Rising From Struggles to Building Legacy Wealth with Megan Ahern

Transcript

[Mattias]
Welcome back to the REI Agent. Erica.

[Erica]
Hello.

[Mattias]
It’s been an eventful week.

[Erica]
Yeah, it has. We had a bit of a crisis happen at our house this week. And our daughter experienced a pretty severe skull to burn in the morning while we were getting ready.

Some hot boiling hot water spilled on her left side. And I won’t get too graphic with it, but it was really hard to see. And she was in a lot of pain.

And we were very quickly on our way to the emergency room about an hour away. The hospital that’s a little bit further away has a pedes ER. So that’s where we were headed.

And we were there.

[Mattias]
It’s not fun to see your kid in pain like that.

[Erica]
No, that was awful.

[Mattias]
Can I trade places, please?

[Erica]
Burn pain, especially, I think is just a different kind of pain. And pain meds don’t touch it near as well as they do other pain. I remember a doctor telling me that once.

But it was just her skin was very raw. And because it fell, it was a cup of water that fell off the counter down on top of her. It hit her shoulder, her arm, her hip, and her leg.

[Mattias]
Yeah, basically, we were heating up a thermos. And she wanted to look at it, look what was in it, and dumped it on herself. And yeah, it’s really hard.

And then she came home. Our nanny came back for the first time this year. She’s a local student.

We just have her for a couple hours every week. And she was there. And then my parents were there, too, because they had to help transition stuff, blah, blah, blah.

But she just comes back. She’s kind of overwhelmed. And everybody’s just so concerned about her.

And I just wanted to pick her up and squeeze her, which would be probably really painful. But that’s what I wanted to do. And she just kind of made it clear she just wanted a little bit of space.

And she was happy that we were concerned. And then she remembered all the fun stuff. She got a Popsicle, got to watch lots of TV.

And so that’s kind of part of the story now that she likes to talk about. But it was really hard to see.

[Erica]
Yeah, it was really tough. And I think in some ways we’re moving on to maybe the harder part of the process for her, because burns take a while to heal. And they’re extremely painful.

And we have to change the bandage every day. And she’s going to have to take a shower tonight. And so I just feel for her.

Because it’s one thing to have it happen. And it really hurts when it does. But healing is slow and painful.

And then being a five-year-old kid, wanting to run around and wrestle and all that stuff.

[Mattias]
Yeah. Yeah. So we’ll, I guess, probably be talking about updates as we go here.

But we are also testing out a camper we just bought this week. We’re not camping people or camper people. We haven’t been before.

And so I backed it into our driveway so we could have it and prepare and pack it and stuff like that. And I actually didn’t take out a mailbox or anything. So I feel like I was very worried about that.

[Erica]
It would have been OK if you did. Our mailbox has been taken out like five times. It’s hanging on by a screw.

[Mattias]
It was seriously, it was like two people that hit it within the span of like a week. It was really funny. And we did not care.

But yeah, so we’re going to try that out. Hopefully it being a little bit more comfortable. It would probably be a lot worse in a tent if it was really hot or something.

For her as well. So hopefully this whole thing will be a little bit more comfortable. She’s certainly excited about that.

The kids are very, very excited about the camper. And we are too. So it’s going to be a fun new adventure.

We’re not, we’re going like 20 minutes away. It’s just a try.

[Erica]
You’re talking about it so casually. What you don’t know is that he’s pretty much spent every waking hour in it since he’s parked it in the driveway.

[Mattias]
We didn’t sleep in it. We reserved that. But I did take some meetings and finish some stuff in the lazy boy in there earlier.

I might take a nap sometime. Whenever I find time for a nap, that would be a great napping chair.

[Erica]
Yeah, you’ve been wanting one like that.

[Mattias]
But yeah, so that’s going to be kind of a new thing. We’re trying to figure out what that looks like for us going forward. I had this idea of like, hey, it’s about football season at the time of recording anyway.

Maybe we can like, you know, go camping and like watch football games in the camper. And then there’s like, well, when is it going to be? Sunday, Monday or Thursday that we can sit down and watch because we’ll be packing up at least on Sundays, right?

To go back. And then also the kids are probably not going to want to just sit around inside the camper and watch football all day. So that’s not a long-lived dream.

But anyway, that’s going to happen. We’re looking forward to it. Today’s guest is one that I’ve been excited about for a long time.

I first came across Megan Ahern in the Better Life Tribe. She led some talks and was, you know, active in one of the summits I went to. Experienced.

People might know her better as the Taddy Investor if you’re on Instagram. Follow her. She is, yeah, she’s great.

And we had a nice conversation with her. We asked her if she could be on the show when we went to Austin and saw her there. And yeah, finally got her on and she was a really fun guest to talk to.

[Erica]
Mm-hmm, she was.

[Mattias]
But yeah, without further ado, let’s get right into it. Here’s Megan. Welcome back to the RAI Agent.

We are blessed to have Megan Ahern here today. Megan, thanks so much for joining us.

[Megan Ahern]
Thanks for having me. This is going to be great.

