$900K in Real Estate at Age 17 by Doing What 99% of Teenagers Won’t

Ashley:
This is Real Estate Rookie, episode 271.

Ava:
First, you need to determine an asset class you want to do, and then you need to educate yourself on it and make that step-by-step checklist. Because once you have that checklist and it’s so much, because it seems so crazy when there’s a whole bunch of things, you’re like, “Oh, I have to do this, I have to do this. I’ve talked to insurance people.” But if you just lay it out on a checklist step-by-step in front of you, it cancels out all the noise because all you have to focus on is that next step. And if you have due dates by it, it’s great for setting goals.
So I recommend just figuring out what asset class you want to do and just choose one, whether it’s multifamily Airbnbs, arbitrage, anything, and then make that checklist with a step-by-step, actionable steps that you can take.

Ashley:
My name is Ashley Kehr and I’m here with my co-host, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast, where every week, twice a week we’re bringing you the inspiration, motivation, and stories you need to hear to kickstart your investing journey.
And today, I want to shout out someone by the username of gzreta9 and gzreta says, “Amazing podcast. This is the best podcast to listen to when you are starting your real estate journey. Tons of information, super easy to follow. Thanks to the host, Ashley and Tony who have great personalities and keep every episode interesting and fun to listen to. It’s also very helpful to listen to all of the guests they bring on to the podcast to stay motivated and learn even more. Keep it up guys.” So gzreta we appreciate you.
And for all of our rookies that are listening, if you haven’t yet left us an honest rating and review, please do. The more reviews we get, the more folks we can reach. The more folks we can reach, the more folks we can help, which is what we love doing here at the podcast.
Ash, I think it’s so funny reading the reviews because it’s like we have the amazing comments like that, and then if you go on certain parts of the internet, on social, it’s just the exact opposite where people hate on the podcast for all these other reasons. So it’s crazy that you can listen to the same exact show that gets such polarizing-ly different opinions.

Ashley:
Which you tell me all the time, we can’t please everyone. So Tony, what’s new with you? How is it in sunny California? We got snow today and it’s cold.

Tony:
It’s snowed out there. That’s crazy. No, it’s, I don’t know, it’s like 70 and perfect out here today, but no, it’s cool. We’re still working on our West Virginia deal, so we’re excited for that one. Feels like we’re getting close to raising all the funds we need for that.
Initially we were looking to raise about a million bucks, but we’ve since made some changes to what we’re doing at the property, so we’re looking to raise about 1.3 now. So it’ll be cool once we get that project done.
I’m just super excited to really see this one across the finish line and the finished product. Once we’re done with it, I am like, “Oh my God, I can’t wait to share it with all the rookies because it’s going to be so cool.”

Ashley:
I’ve been getting your emails and today I was at Lowe’s with Daryl and I got one, and I’m just like, “Okay, read this.” And then I’m kind of explaining to him as to how you are structuring the deal, and it’s just so intriguing to me, so intriguing.
And so I recommend any of you, even if you just want to learn stuff from Tony, you don’t even want to buy into the campground or invest or private money or anything. You have no interest in that. Just like to learn from him and what he is doing. Go, what is it? alphageekcapital.com, and you can just sign up to your newsletters.

Tony:
Yeah. They can head over to Alpha Geek.

Ashley:
It’s so cool.

Tony:
I’ll break down just for those that are listening, how we’re structuring this deal and how it’s different from the last commercial deal we did, so.

Ashley:
I was going to allude for them to sign up to your email list so that they have to go to that, but now go ahead, no one has to sign up now.

Tony:
They got to sign up. I can go over free. So when you buy commercial real estate, you have a couple options. You can syndicate the deal, which is what a lot of people do. They raise the majority of the money, then they bring in debt, I’m sorry, they bring in debt to cover the majority of the purchase, and they use raised syndicated funds to kind of cover the remaining balance.
But because the deal size is pretty small on this one, our total project costs or total everything is 1.3 million, we realized it didn’t quite make sense to syndicate such a small deal. So instead of doing a syndication, we said, “Let’s just raise debt. We’ll just do the whole thing with debt.” And I have a few friends that bought apartment complexes in the last year and it was around the same price and they used all debt to cover it.
Now, we’ve used debt to fund all of our flips over the last year and a half, so we already know how to raise private money from folks, but this is just at a much larger scale just for one big deal. So essentially what we’re doing with all of our investors is we’re offering them 15% annual interest.
So if someone gives us for every $100 to get $15 back and it’s a three-year note, we’re not paying any interest over the first 12 months, and then starting in year two, we’ll pay interest quarterly, and then we’ll pay everyone off at the end of 36 months with all of their accrued interest plus their principle.
So it’s a pretty strong interest rate at 15%, right? I mean, that’s a pretty good long-term rental deal, better than what you’re probably going to get in the stock market from those people. So we felt it was kind of a win-win. And the benefit for us is that once you refinance and we cash all of those people out, now we own 100% of the deal.
So that’s our goal with this one is, pay out some really good interest for the first three years, our cash will be pretty tight over that timeframe because we’re paying 15% interest, but assuming we can refinance into something below 10%, it’ll be a good deal for us to long-term.

