end goal or whatever, I think it helps to set your goals so you can actually achieve them. But they don’t have to be so insane that you just feel overwhelmed and defeated.

[Erica]
Yeah.

[Mattias]
But anyway, so we have a really fun guest today. Deba Douglas, coming out of the Dallas-Fort Worth area. Deba is wearing a lot of hats.

And this comes from the education world. I won’t get too much into the story since she’ll explain it here shortly. But just a really good conversation.

She and I could probably talk and brainstorm about business for a long time since she’s doing a lot of different things and heavily involved in investing and as a realtor. So it’s a really good conversation. And without further ado, Deba Douglas.

Welcome back to the REI Agent. We are so happy to have Deba Douglas here. Deba, thanks so much for joining us.

[Deba Douglas]
I am so honored to be here. Thank you so much for having me.

[Mattias]
Deba, tell us a little bit about your journey into real estate. What got you there, what you were doing before, etc.

[Deba Douglas]
Yeah. So I was in education. I had about 16 years of education experience.

My last one, I was an assistant principal in the Dallas-Fort Worth Metroplex. And at that time, I had two kids and I dealt with a lot of mommy guilt. And so I was just really at the point that I needed to find something else to do, but I didn’t know what else because I went to school to become an educator.

And then just some just so happened that one summer, I went to our office and I read Rich Dad, Poor Dad. And as I was reading that, I’m like, oh, my God, this is like everything that’s in my brain. But I just wasn’t able to articulate it into words.

And so immediately after reading that, I talked with my husband and I was like, we need to make some changes in our lives. And ideally, we were the people in our family that were like first year Americans, first generation going to college. So everyone looked at us like we had it all together.

And yes, we were able to cover our bills, but we didn’t have anything extra at the end of the month. So we decided that at that point, we were going to cut back on like extra lifestyle expenses, like going out to eat, going on these great trips and buying things that we didn’t need and started to save money so that we could buy real estate. And so about a year and a half later, after a saving, we bought our first investment property, which was a duplex.

And that’s what kind of started the snowball effect. I was already over my job, but I knew I needed to show my husband that this is something I really wanted to do and I could really lead it because he enjoyed his job. And he was like, in order for us to step into this fully, one of us is going to have to put our job.

And I was like, please let it be me. And it just so happened that we saved some more money. And then we decided to walk away during that time that I was preparing to walk away.

I started, you know, being part more of my church, serving more in my church because I was like, I’m about to do something I’ve never thought was possible. I’m about to walk away from my career and just being more involved with God and church really gave me the confidence to walk away and try something that I didn’t even think was possible.

[Erica]
Wow. And what, you were an assistant principal. That’s a hard job for one.

We both worked a little bit in the school system and more in mental health settings, but that is a hard job.

[Deba Douglas]
Yeah, it was a very hard job.

[Erica]
Were you elementary, middle, high school?

[Deba Douglas]
I was middle school and high school. So a couple of years in middle school and a couple of years in high school.

[Erica]
How big was the school you were working with?

[Deba Douglas]
Oh my gosh, it was a really huge campus. So high school wise, I think we had over 500 kids. And then middle school wise was close to probably about 700 to 800 kids.

[Mattias]
Wow. And how many years were you deep into that career? So like, I mean, you were not an assistant principal right away.

You had to go through education. So tell us about your degrees and how many years you put into it to get to that point.

[Deba Douglas]
Yes, I went to school in college to become an educator. And so then as soon as I graduated, I went straight into teaching and I was a PE teacher, health teacher, special ed teacher. And then for a couple of years, I was at the middle school being a coach as well.

And then I moved up to the high school level and I was a head volleyball coach while I also taught health and PE. And when you are a coach in some of the school districts, especially in Texas, they also make you drive the school bus. So not only am I a coach, a teacher, I’m also driving the school buses to get us to our different events and our different tournaments and things like that.

So it was a lot and over 16 years total.

[Mattias]
I was going to ask too. Sorry, not to interrupt. I was going to ask too that you mentioned you had the mom guilt or whatever.

So I assume you’re putting in long hours. And what were you averaging a week with that?

[Deba Douglas]
Oh, my gosh. I would say at least 60 to 80 hours a week, because being a principal, you’re the last to leave. You’re the first to get there.

And if there’s any events like football games, band concerts, anything of that nature, you have to be there to be the admin on duty. So I was always gone.

[Erica]
Wow. Yeah, that’s a job you almost have to be married to.

[Deba Douglas]
Yes. I saw the kids at school more times than I even saw my kids at home.

[Erica]
Wow.

[Deba Douglas]
How old were your kids at that point? Yes. So at that time, my oldest, he was probably about seven or eight.

And then my youngest, he was around three or four.

