EP64 Family Roots and Rental Returns with Jacquelyn Duke

[00:00:00] It's so intimidating, I think, when you get into these, listening to podcasts and getting on the websites. And before you know it, you think you have to buy a 10-unit apartment building to be successful. You just can't do it without all these barriers to entry. And I am here to say that is so untrue, so untrue. There are so many ways to be successful in real estate investing, and there's not one right way. From cornfields to high-rises, office to industrial, houses to hotels, and every other asset class in real estate,

[00:00:29] we cover the people, the projects, and the profit. Welcome to the Investing in Iowa Show. This show is for go-doers, action-takers, and business owners. It's for people like you who are sick of Uncle Sam taking a huge bite of your apple. If you're looking to get ahead of what's taking place in Iowa, learn who is doing what and how you can get in on the action. You're in the right place. I'm Jack.

[00:00:54] Hosted by Neil Timmons, an Iowa native who has been involved in over $300 million in real estate right here in Iowa. Recording in studio from West Des Moines. Here's your host, Neil Timmons. I've got Jacqueline Duke here on the show. Jacqueline, welcome. Thank you. Thanks for having me. I'm excited you're here. Stay for the audience to say, who are you? Where are you from? What do you do? Sure. I'm Jacqueline Duke. I am a residential real estate agent with Realty One Group, and that's my full-time career.

[00:01:23] But my more important job is I have three kiddos ages 14, 11, and 5, and I'm happily married. You are busy. Yes. Yeah. Very busy. Talk to me about where you grew up and then walk me through the journey about how you landed in real estate. I feel like most realtors have a pretty meandering journey to answer that question, but I love talking about it. I feel like my journey totally prepared me for what I do.

[00:01:50] In hindsight, I just feel like it was ordained, and I'll tell you a little bit about why. I grew up on a family farm just north of Ankeny. It's now been totally absorbed into the boundaries. If anybody knows what Ankeny is doing, understands that, growing very heavily to the north and actually every direction. Our family farm, Great Grandpa, established in 1942. It was on what is now 36th Street, interstate exit. And just telling those details so people in the area can kind of appreciate the development that we've seen.

[00:02:21] When I grew up, gravel road, cornfields in every direction. You know, I could see Ankeny, twinkling lights in the distance about two, three miles away. I went to Ankeny schools. I had a very unique experience as the only farm kid out of 400 kids I graduated with. But we still are. My family still is full-time, you know, legit farmers. That's what we did. So that's a little bit about how I grew up. That's incredible.

[00:02:50] Especially, a lot of people come on the show and they're from farms, but nobody said they're from the farm down the street that eventually gets absorbed. And now when you think about it, you're like 36. Wow. Yes, exactly. And honestly, it really played into the future career I got into because I kind of have a joke nowadays. You know, I quickly learned that if you can't stop it, you got to join them. You know? True. Are you going to be on the train and get run over or are you going to jump on the train? And I kind of feel like I didn't do it on purpose, but real estate's jumping on the train. You can't really change what's happening.

[00:03:20] You might as well get in there and be part of it and be part of the decisions. And I think that's worked really well for our family. Okay. So you grew up on the farm. You go to Ankeny High School. You graduate there. And then what? Never thought I'd stay in Iowa. Yeah. I was that classic kid. I got to get out of here. I loved travel. You know, it started with Grandpa getting me the National Geographic subscription in sixth grade. And I just look at all these beautiful places around the world and think, I want to go see it.

[00:03:49] And I want to see it all. So I had my first opportunity in high school. You know, I participated in the Spanish exchange program, went down to Mexico, loved it, thrived. And then I had an incredible chance to go to India when I was 16. And I went by myself, lived there for an entire summer. And I was an intern for the World Food Prize. Those of you that know, it comes into Des Moines every year, draws people from all over the world.

[00:04:16] It's the equivalent of the Nobel Peace Prize only awarded in agriculture. I think I probably got the chance to do that through Ankeny High School because I was the only farm kid. I kind of joke. And they didn't have a lot of people pick them. But that's how I did that. And that passion for travel launched me into going to Central College in Pellett, Iowa. Not as far away as I expected. But they had incredible study abroad programs. And I got a full ride there and said, that's what I'm doing. Wow.