[Mattias]
Yeah, Megan, we’ve been connected through the Better Life Tribe, through that kind of Brandon Turner, Beardy Brandon’s network. And I’ve known you most as the Taddy Investor. So if anybody is following you on social media, that is who we’re talking to here.

So yeah, Megan, you are a big investor. Tell us kind of your story about getting into real estate.

[Megan Ahern]
Yeah, so I got into real estate in about 2015. Kind of got sold on one of the big guru programs, spent $30,000 on the big package, and then just taught me enough to get myself into trouble, honestly. So I started sending out postcards, got my first deal under contract.

Tried to wholesale it because it was a long distance deal. Tried to wholesale it, couldn’t. And so I decided, you know what?

These flippers, they don’t know what they’re doing. So I’ll just try to flip it myself and did that. I made every mistake.

I hired Craigslist contractors, everything went bad. And I ended up losing 20 grand on that deal. But in the meantime, had bought a live-in flip, kind of a house hack also in Southern California, where we lived at the time and ended up making $80,000 on that deal.

So going into about 2018, my husband was getting medically separated from the Marine Corps after a bad parachute accident. And so we kind of had to reevaluate like, what do we want to do? What does he want to do when he grows up?

And we decided to just go for broken real estate. Sold everything we owned in California, moved to Lincoln, Nebraska, which was the market that we picked, kind of to own as our market. We’ve actually moved into a travel trailer and just parked that trailer behind our first projects for the first year and really proved to ourself that we could make it work and make it happen and just totally went for broke on real estate.

[Erica]
Wow. What went into the thought process for Lincoln when you were looking at markets?

[Megan Ahern]
Yeah, so we were looking at a lot of different Midwest markets because we really wanted to buy rental properties and I just couldn’t wrap my mind around doing that in California, where it’s so expensive. It is such a high barrier of entry. And so anytime one of our military friends would go like back home, I’d be like, where is back home?

And I would ask him about the cities, ask him about the neighborhoods, would I be safe there? Me as like a small woman, I didn’t want somewhere where I had to feel unsafe in a certain neighborhood. And then I would look at the demographics of the market, the population growth, the job growth in the area, income and then rent versus cost of the property, a lot of different metrics like that.

And I probably looked at 50 different markets very deeply. And finally, a friend of ours who had got out a couple years before, his wife became an agent in Lincoln, Nebraska. She was from Southern California too.

And she calls me up and she’s like, hey, you should come out and visit us. I think this is the market that you’re looking for. I’m an agent now.

This is what you’ve been looking for. And so that was probably about a year or so of us telling all of our friends what we were trying to do and like looking into all their markets. So we came out to visit and I just fell in love with Lincoln.

It’s a nice city. It’s a kind of like midsize, smallish city, but it has everything that you need in a city. But it had all of those kind of demographic requirements, low crime.

It has a couple different universities in the city. So it has a very young population. So a very strong rental market.

So we decided that and just went all in on it.

[Mattias]
So you were in Southern California. Was that military based or was that because of military or were you also like, did you grow up there? Was that home?

[Megan Ahern]
Yeah, I grew up there in Southern California. My husband grew up in Alaska. So that was military based for him.

He was stationed on Camp Pendleton. Yeah, I definitely wasn’t going to Alaska though. So Nebraska sounded like a happy medium.

[Mattias]
I mean, hey, Detroit also, that’s pretty good rent to purchase price ratio is there.

[Megan Ahern]
We know. And there are some markets, you know, in the country that seem on paper to be much better than Lincoln, Nebraska. Like if I would pick again, maybe I wouldn’t have picked Lincoln, Nebraska, but I also knew I was going to be living there.

So like I wanted to pick a spot where I wanted to raise my kids and all of those things.

[Mattias]
Detroit seems maybe like it might be a little more dangerous than certain areas.

[Megan Ahern]
It’s gentrifying now though. It’s better than it was, I think.

[Mattias]
Yeah, that’s awesome. So that was a pretty big shift for you before you were, you kind of did this whole flip thing. Did you have a career as well that you had to leave?

Like, I mean, so I’m getting at, you left your home. Maybe from a military perspective, it’s easier to move around to a completely new area, but that was your home. Did you also then have a career that you also left?

Or were you at that point already all in with that flip?

[Megan Ahern]
Yeah, so I was a stay at home mom at the time, but before that I have done a lot of things. I’ve been in grocery management and sales kind of in the grocery industry. I worked like cold calling, selling small business loans.

So I’ve done a whole lot of different kind of weird things. And I’m always like, I wanna be in a job for maybe six months and I’m either moving up or moving out. I just get bored really easily.

And I’ve always wanted to be an entrepreneur business owner. So then when I got pregnant with my first, I stopped working for a little while and was kind of in that mode still when Jeff got out. But I think with guys that exit the military, a lot of times it’s hard for them to go from military life to civilian life, and then even harder to go from military life to entrepreneur life.

So I was happy I got to kind of step in and fill that gap a little bit in the beginning where a lot of it was he’s like such a hard worker, but I didn’t have that kind of entrepreneurial mindset of like, he would say, tell me what to do and I’ll do it. But he didn’t have that ability to like dream and like really have a direction in our business at first.

[Mattias]
Okay.

[Erica]
That sounds like that could be really hard.