Ashley:
I feel like we need to do a Rookie Reply on this soon, talking about the pros and cons of doing it this way compared to raising money through a syndication for a deal like this. Okay. So let’s, producers are you listening? Let’s put a bookmark on that for a Rookie Reply episode.
But today, Tony and I are still fangirling over today’s episode guest. So we have Ava Yuergens and she is going to blow your guys’ mind. She is 17 years old, has two investment properties. She’s going to tell you exactly how she did it. Of course, not all of you are going to have this option, but there’s still going to be a large majority of you that do as to getting started this way.
But hopefully it can also kind of get the wheel spinning that for those of you that are 15, 16, 17, 18, give you ideas as to ways you can get started so young or somebody you know. I think giving them some of the books she mentions when they’re in high school, when they’re in college to get them turned on to this way of living.
But she is just a very impressive, amazing girl and she talks about, she has a long-term rental and a short-term rental. She’ll talk about how she uses software and the things she uses to manage her short-term rental. Also, very knowledgeable in finding her markets as to where she’s investing too. So she’ll kind of talk about the three P’s there.
Ava, welcome to the show. Thank you so much for joining us. Can you start off with telling us a little bit about yourself and how you got started in real estate?

Ava:
Yes, of course. Well, hi, my name’s Ava Yuergens. I started a real estate investing company with my now fiance, Ben, when we were 15 years old and now we’re 17 with 900K in residential real estate.

Ashley:
First, let’s clap. That’s amazing.

Tony:
Yeah.

Ava:
Oh, thank you.

Tony:
When I was 15 years old, I was working at Finish Line part-time, making $5 and 75 cents an hour, something crazy like that. So that’s super, super impressive, Ava.

Ava:
Thank you so much.

Ashley:
So let’s start from the very beginning. What even intrigued your interest about real estate investing?

Ava:
Yeah, of course. So it’s kind of a funny story. So I was actually sitting in history class, my sophomore year of high school and my teacher started presenting about a guy named Andrew Carnegie, and if you guys don’t know who Andrew Carnegie is, he invented the company, the Carnegie Steel Corporation, and basically it was a cool rags to riches story and he was basically the Elon Musk or the Jeff Bezos of his time.
And just hearing about him and what he did with so little, just really inspired me and I kind of knew after that I really want to be great, I want to do something great with my life. So after class I searched up something so dumb on Google Books to be successful or something like that. And of course, the first one that popped up can guess it was Rich Dad Poor Dad.
So I forced my sister after school that day to drive me to Target because I was 15, I didn’t have my license and she did. And then the day I actually, we got home from Target, and as I opened the door, my dad is at the top of the stairs. He’s never home from work at 3:00 PM when we get home from school.
But he’s at the top of the stairs with a mask, and it turned out everyone in my family except me had COVID, but I had to quarantine anyway with them, which is so dumb. You have to quarantine with people who had COVID, but it was a close contact, so I couldn’t go to school.
But essentially that quarantine gave me the time to actually read the book. And then after I read that book, I found BiggerPockets, I just went down the whole rabbit hole, read all the books, started listening to all the podcasts, started attending the local REIA, and it was all kind of history from there.

Ashley:
I had to read a Dale Carnegie book when I was in high school, is How to Win Friends and Influence People, and I did not appreciate that book at all, until I think I was in college when I read it again.
One of my friends, actually my first business partner was like, “You need to read this again.” And then that’s where I saw the huge value of, only I had been as smart as you when I was in high school and really appreciated the value of that book.

Tony:
Ava, do your parents preach entrepreneurship and wealth building? Because so many kids have heard about Andrew Carnegie in high school, but most of them are probably not going to go out and buy a Rich Dad Poor Dad afterwards. So I guess what was the home life that maybe made you think a little bit differently than most sophomores in high school?

Ava:
So my mom is a teacher, so this definitely, she was never on an entrepreneurship or business route, but my dad had a sales job for most of my life, but then when I was around 10, he ended up starting his own company. And so I got to see entrepreneurship and business with my dad.

Ashley:
Was this kind of the same path for your boyfriend, now fiance or were you the one that kind of convinced him as to getting into this entrepreneurial spirit?

Ava:
So Ben, he has had a lawn care company since he was 13. So he was always kind of just into having his own business and making his own money because we’ve both, we’ve never had jobs before. I’m unemployable by anyone, aside myself. That’s what I always say.

Ashley:
As long as you know that about yourself and found it out early before you spent so many years trying different jobs and realizing you hate it. So you’re lucky that way.

Ava:
Definitely.

Ashley:
Well, that’s amazing that he was 13 and started that business. So what was the first conversation when you guys decided you’re going to invest together? How did that happen?

Ava:
Mm-hmm. So basically I obviously was the one to read Rich Dad Poor Dad, and I was like, “Ben, just read it. Just read it.” But Ben’s not going to read a book. So basically I ended up just having to sit down with him and explain everything. And looking back on it, it might have been more forceful of me, but Ben loves the idea of building wealth and even if it is boring, he is willing to do it.
So I wouldn’t say there was any convincing involved, but I was definitely more of the one, “Okay.” If you ever read the book, Traction, “Okay, we’re going to have our Sunday meetings. We’re going to do this, this, this, this week. I need you to cold call these people this week.” So it was always, I was more of the boss, but he was willing to do any of the work that I needed him to help me with.

Tony:
So Ava, I’m so curious. So you guys had this conversation about, “Let’s become real estate investors.” But you’re pretty young, most people at your age can’t really afford to buy real estate. So after you guys made the decision to say, “Hey, this is what we want to do.” What was the next step to actually getting that first deal and eventually get into almost a million dollars worth of real estate?