[00:04:46] Now, do you have siblings? I do. I have an older sister. She is an agricultural engineer. Worked at John Deere for many, many years. And she actually is full-time farming with my father now. Okay. Yeah. So just one sibling? Just one. Yeah. Yeah. Interesting. Okay. So in India, where were you in India? I was in Chennai. It used to be called Madras. That was the British name. Yeah. And I was way down in the South.

[00:05:14] You go to Central College and you study abroad. Where do you go? I studied two places. So, well, I actually had three majors at the time I started. And I completed two majors and a minor. My international political science was my main degree in my mind. That was my passion. Then I had a Spanish degree. So I studied in Spain for one semester in Granada. And I also was supposed to have a French major. I had all the classes and coursework for it.

[00:05:42] But they tell you after you've been abroad twice, you probably shouldn't go again. We need you to stay on campus. So I would have had a major, but I ended up having a minor in French. And I graduated a semester early since I kind of had done everything I needed to do. Yeah. Yeah. And then what do you do? After that, I took a position in Washington, D.C. I was with one of our Iowa senators. I was really lucky to get that job. Incredible opportunity. Again, it was right in my major political science.

[00:06:11] And my long-term goal at that time was still really wanting to get into international development. I wanted to build on the things I had seen in India. I had actually studied in India microfinance, microenterprises, self-help groups, you know, that classic trying to save the world. Right. Right. Yeah. When you're young and idealistic. Yeah. So how long were you in D.C. then? I was in D.C. for just a year. And something really shocking happened as soon as I moved out there. I think it was less than a month. And my father had a heart attack.

[00:06:42] He's fine. I'm happy to report. Still farming. But at that time, it was really rocked me to my core. I kind of had an attitude up to that point. I'd studied abroad. I'd done these things. And you know who was always there when I came home and never changed? Mom and dad. And I had that kind of young person's attitude that they'll be waiting and life doesn't change at home and they'll always be there.

[00:07:07] And when he had that heart attack, it was on his 48th birthday, which is so young. Yes. And I realized, do I really want to spend the rest of my life away from them? And it took some deep soul searching to think. For me, you know, everybody has a choice. But for me, I didn't want my future kids to see my parents twice a year. I wanted them to see them every Sunday or more. Yeah.

[00:07:34] And I felt obligated to finish what I committed to. I wanted to give a solid year to the senator, which I did. And I got a lot out of that experience, incredible experience out in D.C. But that is why I came back to Iowa. Yeah. So you came back and then what? Well, it was kind of a little bit of a crisis of where am I going to go from here? I'd had all these plans. The resume looked great.

[00:07:58] I had applied to several law schools and was accepted, but I had missed the start because this was around October. Yep. So I did defer at one of those, thought maybe I'll still go to law school, but I got to do something in the meantime and support myself. So I got a job at Meredith Corporation as a paralegal. And I actually was there for almost six years. It was a really great place to work.

[00:08:21] I had an incredible boss that truly mentored me, not just in the job where I was able to really learn contracts and getting comfortable with legal language, which plays into my future real estate career. But I also had someone that was really, I don't want to say a father figure. He wasn't quite old enough to be that, but maybe a big brother kind of figure. Just really looking out for my overall career development and, you know, just life experience.

[00:08:51] So, yeah. Six years there, I can imagine you learned a lot in that space. I did, but I also learned that I wanted more. The only way to really move up from a paralegal position is to be a lawyer. And I quickly learned I wasn't going to go to law school because I didn't want the debt. I had done a lot of thinking about this and I graduated from school with zero debt. That was very important in my family.

[00:09:16] I come from a pretty fiscally conservative family and I worked so hard to get that scholarship and to not take on that burden that law school, for me, I also wanted children. And, you know, a lot of people don't talk about this. They feel like you're not supposed to. But especially as a woman at the time in my mid-20s, I knew I wanted to see those kids. And if I went to law school, I wasn't necessarily going to be able to see them as much as I'd like.

[00:09:45] And, you know, we're talking 20 years ago. I'm in my 40s now. 20 years ago, there weren't a lot of opportunities for women to work full time in a passionate career and have the flexibility to see their kids. That's changing. I'm so thrilled for my own daughters that that's changing. But that was a huge part of my decision not to go to law school. So I had to figure out something else. And that boss I mentioned that was super supportive, he nurtured that desire to want to do more. He knew I probably wouldn't be a paralegal forever.