[Erica]
Okay. Wow. I heard you say too that as you were thinking about or working towards the transition out of the school setting that you needed or really leaned on something else, like you were talking about the church and your community and your faith to give you the support to do that.

Sounds like that was a step that took a lot of courage.

[Deba Douglas]
Oh, absolutely. Because I went to school to become an educator. All I knew was this world of education.

And I just felt like there was something inside of me that God was like, you need to do something more. You need to do something different. And I’m terrified.

And then I’m like, am I really listening to, is that really someone telling me that? Or is I just hate my job? I just need to do something.

And so I just said, you know what? This is God. I’m going to literally dive into church and I’m going to really just start serving.

And it kind of what helped me, I stopped thinking about myself and I stopped thinking about what I was unhappy with. And I just said, you know, I’m just going to serve other people. I’m going to get planted into the church, join connect groups and really love on other people.

And while I was doing that, I felt like God was transitioning me to be ready to go into another world. And he was going to order those steps for me.

[Erica]
Wow, that’s really changing the energy in your life because it, I mean, I guess you’d probably have to speak to this more. But before you did that, when you were just in the school setting and not seeing your kids and being away from your family, I just like that just feels so draining when you talk about it.

[Deba Douglas]
Yes, it was very draining. Everyone at home felt it, felt how unhappy I was. Like, I think they felt it more than I felt it.

And I just thought it was just a normal day. But I think it took a toll on how I was raising my kids. It took a toll on how I was showing up in my marriage.

It took a show. It just took a toll on every aspect of my life, even just with my friends that they probably saw unhappy, how unhappy I was before I really saw it. Wow.

[Mattias]
Sometimes hard to see in yourself, right? Absolutely. And I was just thinking about how rich dad, poor dad must’ve been like a little bit of a slap in the face.

I mean, is that fair? Yes.

[Deba Douglas]
I will tell you what really caught me was the chart when you’re looking at your liabilities and your assets. And I’m thinking like, I went to school, I did what I was supposed to do. I got a good job with great benefits.

Okay, I’m going to ace this chart of lining up your assets and your liabilities. Then I started looking at them like, I have a really nice car. Well, that’s a liability.

I have a really nice house, but I have to pay that mortgage. So that’s a liability. And as I’m making this list, I have more liabilities than I have assets.

There is no asset. I guess at that time, I guess I was the only asset, but I didn’t look at myself as an asset either. Because at any point my educational job could say, you know what?

We no longer need your services. So everything is a liability. And I think that was really eye opening because we think we’re living the American dream by going to school, getting a good job, getting a job that has great benefits, setting yourself up for your future, but you’re really not.

[Mattias]
Yeah, it is a really interesting point that he makes about, you know, you think you’re getting the secure, safe route. But in reality, like you just said, you could lose your job at any moment. And you don’t really have control over that.

And what he describes is kind of, you know, anti the school system. Not fooling, you know what I mean? It’s kind of going a different route.

And yeah, it’s definitely taking the control in your own hands. Like, so you’re creating your own thing so that you can have more control over. And it seems like it’s a scary, wrong thing to do.

Like you mentioned your family were like, what do you guys are crazy? Why would you do this? It just seems like the wrong thing to do.

But in reality, it’s kind of the safer route.

[Erica]
We’re also, I don’t know about you with your family, but we’re also like first generation thinkers in that way. Which, you know, like Mattias turned me on to Rich Dad, Poor Dad and had me read it.

[Mattias]
And it was mentioned so many times on the podcast. I was like, you should probably read it.

[Erica]
I know, I know. I had it at that point. And I finally did at some point this last summer.

And it was really mind-blowing because I grew up with more of the poor dad mindset, I think, with my family. Me, educated. I just kind of get a job, pay your bills.

And so did you. Like your dad’s a professor. And so like the investment or building assets idea was never in the forefront of our minds growing up, learning about financial wealth or financial intelligence.

What about you for your family? How did you, what was the mindset there?

[Deba Douglas]
Yeah. I mean, so I was a first year American. My parents came from Nigeria.

So my parents had their own businesses, but it was more entrepreneurial. And it really was an asset base. Now, there was, when I was about to go to college, the house that I grew up on, my parents ended up finding another house and they kept that house as a rental.

And to me, I didn’t think anything of it. But while I was in college, my dad would always call me and say, hey, the tenant moved out. Can you post it on Craigslist so I can get another tenant?

And I would be like, oh my gosh, I have other things to do. But then I would do it, you know, and I didn’t realize until, you know, later on in my life, those little droplets or those little, you know, seeds that he was planting were setting me up to say, I could be a landlord. I saw my dad do it.

And he didn’t even have, he didn’t even know like the different ways and aspects of finding tenants. He just knew get on Craigslist and he was just basing off what he knew. And then my husband, you know, his mom had just a regular W-2, but I did have that entrepreneur spirit, but I really didn’t want that growing up.