Ava:
So I can step-by-step explain the first deal because I feel like it best showcases how we did it. So obviously, the first thing we needed to do was just figure out the financing. So luckily because my dad’s a business owner, he gets to make his own money in a way, and it’s allowed him to save up a lot of cash on the side.
And so he agreed, him and my mom agreed to partner with me and Ben, which I’m so grateful for because it’s a lot if, you have to put a lot of trust in your 15-year-old kid to handle that amount of money. But basically what we did is the partnership, we ended up using for our first deal was a 50/50 partnership. And essentially I’ll explain later how we did it, but if you think about it like this, you have the down payment, the closing costs, and then the repair costs. If you add that all together, that’s all the costs you have to pay up front.
Me and my parents essentially split that in half, and me and Ben paid half and my parents also paid the other half. So now for our first year, we’ll split the profits 50/50, but I’ll get into how we kind of made that money. But before we even found the first deal, we figured out the financing. So we agreed on that partnership and we got that in writing. Then me and Ben decided to go the off market route when finding a deal.
So we did the cold calling, we did the direct mail. Before school, I would get up at 3:15 every morning and just write out direct mail for direct mail, because I was so frugal at the time. I didn’t want to spend money on any direct mailing apps so I just wrote it out, and then after school, me and Ben would pretty much just cold call for hours on end, until we couldn’t do it any longer.
But after three months of hard work and dedication, we actually got a deal under contract. And over those three months we were able to get our half of the down payment, closing cost, repair cost, by something called couch flipping, which you guys might be familiar with. It’s a great side hustle.
But essentially you find a couch on Facebook marketplace, OfferUp Craigslist, you buy it, you clean it up, and then you resell it for a higher price and you’re able to make 200 to $500 an hour with this method, but of course it’s not in your own time, which kind of sucks. But over time, over those three months, we were able to raise our amount of the down payment, closed cost and repair costs.

Ashley:
That is crazy. That’s amazing. But you are right about it, that’s very time-consuming. When you find a couch, you got to go and clean it and take care of it.
Were you guys doing all of this yourself, going and picking up the couches for sale, cleaning them yourselves, and then were you delivering them to people too once they bought it or were they coming to get them? But you still had to meet the people, I’m assuming?

Ava:
Yeah. So basically some people would have us deliver and if we did deliver, we would just have them pay a fee, because everyone has a pickup truck or is going to rent a U-Haul, and then some people just took it themselves. But if you’re delivering it, you got to charge extra. Okay?Don’t miss out on the extra cash.

Tony:
Well, I don’t want to turn this into a couch flipping episode, but I am just curious, so how were you sourcing these couches and then what kind of work did you have to do to get them ready for the end buyer, and how much would you typically make on one couch flip?

Ava:
Mm-hmm. So I’d say the average cost or the average profit we’d make on a couch flip was around 250. And that would take anywhere from 30 minutes to an hour because we just mainly stick to our area. So we didn’t have to drive that far or anything.
But how I mentioned how me and Ben, we both agreed to do this, but what I had him do was he mainly did the couch flips and I mainly did all the real estate stuff and that’s just, it was easier for both of us because both of our parts were essential, but we both didn’t enjoy each other’s part that much.

Tony:
So you said 30 minutes, so does that mean you guys were literally buying a couch on at two o’clock and then reselling to someone else at 2:30? The same exact couch with no changes to it?

Ava:
So we have sold many couches without cleaning them because sometimes I say we clean them, just to sound like a better person, but sometimes it wasn’t necessarily, it’s sold in 30 minutes, it was just the time that we were actually working was probably 30 minutes added up altogether.

Tony:
Got it, got it. That’s so cool. We’ve been talking about this for a while as having a side hustle episode where we talk about all the different ways, people can side hustle their way towards their down payment.
So Ava, you and Ben used couch flipping to fund your 50% of the down payment in the closing cost for that first real estate deal.

Ava:
Yeah. And it’s super effective because we in the end, were able to raise our half, which was 20K in three months.

Tony:
Wow.

Ava:
Which is great, especially if you’re a teen. I mean, it’s just such a great way to raise money.

Tony:
We got to stop there for a second. Because there are so many adults who can’t save $20,000 in three months, and the fact that the two of you as teenagers were able to do that proves that there is no excuse as to why someone who has a car, a job and the means shouldn’t be able to replicate that same thing. So I am so incredibly happy that you guys shared that story.
Ava, so I also want to talk about the cold calling piece because you said you were up before school, cold calling and after school doing all this work. So cold calling can be a very nerve wracking thing for a lot of people. You’re calling on strangers that have no idea who you are. So how did you, I guess, learn the ropes of cold calling and what did your script kind of look like as you started to make those phone calls?

Ava:
So how I crafted my script was I just went on YouTube and just watched a bunch of people’s videos explaining what they say, why they say it. And then with that I just took a bunch of pieces of theirs and kind of just made my own. So that’s how I made the script.
But of course with cold calling, I was so nervous in the beginning and honestly still today. If I ever jump on a Mojo Dialer session to go cold call people, I’m still shaking for the first hour. But just imagine 15-year-old on the phone like, “Hey, can I buy your house?” Yeah. So it was definitely a nerve-wracking experience and I definitely would say cold calling is not fun to anyone unless you’re really strange.
But it was more just mentally, that was probably one of the hardest things I did, especially because you’re getting rejected thousands of times before you actually get your first deal. Some people say terrible things and I understand you’re kind of probably bugging them, but you still don’t need to say bad things.
But I’d say it was just probably, it kind of made me grow up in a sense, real estate in general made me grow up at a teenager and it made me more of an adult. And I’d say cold calling was especially one of those things because you have to feel out the caller, who you’re calling on the other end of the line, how they’re feeling, what you should say. If it’s a sensitive, if it’s a probate call, you got to be really careful on how you say anything. So cold calling is definitely a skill that takes probably years to master.

Ashley:
Okay. So let’s go into that journey you’ve decided with your boyfriend, you’re going to buy a property you’ve saved up for the down payment. Walk me through that decision to purchase a property together, and then what did that kind of look like to find the property and how did you decide on what strategy you were going to do too?