[00:10:14] And I went to Drake University at night while working full time. And I got a degree in teaching. I got a master's degree in teaching. I'd always love school. So it's kind of like, what else am I going to do, you know, if I'm not going to do international development now and I'm not going to do law school. So that's what I did. And it took a while. You know, it took four and a half years because I was doing it part time on the side. And in the meantime, life happens. I met my husband, got married, had that first baby.

[00:10:43] And by the time I needed to quit Meredith to complete my degree with student teaching, life had already started to shift. And I wasn't sure I wanted to teach full time. So it was a lot of work and I don't regret it. And I use that teaching degree every day with what I do, especially first time homebuyers. But I ended up staying home with what became my two older children.

[00:11:11] And there's another part here that's the curveball. Yeah. In the midst, like I wasn't busy enough in the midst of all of this, you know, working full time, going to school at night, having a baby. I thought I'd start a business because why wouldn't you? Sure. Yeah. So I started a business as a labor doula and natural childbirth educator. And that really just started as a passion and a hobby. I never imagined it becoming a huge business and it just exploded. So that was part of why I was able to not go straight into teaching.

[00:11:41] I stayed home with the kids. I ran my business from home. And I did that for, you know, things overlapped. But I think a solid six years exclusively. Yeah. Wow. All right. So then eventually you find your way into real estate. But what prompted the path into real estate? Why not just stay in that business you just described? Good. Good question. If it was just about passion, I never would have left. I have the best relationships.

[00:12:08] I still see and work with so many of my past labor doula and childbirth ed students. Many of them are now my real estate clients. And I'm really happy that that worked out that way. But the reason I needed to leave was the demands of an on-call schedule. It's kind of the old-fashioned doctor in the small town in the middle of Alaska. When you're a labor doula, it feels that way. Because you're usually working independently. You never know when that baby is going to come. Right.

[00:12:35] A person like me who loves to travel, I wasn't able to go anywhere, not even for a weekend. Right. Because you just never know when that baby might be there. And we had contracts. We had periods that we were obligated to be available. But it was about two weeks before and after the due date. Well, that takes out a whole month. Right. And to make a living at this, you had to have at least two, three clients a month. That's only a part-time living. So you can see where that headed. That just became really challenging to be on-call. Yeah. Yeah. So how did you stumble into real estate?

[00:13:03] My husband and I were having a deep-hearted talk about those challenges being on-call. And it was his idea. Totally give him the credit. I, at the time, thought he was crazy. He had to bring it up probably, gosh, four or six times before I even would listen to him. But he just kept saying, listen, you have built a thriving business with no business degree. You've taught yourself the ins and outs of how to market yourself, how to make it successful.

[00:13:32] You're never going to be happy sitting at a desk again. He knows me well enough. You're not going to be happy necessarily being under somebody else when you've been your own boss. And I've had a lot of flexibility with being my own boss. And he just kept thinking real estate. I think my biggest hesitation going into it was I came from something that was so meaningful. And I knew I was making a difference. I knew when I looked in a woman's eyes and she's holding her newborn child, there's nothing like it. Could I get that from real estate?

[00:14:02] I was very skeptical. But I said, you know what? We got to do something different. I'll trust you. I'll try this. I love learning new things. The barrier to entry was pretty low, in my opinion, for real estate. You know, it wasn't hard to get the license, you know. So I did it and was so pleasantly surprised that there was so much crossover. You would never imagine from a birth business. But I have held people's hands through some of the hardest things they've ever done as a birth doula.

[00:14:31] And holding someone's hand through a real estate transaction isn't that different. It's very emotional. It can have a lot of ups and downs. And at the end of the day, I'm not only emotionally supporting them. I really have always prided myself, even as a labor doula, on being data-based and being very driven by what does the evidence say? What does the research say? Let's make the best informed decisions that we can. And that translated very well into real estate. Yeah. And how many years has it been?

[00:15:00] I think I'm entering my ninth year. I just can't hardly believe it's been that long. It went so fast. Did it feel like home right when you got into the industry? Owning my own business did. To me, a lot of people say, oh, I got into real estate because I like houses. They're pretty. I watched H-F-A-Y. Right. I don't even know what to call it. H-G-T-B. It goes to show it's not my priority. Yeah. I didn't get into real estate because I love houses. Yeah.

