Imperfect Action Creates Extraordinary Wealth Through Focus and Grit with Sarah Msuya

Transcript

[Mattias]
Welcome back to the REI Agent. We are here with Sarah Msuya. Sarah, thanks so much for joining us today.

[Sarah Msuya]
Thank you for having me.

[Mattias]
You said before we got on air that you’re like one of three people in Maine that have been on the BiggerPockets podcast, so congratulations. Do you have that as like a badge somewhere?

[Sarah Msuya]
No, but maybe I should.

[Mattias]
Real quick, give us like a bird’s eye view of who you are and what you do in real estate.

[Sarah Msuya]
Yeah, for sure. So I’m a real estate agent. I’m currently top 5% in the state, so I do a decent amount of volume here.

I’m also an investor, and that was actually what I started off with, was being an investor and then turned into an agent afterwards. So currently my portfolio is seven buildings, 40 units, all here in Maine. I’ve done a lot of different strategies.

I have a lot of different types of buildings, so it’s quite a myriad of things as far as that goes, but I kind of just use my real estate agent business as the active income to source my investments, and I kind of see it all together as one machine, I guess. So yeah, that’s what I got going on, and then I have a four-year-old son, so that’s kind of my life.

[Mattias]
That’s definitely something. We actually had a wonderful morning of lots of screaming, and we have three kids, and our three-year-old son was so dysregulated that ultimately I was like, we couldn’t get anything done to get him out the door, which is what we knew he would be fine once we got going, but we had to take him and strap him into the car seat and drive him to go see some construction nearby so that Erica could finish prepping the meal or the lunch for him so we could actually get him to his daycare, but it’s a lot, right?

[Sarah Msuya]
Yeah, it certainly is. Right now he’s downstairs with his nanny, so I just hide upstairs in my office, and they’re down there because if he sees me, then he’ll lose it, so I’m kind of confined to what you see right here during the day, and I’ll just text her and be like, hey, can you guys go in the other room real quick so I can sneak out if necessary.

[Erica]
Oh man, I understand. Can we just talk about the nanny thing for a second? Because we also actually were looking for a replacement for ours.

Ours is graduating, getting married, same person we’ve had for the last couple of years, but what’s the process been like for you to find somebody and how often you’ve used them just to help you feel like you have the time to devote to what you want to do with work and everything else too?

[Sarah Msuya]
Yeah, absolutely. So my journey with that was he was in daycare, and it just wasn’t a great fit for a number of reasons, and with the flexibility with what I need for all the jobs that I do, I needed somebody who wasn’t just so strictly like nine to five or whatnot. So he’s got some learning stuff as well, so she’s also a behavioral health professional, so that was kind of the catalyst to go that route versus daycare so we could have kind of like one-on-one and the flexibility and just kind of stability for him of having the same person.

But she works with me 25, 30 hours a week, something like that, and then he does go to a preschool program for three hours in the morning, so she picks him up from that at 11.30, and then she has him from 11.30 until when I’m done, four days a week, and then he’s with his dad on Mondays, so just a hodgepodge of different things.

[Erica]
Amazing. Man, thank goodness for the nannies out there. They save us.

[Sarah Msuya]
Yes, absolutely.

[Mattias]
I love it.

[Sarah Msuya]
He’s right here, and it’s just a more flexible option when it comes to this type of career.

[Erica]
Yeah, absolutely. And nice too that I imagine when you’re, especially with real estate and investment stuff, it’s not strict nine to five, and so you can kind of pop down and see him and then also kind of head out the door too. It’s probably nice to do that.

[Sarah Msuya]
Yeah. Works out.

[Mattias]
Sarah, you said you started with investing. What got you into that? Did you come across Rich Dad Poor Dad, like a million people, and decide that that was what you wanted to do, and then kind of what was your process to get started?

[Sarah Msuya]
Yeah, so it was in 2020, during COVID times. I worked as a bank manager at that time, and they had a structure of you work half the week with one set of people, and the other half you don’t cross-contaminate, and so I had more time on my hands where I was working from home half the week. At that time, I listened to a lot of self-improvement podcasts of number one was how to be awesome at your job, and just things in that vein.