[Mattias]
Hard transition.

[Erica]
Yeah. And two, I mean, not necessarily, I guess you would have to speak to this, but living in your travel trailer behind the property, not necessarily having space to be separated or together, kind of depending on what you were needing at the time. I know we talk about that sometimes, like moving to the house we’re living in now, we have a couple of different places we can be depending on how close we want to be to each other.

But you know, when we lived in a smaller home, that was hard when we had like one living room. And then it was tough to have your own space if you need some alone time. Yeah.

[Megan Ahern]
The trailer life is not the best. It’s so romanticized. Everyone’s like, oh my gosh, that sounds so fun.

No, no, no. Actually, it sucks. Like you don’t have a washer and dryer.

You don’t have your own space. You’re living in like 200 square feet, you know? And for us, we didn’t have most of the time like sewer hookups.

So we’d have to pull our trailer out every week and a half or two weeks. And like, you’re trying to stretch that amount of time you can go. So you like try to wash a bowl like with just barely running water.

So it’s just like all these weird little quirks that we have to deal with. And in Nebraska, obviously we have very harsh winters. So going into our second winter, I was about to have my second kid and we’re living in the trailer.

And I was like, bro, get me a house. Like I am done. I am done with this life.

But by then we had done by I think five rental units and done a flip. So we had kind of like figured it out. And we decided, yeah, we can afford a mortgage.

And still is like $600 for our mortgage because we got a great deal, you know, a fixer upper and mattresses on the floor for the next year while fixing it up and doing the live and flip thing. So it wasn’t like a bougie mortgage or anything. So yeah.

[Mattias]
Did it feel like a big step up? It’s funny because we look at the time we bought a house, this house we’re in now. So we went up like 3.7 times in square footage from the house we were in. And we weren’t necessarily looking for a bigger house necessarily, maybe a little bigger. But we were looking for an opportunity like you had, like where we could fix it up. Was it a good area?

It could be a house that we’d love to live in for a long time. And so we got that. And looking back, A, like seeing our kids like crawling on this disgusting stains carpets.

It’s like really hard to see. And then second of all, when we had our kitchen being remodeled, we were like doing dishes in like our bathtub in the basement for a while. And it just was, to me, it was dark times.

But maybe for you coming from the travel trailer, this was actually like a felt better. I mean, how did that work for you doing like a live and flip?

[Megan Ahern]
Yeah. It was like such a huge step up because we actually had like a washing machine, you know, like we don’t have to go to the laundromat. And yeah, but definitely it’s still some weird stuff.

Like you almost have to do it out of order to when you’re doing a live in flip. Like for us, at least we ripped out all the carpets because it was like 50 year old carpet or whatever. We ripped it all out, redid the carpet, but then we’re having to do all the rest of the project around it.

So like drywall work over fresh carpets is just such a bigger pain in the butt.

[Mattias]
Yeah.

[Megan Ahern]
And then we ended up remodeling the bathroom, which was the only one bathroom. One bathroom house remodeled it during COVID. And so we got the shower surround.

We got all the supplies. We got everything. We ripped out the tub in the shower and then went to install the new tub and shower.

We’re going to try and do it like one or two days. And the shower surround was cracked in shipping. We didn’t take it out of the box, like verify before we went to install.

So then we had our shower tore out for like two weeks. And you know how supplies were during COVID. We couldn’t get another shower surround for two weeks.

So we’re going to the gym to shower and it was a hot mess. But you know what? You do what you have to do.

And we ended up making like $60,000 on that house. And it was fine. Worked out.

[Mattias]
Yeah.

[Erica]
Now that you’re a little bit separated from it, do you look back on that time fondly?

[Megan Ahern]
I do. I like, this sounds weird, but going from a travel trailer to a house, you don’t have any furniture. Like we didn’t have any.

We literally just had one couch in the living room and mattresses on all the bedroom floors. But like we had little kids. So we had a three-year-old, a two-year-old and a newborn.

And we would just like the kids would just run and just dive onto the mattresses on the floor. And like, it just became this big, I don’t know, like WWE, like smack down, like just wrestling on the mattresses on floor. And so I look back on that.

I’m like, that was fun. It was fun.

[Erica]
Yeah. Like kids dream. Kids can do, they do such a good job of making an adventure out of like stressful situations for adults.

But kids always just see it as like, this is the best opportunity. We’re going to have so much fun.

[Megan Ahern]
They’re so resilient. We decided to move to Maui a couple of years ago on a whim. Like we decided and then three weeks later, we sold everything we owned and moved to Maui.

And the kids were just like, so down for it, right? They’re like, yeah, let’s go. Like how to get rid of all their toys, all their everything.

And then just moved. And then a year later, we decided to move back. And so they’re just like, all right, cool.

Yeah, let’s do Nebraska again. And like, it doesn’t matter what we’re throwing at them. They’re just so down for it.

And then a few months after that, my daughter’s like, okay, so what are we doing this thing again, where we just switch houses? Like where are we going next? I think we’ll stay here for a little bit, but they’re just super resilient.

[Erica]
I love that that’s the storyline. Our daughter too is on a smaller scale, but you know, we travel a lot and we like to go camping and lots of different things. And she always asks like, when’s our next trip?