Growing up, I just wanted to get a job and I wanted to be able to, it’s so stupid now. I just wanted to be at home on the evenings and watch TV because I was always doing stuff with my parents because they were entrepreneurs.

[Mattias]
Right. That’s interesting.

[Erica]
Yeah. It’s interesting. It came full circle.

[Mattias]
So you said that after reading the book, it took you guys a year and a half to buy your first duplex and then you transitioned. How long did it take to transition for you to leave the school system and go full time? Two and a half years.

Yeah.

[Deba Douglas]
Two and a half years of just saving. We bought the first duplex and we had to put 25% down. So that was a lot of our savings.

[Mattias]
Yeah.

[Deba Douglas]
And we were like, okay, I think we were making after expenses, maybe four or $500 a month. But I was just like, just think about multiplying that. If I did this like 10 other times, that could replace my salary.

I’ll have more time at home and then we can continue to just buy more and it would just be a domino effect. But how long would you have to save to save another 25% on a property that was only $128,000?

[Mattias]
Right. Yeah. So did you explore other avenues of creative finance or anything else with real estate investing?

Did you get into that in that journey?

[Deba Douglas]
Yeah. So during that time, we stopped listening to the radio and we started listening to podcasts. And my husband would listen to podcasts.

I would listen to podcasts. And when we come home in the evening, once we put the kids to sleep, we would talk about the podcast because we were like, we’re listening to all these different podcasts. They’re buying five or six houses in one year.

We could barely buy one. And we’re like, all our money’s gone. Like, how are we doing this?

And then we started tapping into, okay, let’s wholesale. Let’s tap into learning the bird strategy. And I did a little bit of wholesaling and that worked.

But really to scale, it was the bird that helped us scale. That we’re actually able to create a real estate portfolio.

[Mattias]
Yeah. I love it. And if people aren’t familiar with the bird strategy, it’s buy, rehab, let me see if I get all the Rs in the right order here, buy, rehab, rent, refinance, repeat.

[Deba Douglas]
Is that the right order? Yes. You got it.

You didn’t know it was a pop quiz.

[Mattias]
Well, we’ve done it too. We were debating about a property right now that we’d like. But interest rates make it a lot harder to burn.

And so we’re debating whether to get rid of it or to keep it.

[Erica]
I don’t know if you’ve ever had a property like that. But we have gone back and forth over whether to sell or keep this property for months. And we’re getting to the point where it’s almost done.

And we need to make a decision on it. It’s just a really cute house.

[Mattias]
It’s a good location.

[Erica]
It’s a good location. And it looks like it’ll live well. But it is an older house.

[Mattias]
1950.

[Erica]
And the numbers don’t quite make sense. It’s right on the line.

[Mattias]
We wouldn’t be able to pull all of our cash out in a burr and have it pass out. So we’d have to leave a little bit of equity or capital in it. But if you look at it the other way, if you were just to buy this off the street, people, investors around you would kill for this opportunity.

So it’s one of those things. It’s good either way.

[Deba Douglas]
It’s good to have these options.

[Mattias]
Totally, totally. So on top of burr, did you get into flipping as well?

[Deba Douglas]
Yes. So as we started doing the burr, and I think on average, we were burring maybe seven to eight properties a year, we decided. And at that time, I actually was also working on my real estate license before I walked away.

So we were thinking, OK, doing the burr is going to be our passive income. But we still need to have some type of active income so I can cover my side of bills and just kind of have more money to pour into the investing side. So I became a realtor.

And so while I was being a realtor, you get connected and meet a lot of different people that have a lot of different strategies. So we were able to purchase some properties with just owner financing, bringing zero dollars to the table. Then we started tapping into flipping some houses that maybe we have a client that wants to sell it, but they don’t want to put a lot of work in it.

And they’re willing to give it to us for little to nothing. And it may have not made a good rental. So we decided that we would just turn around and flip those.

So on average, we may flip maybe two or three houses a year. I don’t like to flip. I like to keep things just for the long term.

Every house I have flipped and my intentions were to flip it. I still regret it to this day when I sell it. I always regret my houses that I sell.

Yeah.

[Mattias]
You see what they’d be worth now.

[Deba Douglas]
Yes. I’ll drive around the neighborhood. I’m like, I had a house over here and it was probably it was worth this amount two years ago and I bet now it’s worth like double.

So yeah.

[Mattias]
So no matter the age, you’ll keep it.

[Deba Douglas]
I will. And I usually gut everything. I have a really solid crew here in Texas.

Most of your houses that are aged 1970s or lower, they probably have cast iron piping. And that’s where I’m dealing with a lot of issues. So we just, regardless of the cast iron, it’s in sound shape.

We just gut it and just get rid of all that. Always update electrical because usually tenants are going to call regarding plumbing or electrical. And so we update that all the way through and we make the houses look really, really nice.