So somehow it got suggested, the BiggerPockets Rookie podcast, through the things I was listening to. So I started listening to that, and then just kind of got hooked once I started hearing stories of just regular people getting started, and I was like, you know, if they can do it, I think I can do it, and I kept listening more and more. So that was maybe July of 2020.

I’m a quick start, so I just kind of, I need a little bit of information. If it sounds like a good idea, I kind of just go for it until something stops me. So I just started towards that.

So I started looking for people in the space that I knew that I could hang out with, like going to lunch with people, and then I was focused on doing like a BRRR, you know, go to auction, buy a distressed property, use hard money to fix it up, and then use the BRRR strategy to exit. I got one under contract in October, so this is from July, and then by October, I had one under contract. But my hard money guy, once he got there, he was like, you don’t have the experience for this level of renovation.

He didn’t want to lend on it. So I happened to see somebody next door that I recognized from my bank job and got talking with him. So long story short, I ended up wholesaling that deal to the neighbor who was someone I knew from the bank.

So that was kind of my first deal, and then the next month, I found out I was pregnant with my son. So that kind of shifted me from, you know, like a DIY handywoman, you know, real risky thing to more of what can I do with my new situation. So I kind of pivoted.

I got a HELOC on my primary residence at the time, and I just looked for something boring that I could handle. So I did a 20% down investment loan using my home equity for a single family in a less expensive market about 40 minutes north of me. So it was $113,000.

I needed like three or four grand in updates. I think my mortgage is about 800, and I got a renter in there for 1,500. It was a single family. So they take care of all of the yard maintenance, the utilities, everything. So it was just like a very simple math equation, one tenant. You know, numbers work great because it was January 2021 when I closed on that.

So that was the first investment property purchase.

[Mattias]
So you were paying the 20% down as well, right? Like from the equity line. So what was your take home after that, or how did you factor that in?

[Sarah Msuya]
Like the monthly home equity line of credit payment.

[Mattias]
Yeah. Was it in interest, or were you trying to pay it off by a certain amount of time, or what did that look like?

[Sarah Msuya]
Yeah. So it was interest only. I’ve used my HELOC a few times to purchase a few different properties.

So I just aggressively will target that with all of the rental, like the cashflow that’s coming in until it’s paid back down. So it’s back down to zero. So I can’t really recall how long that took me or anything like that, but it wasn’t super long because it was maybe 20 grand or something like that that was owed.

And I would have been making like 700, 800 bucks a month in cashflow on that at the time. And I don’t really spend the money that I make off of these properties. I just use them for that property.

So like that account, I still have never pulled from it for like personal use. I just have used it to, I’ve replaced the roof now, I’ve replaced the furnace, paid off the HELOC associated with it, just replaced different things. And then I just kind of let it sit there and grow so that there’s money for renovations that are needed, or if I’m going to exit it, have money to fix it up and make it look real nice.

So it sells on the market for top dollar when the time comes. So I still have that one now, same tenants from day one. We’re still in there right now.

Now they pay 2150. I’ve since refinanced that and pulled equity out to buy another property with that. So my mortgage is at, I think it’s 1300 now, something like that.

And so I get 2150. So I’m kind of back to that same $700, $800 a month cashflow, but there’s been different iterations over time. And I’ll probably exit that one next because I don’t really care too much for the single families anymore.

I’d prefer to have midsize multis, like eight to 20 units somewhere in there.

[Mattias]
Yeah. That makes sense. I think that that’s, you’ve touched on this a couple of times.

Well, you touched on it early on. You said that you have an active income and you have a passive kind of income. And I think that’s something that often, I mean, okay.

So passive income, this wasn’t the point I was trying to make. It’s more like, if you look at your, for us, if we look at our net worth, that’s like all from our investments pretty much. So it’s all that.

And we often don’t have a ton of cash lying around because we’re trying to deploy it. We have our earned income side as well, which comes a lot from commission and your therapy work. And I think there’s like, people assume maybe that after you’ve been established with rentals, that maybe you can live off those, that or whatever.

And it can help, but really it is that kind of longer term play often where you’re wanting to build wealth over time that you do reinvest into bigger projects or whatever. But I like that mindset of kind of having two different avenues that you’re kind of trying to pursue both, right? You’re trying to have the active income to live off of, to reinvest, et cetera.

And you’re trying to grow your net worth along the way as well for retirement or whatever.