What are we doing next? Yeah, I love that.

[Mattias]
With these moves, did you pick up another like live and flip again? Did you do any of that while you were, or were you like, okay, we’re just going to get a house so we can chill in?

[Megan Ahern]
Yeah, in Maui, we actually rented a fully furnished place. So we just brought like 16 suitcases to Maui on an airplane. And that was it.

Yeah, that was just like a year of rest. And that was very refreshing because we were flipping a ton. We were working like 100 hour work weeks.

And we just decided like, we’re getting burnt out. And we need to just remove ourselves from this and do it in a way that doesn’t require us to be here. So that helped us like test our systems to say, can we still flip houses in Nebraska while being in Maui?

And we’re able to get it down to like, I worked probably 10 hours a week. My husband worked 10 hours a week and still be able to flip and do real estate or agent business. And I own a staging business.

So we’re able to actually grow all of those businesses while not being there.

[Erica]
Wow.

[Mattias]
That’s amazing.

[Erica]
That’s a great way to test our systems. Maybe we could do that.

[Mattias]
Yeah. Well, let’s break it down for selfish reasons. No.

Yeah. Tell us a little bit about how you manage some of that. Obviously, you had been there.

So you probably had this laundry list of contractors and that kind of stuff. You know who could do what. So were you hiring or were you having managers in the area kind of take over more?

Or how did you do that?

[Megan Ahern]
Yeah. So I had hired a full time, I called her an assistant. But really what she was for me was, I called her an assistant because she would do whatever I asked her to do, quite honestly.

But she ran my entire staging company and also ran our project. So kind of a project manager. But she would also do tenant showings and things like that for us.

We also kind of transitioned into midterm rentals while in Maui. So she would furnish those completely. So without her, I would not have been able to do it or I would have had to do it in a very different way.

But we had that full time kind of boots on the ground person that could just do whatever. And so we had hired her about a month before moving. And so I got to train her up on like, okay, this is how we stage this, how we run this business.

And then this is how we run projects. And then I was still very much a part of running the projects because she doesn’t have any construction experience previously. So I’m managing that still.

Like the parts that are hard to teach someone is if you put this money into a certain rehab, like a remodel this bathroom or add a bathroom in the basement, will you get that money and then plus some return out on the back end of that? That concept is very hard to quantify sometimes. But the getting the bids part of it and checking up on the contractors and doing all those things, like it’s not actually that hard of a task.

So she’s able to do all of those and go to Home Depot a million times and whatever is needed of her. So, yeah, from afar, the way that we run it is she’ll go to a project usually about once a week, at least she’ll check on each of the projects. She’ll take 100 pictures of the project and then upload them to Dropbox and then tag us in our project management software, which we use Podio that like, hey, I checked on this and then I’ll go in and look at all of those pictures.

And then I can say, okay, are we going to be dealing with this concrete pulling away from the foundation or like, what’s the plan for this? What’s the plan for that? I might pick out like little things like that where she might not notice it or if things are framed up right or wrong, I might notice that where she didn’t.

But that’s how I get eyes on my properties like every week. But for me, then it only takes maybe five minutes to go through a hundred pictures of the project instead of driving across town, checking it out, chit-chatting with whatever contractors are there. It becomes a much less of a process for me.

[Mattias]
And having like, I don’t know, like I think sometimes I get lost in all the weeds that I’m in and just having like a consistent like check in with the contractors, make sure that they’re working, getting stuff done in a timely manner. Like that can be a challenge for sure too. So like that, I love that.

One of the things that I love to do too is kind of have this like checklist that I would because I hated, I got so sick and tired of going to Lowe’s like every day that I would just like, I would try to, especially if it was a lighter flip where you didn’t really need to, you know, gut it or anything like that or reframe anything would just go through and like each room, you know, like make a checklist, like does it need a light fixture? Does it need, you know, X, Y, Z.

And then I can just make a shopping cart in Lowe’s, print it out or make it a PDF and email it to my Lowe’s like pro representative. And then they can just like bulk order that all at once, which is nice, a nicer way for me because it was delivered and didn’t have to go to Lowe’s 16 times. I know I got a lot of things wrong when I did that too.

I mean, I know I ordered some wrong cause you know, you like order a, a, a faucet or a, a sink fixture or whatever. And then they like say, you know, add these like plumbing parts as well. And I probably ordered the wrong ones cause I just clicked add.

[Megan Ahern]
Yeah, we we do a lot on the front end of a project to like really plan that out. And then we also have kind of our standard finishes that we always use. So Natasha will go through and take measurements and counts of everything that we need and then do that big bulk order that you’re talking about.

But we do home Depot and then we do a pro order, send it to the bedroom, get money off and all that and then get delivered. And then for like a lot of our fixtures we’re getting off of Amazon cause there’s just significantly cheaper on like light fixtures, plumbing fixtures. And then we’re getting those all delivered to the property as well.

And so it just makes it like very streamlined process for us. And then anything that’s like cute stuff we’re ordering. And then anything that’s like the ugly stuff the contractors are getting.