My biggest thing of transitioning from education was seeing the disparity in my kids with housing that I would hear my kids talk about how they were living in a one bedroom apartment. And it was like two or three families living in one apartment. And so my focus was like, I want to buy in lower income areas, make the house look beautiful so that those kids will understand that you deserve the best too, regardless of where your parents are in their season of life.

[Erica]
Yeah, that’s awesome. That’s been some of our intention too here. We’re in a refugee resettlement area.

And so we’ve had a lot of refugees come in in the last couple of years, more so maybe before COVID, but there was a house that we flipped and sold then that wasn’t even listed as real estate at the time when we bought it because it was so, I mean, it was almost not condemned, but it was uninhabitable. It was awful. It was really gross.

And he walked into it and was like, wow, this is great. I can’t wait to get my hands in this. I have a hard time seeing the dreams that he builds in his head at that point.

But we did then, we kind of gutted it for the most part and then flipped it and made it really nice and then sold it too.

[Mattias]
Nice. Yeah, we definitely try to when we’re burying, I mean, I think almost everything we’ve has granite countertops and we’re trying to make it into a nice place and try to get somebody in there that’s going to take care of it and really appreciate the hard work we put into it. So that’s usually our goal as well.

[Erica]
Yeah, I did want to hear about your system. You said you have a really good crew. So you use the same folks every time.

Walk us through how you do your flips, your burrs.

[Deba Douglas]
Yeah, so my crew, I’ve been working with them for maybe like three to four years. And these are also including like my subs. I’ve kind of taken on and become the GC.

I have a project manager that they kind of make sure that the day to day is working. And I’m just kind of the overseer. But they kind of know what I expect.

We literally paint the houses all the same. We put the same countertops. We put everything exactly the same where it kind of keeps just repeat, you know, rinse and repeat for every house.

So they don’t usually even come out to the house until we’ve actually purchased it, because I already know the numbers. We’re buying literally the same type of price point homes. Most of these houses are probably about nine to a thousand square feet.

They’re usually a three bedroom, one bath with a one car garage. We will then convert that garage into a room, add a bathroom. So now we have a four bedroom, two bath.

Now we can get more in rent and the value has increased because we’ve added that bedroom and bathroom.

[Erica]
Oh, cool. That’s like a decide once, make it easy. Yes.

[Deba Douglas]
Yes. And so they kind of know what to expect. They kind of know, hey, foundation starts and everyone knows their plan.

And it just moves pretty quickly. Every now and then the delay is usually when I’m flipping something and I’m like, oh, I want to try all these different things. And they hate it.

They’re like, Deba, just pick whatever we need to pick and let’s move on.

[Erica]
And is this crew employed by your business?

[Deba Douglas]
No, I still have them as 1099. Right now, it just makes it easier for tax. But we have talked about it with my CPA.

Maybe I need to bring them in. It’s probably in-house.

[Mattias]
That’s interesting. Now, what are you doing to finance these deals? And are you doing a cash out refinance afterwards?

You’re financing at the beginning. What’s that look like?

[Deba Douglas]
Yes. So I’m using a hard money lender. They are freaking phenomenal.

It’s Longhorn Investments. And I want to say they fund in other states other than Texas. But they have a really cool program that’s 100% financing.

And what I mean 100%, there’s no down payment. It’s literally 100% financing if you can get the numbers to make sense. And so I’m purchasing the properties that 75% of the ARV.

And so literally, I’m bringing just the closing costs. So sometimes I’m buying deals and I’m only bringing like $7,000 to $10,000 out of my own pocket, which in case you’re able to scale better, because now I can buy three or four at the same time and just have different phases of where my crew is working.

[Mattias]
Let’s hold on. Let me make sure I understand this correctly. So you’re getting the cost of the repairs as well in that.

Yeah. So you’re getting 75% of the total value after it’s done from the very beginning. And closing costs.

That’s awesome. Yeah.

[Deba Douglas]
Yeah.

[Mattias]
And then after that’s done, do they switch that over into a long-term financing or do you have to refinance it then?

[Deba Douglas]
Yes. At that point, once I have a tenant in place, I will go out to another lender and they do my cash out refinance. And lately, she’s been able to do it at 80% of the ARV.

So literally, I’m able to get most of the money I put into the deal. Closing costs back. And bring my costs back.

And then I’m able to do it over and over again.

[Erica]
Wow, that’s great.

[Mattias]
Yeah. It’s one of those things that when you first stumble upon this and it works, you’re like, this is like a magic trick. I just…

[Deba Douglas]
Yes. You want to whisper it because you’re like, I can’t believe this really happened. One of my deals that literally, I feel like this is like textbook one-on-one for the bird is I bought a duplex for $197,000.