[Sarah Msuya]
And the one thing I do use it for in my daily life is I have, so I live in a nice single family home now, but prior to this, I lived in a duplex and I use that duplex to pay most of the mortgage on this place now. So I bought like a nice house once my son was starting school to be in the right school district. And so I paid 775 for the house that I’m sitting in right now.

But the way I did that was I used the income from the duplex, which is now rented out to group homes for intellectually disabled adults on both sides. It’s a triple net lease to the same company. And so it makes it easy because if a toilet gets clogged, I’m not getting that call, like they handle everything.

But that cash flows about 3000 a month. My mortgage here is 4,400, 4,500, something like that. So that leaves me with 14, $1,500 a month of my responsibility for the mortgage.

So I don’t like paying any mortgage. So I am now building an ADU in my basement currently. So once that’s done, then I’ll be back to no mortgage.

And this home is appreciated as well. So this is worth almost 900,000 now. So I get to live in a home like that for free basically.

But that’s the only exception to, when I say I don’t touch my rental income, that’s my exception is I use that duplex to pay for this.

[Mattias]
And I also say a goal can be to try to get to a point where all your living expenses are covered through rentals. But really, it’s often, to me, and I guess it also depends if you’re in an appreciation heavy market or a cash flow heavy market and where your focus is. But for us, historically, it’s really just been wealth creation is the primary and there’s some extra benefits along the way as well.

[Erica]
I was curious, Sarah, when you were getting into the real estate and it was new for you, the investment piece, were there other people around you that had been doing this or were you the only one in your sphere that was starting this?

[Sarah Msuya]
I was the only one. I don’t come from a background where anybody has ever invested into real estate. Kind of more like humble beginnings, I guess I would say.

But once I listened to that podcast, that was really the catalyst for getting into that and sense that I’ve developed a network of having like-minded people around me, which is a huge help.

[Erica]
Wow. I guess I’m just curious what that was like for you. I always admire hearing stories like this where especially it was pandemic era, but you were getting into something new that you’d never done before.

And there weren’t a whole lot of people or anyone around you doing it that you knew of. And it’s such a big learning curve. And so I’m just curious what that was like for you to step into something brand new on your own with so much to learn too.

[Sarah Msuya]
Yeah, I think my life has prepared me for that to where it’s not something out of character for me to do something like that. I’ve kind of always paved my way throughout life. And if something makes sense to me, it’s not so hard for me to move on it.

It just feels like it’s the right thing to do. So it made sense to me. I’m a big math numbers person.

And especially those rookie podcasts, hearing them and hearing people that maybe had less life experience than me or the banking background had less in some way than me and we’re still killing it and still doing all these things. That was enough of a confidence boost for me to be like, I can do this. And also, I realized how forgiving real estate was.

With that first one, my then husband at the time and myself, neither one of us had car payments. And so the mortgage was 700 bucks a month. So most couples have car payments and that probably equals about that amount.

So worst case scenario, we pay it out of pocket. If everybody hates this place, nobody wants to rent it and it’s just a disaster, what’s the worst that will happen? We pay it for a few months, we put it back on the market and sell it because that particular property had multiple offers on it.

So that’s the way I view things. What’s the worst that can happen? Am I going to be in a worse spot than I am now?

And if the answer is no, then I just proceed.

[Mattias]
Yeah, it’s great. It’s great to be able to do that. And I love how fast you took action on everything too.

I think a lot of times people will do a lot of research or they’ll go down different rabbit holes of which is the best approach for getting into real estate.

[Erica]
We’ve been knowing how to pivot too. When you found out you were pregnant and it wasn’t like, oh, I’m just going to put a pause on this. It’s like, well, how do I do it differently so it accommodates what I’m facing now?

[Sarah Msuya]
Right. I definitely thought about it. I wasn’t immediately powering through, but then I was like, I’m pretty sure when you have a kid, things get harder.

So if I have a kid, but it’s still in my stomach and I don’t have to be carrying it around and doing things, that probably seems like an easier time to start than to wait for a newborn child to be here. And that turned out to be true.

[Mattias]
So yeah.

[Erica]
Motivating too. You’ve got a deadline.

[Mattias]
So take us back then. So we’ve gotten past this one. You said that you now prefer getting into multifamily or whatever.

What was the next step and when did you get into getting your license to sell?