[00:15:26] I got into real estate because I love people and I love helping them make good, solid, informed decisions. I want them to look back and feel like it was the best choice they made of their life. You said that owning your own business felt like home. I'm wondering, going back to where it began on the farm, tremendous responsibility at a very young age. I wonder if that is a thread all the way through for you. Oh, absolutely. Absolutely.

[00:15:55] This didn't, that's what felt like coming home because it was home. My parents have always been self-employed. Farming has gone through cyclical changes just like real estate does. I think, what did I hear when I first entered real estate? Is it only 20% survive the first five years or something crazy? Yeah, probably. They get to survive and then how many actually make a living out of it? Right. That's substantially less. Yeah. It's kind of that 80-20 rule again, right? Like the 20% of agents do 80% of the transactions.

[00:16:25] Those numbers didn't scare me because as a farm kid, you know, I was around the dining table talking about corn prices changing and how are we going to make it through this year when there's literally no income? But we've got to make it happen because next year could be a bumper crop. And, you know, those are normal conversations for me. And I could apply that, especially in the last couple of years. You know, things have been rough for some realtors.

[00:16:48] And I feel like I had the life skills and training that I'm so thankful for from my father and my mom, who was such an adamant support person for him to put our personal finances in a situation where we were going to be okay to ride out the storm. Yeah. At some point you decided to start buying rental property. Yeah. Tell me a little about that. When did that occur in this journey? Sure. Um, I had to be a little bit into the real estate world. Um, I think, gosh, good question. 2019.

[00:17:17] So I guess I was maybe three years in and I just always knew I wanted to do it. My husband too. He was probably the one, again, he tends to be a little ahead of me on these things, a little more adventurous. Um, but he always wanted to own rentals and we didn't have parents that did that. So I'm not really sure it came from there, but just this idea of we're in control of our investment.

[00:17:41] You know, I don't like, you know, it sounds ridiculous, but I don't like somebody else in the stock market controlling what happens with my money. Um, not to say we don't invest there as well. It's good to be diversified, but I want something that's mine and I want to control what happens with it. And if it goes downhill, it's my fault. No one else's total accountability. Yeah. Total accountability. That was how I was raised. You got your legs under, you felt good about the, the, the market, the values, understanding that. What was that first rental like?

[00:18:11] Cause there's a bunch of things you may, you may have felt good about it, but there's a bunch of things you still had to do new for the first time. Oh, I was terrified. Yeah. I was a real estate agent that sold houses to people and I was still terrified. So what's that tell you? Yeah. Um, and I was a good agent. It wasn't like, I didn't know how to look at the data, but I think one of the biggest reasons I was so excited to come on your show today. So thank you again for having me. I want to speak to the people out there listening. That might be like my husband and I, um, what I call the average normal folk. It's so intimidating.

[00:18:41] I think when you get into these, uh, listening to the podcast and getting on the websites and I think I want to own a rental, but you, you go down a rabbit hole and before you know it, you think you have to buy a 10 unit apartment building to be successful. And if you can't do that. And you need a million bucks. Yeah. You need a million bucks and you, you, you just can't do it without all these barriers to entry. And I am here to say that is so untrue. So untrue. There are so many ways to be successful, as you know, in real estate investing.

[00:19:09] And there's not one right way. Um, in this industry, people are very passionate about what they choose. I'm passionate on my path, but that doesn't mean the other paths are wrong. Right. Um, the path that we've chosen and we are so thrilled and happy with was the one that felt the most comfortable. It's what we knew. My husband and I had bought and sold residential houses for ourselves. Um, I had helped clients buy residential houses. Why not buy a single family residential house? Why not?

[00:19:38] Because you know what? If all else goes wrong, you got to have an escape path, right? I think that's just getting that first one bought is so scary that it takes some of the fear away. If you know, there's a way out, you know, if this isn't for me or it doesn't work out. And when you buy a residential single family home, you don't just have investors to sell to, which many of these multi unit properties you want out, they're going to be investors. You buy single family. You've got the entire world to sell to. There's always a way out.

[00:20:06] Um, so I think minimizing some of those fears was huge. Um, the other re of course, I can't lie. The interest rates were fabulous, you know, so that definitely played into the numbers and the equation. Um, but I also want to be encouraging. We just bought one, two weeks ago and it still made sense at 6.375. So, um, that's not a reason or an excuse to not move forward. Um, yeah, that's how we, that's how we did the first one. And then it works so well. We did it again and again and again. Hey, Iowa investors.