It had two dining rooms in each side. And so I was like, well, let me just close up one of the dining rooms, make that into another bedroom. And it already had a window.

So now I just had to put a closet and a door. So now instead of it being two bedrooms, two baths, it’s now three bedrooms. And as soon as I did that, I was able to increase the rent.

I think the previous tenants were paying like $950,000. As soon as I added the next bedroom, I was now able to increase it to about $1300, $1400. And then when both sides were completed and rented out, I was in a praise for $450,000.

It blew my freaking mind. And so when we did the cashout, she was like, well, you can go all the way up to like getting back 80 grand. I’m like, well, let’s not do that because I don’t need all that.

Let’s do enough that I get my money that I put in and I make a little bit of extra to help me scale faster. And I mean, after that, I just kept doing them over and over again. Yeah.

[Erica]
Do other realtors in your area also do a lot of… Do they do this too?

[Deba Douglas]
Some of them do. One thing that I feel that helped me become a better realtor is that I was an investor first before I was a realtor. Because once I became a realtor, there were a lot of realtors that were like, you can’t do that.

You can’t do that. I’m like, well, yeah, you can like find another way to get around it. So any house that I come across, there’s an option, like there’s options of getting out of it.

There’s options of figuring it out compared to some of my other realtor colleagues that are like, no, if we can’t sell it or buy it, then there’s no other option around it. So it makes me more creative. So there’s not a lot of realtors that do it, but the ones that do, I’m like, they’re my best friends because no one really understands this type of world.

[Mattias]
It is really two different worlds. And that’s one of the things I’m trying to preach that it really does help your business. Having the contacts to help fix, get a house ready for the market, even if it’s not a huge project.

There’s all sorts of ways that it can make your business better. And you know how many times I’ve shown a house or somebody has said like, oh, this house is going to take $100,000 to fix up. I’m like, where are you getting that number from?

Why is it always $100,000? That’s so far. It’s amazing what you could do for $30,000.

[Deba Douglas]
Absolutely. And I have a lot of realtors that are like, they’ll just make up things. And I’m like, just because you don’t know it, don’t make it up as if it’s impossible.

It may be better for you to have an open mind and see it a different way. Totally.

[Erica]
Yeah, that’s the thing. I think you mentioned, you’re able to think more creatively and it does seem like moving from investor to realtor in that order has really allowed you to see different ways to problem solve. As opposed to starting from like a rule book, which you would have taking the test to become a realtor.

There’s kind of this one way to do these things. And you might be more risk adverse as opposed to an investor who’s maybe a little bit more comfortable with risk in different situations.

[Deba Douglas]
Absolutely. And I tell all the realtors that I’m connected with that you’re too close to this business not to be an investor. You have access to the MLS.

You have access to so many different software systems that you can go directly to the seller. And you’re already credible because you say you’re a realtor. So it’s like just learning, being more open-minded to learning different avenues.

And let’s be real. I think reality TV makes realtor’s job look like it’s just this beautiful world. But it’s hard.

And you’re starting at zero every month. I tell realtors, what if you had like two rental properties that you were making maybe a thousand dollars a month from each rental property? Then you wouldn’t have to hustle so hard and be so dependent on, I got to close something this month.

You could actually give your clients the best service because you’re not really concerned about when we’re going to close. You have extra income coming in. So it makes life a little bit easier to really look at the entire picture of doing what’s best for your clients.

[Mattias]
Yeah, 100%. So just imagine anybody listening to this that hasn’t started investing, that your first target is to cover your mortgage payment, right? Like with passive income.

And then you just kind of get these other targets until eventually you could have a drought for a year and you’d be fine. And it’s not just eating away at your savings. It’s something that keeps growing.

I 100%. And I think also, how many agents do you think understand what it means to be a real estate professional tax-wise?

[Deba Douglas]
I don’t think any of them really do. Yeah, it is such… I mean, I remember when I was still in education and my husband’s still doing his job, we were paying taxes and we didn’t make that much money.

We were still paying taxes. And now when I’m over on this end, where I’m making money as an investor, making money as a realtor, my husband still has his W-2. Because I’m slated as a real estate professional, everything we do is an expense before we’re taxed on it.

So it makes life so much easier when it comes to tax benefits.

[Mattias]
Yeah, yeah. And you can… Do you…

Have you gotten into any accelerated depreciation? I know that’s often reserved for bigger multifamily properties, but have you done it at all with your duplexes and single family?

[Deba Douglas]
We really haven’t. We haven’t tapped into it as much. I don’t think my CPA is very well versed in that.

So that’s something I will… Honest, I am looking for because I’m like, I know there’s money that I’m leaving on the table every year.

[Mattias]
Well, the hard part about it too is that it’s a bit of a… I mean, I think… So one of the things is I think a lot of times a big commercial operation like a mobile home park or a big apartment building, they’re going to pay somebody like $5,000 to do this cost segregation.

