JF2110: Actively Investing Part-Time With Aundrea Newbern
Aundrea is a full-time internal audit executive who is a part-time real estate investor spending about 8 hrs a week managing properties and when acquisition mode, she spends about 15-20 hrs a week. All of her deals were 100% on her own without any partners.
Aundrea Newbern Real Estate Background:
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Best Ever Tweet:
“Always, every day I’m looking for a deal.” – Aundrea Newbern
Theo Hicks: Hello, Best Ever listeners, and welcome to the best real estate investing advice ever show. I’m Theo Hicks, today’s host, and today we’ll be speaking with Aundrea Newbern. Aundrea, how are you doing today?
Aundrea Newbern: I’m doing well, how are you?
Theo Hicks: I’m doing great, thanks for asking, and thanks for joining us today. I’m looking forward to this conversation. Before we jump in, a little bit about Aundrea – she works full-time as an internal audit executive with a mortgage company. She started investing in 2016. Her current portfolio value is slightly under three million dollars, and she’s done every deal by herself, without any partners.
She is based in Brunswick, Georgia. You can say hi to her at blueprintrealestateinvestment [at] gmail.com. Aundrea, do you mind telling us a little bit more about your background and what you’re focused on today?
Aundrea Newbern: Absolutely. First of all, thank you for having me on today. A little bit about me – I was born and raised in Brunswick, Georgia, and when I was 18 I left to go off to college; I did the normal route of getting my undergrad degree, and then subsequently my MBA. I graduated right when the market crashed, so I had some difficulty getting a good job for quite a while. I did eventually get one and moved up quite fast in my company.
Then in 2016 I decided – while I love my job and I love what I do, there has to be a way to have some passive income in case there ever was another recession and I couldn’t find a job, or needed some way to pay my bills.
So I did a lot of research out there, and decided that real estate was probably gonna be the best path and the fastest path to develop that wealth and be able to have a passive income.
So in 2016 I purchased a condo that I lived in for a little while in Atlanta, Georgia, and then moved out and moved to Chicago for a little bit. I ended up selling that a few years later for quite a nice profit, and over the last four years I have purchased about 15 different properties, multiple doors – some of them are multifamily.
My focus right now is actually in the South-East, around Brunswick, Georgia. I do multifamily, single-families, Section 8, higher incomes… You name it, I probably have a property in that asset class.
Theo Hicks: And you’re doing this while working full-time as an internal audit executive…
Aundrea Newbern: That is correct.
Theo Hicks: What is an internal audit executive?
Aundrea Newbern: I manage internal audit, which is kind of an assurance function, for a mortgage company. So I make sure the company is doing what they’re supposed to be doing, basically.
Theo Hicks: Okay… So how much time do you spend on your real estate investing each week?
Aundrea Newbern: Surprisingly not a lot. I would say on an average week it may be about eight hours, just managing properties. When I’m in acquisition mode, that obviously goes up quite a bit, so those weeks are probably 15-20 hours.
Theo Hicks: And you said you’re kind of all over the place, you have all different types deals – low-income, high-income, multifamily, single-family… You said you’ve got 15 different properties. How many doors does that total?
Aundrea Newbern: That is 27 doors.
Theo Hicks: Okay, so what was the first investment property you bought after that condo?
Aundrea Newbern: I jumped to a duplex in South Georgia right after that.
Theo Hicks: Do you mind walking us through that deal? So how you found it, what you bought it for, and what the business plan was?
Aundrea Newbern: Absolutely. I wouldn’t say there was much of a business plan at the time, but I knew that I would make a little bit more money the more units I had… So I reached out to an agent here in Brunswick, Georgia. She happened to know someone that was about to list a duplex in a pretty decent neighborhood, so I jumped on that pretty quickly.
Do you wanna know a little bit of information about the duplex in terms of costs, what I spent on the rehab etc.?
Theo Hicks: Yeah, exactly.
Aundrea Newbern: So that purchase I got for, I believe, 155k. Again, a duplex, so two units. Each unit was renting for about $900, both sides. I had to put 15k into it to do some repairs, I’ve upped those rents now to $1,150 a piece, and I only have about 90k of debt left on the property. It’s been a pretty good one. It’s been one of my better deals so far.
Theo Hicks: Nice. So the duplex — and then what was your biggest purchase in terms of number of doors?
Aundrea Newbern: The biggest has been a fourplex so far.
Theo Hicks: A fourplex… Can you walk us through that one, the same info?
Aundrea Newbern: Yeah, that’s actually been one of my better and worst, at the same time. So I purchased a quadplex – this is in St. Marys, Kingsland, GA, so right near the Florida line… And this one was purchased from another investor who got it at an extremely good deal, and then was flipping it around, but he didn’t really put any repairs into it… I had months of negotiation on this one. I knew it wasn’t gonna appraise at what he expected… So I got the fourplex for 270k. I think he was trying to sell it for 350k… And the day I purchased it, a hurricane hit South Georgia (Hurricane Irma) and just completely flooded out the units. So that one ended up being about 75k in repairs out of pocket. There was no flood insurance policy on it, it was nowhere near a flood zone… So that actually ended up costing me a lot of money… but the silver lining of that is I was able to raise the rents quite a bit. The property is in great shape now, and it’s now appraised for 350k.
