Description

As real estate investors, how can we best prepare our rental properties and tenants to weather uncertain economic storms like the one caused by the coronavirus pandemic?

On this episode of the podcast, Liz Faircloth joins Angel Williams to share her experience as a real estate investor managing rental properties during difficult times. Liz provides advice on building financial reserves, proactively communicating with lenders and tenants, and learning from mistakes.

Liz was born and raised in a middle-class family in New Jersey where her home was filled with love but going out to dinner was a big deal. From an early age, she has always wanted to serve others and even went to graduate school to become a social worker. While studying to become a social worker, her brother-in-law handed her Rich Dad Poor Dad, which changed the trajectory of Liz's life forever. Over the next couple years, she started learning as much as she could about real estate investing. After a year of taking courses and hundreds of attempts to get an offer accepted, Liz's boyfriend at the time (now husband) purchased their first investment property, a duplex, with none of their own money since they did not have the funds. Liz is also the co-host of The Real Estate Investher Show, a podcast all about real estate investing strategies that empowers women investors to become financially free.

(00:00:00 - 00:02:30) Building Reserves and Planning for Expenses

• Budget properly for expenses like capital expenditures in your projections
• Have reserve funds available, especially for older properties
• "We failed to pay ourselves first or have adequate reserves" Liz expands on paying yourself first.

(00:02:30-00:07:14)Securing Financing and Managing Vacancies

• Secured financing despite only 50% occupancy by having renovation funds and a turnaround plan
• Multifamily helps spread the risk compared to vacant single-family homes
• Plan to work with tenants on rent relief or concessions if needed

(00:07:14 - 00:10:15) Defining Capital Expenditures

• Renovations are one-time upgrades to prepare a unit for rent
• Capital expenditures are major intermittent costs like roofs
• Maintenance is ongoing upkeep and minor repairs

(00:10:15 - 00:14:26) Commercial Properties and Working During Crisis

• Many commercial tenants like lawyers and contractors need office space to operate
• We hope our tenants can weather this but are preparing for potential issues
• Communicating proactively with all stakeholders is crucial

(00:14:26 - 00:19:00) Timing New Purchases During Market Uncertainty

• Focus on deeply studying your target real estate market before buying anything
• Existing owners are focused on stabilizing assets not buying more now
• Capitalize on opportunities that emerge later when you understand the market

Quotes:

"I felt like we just developed a nonprofit for many years where I was just working for free all the time." - Liz Faircloth

"Keep failing forward. That's what I would say." Liz Faircloth

Connect with Liz:

https://www.therealestateinvesther.com/our-story

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