And obviously, we’re not going to go out and pay $5,000 to have a single family house get analyzed like that. But I have come across a do-it-yourself kind of model.

[Erica]
Okay.

[Mattias]
Where you can kind of start just filling in some blank system. How old is this system? How old is this system?

That kind of thing. So I think there’s a way. But yeah, you do have to…

If you can get all that information to your CPA, they will be able to use it. But that’s the hurdle. They’re not going to do it for you or it would probably be really expensive.

So yeah, it’s an interesting strategy. I haven’t heard as many people on the smaller property deals. There’s probably a way to do it and take advantage of it.

That’s true. I definitely need to tap into that.

[Erica]
So how has your marriage evolved since you’ve gotten into investment and away from the strain of your earlier career?

[Deba Douglas]
I have more freedom and my mind is more at ease. So I can be more present than I was before. And so I’m more present with my husband.

I’m more present with having true communication. There’s a lot more transparency. I think before I would hide money and we wouldn’t talk about money a lot.

And I would just say, well, that’s his money. And I’m responsible for these bills and vice versa. Where now I feel like money is easy to talk about because we have more of it.

And our bills are paid. I think we just, we live under our means. We literally still live in the same house we bought before we even had any kids.

And now we have three kids. That’s a whole nother issue right there. But we live under our means.

So therefore we can live a life that a lot of our friends and family can’t. And I enjoy that. And so money, which is a lot of people’s stressors, it’s not one of ours.

So we can be present. We can do things with our kids that many people can’t. And it just makes our marriage better and easier because we’re not at the constraints of trying to keep up with anything.

[Erica]
That sounds like it took away a huge strain.

[Deba Douglas]
Yes.

[Erica]
That’s really putting a lot of pressure on your marriage.

[Deba Douglas]
Yeah. And now we can just decide what we want to do and how we want to do it. And not everything is a money issue.

But you realize that is always intertwined with different frustrations or triggers.

[Erica]
Yeah, for sure. So now that the financial side of it is not necessarily a strain for you all, what have you both come to realize is a priority for your family now that that piece of it is removed?

[Deba Douglas]
Um, you know, the biggest thing is that I don’t want and I think my husband, we talk about this a lot. We really talk about how we’re raising our kids. And we really talk about what are our triggers that made us who we are and what little boy is in him, what little girl is in me and really be have a very conscious effort of, I don’t want to pass this down.

Like we all talk about, we want to create generational wealth. That’s beautiful. But I don’t want to cause generational scars and trauma where they’re 30 plus years old.

Now they got to go to counseling because I said something or I did something. So now we’re more focused on creating the whole child because we have three kids and they’re all freaking different and they all need something else. And we’re like, oh my gosh, like everyone needs something different.

But we’ve carved out our day where now two or three days out of the week, my middle child, because that I’m a middle child. So I know how you get lost in the shuffle. He gets to walk home from school and he gets to spend time with just me or Samson, my husband, when we’re home.

And we get to build that relationship and bond with him. And then the other days, my oldest will get home before everyone else does. And we’re able to build that relationship with him.

And then our youngest is the girl and she just shuts down the world. So we all give her more than enough time and space, but it makes us really be more intentional with what we say, how we raise them, what exposure we want them to have. And just let them be.

[Mattias]
Do you ever have any concerns about the generational wealth you’re creating and how that might impact them as if that was different than what you were raised with? And how you had to create your own? Does that ever come up?

Yeah.

[Deba Douglas]
I feel like more or less now it does, because we’re at a place now that I feel like I want to make sure that they still have grit. I still want to make sure they have the determination. I don’t want to raise brats.

I don’t. And I have to check myself sometimes when they’re like, I want this. And I’m like, yeah, let’s just go get it.

No. Did you earn it? Then I have to check myself on that because I still want them to be whole kids that can deal with conflict.

I do want them to cope. Because when I was an administrator, those are a lot of things that I saw that kids just did not have coping skills. Yeah.

[Erica]
That’s something that Matias and I talk about a lot too, because generational wealth is not a part of our family history.

[Deba Douglas]
Yeah.

[Erica]
And we also come from a religious background where wealth isn’t really talked about a whole lot. There’s almost a little bit of shame with it sometimes, which is really interesting. And I don’t think I quite understood that until we started getting into the investment world and we’re making some money.

And then we were realizing that’s really hard to talk about with some of our friends and family. And we’re like, why is that? Why is this weird?

And so it’s been something. It’s been kind of a journey for us. And we’ve become more comfortable with it ourselves, even just the topic of it and getting into the investing piece of it with the money.

But we talk about that a lot, generational wealth, and how do we communicate financial intelligence to our kids? And how do we talk about money? And also building character and grit.

I like that word that you used.