Ava:
So originally we were going to wait till we’re 18 just because we’re not old enough to get a loan. And we weren’t really exploring co-signing or anything quite yet, but we both have severe ADHD and we’re like, “Okay, we got to start now. I can’t wait.”
So that’s initially just how we made the decision and just our goal in general, like any other couple is we want to build wealth together and we’re just so passionate about it and we love doing things young. I mean, just doing business young and doing cool things young. So honestly, that decision, it wasn’t hard.

Ashley:
Was there anybody that doubted you guys, like, “You guys can’t do this, you’re too young.” Or, “Don’t buy a house together.”

Ava:
Literally everybody.

Ashley:
How did you overcome that?

Ava:
Honestly, it wasn’t necessarily overcoming it. It was kind of just blocking those people out. And it was surprising by how many, even family members didn’t even believe in us and obviously our friends thought we were crazy.
And as I said earlier, it’s not necessarily overcoming it, it’s just blocking those people out because at the end of the day, you know yourself the best and if you know you can do something, you can do it and you shouldn’t let other people’s opinions affect you.

Tony:
Ava, I’m curious because one of the biggest challenges for new real estate investors is the lack of community, where it feels like you’re kind of on this island by yourself. And I wonder, did you and Ben feel that same feeling of being alone? And if so, did you guys take any steps to try and find that community of other real estate investors that you could connect with?

Ava:
Definitely just being so young, it wasn’t something we could talk to our friends about ever or even our families because none of our families have invested in real estate. But I definitely say we found a lot of people at our local REIA, which was nice, but again, you only meet with them once a month.
So you have to go out of your way to ask people like, “Hey, do you want to meet up for lunch this weekend?” Or, “You want to go check out this property together?” So yes, it’s super easy to feel alone, but you yourself have to go out and find that community because it’s always there in every single market.

Ashley:
Okay. So you guys are still going forward, you’re blocking everybody out. How are you going to buy this house when your not 18, you can’t get a loan, I’m assuming you probably don’t have any kind of credit history at all.

Ava:
Yeah.

Ashley:
Yeah. So how did you guys do that?

Ava:
Well, actually we again, decided to go with our parents and get a loan with them and then also split the down payment, closing cost, repair cost. So I guess that’s how we went about that.
And as actually for the credit, something that anyone can do for their kids or if you’re a teenager listening to this, I actually do have a credit score even though I’m not 18 yet. It’s because I became an authorized user on my parents’ credit card, and essentially when you become an authorized user on someone’s credit card, you get their credit score.
And so you have to make sure you go with someone who has good credit, but you don’t even have to, you have a credit card, but you don’t have to spend anything on that credit card.

Ashley:
So with this partnership with, is it both of your guys’ parents then?

Ava:
No, it’s just mine.

Ashley:
Just yours. Okay. So it’s the four of you. And then how did you work that out on the mortgage? Are your parents just on the mortgage? Did you guys do any kind of written documentation? What does the kind of partnership look like? Who’s responsible for what?

Ava:
Yeah. So basically we had them put their names on the mortgage, just because obviously you have to be 18 to have your name on a mortgage. But we actually did transfer our property into an LLC, which I do want to say the due-on-sale clause is a thing, so that’s not me advising you to do that but we took the risk, we’re good so far.
So my parents are members on the LLC because again, you have to be 18 to actually have your name on that. But on my birthday I’m getting a call from my attorney, it’s scheduled to have my name switched on the LLC and me and Ben will become the members.

Ashley:
Can you explain that a little more, the due-on-sale clause and what that process looks like of buying the property in a personal name, getting the mortgage and the personal name, and then going and switching it into the LLC and just what are some of the pros and cons of doing that?

Ava:
So we always kind of wanted to buy in an LLC, but obviously the terms are more favorable that you can get on the loan if you buy it in someone’s personal name. So we did is we had, my mom and dad get the loan and so it was in their names, but then we decided to create the LLCs with our attorney after. And the attorneys can handle the whole switching the name process and they can handle that, but the risk is of course the due-on-sale clause.
And I’ve heard maybe one or two times where it actually has gotten called on, but they were able to resolve it with an attorney, but again, that’s not me advising you to do it. I’m sure there’s plenty of horror stories to do with that.
But essentially what the due-on-sale clause is, if you switch it over and the bank finds out, they can say, “Oh, all of your loan is due. In the next 30 days, you have to pay it over.” So essentially if you get caught, you might have to pay the rest of the loan in full, right then and there.

Tony:
Yeah. I think Ashley and I both, a lot of people have heard the due-on-sale clause. I personally have never met anyone that’s actually had that triggered, and I’ve known quite a few folks that have moved tattle over to LLCs. But like you said, Ava, it definitely is a concern. Might I just mention that you handle that appropriately.
Ava, I want to dig a little bit more into how you are splitting up the duties and responsibilities on that first deal. So obviously your parents helped with the mortgage application and 50% of the capital that was needed.
What about actually finding the deal? Sounds like you guys found it through your cold calling, but everything that comes after actually owning the property, how are you guys splitting up those duties and responsibilities?

Ava:
Just because my parents have obviously closed a house before, they were kind of right at our side teaching us and showing us, every time they had to sign a document, my dad would call me downstairs and be like, “Okay, Ava, watch me sign this document and you’d explain what it is.” So it’s honestly super helpful just having someone who’s actually bought a house before, and so he was a huge helper on showing me how to sign everything and just all the process that comes with it.
But when it came to pretty much everything else, calling the insurance company, making sure that’s set up and figuring out property management and stuff, that was all me and Ben, because obviously they haven’t invested in real estate before, but I’ve read all the books, so that fell all on us.