[Sarah Msuya]
Yeah. So I got my little timeline here because it’s just been kind of a blur, but so I got my license to sell in the beginning of 2022. I was still working full time as a bank manager.

I just returned from maternity leave at that point. And I’d gotten it just because I wasn’t so satisfied with my agent experience when I bought the duplex a few months prior to getting my license. And I saw the commission they made and I was like, wow, like I could have made that for myself and not been frustrated because I would have been doing all the things that I wanted them to do.

I sense learned it was a much harder job than I thought. And there was probably a lot that they were doing behind the scenes that I didn’t recognize, but that was the initial kind of catalyst to it. So I got my license real quick at the beginning of 2022.

I did one deal from January of 2022 until I quit my job in July of 2022 while working full time. But as probably most of us know, being a part-time agent is extremely hard. And for me, the difference was drastic to where that part-time period, I did one deal.

And then my first full year as an agent, I did 49 deals. So it kind of shows the difference between when you have all your time versus none of your time. So yeah, so I started investing beginning of 2021, became an agent beginning of 2022, full-time agent by July of 2022.

So I’ve now completed three full years as an agent. I’m entering my fourth. Was there a second part to that question?

[Mattias]
I wasn’t sure if you had continued to invest a little bit more as before getting your license or if that was the next step. Your response, though, makes me wonder what you did and how you were able to get 49 deals your first full-time year.

[Sarah Msuya]
Yeah. So I just knew I couldn’t fail and that I had to make something work. So I kind of threw everything at the wall to see what would stick and everything kind of stuck.

So then I became very busy, which is a blessing and it’s a great thing, but it was a very overwhelming year for sure. So when I first quit my job, I think I maxed out one of my credit cards to buy a wholesaling course with Jamil Damji, who’s like a big wholesaler. And that’s what I thought I was going to do was because I did it once accidentally and made some money.

So I was like, let me just do that. But then I ended up connecting with… She’s still the broker at my agency now and one of my best friends, but she was looking for a buyer agent.

She was a pretty big agent at the time and still is. And she was looking for a buyer agent. And so I just did everything I could to prove myself to her and anything she needed, I was right there.

I wasn’t really asking questions. I would figure it out on my own. All she had to do was give me the client and I was going to get them to closing one way or another and not bother her.

So when she learned that about me, she started just giving me almost all of her buyers because she didn’t have to do anything. We had a split structure where it was tiered. So it started out with me making, I think, 20% and after three deals, it goes up and goes up and goes up.

So I was doing almost all the work, but making a very small amount of the deal. So it worked out great for her, worked out great for me because I was getting the reps in and getting that confidence built up. So that was from July of 2022 to maybe January of 2023 that that was what I did.

And then around that time, her business was slowing down a little bit where she was ready to service her own buyers again. So I’m like, okay, I got to pivot again. So then I was like, let me see about buying leads.

Um, so at that point I had done enough transactions to where I could do that. Um, like with Zillow and things, I think you need to do five or 10 or some amount of transactions in order to do that. Um, so I now met that criteria.

So I, um, I did Redfin and then I spent about, it was a significant amount of money. I can’t remember exactly, maybe $1,500, $2,000, something like that a month on Zillow leads. And I just, again, you know, went all in, um, every lead that would call me, I would make sure to answer and have like a very robust conversation with them because I was going to make sure that that lead was going to be converted for the amount of money that I was spending to, to get that.

And so I had an extremely high conversion rate on, um, Zillow and that was about half of my business in 2023. So about half of that 49 number was that, and the rest was residual from my partnership with, um, with the, you know, the agent that’s now my broker, um, and her stuff like referrals from there. And then also, you know, repeat clients or referral clients from the people who I had helped, um, previously.

And then it’s transitioned again from that to now the buyers turn into sellers and then more referrals. Um, so then I’m not getting to my Redfins anymore. So now I’m outsourcing those that I wasn’t getting to my Zillows anymore.

So I’ve actually shut those down. And now it’s, um, at this point, referral, um, either from past clients, um, and also a lot of other agents now will refer business to me because I have a niche in, um, in investor, uh, especially multifamily owner occupant, uh, purchases. So a lot of agents would, would know that I’ll just, they can get them to me.

I’ll take good care of them. They can just take a split and they don’t have to go through running all those numbers or doing something that isn’t as comfortable for them. So that’s where I’m at kind of now with lead gen.