[Mattias]
And why is it taboo? I think that for my kids, it’s a skill just like anything else. And it’s a very, very fundamental skill that has a huge impact on life.

And I’m not saying that I need my kids to go out and try to become billionaires or anything like that. But they should have an understanding of where money comes from, how you get it, how you can best use it. That’s going to be a huge advantage.

Yeah, just as I think that they should also understand their bodies and learn how to exercise and eat to make themselves feel well.

[Deba Douglas]
Yeah. And I think it’s a taboo because culturally, people, I think, and this is just me growing up, whenever we did see someone that was wealthy, we had a negative connotation with it. Like, they’re just greedy and they just want all the money.

And then I remember being an educator when, let’s say, a teacher had a baby or they got a new house. I had to consider, do I want to buy them a gift or do I want to make sure I do these things with my kids? I didn’t have enough to live a life of abundance, to give.

And so I think as I started being more involved in the church and started realizing, like, God does want us to be wealthy. He does want us to have abundance because we’re going to be better doers with that money. Like, I want to give the same way I gave when I was an assistant principal.

I just give now 10x it because now I have a lot more to give, but I’m still the same giver. I’m still the same. I see a need.

I just jump in and want to help. So I had to change the view, change the people I was around and realize that we all need money. That’s why we get up here and we go and leave and burn up in the neighborhood because we want to go to work.

We have bills we have to pay. But I think the society, how we set it up is that we don’t talk about money because I don’t want you to know what the next person made because then everyone will start having an uproar when you start really thinking about money. So I think the biggest thing is we all need money and we want more of it because if we take care of other people, God will always bless you with more.

[Mattias]
And I would say that the investors we speak with on the show, the investors in my circle are some of the most abundant people. I mean, they are so willing and eager to help you with whatever you want, whatever you need, however they can help because they know that it comes back. I mean, it’s not a dog-eat-dog world.

And I feel like that’s the problem a little bit with realtors, like the real estate sales. And I know it’s a little bit different because most of the time I’m talking to somebody in a totally different market and so we’re not competing against anything. But I do think that is an important part.

I don’t think it’s a zero-sum game. I think there’s plenty of business out there. And I think that more agents should be in that mindset of abundance and not so much scarcity that they’re buying the next deal.

And again, like we talked about, the passive income is one way that you can unlock that sense of abundance that you’re not stressed about if you’re going to make it through tax season when the rates, when the splits reset, all that kind of stuff. So, yeah.

[Erica]
Yeah. And to tag onto that too, Devo, when you’re talking about just how you and your spouse are trying to be more intentional about what your kids need and recognizing what you might bring from your childhood, what you don’t want to pass along. I was just thinking that moving into some financial freedom, it does also open up that mental capacity to even consider those things.

[Deba Douglas]
Yes, absolutely.

[Erica]
And to have the flexibility in your schedule to be able to be home when one of your kids comes home from school early or to spend time with them. And it does really allow you to be more present in a number of ways, like Lisa, you can do those things. Otherwise, when finances are stressful and strained and you’re not sure, or if maybe you’re just making ends meet, that’s going to be the focus first.

We’ve got to get food on the table. We’ve got to keep our house. We’ve got to get to work on time.

And so, what you’re talking about, that can be so tough for parents to bring in front and center. I used to work in the community mental health setting with quite a few low income families, and that was really tough for them to think about different ways to parent or to be with their kids because their main focus was just food and how to get to the next week.

[Mattias]
That’s the hierarchy of needs, right?

[Deba Douglas]
Absolutely, absolutely. And I think that that is where the hindrance of, I look at life, it’s not a race thing, it’s a social economic. It’s really social economic because if we can help people in need and show them another world of living and show them, hey, just buy a house, get into home ownership, you don’t even have to become an investor.

You don’t realize by buying a house, you actually become an investor because now you’re putting your money to work for you while you’re still working. And once they see that, life changes and that frustration of money slowly goes away. And I think that’s what gives you that autonomy to say, okay, now I’m at a different level where I can really start digging deeper into different levels other than just money.

Let me start deepening, deeping into who I really am. Let me work on some things that I know are my triggers, but I can only get there if I can establish who I am and establish the money side because that stresses a lot of us out.

[Erica]
Yeah, yeah, absolutely.

[Mattias]
I have a real quick question that’s totally, we’re going to go do a U-turn and drive back 20 miles. But I was curious, are you managing your own rentals as well? Or do you have property management in place?

[Deba Douglas]
So I manage them, but I have someone in-house that her role is to manage them. We use a software system called Tenant Cloud. And so the tenants kind of do everything through that platform.

So at any time, if I want to know something, I can go in there, but she’s more of the direct contact of making sure tenants are paying. If there’s late fees, she does all of that for us. And then because I am a realtor, I have a team of agents.