Tony:
Yeah, I love that. And people ask all the time, “Tony, Ashley, what’s the right way to set up a real estate partnership?” And our answer is almost always the same, where there is no right way or wrong way as long as both sides are happy.
And it sounds like for your partnership with your parents, it was more so they were bringing the capital in a little bit of the guidance, but yet you and Ben were doing all of the legwork. And even if that’s not a parent and a child relationship, but just two separate investors, that could still very much be a win-win situation. And there are countless partnerships that have that exact same structure.
So many properties in my own portfolio, I have partners that brought all the capital and carried the mortgage, but we found the deal, we set it up, we managed it long-term, we split the profits down the middle and everybody’s happy because all they had to do was sign some docs and wire some cash and we did everything else for them. So it definitely can be a win-win situation when you set it up the right way.

Ava:
For sure.

Ashley:
One question I do have is, what would be your advice if somebody is in your position and they want to pitch to their parents this investing idea? How should they present it to their parents? Maybe they’re unsure that their parents would actually say yes.
What’s some advice you can give that maybe you notice when you talked to your parents about this that they were eager to go ahead and help you with this?

Ava:
Yeah. So of course, again, I’m so thankful because I have super supportive parents, but essentially what me and Ben did was we created a slide deck basically explaining start to finish, how we would find the property and then after the fact what work we would do and what would we need them to do and how the numbers would kind of work.
But it really closed the deal once we actually found the property and showed them the numbers, that’s when they fully agreed, to work with us because obviously at the end of the day, the deal then the money they’re going to make is the most important thing.

Ashley:
And the fact that you wrote it down and you showed them too, and it wasn’t just like, “I know what I’m doing, I know I can do this, I’m just talking.” I think really showing them the numbers and breaking it down is really great.

Tony:
And Ash, I think that’s a valuable lesson for all of our rookies. If you’re looking at raising capital from someone else, obviously if it’s someone you have a really good relationship with, maybe you don’t need to do this.
But if it’s someone that’s maybe a newer connection, giving them something tangible to read, digest and understand, really helps them grasp both the value that you’re going to bring and the value that they’ll get out of partnering with you on that specific deal. And Ash, I mean you’ve talked about yours before, but you did a presentation for your first partnership too, right?

Ashley:
Yeah. So I used to make these binders. I’ve physically print everything out, put them into a binder when for private money or for partners and it’d be my deal analysis, BiggerPockets, calculator reports, everything. And I’d give them a binder and me, a binder and we’d sit there over coffee and go through it all. And now you can just email stuff, but I just thought it was more efficient to hand these old guys a copy of the binder to go through.
But also thinking about that too is who is the person that you’re delivering that pitch, that speech to too? What’s easier for them to understand and comprehend a physical copy of something, actually seeing it and visualizing it. Maybe it is them just hearing it and you talking about it, or maybe it is sending them a Google Drive folder with all of the information in it and them sitting down at their own time going over it.

Tony:
Ava, I’m curious, have you used that same pitch deck for any other opportunities or was it just that one time with your parents?

Ava:
So that specific pitch deck I only used with my parents, but when I did acquire my short-term rental, I pitched to a bunch of different investors with a new slide deck I made.

Tony:
Interesting. Let’s talk about that a little bit. So you guys obviously do well with this first deal and then you stumbled upon the second property. So tell us about the second deal. How’d you find it? Was this another off market deal? And walk through how you kind of put the financing together to close on this one.

Ava:
Yeah. So actually for this one, I’d love to go step-by-step on how I acquired it and the whole process that it’s applicable to anyone. So teenager or not, you can do this no matter what your age is or how much money you have.
So I guess going into the second deal, since it was new asset class as a short-term rental, I needed to educate myself. And whenever I do go into a new asset class, I always find the best book that everyone recommends about it. So in this case it was Short-Term Rental, Long-Term Wealth by Avery Carl, which is a BiggerPockets book, I swear I’m not biased. It was so good.
She talks about how to acquire the property and then after the management side of it, and then I also went on to YouTube for education. And you have to be careful on social media because a lot of the people who are posting about real estate in general, specifically tend to, it’s sometimes they’re more about the money than actually offering people value. So you have to really seek out the people who are providing value over money. And there’s two YouTube channels that I love.
So Tony, I’m going to pretend you’re not here, but I love Tony and Sara’s YouTube channel, The Real Estate Robinsons. I swear this sounds so biased, but it’s not. But I love their videos and I think my favorite video was the messaging template video you did for the automatic, that was so helpful. And again, that video’s not going to get millions of views, but you still posted it because it was valuable, which I really appreciate.
And then also Robuilt, so Robert Abasolo who is the co-host on the BiggerPockets podcast. So that’s step one, educating yourself. And then step two, is what I love to do is make a step-by-step to-do list of exactly what I need to do to acquire this property.
So for short-term rental, I just wrote that all out checklist form, and then I just write a date next to each step. What date do I want to find an agent? What date do I want to choose what market I’m in? So then you can be like, “Okay, in 60 days I should have a property by then.” And then the next thing I did was figure out financing. So this is where the pitch deck kind of comes in.
I made my slide deck and we actually had, me and Ben had a business class and you had to make up a business. So we did the Airbnb thing and that’s where we actually originally made the slide deck. But it was super intense because we had a business competition and 60 kids were in this class and we had to present our presentation. And if you won, you didn’t have to do any more assignments the rest of the year. And we won, with our amazing slide deck. So that was awesome.
So we use that pitch deck on people just at the REIA because there’s a bunch of investors there. And it was kind of mortifying because it’s easier to pitch to your parents than to these investors. But after about 20 people, we finally got someone to say yes, but it wasn’t humiliating. It was just really scary, especially getting rejected in person, because all of these were in person.