Theo Hicks: So you bought that from the investor? How did you find the deal?
Aundrea Newbern: He had that one listed on the MLS.
Theo Hicks: Okay. So are you always looking for deals, or is it just whenever you have enough money to fund the down payment is when you start actively looking again?
Aundrea Newbern: Always. Every day I’m looking for a deal. So I do keep cash reserves to be able to that, if I need to pull the trigger on something, but I do wait until the right one comes around, which has been a little bit harder the last year or so.
Theo Hicks: So what types of things are you doing? Because I’m assuming you’re doing this at night or in morning, and on weekends…
Aundrea Newbern: That is correct. I wake up usually between 4 and 5 AM every morning and I take care of my real estate portfolio for what I can, without any customer interaction during the mornings… And then I do a little bit of the work at night. I also got my sales license here in Georgia, just so I can have quicker access to properties and don’t have to go through a middleman/agent to be able to do that.
Theo Hicks: That’s smart. So is that how you’re finding all these deals, they’re all on the MLS?
Aundrea Newbern: Some of them. I also work with wholesalers here that bring me deals, and then I do some direct marketing as well.
Theo Hicks: What type of marketing are you doing? Direct mail?
Aundrea Newbern: I do direct mail, I also do skip-tracing, direct phone calls…
Theo Hicks: Is there any specific deal that you’ve found through direct mail?
Aundrea Newbern: Yeah, I actually just did a recent campaign and had someone contact me… This is another investor that owns a duplex. It was just a simple mailer, to let them know that I was interested in their property. They contacted me, they told me that they’re ready to sell, they’re a little bit nervous about what’s going on with the market, so we’re in the process of trying to get that deal closed right now.
Theo Hicks: Nice. That was a pretty quick turnaround. Are you still negotiating on that deal right now, or have you actually bought it already?
Aundrea Newbern: No negotiations. It was pretty easy. I paid a good price, I didn’t try to low-ball them on it, and they were ready to sell.
Theo Hicks: What about with the wholesalers? Have you got any deals from them?
Aundrea Newbern: I just got a wonderful deal from a wholesalers that we’re trying to go to contract actually today on this one… And this is gonna be a flip property.
Theo Hicks: Do you mind telling us what the plan is for that one, and maybe also explaining not just necessarily how your relationship is with the wholesaler, but how the whole process works? If I want to start getting deals through wholesalers, what do I need to do? How do I find them? Do I need to talk to them all the time? How do I get them to send me their best deals? Things like that.
Aundrea Newbern: Absolutely. A few different ways… We have a group here that recently started a local real estate meetup, so I’ve met a couple wholesalers through that group. I made sure they got my business card, I got added to their mailing list… I also reach out to people on Bigger Pockets that I see that are actively wholesaling deals, trying to get added to their mailing list… And then they reach out to me if they think they have a deal that fits in with what I’ve told them I’m interested in; they reach out to see if it’s something I want, and I make a best effort to close as quickly as possible, and do fair terms, and it works out pretty well usually.
Theo Hicks: Before I ask you the money question, what advice do you have for (let’s say) someone who has a full-time job and wants to get started in real estate, but has the limiting belief that they don’t have enough time? Obviously, they do have enough time; they can get up earlier and stay up later… But obviously, it’s probably more about a mindset block, so… If you’re talking directly to someone who says “Hey, I wanna invest in real estate. I work as a full-time employee. I don’t have time to do it… How are you doing this, Aundrea? I don’t understand. Help me.”
Aundrea Newbern: Well, I think you touched on a key thing – it’s mindset, and making sure you’re committed, and that you understand why you’re wanting to do this… Because if you don’t have a why, you’re not gonna want to do it. You’re just gonna be tired all the time and not see the value in it.
One thing I would say is being able to time-block… So set your schedule each night, say “Okay, tomorrow morning from 6 to 8 AM I’m going to be prospecting or trying to understand how to get into real estate”, and every single day you wake up and you make that a habit. You don’t let anything else get in the middle of that time, and you do it.
The other thing is really setting up systems for things. If you can set up ways to automatically prospect without having to do a lot of work, and being able to use technologies to do those types of things – that’s gonna significantly cut down on the time you would be manually spending looking for these deals.
Theo Hicks: Do you work just in the mornings and at nights on the weekdays, or do you work on weekends, too? Or are those your breaks?
Aundrea Newbern: I work on the weekends too right now, unfortunately… So it is very time-consuming, but it’s worth ramping up very quickly to have to do that just for a couple days.
Theo Hicks: Is it a plan to continue to be a part-time investor, or is it a plan to eventually transition into being a full-time investor?
Aundrea Newbern: Well, if my company is listening right now, it’s never to transition to a full-time investor. [laughter] However, I like the idea of maybe in 5-10 years looking at potentially transitioning at that point.
Theo Hicks: What time do you go to bed at night when you’re waking up at 4 AM?
Aundrea Newbern: I go to bed pretty early. I’m usually in bed before 9.