So like those plumbing fixtures and all of those or fittings, you know, like the P trap and the, the supply lines and all of those they’re responsible for. So we’re not having that like back and forth so many times getting the wrong stuff.

[Mattias]
No, that makes sense. And that’s, they just include that in their initial bid. I would imagine then.

Yep.

[Megan Ahern]
And we work with a lot of the same people. So they kind of know like what are the things that we’re going to get and what are the things that they’re going to end up getting?

[Mattias]
Did you all start off doing your own work? Like were you rehabbing those first properties yourselves?

[Megan Ahern]
Yeah, we were doing a lot of it. There were certain things that obviously we wouldn’t touch like HVAC and stuff. And then certain things that real quickly were like, okay, drywall is an art, not a science.

Like I don’t want to be doing that. But for a while we were doing a lot of the project ourself and we just had certain parts that like I would do certain parts Jeff would do and then certain parts we would sub out, but we could get a flip done in like 30 days because we were there every day or working like full, full days on it. And, you know, he’s doing all the electrical, I’m doing all the trim and paint and all of those things.

And I mean, it worked for the time being, we were able to make deals work that we couldn’t make work now. Just because we’re saving on that labor. But like, man, I don’t know how many times I’ve been nine months pregnant and up a 30 foot extension ladder painting the exterior of a house in snow.

You know what I mean? Like it’s just totally not worth it. Praise Jesus that my babies are all safe.

But yeah, it was wild for a couple years there.

[Mattias]
What did you, did you, so was this like the trip to Maui when you kind of drew that line in the sand and said, I’m not, we’re not doing everything anymore? Or like, cause I know that’s often really hard for people to separate themselves from like, you know, like every time something happens in a rental that, you know, it’s an easy fix that you could do. Like calling somebody to do it instead of going yourself.

Like, is that, is that the time where you were burnout? Like we need to make, draw the line or are you already kind of phasing out of some of the day to day before then?

[Megan Ahern]
We were phasing out of a lot of the day to day, but when those things came up, it’s still just easier to like, Oh, just run over there and do it. Um, and, and Maui really did remove that ability from us. Right.

It just say like, all right, well you got to call a plumber, like their toilet needs plunged and that I can just go do it in five minutes and cause zero. Or you call a plumber on off hours and it costs 200 bucks or whatever. Um, but it, it changed the mindset of it.

And so now even when we’re back now we’re like, no, we shouldn’t be doing that. Our time is best spent either hanging out with our family and just enjoying our life or doing really high value, um, tasks.

[Mattias]
Yeah, that makes sense. I, I was fortunate enough not to be very handy and mainly, uh, you know, started my career as a real estate agent. Um, so when we started getting investment properties and rentals and that kind of stuff, I partially drew a line in the sand cause I couldn’t do it partially drew a line in the sand because I knew that that would just suck joy out of it for me.

And I don’t think it was going to be a longterm way of like building up rentals because I would just hate having to go do those things. And so like eating the cost of it, knowing that like, you know, if we’re not killing it cashflow wise because of these things, like it doesn’t matter now we don’t need that. Um, we’re, we’re really, uh, that’s a longterm investment and it’s going to pay dividends down the line.

And so it’s better for us to have the enjoyment of our life and not just sell everything as we’re sick of it, then save a little bit of money as we go.

[Erica]
Yeah. But with that, I mean, this week, this is when, so we have a midterm rental where we had just started like earlier this year and we just had our first tenants move out and we had, uh, about 24 hours before the next tenants moved in and we didn’t realize that the landscaping had been become so overgrown. And, and so like I was really wanting to get it cleared for the new tenants coming in, but man, I worked my butt off for like two and a half hours pulling those weeds.

And these were the kind of weeds that like, as they grow, they also attach more roots and then more, you know, like horizontally. So I was just pulling and pulling and pulling and two and a half hours and I made it about six feet and there’s still like the other side and then around the side of the house. And finally I like threw up my hands.

I was like, you know what? I’m just going to call landscaper because my time is better spent somewhere else and I’m going to end up hating this space.

[Megan Ahern]
Yeah, yeah, for sure. I, I just think too, like a lot of times the professionals can get it done so much faster. So you’re like, man, they’ve been charging for like 10 hours because it would take me 10 hours to do this thing.

Really, they get done in an hour and it’s no sweat. So it’s like, I would just much rather call and get it done. And once you kind of switch that to that mentality, it just makes everything easier, you know, and then it brings you up to make a hundred or a thousand dollar per hour tasks instead of doing a $20 per hour task.

[Erica]
Yeah, that’s been a hard lesson for us to learn because we grew up in a Mennonite culture where you don’t spend money on services if you can’t. Like you probably should be able to do it yourself and if you can do it for cheap, you should do it for cheap. So that’s been like a big mindset switch for us.

[Mattias]
For you, more.

[Erica]
Okay, for me. For myself, for me. I probably, well clearly I haven’t moved out of it because I was just pulling weeds for two and a half years.

[Mattias]
She is the only one that has a tool belt in this house.

[Megan Ahern]
Yeah, it’s hard to break those like cultural norms. My dad is very much like that too. Why would you pay someone to do it if you could just do it yourself?