[00:20:36] This is Ava Bowkamp, chief of staff at Legacy Impact Investors. Have you thought about adding real estate to your portfolio, but don't have the time or desire to play landlord? At Legacy Impact Investors, we do the heavy lifting. Our team finds the deals, manages the properties, and handles all the day-to-day operations. Our select group of qualified investors co-invest with us, gaining ownership equity without opening a tenant email or responding to a maintenance call.

[00:21:03] They just share in the income, appreciation, and tax benefits. These opportunities aren't for everyone. They are for qualified, accredited investors only. If you want to learn more, please visit LegacyImpactInvestors.com to apply. Tim Ferriss has an exercise, um, and I forget the name of it, but I'll summarize it for you. Essentially, it's, uh, write down the thing that you fear and then write down what are the worst case scenarios that could possibly happen if I went down this path?

[00:21:33] If I bought this single-family home journey into rental, what's, what are the worst case scenarios? And then, what are the best case scenarios? Yes. I love it. What's my risk and reward, if you will, from, from these scenarios? And so much of it is we manifest in our own mind. Yeah. For them to actually play out as... And that sounds so much like my dad. You know, just going back to the way I was raised, my father, you just made me think of something I'd forgotten. I was sitting there analyzing that first deal. I knew I needed to get the offer in or I was going to lose the chance. And I was just scared.

[00:22:00] I was sitting at my desk in my office and I called my dad and I'm talking to him about it. And, you know, he's always been so fiscally conservative. I forget that he's still an entrepreneur. He just weighs risk. He weighs risk. Yes. He doesn't not take risk. He weighs it. And he said, just like your exercise, he said, Jacqueline, I'm going to... What if I can't get a renter? And I'm going to be out a thousand bucks a month. Right. You know, it's going to be horrible. He goes, wait a minute. Are you going to really be out a thousand bucks a month if the worst case happens?

[00:22:28] Do you think you can't get a renter in there for half the rental price? If you had to, not that anybody wants to do that, but could you get a renter? If it's a thousand dollar normal rent, could you get somebody for 500, Jacqueline? Well, duh, dad. Like, anybody would rent that property. Right. Well, then your risk isn't a thousand. Your risk is 500. And just that basic way of just settling those nerves. What's the worst thing that could happen? And then the worst thing doesn't usually happen. Right. Yeah.

[00:22:55] How did you decide on the tools you're going to use? How did you decide to rent it? How did you decide to manage it? Right. Sounds like you self-manage. We do. Yeah. We do. And we're pretty passionate about it. Yeah. We do that at the beginning. Well, that's fantastic. So let's talk about that. But what led you down those paths? And then how have you put it together today to get it to work for you? Sure. Sure. Sure. Again, trying to find the easy way. I wasn't trying to find the fanciest or the most expensive software.

[00:23:24] I wanted something that could fit into our busy lives. So I, first of all, to analyze the deal. I love bigger pockets. Sure. I know it's a popular one. You've probably heard it a million times, but that's where I send people when they're just learning and they want to dabble in this stuff. They've got some excellent calculators, some great ways to feel like you're making an informed decision. So that's what I used. Now, on that note, I want to say I am not a fan of the 1% rule.

[00:23:50] I think it doesn't apply very well in our niche market, at least not where I buy and sell. I agree. Excellent. I'm glad I didn't burn any bridges saying that. Couldn't agree more. Yeah. It's widely, largely dependent on taxes. Yeah. So many things. And actually, one of their best videos that just came out back in April, you could probably look it up. It's on YouTube. They're talking about how the 1% rule shouldn't apply anymore and we should be looking at the 10% target. Have you heard of that? No. Well, I'm sure there's another one out there.

[00:24:18] Everybody's got their own name for it, but it's essentially a way to analyze, does a deal do more than just cash flow? Because it could be a great deal even with not fabulous cash flow. Right. What about the appreciation that the home is going to see long term? What about tax benefits? What are we looking at for the equity? Your renters are paying down your equity. What other investment do you get to use somebody else's money that you're going to make money on? Yeah.