Theo Hicks: Okay, so you’re getting 7(ish) hours of sleep.
Aundrea Newbern: Oh, yes, definitely.
Theo Hicks: Because whenever I hear people telling me they get up at 4 AM, I’m just like “The only time I ever get up that early is when I need to catch a flight, and I’m just a mess the entire day…” Because I don’t go to bed at 9 o’clock.
Aundrea Newbern: Exactly.
Theo Hicks: That’s like when my day almost begins. Anyways, Aundrea, what is your best real estate investing advice ever?
Aundrea Newbern: It’s keeping the right mindset. Anyone can do this. I consistently tell myself “You have more to lose by not doing this than doing it.” So no matter how many mistakes you’re gonna make, assuming they’re not huge mistakes, you’ve gotta just get your feet wet and start doing it, and after a few deals you’ll understand the value of it. So just step out and get it done.
Theo Hicks: Alright, are you ready for the Best Ever Lightning Round?
Aundrea Newbern: I think so.
Theo Hicks: Alright. First, a quick word from our sponsor.
Theo Hicks: Okay, Aundrea, what is the best ever book you’ve recently read?
Aundrea Newbern: The best I have read recently is The Power of Habit, by Charles Duhigg. Fantastic book.
Theo Hicks: If your business were to collapse today, what would you do next?
Aundrea Newbern: Start it back up the next day.
Theo Hicks: So we talked about some of your good deals… What is a deal you’ve lost the most money on? How much did you lose, and what lesson did you learn?
Aundrea Newbern: That is by far the fourplex, regarding not having a flood insurance policy active during hurricane season, even though it wasn’t in a flood zone. So going forward, I make sure that all of my units have a flood policy, no matter where it’s located.
Theo Hicks: And do you make sure you take that into account when you underwrite it, so the insurance is a little bit higher expense-wise?
Aundrea Newbern: Absolutely.
Theo Hicks: What is the best ever deal you’ve done, besides the one that we’ve talked about already?
Aundrea Newbern: I’m looking forward to the one that I’m trying to go under contract with today, because I think that’s gonna probably make about a 60k-70k profit… So I think that’s going to be. Otherwise, I would say that first condo that I bought, that I lived in for a couple of months, and then sold it three years later. I made a net profit of about 68k on that.
Theo Hicks: What is the best ever way you like to give back?
Aundrea Newbern: I work a lot with local animal rescues, and I foster lots of dogs, and I monetarily help with that. So with the animal community here.
Theo Hicks: Nice. And then what is the best ever place to reach you?
Aundrea Newbern: So that’s gonna be probably either through Bigger Pockets or the email address that you gave out, so blueprintrealestateinvestment [at] gmail.com.
Theo Hicks: Perfect. And on Bigger Pockets just Aundrea Neubern.
Aundrea Newbern: Yeah, so the last name is Newbern.
Theo Hicks: What did I say?
Aundrea Newbern: Neu…
Theo Hicks: Oh, gosh. Sorry. I’m really dyslexic when it comes to reading things, so I apologize.
Aundrea Newbern: It was close enough…
Theo Hicks: Alright, Aundrea, I really appreciate you joining us today and giving us advice on how to scale a real estate investment business while working full-time. You mentioned that you’ve been able to buy 15 different properties since you began investing in 2016. You said you spend about eight(ish) hours per week on managing the current portfolio, and that will double whenever you’re actively acquiring a deal or working on a deal; you’re working on a deal right now.
We talked about your first purchase after that condo was a duplex, you got it by reaching out to an agent. Your biggest deal was a fourplex, that you got from an investor who wanted to flip the property without actually repairing it… That was actually the deal you lost the most money on, or I guess the hardest deal because of the hurricane hitting it, the flooding of the property, and it was nowhere near a flood zone, so you didn’t even think to get flood insurance. Now if you buy a property near hurricanes, then you get flood insurance no matter what.
You talked about becoming an investor while working full-time. You mentioned getting up really early to work on your business, and working a little bit after work, making sure you go to bed early enough, so you actually are functional at 4 AM in the morning.
We talked about having a strong why for why you want to become an investor, making sure that you time-block really well… So the night before you go to bed, schedule your next day, and exactly when you’re gonna work on your real estate investing business and what you’re going to do, and then where you can, try to create systems so that you can automate things, so you don’t need to actually spend time on that part of your business. We also talked about how you are finding deals – MLS, wholesalers, direct mail, we talked about a duplex you got through a simple mailer, we talked about wholesaling and how you meet wholesalers at local meetup groups, and you reached out to people who were actively wholesaling on Bigger Pockets…
And then lastly, your best ever advice was to make sure you have the right mindset. I really liked when you said “You have more to lose by not doing anything, unless something goes really wrong. But even then, I still think that you probably have more to lose by not doing it.
Aundrea, again, thanks for joining us. Best Ever listeners, as always, thank you for listening. Make sure you take her up on her offer and reach out to her email address. Again, that’s blueprintrealestateinevstments [at] gmail.com. Have a best ever day, and we will talk to you tomorrow.
Aundrea Newbern: Thank you so much, Theo.
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