Awesome.

[Erica]
In your community, Sarah, um, you know, if we would ask some of the like mortgage lenders or real estate agents in your community, you know, what, how would you describe Sarah? Like what’s her reputation? What do you feel like you’re known for?

How, how would they see you?

[Sarah Msuya]
Yeah. So kind of what I just, um, was talking about at the end there, like I’ve, I’ve kind of found my niche with the owner occupant multifamily and also like getting, just getting people started investing. So, um, you’ll see on my social media and different places that I really like to talk about.

How did I get my first deal? How did my client do this? Like different real world stories, um, showing again, how, how regular people can do it.

Um, kind of like what I experienced with the real estate rookie podcast way back. I tried to like replicate that for my clients now, or just the general audience. Um, but yeah, I think lenders and whatnot would describe me as, you know, very kind of smart in that space and knowing what a good deal is being able to advise people with, um, confidence.

And, and, you know, a lot of people get nervous about doing this sort of thing, but I feel like because I have my real life to back it up and to show, Hey, I did this. I’m not just trying to sell you something. I’m not just trying to make a commission here.

I’ve actually changed my life doing the exact same thing that I’m now advising you to do. So now you’ve got the person who’s, who’s done the thing side by side, lockstep with you, showing you how to, you know, vet tenants, how to, um, you know, just buy a, an investment property and how you can stack that to build generational wealth to, you know, reduce your, your living expenses and to enjoy life and not just be chasing the next paycheck all the time. And I take a lot of pride and joy in helping other people get out of the rat race and be able to actually enjoy their lives and their families.

Um, so passionate, I guess would be one, one word that you would hear from them.

[Erica]
Yeah. Yeah. I hear that grit too probably.

[Sarah Msuya]
Yeah.

[Erica]
You’ve done, you’ve, you’ve definitely, um, changed from what you’re saying. You know, you had mentioned coming or starting from like humble beginnings and you’ve really done so much to change like some of the generational patterns that sounds like that existed in your family and your son will be growing up. It sounds like much differently than maybe you did.

Yeah, definitely.

[Mattias]
Um, Sarah, I know that often, uh, when, you know, people are paying for leads, um, it’s, it feels a bit like being a receptionist, which, which you kind of mentioned that you kind of lost, you weren’t able to do as much as, as you got busier, right. It was like, you have to answer the phone really fast. You have to talk.

Um, but it sounds like through that process, you were able to maintain relationships with, uh, the past clients. Um, like it wasn’t that, you know, you just have this well that you’re always drawing from. So like, forget the people that have already bought, let’s just keep getting this as well.

So like, have you, do you have systems in place or what do you do for, um, well, first of all, it sounds like you, you took a lot of time to try to be, uh, to, to really build that relationship from the first phone call. Um, so that’s probably something you do very naturally. Uh, but do you, do you follow up with the past clients, et cetera, uh, frequently?

[Sarah Msuya]
That’s, to be honest with you, um, a newer, uh, focus of mine for the first couple of years, it was honestly, it was like drinking from a fire hose where I was just hoping to have enough money to like live, you know, maybe replace my salary, but it turned into something way bigger than that. And I did not have the systems in place to handle that. Now I have, um, like I have a spreadsheet.

Well, I always have the spreadsheet, but now I’m using the spreadsheet to look back through past clients. And like this year I sent, you know, Christmas cards and I, I try to just kind of go in there and, um, send maybe a couple texts per day or every couple of days or just, Hey, how’s it going? Or I saw you posted this on social media about, you know, um, your engagement, congratulations on that.

So like kind of little touch points, but I don’t know that I have like an amazing answer to that question. I would say I’m still a working work in progress on that, but, um, definitely have had a lot of repeat clients. I think with the experience that I provide, that, that, that relationship kind of naturally continues because they’re asking me, what do I do?

How do I deal with this eviction? How do I deal with this situation? So we’re maintaining, um, uh, active conversation because of kind of that rental component with many of the people that I work with.

[Mattias]
It sounds like you provide a lot of value and you’re, you’re an expert in this space. Um, so that, that definitely makes people want to go to you. Um, and I guess it’s just something that I think people need to be cognizant of.