One of my agents, all she does is leases. So she’s the one that would literally list one of our listings that we have. I used to have property management and I just did not find the right one.

I didn’t feel like they took care of my clients or took care of my tenants. It was always an issue. And just trying to track down where the money is was just too much of a headache that I was like, I know how to talk to people.

I know how to respect people. And I know how to do what I need to do to help them get to their next level.

[Mattias]
Yeah. Yeah, no, we manage our own. And I think it’s tough to trust that somebody’s going to care as much as you do.

[Deba Douglas]
And they’re going to attack you with all these fees that you’re like, it really costs $120 to just go out and see if somebody was present in that house or not. Like, seriously. Yeah, that’s not fun.

[Mattias]
That’s cool. Wow. So you got a whole, you got a big world going on.

[Deba Douglas]
It’s a lot of moving pieces. It is a lot of, but I will tell you one thing I had to learn is personnel is will make or break you just like contractors will.

[Erica]
Yeah.

[Deba Douglas]
So instead of just immediately finding someone to plug in, it may be better to take some time out and find quality people.

[Mattias]
Wow. Deba, we could talk for a long time because I have so many more questions to ask. But I do want to know about a fundamental book that, or just a favorite book of yours currently that you would suggest other people to read.

[Deba Douglas]
Yeah. So if you would have asked me this a year ago, I would have probably said a real estate investing book. But this year, 2024, I literally charged myself with, I want to read the Bible and I’m going to spend the entire year reading the entire Bible.

And when I tell you there is something fascinating about reading the Bible, because it had helped, it’s helped me more than any real estate book I’ve ever read at all. Because whatever I’m going through, where it may be a personnel issue or maybe a client issue, there is some type of parable or some type of similarity in something that I’m reading that I’m realizing, like literally when the pastor says it’s really in the Bible, it’s really in the Bible. So just thinking, for example, when I think about the people of Israel and all the things that God has continued to do for them, open up the Red Sea, doing all these things to get them to the promised land, they still found a way to go follow other gods and serve other people.

And God was a very jealous God and he would do things and say, okay, well, that’s why you guys will be in the wilderness for 40 years. And even past the time of being in the wilderness, they go out and they finally get to the promised land. They still deter and go other ways.

So for me, it just realized like the fear of God is the biggest thing I need to focus on. Because if I fear God, everything else will fall into suit. And if I focus on that when I’m working with people or partnering with people, God will give me the discernment of do I need to move forward with them or do I not?

And it’s crazy. If someone would ask me this a year ago, I would have told you a real estate book. But the Bible has really been phenomenal to read.

It’s awesome.

[Erica]
That’s so cool. Did you do it beginning to end?

[Deba Douglas]
Yes, I did beginning to the end. But I also have this book that was actually have it here on my desk. It’s like the Bible in 52 weeks, a year long study for women.

And that’s what I just kind of followed every day.

[Erica]
Okay, that is quite the commitment. I have attempted that many times and I have never been able to make it through. That’s incredible.

[Deba Douglas]
It’s been very life changing. I feel like I haven’t seen the transformation because it’s me. But my family and friends see the transformation.

My kids see it because whenever they’re having an issue, it’s so easy for me to say, well, hey, remember this happened in the Bible. And I used to always tell when I used to talk to other people that would say stuff like that. I’m like, dang, how do they even know everything about the Bible?

How are they able to recite stories? But it’s powerful. Now it’s ingrained in my heart and I can see different things of like, oh, I was struggling with that.

And then I realized if God dealt with that, then I should deal with that too.

[Erica]
Yeah, when you have something that centers you that’s bigger than yourself, it can make the really trying times so much smaller than otherwise.

[Deba Douglas]
Yeah, for sure.

[Mattias]
Is there any place you would suggest people to go to follow you? If they have any questions for you to reach out? Is there an Instagram?

Where do you want people to go?

[Deba Douglas]
Yes, you can follow me on Instagram. And my Instagram handle is debaflipstexas. And I literally give tips, strategies, anything that I figured out that works.

Hey, you should do this. And if you ever want to reach out to me, I literally respond back. So just reach out to me with anything.

[Erica]
Cool. Your picture on your website, by the way, is amazing. I know this is separate from everything else, but your lip color, whatever you had on in that picture is perfect.

[Deba Douglas]
Oh, thank you. Thank you so much.

[Erica]
Yeah, I love it.

[Mattias]
This is why I love when she’s on here. We don’t always get Erica, but she asks the questions I don’t.

[Erica]
That statement would seem real weird coming from you.

[Mattias]
That’s why I held back. That has been a lot of fun. Honestly, we could probably talk for two hours.

But thank you so much for being on.

[Deba Douglas]
Thank you so much for having me. Such an honor.

[Mattias]
Thanks for listening to the REI Agent. If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.