And every once in a while, I’ll catch myself like, why are we even doing this? I still shovel my snow because I just feel like it’s such a waste of money. But every time I’m doing it, I’m like, am I doing this because I love it or am I doing this to save $20?

And if it’s to save $20, it’s really dumb. But I actually do really like shoveling snow. It’s kind of like one of those things.

I do love it.

[Mattias]
It’s kind of like me and my lawn. I kind of still enjoy mowing it. I don’t enjoy the weed eating part.

Nobody wants to do the finish work. You can’t really carry out just the finish work. I do want to ask more about the midterm rentals though.

So you shifted into that. We were talking a little bit beforehand about how it’s kind of a nerve wracking. This is our first one and this is our second tenant.

And it seems like you had mentioned, it seems like the bookings come last minute. You have it advertised. We’re setting it up so that the tenant, if they’re not sure when their end date is going to be, they have to basically commit for a month.

So give us a month notice so that we can advertise it and everything. But yeah, it just seems like it’s crickets. And then boom, there is interest when the availability is there.

So was that a transition thing for you as well to get used to? And how many did you start with? You said you did multiple, right?

So did you just go all in and get a bunch at the same time?

[Megan Ahern]
I started it because we had this 7plex from hell project. And in order to save that deal and make it make sense, I thought, okay, I need to switch some of these units to midterm rentals. So we started with the first three units on that building as midterm rentals.

It was the first time I did midterm. So I didn’t really know what to expect. I didn’t really know what rates we could get for it.

But yeah, it’s super weird to me. I would think traveling nurses or traveling professionals in general would have it a little bit more together, have their stuff together and be booking more than a week out. But a lot of times those bookings come within a week or two weeks.

I don’t think they get their contract information from the hospital until right at the last minute. And to me, I just am a little bit more of a planner than that. It seems crazy, but that’s just how it is.

So as a midterm host, you have to just expect that. And you can look into what the demand is in your market and see the searches per unit in your market. And that’s a really good indicator of whether you have strong demand or not.

And if you have strong demand, you just have to trust in the process of you are going to get a booking at the last minute. I also in my portfolio now, we’ve been doing it for like probably a year and a half, and we’re running at about a 5% vacancy on our midterm rentals. It is amazing because that’s about what we’re running on our long-term rentals as well.

But we’re only taking like two days of vacancy between each booking. And then we are having like an average stay of about four months per booking. And what I do is we post them both on Airbnb and on Furnish Finder.

On Airbnb, we do a 31-night stay minimum, and we remove the instant booking ability. So when we get an inquiry on either platform, if it’s available like September 1st, but they want to move in September 15th, I’ll tell them, I don’t want to have to take two weeks of vacancy. So can you move your move-in date to September 1st and start paying from there?

You can move in whenever you want. And 90% of the people will say, yes, they’ll pay the extra two weeks to get the spot that they want. And you just have to, it’s a bit of a ballsy move because you have to know like, or you have to be comfortable enough that if they say, no, I’m not going to do that.

And they just go away. Are you going to get another booking that’s, you know, better? And in our experience, they mostly say yes, or we mostly get a better booking that lines up anyway.

So that’s how we’re able to get like no vacancy on our properties.

[Mattias]
I love that. And I think one thing that’s helpful for me too, hearing you talk about it is that, you know, if it is last minute for these people, they’re not planning ahead. So even if you’re worried about having some vacancy after these people move out and you don’t have another booking lined up, that likely whoever books it, it won’t be like for the next month, it will be something like fairly soon.

We had, we had a booking request for that would leave us about a month of vacancy. And we just, I was like, I also wanted to add a cheaper price. I was like, this just doesn’t make sense.

Like we can’t like have just a month gap because it’s going to take out a lot of people that might want to be there for longer and be there sooner. And that kills your numbers. When you first started, what were you, what were you projecting for vacancy?

And did you price according to try to make up for that? And, or, or what did you base your pricing on?

[Megan Ahern]
Yeah, I was looking at furnished finder and kind of seeing like what other people are charging for in the area. It’s a little bit challenging to really like dial that in though, because some units are going to be better furnished. Some units are a little better area.

Some units are professional pictures, which I think is probably the best indicator that you’ll be able to get the most amount for your property is that really very professional dialed in looking listing. But I think that we thought it would be worth it if we got 1500 per month for our midterms. And that was a two bedroom unit, but we were probably going to be able to get like a thousand dollars a month.

And we ended up getting the 1500 like instantly. And so I thought, okay, let’s push it on these next time. So every time it would turn, we would push it up, push it up, push it up.

And now we’re getting in around 1850 to 1900 on those same units. So I think you’re able to push higher than what you’re maybe the other furnished finder like comps seem like if you have a very professionally managed property.

[Mattias]
So you were saying a thousand would be the long-term amount?

[Megan Ahern]
Long-term, yep. Yep. Yeah.

And we’re paying like an extra, I would say a hundred dollars a month on our utilities between long-term and midterm.

[Erica]
It’s been interesting to see the type of inquiries that have come through. So we live in a town that has a university, a hospital right along like a highway corridor area. And some of the inquiries have been like athletics with James Madison University.