Tony:
Ava, I just want to pause here for a second. So you said that you pitched it to 20 people. Was this you standing on stage, pitching to an audience of 20 people or were you one by one pitching to 20 different people who said no?

Ava:
So for the one I did in class, we actually had 20 business owners come in and we pitched to them. And then when I did it just for my own personal Airbnb reasons, I pitched it to 20 people separately.

Tony:
So I want to talk about how you initiated that conversation to pitch it to those people separately. These were people you had met through the REIA I’m assuming, but how did you actually set up the call to say, “Hey, I want to pitch you on this next deal that I’m working on”?

Ava:
Yeah. So first I just went around the REIA, I asked around and wrote down who all the investors were, got their business cards or information. And then individually I would just reach out, set up a meeting, reach out, set up a meeting, because honestly, I didn’t want to set up more meetings than I had to.
So I do one by one, which is kind of tedious, but after a couple months I finally got someone to say yes. So this wasn’t something that happened in a week. It took a while.

Tony:
So one theme that I’m noticing, Ava, is that you have a very high level of determination and you do well with rejection. That first deal that you and Ben got from cold calling, how long did you have to cold call before that first deal came through?

Ava:
Yeah. It was five hours every day for three months.

Tony:
Five hours every day for three months. You talk one-on-one with 20 different investors and hear no, but yet you keep going to find that 21st. There is so much value in that little nugget of the episode alone because there are so many investors or aspiring investors who after that first, not even the first rejection, just the thought of that first rejection, they’ll stop or they won’t move forward or they won’t take that action because they’re just afraid of that first rejection.
You got rejected for three months straight, for 20 conversations straight, but you didn’t let that stop you. So I’m just so incredibly happy that you did move forward because that is such a big lesson for our rookie audience.

Ava:
And something interesting about that, is I’ve started other businesses other than real estate and getting rejected so much in real estate and then moving to marketing and other businesses, real estate is honestly, I think it’s the best business to start because you have to market like crazy to get a deal. But if you take that same amount of marketing you did into a different business, a lot of the times it is so much easier.
I did not realize how much you had to, I wouldn’t say harder because that sounds discouraging, but real estate, you have to try really, really hard to get that deal because a deal is life changing.
I mean in other businesses, if you market and you get a client it’s not necessarily life changing. That’s why it should be hard, but just applying it to other businesses, it’s crazy how real estate has still helped me so much in business in general.

Ashley:
That’s really cool to hear, and that’s interesting as to that progression of taking things that you’ve learned from one business and easily implementing them to another business instead of like, “Okay, this is a whole different industry, I’ve got to start from scratch again.”
And really taking those tools and I think that’s what a lot of our listeners have to realize are things that you’re doing in your nine-to-five W2 job that you may hate now. There’s got to be at least one thing you can take and implement it to give you that leg up, that advantage in a real estate business.

Ava:
Also, to mention the financing we did for the short-term rental, this is what I pitched in the slide deck is, it’s kind of similar to what I did before. Avery Carl mentioned this in her book, but it was essentially taking the down payment, the repair costs, the closing costs, adding that big chunk of money together and splitting it.
So that’s kind of the same thing we did. But we’re the investors, they would get the loan, so the money partner. They would get the loan and they would pay all that money up front, including our half. And then us, we are the sweat equity partners. We would do all the work to all the management, get the things set up, and then we’d take any profit that we made from the Airbnb and start paying down our half.
And we got this in last May, so we’re almost done paying off our half with all the profit, but once our half is paid off, we’ll revert back to splitting. We’ll revert back to splitting the cash flow 50/50. But the reason I say anyone can do this is because we don’t have any money in this deal and we use partners so it didn’t really matter our age.
So that’s why anyone can do this method just with that partnership. I’m not saying this, it was a very hard deal for define for that reason to make this partnership work, but it is possible and it does show that anyone really can do this.

Tony:
Yeah. That is so incredible, Ava. There’s so many investors who don’t necessarily have all the capital they need to grow their portfolio, but you’ve just displayed in an incredible way, that as long as you focus on building your network and providing value to other people, there’s a good chance you can find someone that has the capital to fund your deals.
And the structure you use, it’s another great way, right? It’s like the first deal you did with your parents. It was just kind of you put up half, they put up half, you guys split everything half. This deal, this other partner brought everything to the table, but you worked out a way to repay them with the cash flow.
There’s so many creative ways you can structure a partnership to still make it a win-win. Just out of curiosity, Ava, where’s that short-term rental at? What city in? What city is it in?

Ava:
Yeah. So that actually kind of leads to my next step, which is choosing your market. So I know you have one there, but I have one in the Smoky Mountains of Tennessee. And the reason we chose that market is there’s so many reasons.
First off, the policies were great. The economy relies on short-term rentals there to make money and then also the price, so it’s gotten really competitive, we’ll just say that. But we were able to get a deal that made the numbers work.
So you got to make sure the average daily rate along with the medium home price and the occupancy rate, you got to make sure that works. So using sites like AirDNA for example, that’s kind of where we found the numbers. And then, I’m trying to think, policy, price, what is the third P? Popularity.

Tony:
Popularity.