Um, if they are wanting to take that approach, which obviously is made you very successful is just, you know, that it can feel overwhelming to have to, to, to feel the new ones, to not reach out to the old ones. And, um, ideally if you are getting, if you are paying for leads that you’re, you are then also able to nurture the ones that you’ve closed, um, work your sphere, et cetera, to, to kind of build that up. Because, uh, would you, I mean, would you go back?

I mean, I guess if things slow down, um, you probably would be happy to go back to that system, but do you, do you find, uh, being kind of like fielding calls, being kind of more receptionist versus like having people coming to you and asking for, um, you know, help for the new business. Do you, do you have a preference between the two like, uh, styles of business, if you will?

[Sarah Msuya]
Oh yeah, for sure. Um, definitely love the referrals. It’s much easier.

And, um, I think I’ve lost a little bit of the energy that I had in the beginning of like, you know, just that fighter energy of conquering every Zillow call. You know, it, it takes a lot of mental energy to convert those types of just completely cold leads. Um, so I think it’s like a graduation like anything else.

And, and that’s why, you know, most agents, I believe the stat is like 90% of agents fail in the first year or something like that because it’s, it’s that ramp up period that’s so challenging. But once you’ve gotten there a little bit, um, I feel like the referral, um, piece kind of takes care of itself over time, but it’s just getting to the point where you’re able to survive off of that, which takes time. Um, I feel like I did it at an accelerated pace, which was, you know, like I said, painful for sure at the time.

Um, but I’m thankful for it now because, um, it’s just, it’s definitely much easier, much more comfortable way to get leads, you know, from somebody that already knows somebody they love and care about who used you and had amazing things to say. And then it’s just a very different experience versus having to prove yourself and show your value without them hanging up on you, you know, with just a blind call in the middle of the day with no, um, no warning. Um, and if you don’t pick it up, you lose the lead.

So it’s, it’s a very different experience. Right. Yeah.

[Mattias]
Yeah, totally. It’s, um, yeah, I would agree. Um, that’s, that’s my perception of it as well.

And it can be, you know, again, it can be hard to start without, um, having some kind of source like that. So like it can, can work. It’s just, uh, I think it’s a good, good idea to, to start with the intention of trying to get out, um, and, and by building the sources of, of leads from other places, uh, curious then about the, the, some of the other investments you’ve made since like, so, um, you talked about like kind of having this realtor income, uh, provide the capital to invest in these properties.

Is that correct? Have you, did you go right into multifamily after this, this first single?

[Sarah Msuya]
Um, I did, I did kind of, so I did the first single and then, um, I got a duplex, which I lived in one side, rented the other side, but I retained the single family that I had lived in prior to that. Plus I had the, um, they just a strictly investment single family at that point. So then that was four units.

Um, then I quit my job. So then it was harder, you know, actually impossible to do residential financing. Um, so then I had to pivot.

Um, so that’s when I pulled equity out of the very first investment that I had gotten. Um, I did a cash out refi. I pulled, uh, the down payment money for a beach condo.

And that was my first Airbnb, which I don’t love. Don’t have that anymore, but that I got that one. Then in 2023 was when the real ramp up happened, where, um, I started working with a business partner.

Um, she was actually my boss at TD bank. Um, a few positions before the bank manager position I spoke about, um, we both had, um, you know, kind of been interested in investing, but had never spoken to each other about it. So we actually saw each other, um, at a real estate auction one time.

And we were both pregnant. Our, our sons are about a month apart in age. And we were like the only females there, certainly the only pregnant females.

And we happened to know each other. And, um, that’s kind of when the conversation started. So she was like, I think I want to quit my job.

And I’m like, I want to quit my job too. Um, so I quit at first in July of 2022, she quit hers in January of 2023. Um, we both worked for TD bank for, uh, I think she was like 15 years.

I was, uh, 12 years, a long time. And, um, so then we’re like, maybe we should make an LLC and start flipping houses together because, um, we’re going to need some, some income to be able to put 20% down on buildings and whatnot. So we created an LLC in May of 2023 to start doing flips together.

Um, we have yet to do a flip. Um, we actually, we just started buying and holding. Um, so she is also a real estate agent and she had a client who was under contract to buy a four unit.

And that person got cold feet, um, after the inspection. So she was like, why don’t we assign the contract to ourselves and we can buy this and we’ll burrow it. Um, so we did, um, I had been talking to my sphere about what I was doing all these, you know, this couple of years.