[00:24:47] I don't get to take a loan to go invest in the stock market. I suppose. Yeah. I would never do that. Right? So looking at the whole picture, because suddenly those numbers start to look a lot better than this 1% rule that's out of fashion. There's a multitude of benefits associated with buying property, buying a piece of real estate. There's no doubt about that. Yeah. Yeah. Yeah. So looking at that full picture, you know, it's something we were doing even five years

[00:25:15] ago when the market was different. As far as managing it, you asked about that. Yeah. Um, I always send my clients, my folks to the same book I fell in love with. It was from bigger pockets. It's called managing rental properties. Very easy read written in a way that's easy for everybody to understand. And it comes with several, uh, word documents of the forms such as example, leases, all those things that, you know, you want for managing it just ready to go and you can tailor them

[00:25:43] to fit your market and what you want. Yeah. What software are you using? Um, I keep it simple. I just am using Zillow rental manager. Um, I didn't start with that. I actually started by just doing a lot of it myself. I was a paralegal, so I felt pretty comfortable reviewing contracts and things. Um, like I said, I use those forms from the book to get going and then I would modify them. But I think my first couple rentals, we advertised on Facebook marketplace and it wasn't hard.

[00:26:13] Yeah. How do you screen people as they come in the door? I recall back to my very first rental, you know, some of these things that, that your, your years, certain life's over a period of years. Uh, but I remember that being a fear to go, all right, cool. If I get somebody and want to put somebody in, how do I know they're not just like terrible person or, you know, you're going to actually, Hey, right. Oh gosh, you should screen. That's one of the biggest things I will say. Don't get corners there.

[00:26:40] As funny as that sounds from what you just said, there are, there are people who it's like, hi, nice to meet you. You can move in Tuesday. Okay. Moving to, I mean, they are, there is no screen at all. I'm going to tell you the very first one we learned a lot on and even knowing what we should have done, that fear component is real. And I, um, feel like we still had great renters. If they're out there listening, definitely don't want to say anything negative.

[00:27:06] Um, they paid their bills every month, good people, but I'm putting this back on Jason. I, we did not set up, um, the minimum qualification standards, uh, that we should have. That wasn't something I'd heard of before. Um, I hadn't read that book yet. So we, you know, we didn't meet them. We did put them through somewhat of a vetting process, but we ran into some challenges that were probably just miscommunication or misaligned expectations that could have kicked some people

[00:27:34] out of the game, you know, if, if they weren't more resilient and I would hate for that to happen to someone else. So set up good standards, um, that you apply to everyone. You got to follow those fair housing laws. Um, but you get to decide where those standards are. My minimum might be different than your minimum for qualification standards. And I, uh, you know, I set a certain credit score income, um, to rent, you know, ratio. I'm not probably saying that right, but I want to make sure they're making enough to be able

[00:28:00] to pay their rent and it's okay to have those and don't feel bad about it. Um, I, as far as the tool I'm trying to remember in the early days now rental or Zillow property manager does that. So I don't have to worry about, you know, screening the background checks and things. I think I remember getting on, I work online and kind of doing a lot of that. Doing the old stuff. Yeah. Old school myself. Yeah. But it doesn't have to be that hard. You know, if you just use the Zillow rental manager. All right.

[00:28:27] So you mentioned just recently, Bob, because I, a lot of people I talked to go on, you know, these, the days are over. I can't, uh, it's so challenging and no doubt it's more challenging. Um, but there are still deals to be had. Absolutely. Absolutely. Um, again, I, I look at things a little differently. I'm not looking at cap rates because I'm in a single family market. So I'm looking at how does home compare to the other homes like it?

[00:28:53] Um, that's, that's kind of what my first metric is, is, is this a good buy just for anyone, you know, any family? Um, that, that's an, that's a nugget for you because, uh, that is an option for you to go resell when you resell. It doesn't have to be an investor. So you're, you're looking at this, the lens of a buyer in this neighborhood going, is this, is this potentially, is this an attractive home for when I go resell it for a buyer to buy it and live in it? For anyone. Right.