Ava:
That’s it. There you go.
So there’s Smoky Mountains, number one most visited national park in the US. So obviously it was a great place because a lot of people are going there and national parks, they will never die. People will always love them unless the world all catches on fire, so they’re safe. I say they’re a safer area, it’s completely safe.
But then the next step was kind of just determining the property criteria, so how many beds and baths we wanted and then for the Smoky’s, you want a cabin, obviously you wouldn’t want a modern house there, that just wouldn’t make sense. So the cabin, number of rooms, just and also we wanted one with a hot tub already because a lot of people like hot tubs there, the guests that come. And then after that we needed to figure out how are we going to find this deal.
So we ended up using an agent and going on market. And when you do go for an agent, I recommend finding someone who has a deal on that market. The agent has a deal, and no short-term rentals in that market because it’s always nice to have someone helping you and confirming like, “Oh, this would make a great Airbnb.”
And then the next step is honestly just finding the deal. And basically I think, trying to think, my goal was just to find a deal before I turned 17 and we got it under contract three days before I turned 17. Sorry, I did it, but it took probably two months of waking up early every day, checking out the MLS, analyzing a bunch of deals before we found the one where the numbers were right.
But after that, after you closed, it’s basically just setting up the property, getting it automated with all the apps and softwares. But that’s pretty much start to finish, how we did it.

Ashley:
I just want to say, and Tony and I have a separate little chat thing that we do, as to who’s going next or whatever we did or what should we talk about and we’re in there just hyping you up. It’s, she is explaining, analyzing a market better than some of our grown adult guests. Come on here. This is amazing. So would you be interested in talking deep into the numbers on one of the properties?

Ava:
Yeah. The one I probably know best is my first deal, the long-term rental.

Ashley:
Okay. Let’s go into that. I’m going to spit some rapid fire questions at you and then you can kind of go more into the story of how that worked. So what was the purchase price?

Ava:
So the purchase price was $175,000 even.

Ashley:
Okay. And what market was it in?

Ava:
It is in the Greater Milwaukee area.

Ashley:
And this was you did a mortgage with your parents on it?

Ava:
Correct.

Ashley:
And what kind of mortgage was it? Was it the 30-year fix, conventional?

Ava:
It was an investment, I believe it was an investment property loan. It was 25% down and the interest rate was four. Looking back, we probably could have gotten better just because when we bought it was at the time where interest rates were like three. But my dad was honest, he said it was an investment property, so that’s kind of loan we got.

Ashley:
Yeah. Well that’s not a bad thing at all. And then is it fixed for 30 years?

Ava:
Correct. Yeah.

Ashley:
Yep. Okay. And then how did you find this deal?

Ava:
So again, B found this cold calling. I will give credit to Ben. It was his cold call that got the deal. He’ll never let me forget it.

Ashley:
There you go, Ben. She gave you credit. Okay. And then what was the rehab needed on this property?

Ava:
So actually this is super interesting. So the property is over a hundred years old. And while this deal was off market, we still worked with an agent to close it just to make sure we’re doing everything right.
And when we got the inspection report back, the agent said, “This is the best inspection report I’ve ever seen.” And the house is a hundred years old, it needed $200 in repairs. It was crazy.

Ashley:
Okay. So you want to kind of go into a little bit. I know you’ve touched on it throughout the episode, but was there anything that kind of stood out to you about this property?
Anything that failed or that you just weren’t aware of? Something that went wrong? Huge success. I mean, I think only having $200 in repairs for the property was a great success. And then also kind of wrap it up with what your cash flow is.

Ava:
Yeah, of course, so I guess we can just go right into the numbers. So it was already a rental previously, so we had inherited tenants and essentially since it was 25% down, our mortgage was a little bit lower, but the final numbers look like this. So it’s a duplex. So there’s two units and our final rent, our rental income is around 2100. Our mortgage payments plus expenses, insurance taxes is around 1500.
We do not have to pay any of the utilities just because our market that we’re in, it’s just law. You don’t have to do that. You have the tenants pay it. So we have about $600 a month in cash flow and then we split that in half with my parents. So we each get 300. And something about this deal is, that’s kind of funny I guess, is me and Ben decided to take on the property management role of the property. And just at the end of the day, being 16 and being a landlord, no one takes you seriously. So that lasted about two weeks.
So we were inheriting tenants and we had one encounter with them because their lease was ending, so we had to renew it. And so I just remember that day getting ready, I put on a suit, put on makeup to myself look older, I’m literally with the suit. I wore sneakers, so I don’t even know what I was trying to get at here.
But I remember getting into the property, my hands were shaking, clammy too, I was sweating. But we sat at their kitchen table and I’m going through this rental agreement that we drafted up with our attorney and getting to the expectations and the rules part, and I’m getting through these so quick because I just want to get this over with.
And I started saying, “Oh, there’s no smoking in the property.” And then as I say that, I literally, my ice dart to the ashtray on the table and it was the most awkward experience for my life. I was staring at the tenants, staring at the ashtray and it went silent. Let’s just say they did not sign the lease. They’re not our tenants. We never continued that with them.

Ashley:
So what happened? Did they move out the next day?

Ava:
Okay. So their lease expired in two weeks. So we basically, I just didn’t know what to do. So I just kept reading the rents for agreement. And then originally we were going to have them sign it there, but I just left it at their house. I’m like, “Yeah.” And let’s just say they ended up moving out.
But never again, we hired out property management and I do not regret it. Honestly, it’s been so seamless because we interviewed a bunch of people, but it was mortifying.

Ashley:
So did you include a property management fee when you ran your initial numbers on it?

Ava:
Yeah, I did because we were going to pay ourselves to do the property management. So yeah, we did.

Ashley:
That is so smart. And that’s what I wanted to hit at, is that even if you’re going to self-manage to start, is to run the, put that number into it in case you ever decide to outsource management.
And I love that even more is when you are paying yourself to do it because you had partners, your parents, and you guys are doing the self-managing, not your parents, and it’s not fair you’re doing that for free while you’re splitting the cash flow evenly.
And any of my business partners, we did the same thing too. When I was managing, I would take an extra pay, out a cut for doing the property managing on the property if they weren’t doing anything. So smart. And then what about the short-term rental?

Ava:
For management purposes?