So at that point I reached out to somebody I knew who I knew had some money from, um, from some things and asked if they would be interested in, you know, lending me some money if I paid them, it was 12% interest. Um, so I was sourcing my own private money and I, and they said, yes, you know, and I was like, I’ll give you a lean on a couple of houses that way you feel really comfortable about it. So they lent $255,000 for a cash purchase of this four unit that was in need of repair.

Um, so we did that with private money. And then, um, my partner and I put about 80 grand of our own money into the rehab. Um, and then we went to a commercial bank and, um, refinanced and it appraised for enough.

I can’t remember now. I think if we bought it for two 55, it appraised in the four somewhere, maybe high fours after that renovation. So we were able to pay back the private money guy for two 55, pay back to our pay back ourselves, the 80.

And now we had a cash flowing four unit with no money into it. Um, so yeah, so there’s that one. And then, um, I can speed up the other ones.

It was a next one was a subject to situation of a distressed seller who got in over their head. There wasn’t a way to really sell it cause it had gone down in value because of what had happened. So I proposed a subject to, um, purchase.

So I did that, let the person stay in the, in their apartment for four or five months, rent free and paid them like maybe 30 grand over a nine months and then assumed their mortgage. Um, so I did that one. I did a seller finance two unit that year as well.

So that was about 10 units in 2023. Um, do you want me to keep kind of going?

[Mattias]
Oh, that’s great. I mean, this is, we’ve done a lot of different strategies, uh, which is, which is awesome. I think it’s, it’s nice to like, I think you’ve, you’ve taken action really fast.

Um, but you know, and, and I think there’s something about, you know, the and focusing on one kind of opportunity, what kind of one kind of deal. Um, but I think especially as an agent and if you’re, you know, kind of focused on the real estate, um, investing side of things, you probably get some opportunities, uh, and, and having kind of a tool belt of all the different things you could do, uh, could be really helpful to, um, yeah, to, to make a deal work that may not have worked otherwise. So subject to seller financing, uh, burr, all that stuff is, um, is, is really cool, uh, to have that experience is, is awesome.

And I’m sure you can pass on some of that knowledge and that creativity when you have situations come up for your clients as well.

[Sarah Msuya]
Yeah. Yep. So just kind of been continuing that process from there on out.

But again, just kind of like what the, the leads, you know, it takes time to build up to a certain level. Um, in the beginning I would have no business doing burgers and doing private money and all of that kind of stuff. I wouldn’t know how to do it anyways, but, um, so kind of similar now, like where everything I’ve done, um, I think since that burr I talked about has been creative finance at some level.

So I don’t think I’ve put any of my own money into a deal in a while. Um, cause I’m just putting together, you know, commercial lending, um, seller finance, um, and private money. So like the most recent building I bought a 15 unit $0 out of pocket cause I’m stacking three levels of financing on to each other and a hundred percent financing the building.

So it doesn’t cash flows nicely, but it’s, um, no money out of pocket. So it keeps, keeps the ability to keep buying, um, there.

[Mattias]
And obviously you’re a numbers person, so you’ve done the math about a penciling out. That’s awesome. Sarah, uh, you’ve, you’ve given us a lot already, but I was curious if you have some golden nuggets for our listeners.

[Sarah Msuya]
Yeah, definitely. Um, so I think imperfect action is better than perfect action is a quote that I’ve always liked. Um, you know, I think you just have to make moves based on what you know in a safe way.

Um, you know, don’t be reckless about it, but like the story I shared about with the single family when I was pregnant, had to pivot, um, just doing something there versus doing nothing because life wasn’t perfectly lined up or wasn’t convenient. Um, that’s a big one that I’m constantly, you know, uh, talking to my clients about. Cause I think that’s the biggest thing that holds people back is waiting for that right moment, waiting for the kids to be grown or the finances to be perfect or whatever.

And it’s, I think you should just do what you can do now as basic or simple as that is.

[Mattias]
I love it. Zig Ziglar has something along those lines too. Like, um, if you wait for all the lights to be green on your path, you’ll never get started or something, something to that extent.

Like if you’re driving to some destination, you know, if you’re waiting for all the lights to turn green before you start, like you’ll never leave. That’s awesome. I love it.