[00:29:22] And that's why I feel like I have a little bit more flexibility and freedom than maybe some of your other investors, because I don't need it to need a certain cap rate. I need to know that it at least maintains its value to the general public. Of course, I'd like to save on the front end some, but my husband and I's plan, and this kind of goes into everybody has a different approach. Um, we're holding, we're not sitting there trying to flip these. Um, we're also not trying to buy homes that are super dilapidated and we're going to make

[00:29:49] our money on the flip or, or on the value add, I guess you would say. Um, we do do work on our properties. We do make improvements, but we're not out there looking for that to be where our money is made. We're just improving them enough to get them rented. Yeah. That, that's what we do. That fills, that fits into our family because back to barrier to entry, I got three kids. We both have full-time jobs. You know, that's not realistic for people like us, um, to, to be doing all that.

[00:30:16] So when we're looking, we want it to be worth what it should be worth, which as a realtor, I obviously have the ability to analyze that deal. Um, to the general public, uh, I'd like to save a little on the front end. I have obviously the benefit of, I can do the work for my family. So we save on commission. Right. Um, it, not to, sometimes I wonder if the time is really saving, but sure. Yeah. Yeah. Yeah. Right. But back to, you know, you don't necessarily need to be getting this house for 70% of its market value.

[00:30:45] That probably as a realtor, that kind of drives me a little nuts when investors come to me and you're like, well, I'm not going to look at anything unless I can get 70% of the, the average fair market price. Good luck in the last, you know, seven years. That's going to be tough to find. Um, but you don't have to. If you're a house flipper, execute the burst strategy or do double closings and are in need of money. Little Guy Loans is your go-to lender here in the Des Moines area. Time is money. Loan approvals in 24 hours.

[00:31:14] Closings in five days. Little Guy Loans was founded by Neil Timmons, an investor just like you. Since he has been in over 10,000 homes in Des Moines, there's never an appraisal. Houses, multifamily and commercial property loans up to 1 million. Check out www.littleguyloans.com. Uh, I can even walk you through some numbers when we talk about that. Yeah. That target. Yes. Yeah. Yes. And I want, I want to go a little deeper.

[00:31:42] So yes, let's talk through it because I may have some questions about to get a total comprehension surrounding this 10% target. Yeah, for sure. So the 10% target, uh, again, it's just a way to kind of look at the whole deal. Uh, you're going to look at cashflow, uh, based on cash on cash calculation. Again, bigger pockets is really good at explaining that if anybody wants to look a little deeper. Um, look at the cashflow, but also look at the amortization, which is paying down the loan with rental income. Yeah. Wonderful thing.

[00:32:10] Uh, how much is getting paid down each year? Look at the value add. Are you improving the property at all? You know, I did say we do some work to ours just to get them kind of where renters would want them to be. So in our first year, we're going to have some value add on that property. Um, market appreciation. We really love investing in Ankeny and it's a more expensive market. I'm not going to get homes for much less than market value. Um, so I really like my longterm appreciation in Ankeny.

[00:32:37] Uh, my very first house I ever bought, I was 21 years old, had just come back from Washington, D.C. Yeah. Cause I had graduated early. I'm like, that's awfully young. But yeah, I did have my degree and that house I had to sell in the middle of the recession. It was 2010. Um, just life circumstances. I needed to, and I got every dollar out of that house that we had not only paid, but put in and I strongly believe it's because we bought in a great location. So I'm a big fan of longterm appreciation.

[00:33:07] Ankeny is really solid. I mean, three to 6% is super doable in Ankeny on a regular basis. Um, and then those tax benefits, I, I kind of just throw a number on there of around 1%, uh, mostly due to the ability to write off the mortgage interest and expenses. Um, you know, my accountant might argue it's a little more or a little less, but that's what I put in there. So when you take all five of those things into account, if you want a real life example, I'm an open book. I can just kind of talk about what we just bought. Absolutely.

[00:33:37] Yeah. Um, so that house, we bought it for 165,000. Um, it was a little below market value cause I was able to get it off, off market. Um, it was a friend of a friend that knew we invest and, um, you know, so there were no commissions, uh, involved in that. Sure. Uh, so 165, I think, you know, normally that house would probably be 180. It did have some, uh, issues that needed addressed that maybe the average buyer wouldn't have been comfortable with. It had some, uh, previous roof leaks. The roof had been replaced, but she'd never fixed the drywall.

[00:34:07] Yep. Um, those kinds of things can scare the average person. Yep. Um, but they weren't hard fixes and I haven't mentioned in this whole story that my, my maintenance guy is the most important thing and that's my husband. So I do the half, that's the finding the deal, screening the clients, you know, signing leases, examining contracts, all that's my deal. He's the maintenance guy. He's the fixer. And that's super important too. And he looked through that house with me and said on his end that it was not hard stuff. He could handle it.