Ashley:
Yeah.

Ava:
Okay. Yeah, so just with all the technology and the Airbnb softwares, we personally decided to manage that and we use a ton of different softwares and literally, I probably work on my Airbnb because I only have one, it’s maybe 10 minutes a week.
We have automatic messaging, saying the guests giving them the code and the directions of the property. And we also just have automatic things with our cleaners and it’s just, it’s so nice. You just have to put in the work to do the research to figure all that stuff out. But once you do, I recommend you go that route because you don’t want to be paying 25, 30% in short-term rental management fees because it really adds up.

Tony:
Yeah. I think it’s interesting, right? I know a lot of people who have property managers for their long-term rentals, yet they self-manage their short-term rentals.
And it’s weird because you think that it would be the other way where people would be more willing to self-manage their long-term because it’s one tenant, one person. But the short-term rentals, I think there is an element because there is so much automation and so many things you can do to where it is easier to self-manage those in a lot of ways.

Ava:
It is.

Tony:
That’s awesome. And sorry, I know you mentioned this, but can you just restate it one more time? What’s the cash flow that you guys are getting now after the management fees on the long-term rental?

Ava:
On the long-term rental, we’re getting about $600 and then we split that 50/50, which 300 each.

Tony:
Not bad. Not bad at all. Cool.
Well, anything else from you, Ash on this deal or should we hit the exam next?

Ashley:
Yeah. I think let’s go to the exam. So we have three questions for you today, Ava.
The first one is, what is the one actionable thing rookie should do after listening to this episode?

Ava:
I would say, first, you need to determine an asset class you want to do, and then you need to educate yourself on it and make that step-by-step checklist. Because once you have that checklist and it’s so much, because it seems so crazy when there’s a whole bunch of things, you’re like, “Oh, I have to do this, I have to do this. I’ve talked to insurance people.” But if you just lay it out on a checklist step-by-step in front of you, it cancels out all the noise because all you have to focus on is that next step. And if you have due dates by it, it’s great for setting goals.
So I recommend just figuring out what asset class you want to do and just choose one, whether it’s multifamily Airbnbs, arbitrage, anything, and then make that checklist with a step-by-step, actionable steps that you can take.

Tony:
Love that answer. All right.
Question number two, actually before I ask this question, so did you graduate from high school already, Ava?

Ava:
So technically I should be a senior, but I graduated my junior year, not because I’m extra smart, but just because I took the credits I needed to on time.

Tony:
Got it. All right.
So my next question then is what’s one tool, software app or system that you use in your business?

Ava:
So the one software I choose would be Guesty, it’s basically an Airbnb, it’s a system that covers pretty much everything for your Airbnb. It has automatic messaging on there. You can connect your schlage lock to make new codes for each guest on the door lock.
It’s just an all-in-one platform where you can see all your bookings, because let’s say you have a listing, you can post on Airbnb, but you can also post it on Vrbo and all the other booking platforms. And it will basically give you an overview of all those platforms together in one.

Ashley:
Okay. And our last question is where do you plan on being in five years?

Ava:
So I, right now have another business that has to do with helping people build their personal brands with short-term content on social media. So right now I’ve been super honed in on that business to get capital for bigger multifamily deals, because after exploring a bunch of the asset classes, I realized I don’t like flipping. My heart lies in multifamily and it will forever ever.
So I’ve been basically just trying to hoard money to buy those properties myself this time because I love the idea of using investors, but it’s a lot less stressful when it’s just your own money because I never ever want to lose someone else’s money.
So basically I’ve been focusing on just building up a lot of cash for that. But then also at that point, I think my biggest goal in life is to be buying businesses, whether they’re real estate businesses or not. At the end of the day, cash flow is cash flow and I think buying businesses is a really great way to do that.

Ashley:
Hey, awesome.

Tony:
All right, cool. So before we wrap things up, I want to give a shout to this week’s Rookie Rockstar. This week’s Rockstar is a name you might know. So if you’re active in the Real Estate Rookie Facebook group, you 100% know this name. He’s also a previous guest. I always forget his episode number, but you can look him up.
But this week’s Rockstar is Kevin Christensen and Kevin says, “This is what it’s all about. Ricky’s my 19-year-old daughter and her 19-year-old husband just closing their first investment property. At 19 my wife and I were horrible with money. My wife and I didn’t buy our first investment until we were 36. I cannot imagine where my kids will be at 36, armed with the knowledge that they’ve gained over the last few years.” And that he’s super proud of them.
But he finished it off by saying, “Never have I more felt the old adage, feed a man once and he’ll eat for a day. Teach a man to fish and he’ll eat forever.” All right, so Christian, Kevin Christensen. We love that man. And congrats to your wife and your son-in-law for that amazing first real estate deal at 19.

Ashley:
And Kevin’s episode was episode 51, if anyone wants to go back and take a look at it.
Well, Ava, thank you so much for coming on to the episode with us. We really appreciate it. Can you let everyone know where they can reach out to you and maybe ask you a couple questions?

Ava:
Yeah, of course. So on every social media I’m at @avayuergens, that’s A-V-A, and then the last name is Y-U-E-R-G-E-N-S, and that’s Instagram, TikTok, YouTube, everything.

Ashley:
Okay, awesome. Thank you so much. You definitely brought a lot of value to this episode and I hope everyone learned a lot, but talk about a huge inspiration and that’s what I love so much about being a host on this podcast that after these recordings I get so motivated and inspired. So thank you so much for sharing your story with us.

Ava:
Thanks for having me, guys.

Ashley:
I’m Ashley, @wealthfromrentals and he’s Tony, @tonyjrobinson on Instagram, and we will be back on Saturday for a Rookie Reply. (singing)