Or, but then some have been like 911 contractors that are coming into the area. And then there’s been a lot of engineering contracts, just like some different stuff that I didn’t quite know was happening in our area. So that’s been kind of interesting to read.

[Megan Ahern]
Yeah, it’s super random. We have a handful of guys that are from Europe, maybe England, something like that. And they’re all working out of like a wind farm.

And I’m like, I don’t even know we had a wind farm. But apparently it’s like 40 minutes away, but there’s nowhere else to stay. And we accepted one of them.

And now they’re just like, oh, I have another friend that’s with me at the wind farm. Could you have any other places? And so they just say, yeah, my coal, I guess we have that here.

That is very random.

[Mattias]
You know, I think this property, you know, we love it. We did a lot to it. We made it really, really, really nice.

And I think, you know, it’s part of it is just because it’s a really good location that we just wanted to hold this long term. If we ever can refinance it, I think the numbers would work well or a lot better for a long-term rental as well. But all that to say is that, like, I think if we were targeting a midterm rental, I think we would probably not necessarily target a different property, maybe target a different property, but just probably not go all out with the furnishings, you know, everything.

We have, like, you know, a really fancy bathroom with a floating sink and under cabinet lighting underneath it, wallpaper, tile, everything, and like, you know, granite countertops and all this. Like, we went really fancy with it. But yeah, you know, I think it seems like it’s more workforce housing.

We could have maybe gotten a little bit cheaper of rent to make it work. And yeah, people probably don’t care as much about that stuff for this type of thing.

[Megan Ahern]
Yeah, that’s like, it really matters with, like, short-term rentals and they want the whole, like, experience on the vacation. But for midterm rentals, they’re like, I want clean, functional, like, it doesn’t need to be so bougie. We have one property that’s a duplex, up-down duplex, completely, like, exactly the same units stacked on top of each other.

One of them we completely remodeled before it had, like, a 20-inch stove and no dishwasher. So we added a dishwasher, full-size stove, microwave over the stove, and, like, all these different kind of upgrades. Totally remodeled, tiled the bathroom, right, tiled the shower surround and just made it really cute.

And then the other one, we left it totally like that. 20-inch stove, countertop, microwave, no dishwasher, green linoleum in the kitchen and bathroom, and just kind of outdated. They rent exactly the same.

So, like, it has no lift, the $20,000 that we put into the basement unit. So it’s like, okay, well, now we know.

[Mattias]
This is like A-B testing.

[Megan Ahern]
It was, split testing.

[Mattias]
It’s amazing. So lesson learned. Yeah.

Now, every time we go back in there, I’m like, man, if we didn’t have three kids, like, I’d move in. I love this house.

[Erica]
Yeah, it is really cute. It’s also, unfortunately, where we, the city where we live, and at least at this point, they don’t allow Airbnb short-term unless it’s your principal residence or a part of it. And so we can’t fill in with some of the, like, short-term.

But otherwise, like, it would be a really cute short-term rental, too, because it’s right downtown. It’s walkable to, like, all of our cute brunch spots and breweries and a park and lots of things. But it’s been a big learning curve for us in a good way.

But lots of things we weren’t quite expecting. But it’s worked out. Yeah, that’s awesome.

[Mattias]
I did want to ask you quick. You mentioned that you also have a real estate sales business then that you opened. I wanted to ask about that.

When did that come about? And what’s that look like?

[Megan Ahern]
Yeah, as soon as we moved here, my husband got licensed. And so that was mostly to get us into properties as quickly as possible. When they hit the market, we could just be making offers pretty instantly.

And also to list our own flips. And then it also kind of evolved into, like, okay, now we’re helping clients and that whole part of it. I would say that, like, our business, our flipping business, is still our number one client.

But we do also work with a lot of retail clients. And then I got licensed just a couple years ago because they changed the laws in our state so that essentially they said you can’t market equitable interest in a contract unless you’re an agent. So essentially you can’t wholesale properties unless you’re an agent.

Where previously it was like, okay, Jeff’s going to be the real estate agent and I’m going to do the seller walkthroughs, do the off-market stuff, and then wholesale properties. But that legislation for us kind of said, okay, well now it’s allowed that I could also be an agent and I could also wholesale. So I decided to get my license.

We always kind of joked, like, it would take me longer to get my license than it would take to lose my license. Because I’m a bit of a rebel and a rule breaker. So I’m a loose cannon with my license.

So Jeff mostly handles that side of the business. But yeah, I am licensed.

[Mattias]
Okay, cool. And do you have other agents around as well or such as you two?

[Megan Ahern]
It’s us and then we also got our assistant who handles all the rest of our business license as well so that she can do showings for us and all that kind of stuff.

[Mattias]
That’s cool. So yeah, you attracted this person and you taught them in a month how to be a contractor, a GC, a stager, an agent. That sounds like a special hire.

You did well.

[Megan Ahern]
Yeah, and she’s still with us. She’s amazing. I don’t think she’ll ever leave.

She’s awesome. But yeah, we don’t do small volume either. We probably close 35 realtor transactions a year.

We flip 30 houses ourselves per year. And then we have, I don’t know, 80 to 100 stagings a year. So she’s a busy lady for sure.