[Sarah Msuya]
Yep. Um, another one is, you know, talking to other people about what you’re doing. Um, some people get shy about it or, or they don’t, you know, they feel like they’re bragging or they’re embarrassed about it.

But, um, I’ve found so many connections like the private money from just talking about what I’m doing. Um, I feel like everybody like looks at real estate investors like they’re, um, a unicorn or like that. They’re so cool and doing something that nobody else could ever do.

So a lot of people like to just hear, um, hear those stories and then you never know what that’s going to turn into, whether that’s, um, you know, a new client, um, a private money person, or just being able to help somebody look at the world differently and maybe improving their life in some way. Yeah.

[Mattias]
I love that. I love that. I know people talk about putting out on a social media that, uh, you, you know, I’m looking to buy that kind of thing.

That’s something I haven’t done yet. Um, but it’s, you know, that’s one form of that maybe where, um, you can definitely increase that exposure and tell people what you’re doing, but yeah, I love it. Do you have any others or are we going to the book?

[Sarah Msuya]
Uh, they kind of lead into each other. Um, so the last one would be kind of, um, well, the book is the one thing. Um, and then the, the focus would be on that kind of that laser focus.

I feel like whenever I’m distracted in my, um, my focus is distracted into too many different pockets. It’s very hard for me to perform at the level that I just described as far as the growth over the past number of years. Um, so I think when you’re trying to get started, whether it’s as an agent or as an investor or both, um, being solely focused on one thing at a time is going to lead to the biggest results.

Um, whether that’s, you know, all in on Zillow leads and you’re making sure to pick up every single call and make sure you’re fully present in that conversation and, you know, really, um, kind of, you know, selling yourself with that or whether it’s investing and you need to be, you know, a hundred percent focused or 95% focused on how do I get that next property and not be doing that plus learning how to, I don’t know, um, do a new type of like exercise class or different hobbies like sourdough bread, or, you know, like just doing all of these different kinds of random things that are pulling your attention in so many different ways. If you’re starting in a, in something that has a pretty low, uh, rate of, of success in the beginning or like a high ramp up, um, period, if that makes sense.

[Mattias]
Yeah, totally. One of the things I’ve thought of often, um, if you’re like trying to be an agent, but you also want to invest like, you know, kind of like your story is, is, you know, house hacking is such a perfect way. Like, I mean, you got to live somewhere anyway, right?

So if you can, before you maybe jump out of your full-time job, if you pick up a house that you can turn into a rental later, and then, you know, just focus on, uh, getting your sales business going. And then whenever you have some capital and you can borrow again, then, you know, uh, next one to keep it as a rental. And it’s, it’s not a way that you’re going to have to spend a lot of time and energy focusing on the investment side of things.

Um, but you know, it does start building up the equity that you can tap into later. Like you talked about with some of the properties how you’ve been able to leverage that. So, um, yeah, and that’s great.

I mean, I think it is true. I think if you want to, like, if you want to be an agent, like in the beginning, it’s hard and you have to really try to be laser focused and really commit everything to it, to, to, to get that wheel turning. Cause it takes some time.

[Sarah Msuya]
Yeah. Get the momentum going and then you can add in all the other things back again. But, um, that’s where I see a lot of agents kind of stall out or fail is when they’re trying to do so many things and being an agent is just like one little piece of all the things that they’re doing.

Nothing wrong with that either. Some people, you know, they’re not trying to do crazy volume, but if you are.

[Mattias]
Yeah. Yeah. I love it.

Um, and then is there a, you mentioned social media, what, what platforms are you on? What’s your handle? Um, is there any place that you want people to find you on?

[Sarah Msuya]
Yeah. So I’m on Facebook and Instagram. Um, both of them are @SarahTalksREI.

So like “Sarah Talks Real Estate Investing.” Um, and well, I have a business page as well, um, which is SarahMsuyaRealtor. Um, so two Facebook pages and the Instagram page.

Um, and the content’s honestly pretty similar on all of them. So whichever one you prefer.

[Mattias]
Well, Sarah, thanks so much for being on the show. It’s been a lot of fun talking to you.

[Sarah Msuya]
Absolutely. Thank you for having me.

[Erica]
Thanks for listening to the REI agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week, visit REIagent.com for more content until next time, keep building the life you want.

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