111: Transitioning from Single Family Flips to Commercial Rentals with Kimberly Marie
“It was going to be an additional hundred grand and change or whatever,” mentions Kimberly Marie as she casually explains her rationale to begin flipping houses. At the time, she had thoughts of going back to school and getting her doctorate degree. And surprise, surprise—education costs money. So in order to pay off any debt she’d carry as a result, Kimberly turned to flipping real estate to offset her expenses.
Without much more thought, Kimberly began purchasing the ugliest homes she could find in her neighborhood and turning them into fresh, liveable homes that people could enjoy. And not long thereafter, she had established herself as the investor on the block.
Eventually, Kimberly finished school once again (and paid off debt once again), and this marked the first major transition in her investing journey. She didn’t need the immediate lump-sum cash anymore, and she wanted to take her foot off the gas a little bit. As a result, she began to hold these single family properties and turned them into sustainable rentals.
Fast forward to present day, she is amidst another transition in regards to her life. Up to date, she is selling off her single family properties and setting her sights to commercial rentals and developments.
Takeaways from our conversation with Kimberly: 1) Take a look around. At the time, Kimberly explains, in her home market of Indianapolis, the city hadn’t yet seen the gentrification it is undergoing today. But being a local in the city, there was more than meets the eye. Walking around town, she saw more and more people moving in, as well as more and more businesses being put up. So where others felt fear, Kimberly saw opportunity. Gentrification was just around the corner. And to her, it didn’t take a rocket scientist to figure it out. All it took was nothing more than common sense, and a simple question, “Would I want to live here?” The answer was “yes” so she was there to stay.
2) Don’t be a stranger. When renovating her first several flip properties, Kimberly quickly became a staple in her community. As she describes, she wasn’t some out of state, corporate investor. She was in the property every day wearing her construction attire and swinging hammers. We’re not saying that you have to do your own rehabs. In fact, we encourage anyone who wants to outsource labor so they have more time to acquire more deals! The point is, us landlords don’t have the best reputation out there with non-homeowners. It is our individual and collective social responsibility to positively affect and influence our market, our community, and the people in it. Take it upon yourself to make it more than just about cash flow.
3) Audit your goals. As mentioned above, Kimberly has pivoted a few times during her career thus far in real estate. She started off flipping homes, to owning rentals, and now commercial development. And this wasn’t by accident. Kimberly has taken a hard, inside look at herself and understands that her goals and aspirations have changed. Her reasons for investing have changed. And her attitude towards work—you guessed it—has changed as well. Set your goals and get after it. No two ways about it. Just understand that in order for you to grow as an individual, sometimes your goals have to do the same as well.
4) Ignorance is bliss. We don’t mean this in a bad way, not at all! Sometimes, you just need some naivety in your life. That’s all. Take it from Kimberly. Purchasing her first rentals, it was done more or less on the fly. She knew what to look for and what data to analyze, but it wasn’t some esoteric activity for the syndicators or ultra rich. She admits that looking back, she’s surprised just how much she didn’t know. But that’s the point. That’s why beginner’s luck exists. You do something with no idea how hard or complicated something is, and you find that it’s not hard or complicated to do at all. Approach real estate investing as if it's only for the “smart” or “rich,” and you’ll never be either of those things. So when learning something for the first time or trying to master something permanently, keep it simple.
If Kimberly could go back and talk to her 16 year old self, she’d tell her, “Just pay attention and look around.”
An unexpected benefit of real estate investing, Kimberly said, was the tax benefits and time. (She literally got a doctorate which, mind you, is the highest level you can study something and now she doesn’t even want to work.) She didn’t expect to earn and learn what she is now.
When a friend asks Kimberly about getting started in real estate, she asks them questions. Figure out your “why,” as well as what you can and won’t do.
Kimberly recommends using CoStar and Redfin to find deals and analyze markets.
Kimberly recommends reading Skip the Flip by Hayden Crabtree to help you learn aspects of real estate and personal finance that you wouldn’t necessarily learn elsewhere.
If you’d like to get in touch with Kimberly, follow her on Instagram @kimberlymarie920 or contact her at: firstname.lastname@example.org
Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!