[Mattias]
That’s amazing. Yeah, who not how? I just exemplified.

We should probably get into the golden nugget question. If you have any golden nuggets you’d like to share to our listeners, could be about investing or agent specific, whatever comes to mind.

[Megan Ahern]
Yeah, so okay, golden nugget. For us, the best off market marketing right now has been pay per lead marketing. So that works really well, especially if you’re an agent too, because some of those leads come in, they’re highly motivated, they want a cash offer.

Or if they’re not highly motivated and they’re just kind of tire kicking or they’re like, I want top dollar for my house, you can steer them into being a listing client as well. But essentially what pay per lead marketing is, is there’s certain companies that will run pay per click ads for people that are going to the internet and typing in like, how do I sell my house with a non paying tenant in it? Or how do I sell my house if it’s a hoarder house?

How do I sell this inherited house that I don’t want? And they’re taking all of those kinds of searches and they’re running pay per click ads. So they’re the top Google search ad when it comes up.

And then the seller is putting their information into the website. And then you get that lead and you’re paying per lead instead of per click, but you’re getting that lead exclusively to you, to your phone. So you can call them immediately.

And those leads for us have been the hottest leads. We can close them super quickly. And so, yeah, we’ve been just mostly getting most of our deals that way.

[Mattias]
That’s awesome. That’s a really good tip. It’s amazing.

And yeah, that’s a, it’s a really cool way of, if you’re, if you’re able to do walk that line, and I think it’s, it’s the one to be a bit careful of. But like, if you’re able to clearly, clearly like kind of walk that line where there are times where it is in their best interest to not go in the market and just like, have a quick and easy closing. But yeah, I feel like there’s definitely ways you could, you could have best of both worlds with that kind of marketing where you could sell some on the market, et cetera.

So that’s, that’s really cool. Love it. Yeah.

[Megan Ahern]
We as agents, like obviously you have a fiduciary responsibility. We have that responsibility to say, like to not pull the wool over grandma’s eyes and be like, oh, your house is only worth a hundred thousand bucks. But I’m allowed as an agent to say like, hey, why don’t you list it with an agent?

You’re going to get the most. If you want to get the highest top dollar for your house, it makes the most sense to list it with an agent. And grandma’s like, I, I just hate the whole realtor thing.

I don’t want all these people coming through my house. I don’t want to have to clean up. I don’t have to do this and that.

Okay. Well, I can take my agent hat off and talk to you as an investor and tell you I can pay a hundred thousand dollars for it. But I’m just telling you, we might be able to list it.

We can get 140 for it. If you do X, Y, Z, clean it up a little bit, we’ll get some professional pictures. Now, I don’t want to deal with any of that.

I’ll just take the hundred thousand bucks. All right. Well, great.

I’m not lying to them. I’m not being deceitful. A lot of times we do give them both of those options of like, hey, we can do this for you, list it for 140 and clean it up.

And I can even, you know, use my guys to, to do some work on it or whatever needs fixed, or we can just do it easy cash. I won’t do any inspections. I’ll pay all your closing costs.

You won’t have to pay any realtor commissions and I’ll pay a hundred thousand bucks for it. They’re like, that just seems like the better option.

[Mattias]
So yeah, I’ve done that. And you’re exactly right. Like if you spill it out, like you can have like three different options, even like where like there’s, this is like how you could do the fixed up, you know, top of the dollar way.

But yeah, you’re gonna have to spend 20,000 or whatever to, to fix it up, to get that. And I can help you with the contractors and stuff like that too. And that’s one of the beauties of being in both worlds is that you have this, like you have people that are willing to jump for you because you give them a ton of business every all the time.

And and so, yeah, that really can help as an agent is if you have those contractor contacts as well. But yeah, I love that. That’s really cool.

What about a book? Do you have a favorite book or a fundamental book you think everybody should read?

[Megan Ahern]
Uh, the book on flipping houses, I think was like super instrumental by Jay Scott. I read that book, bigger pockets, one of the bigger pockets ones. Yeah, uh, read that.

And then there’s a sister book, the book on estimating rehab costs. Um, both of those were just huge and be able to get my flipping business off the ground.

[Mattias]
Yeah, that’s a huge barrier. It’s something that people, um, get wrong often. It’s knowing how much something’s going to cost and, um, yeah, how long to hold it, all that kind of stuff to, to make it profitable.

[Megan Ahern]
Yeah, for sure.

[Mattias]
Um, and then what about, uh, where can people find you? Do you Instagram? I know you’re big on Instagram.

What, where are people looking for you these days?

[Megan Ahern]
Yeah, on Instagram, I’m @The_Tatty_Investor, both underscores between the words there. And then, um, I am also an advisor at firstdeal.com, uh, which is Brandon Turner’s, um, program that teaches new and aspiring investors how to get their first deal. Um, so definitely if you’re kind of in that boat, hit us up there.

We’d love to help you out.

[Mattias]
Well, I feel like we have like three more hours. We could probably talk if we had the time, but we really appreciate your time being here. Thanks so much for being on the show.

[Erica]
Yeah, no problem. Thanks for having me. Thanks for listening to the REI Agent.

[Mattias]
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 the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.