[00:34:36] So not super expensive to fix. Um, we put 25% down. This may again be unpopular with some other investors who have lots of unique financing. I'm thrilled for them. That's great. My husband and I are risk adverse. We like to have at least 25% down on our properties. Um, makes us feel good. So peace of mind has value that I'll put that out there. Yeah. And one of the things that I think is, is, um, potentially unique about you is this arguably is a side hustle. Yeah.

[00:35:05] This is an investment vehicle for you. Just like stock market is largely an investment vehicle for the, for the average folks. Precisely. You've got a, you've got a full-time job. Your husband has a full-time job. This is, this is what's done on the side. Exactly. So we have to mitigate our risk, whether that's our time or, you know, our money. So, um, that's why we do things the way we do. Yeah. Um, so we put 25% down. That means I had 42,000, um, plus another 3000 to get the house into rental shape.

[00:35:31] So we're looking at 45 K, um, that I suppose you would call our basis. Yep. Um, yeah. Annual cashflow after debt payments is about 4860. So about 405 per month. Okay. And I'm really confident in that because we have four of the rentals on the same street. So I know what they're renting for. Um, when we look at that, that means my cash on cash is already 10.8%. Correct. And everybody's telling me there's no deals out there. Right. You know, that target rule we mentioned says you just got to hit 10%.

[00:36:01] I've already hit it. And when we're at Amherst, they- One, one, one, one matrix, not five. Say that again? On one of the matrix. Exactly. One of the components, not five totaled up. Yeah. I've already hit it on just once, which I, I'm trying to be encouraging to folks, you know, um, amortization. I put it 3%. That's, you know, the principal paid down each month. Right. I've got 3% on value add just this first year because we did have to make those improvements I mentioned and kind of update the kitchen and bath a bit.

[00:36:28] Um, market appreciation, 3% in a slow year. Like this is a, you know, we've had a slower time. So I want to be conservative. And then tax benefits, 1%. So this deal, we're looking at an ROI of 20.8%. Tell me a stock market deal that does that. That's real estate's where it's at. And it's a hedge against inflation too. So, um, we're really pleased with that. Now it comes with work. We're in the middle of painting and, you know, getting things going.

[00:36:57] So it's not easy, but we try to, you know, again, cause we do this on the side, we have to balance it with our family life and making sure we don't burn ourselves out. Right. So we do about, we try to get one property a year. Um, we try to get them flipped and ready for renters within a month. Um, if it takes a little longer, that's okay. We're not going to miss our kids choir concert to do it. Um, we've done those mistakes in the past and realized it's not worth it. That's right. Um, but it's doable. Yeah. It's doable.

[00:37:25] What are you most excited about in this 2025? Oh, so many things. I just feel like the clouds are partying. The sun is shining. Um, it's been a rough, uh, 18 months for everybody, not just realtors, not just, uh, you know, lenders. It's been rough on the general public, just buyers that want to get out there and buy in the houses cost a lot more and the rates are high. And I think what's changing is there's something to be said for we're all getting used to it.

[00:37:54] And we're building some grit and some resilience as a society. I'm a millennial. Technically I'm an older millennial, but we've never, my generation has never in our adult lives really had realistic interest rates. They've always been falsely propped up by the government ever since the housing recession. So I think that there's something to be said for, we all just had to get used to this, you know? And I think that's happening.

[00:38:22] And I think people are starting once they get that frustration out of their mind, they're starting to see that there's still opportunities like the one I just showed you. Yeah. They're out there. You have your eyes open. You can find anything. Yeah. Yeah. Ready for the final three questions? Oh, sure. All right. If you had one piece of advice for your 20 year old self, what would it be? Do exactly what you did and buy that house. I bought a house at 21.

[00:38:51] All my friends were going out and using their newly found extra money from their first real job. And they were partying on the weekends and they were traveling. And I was remodeling a bathroom with my precious little extra money and time. So buy that house. That house was, like I said, even in the middle of the recession, it ended up at the time we felt bad.

[00:39:13] I'll tell you that we sold it, I think five years after I bought it, we sold it for the amount of money we'd put in and what I'd purchased for. But we didn't get paid for any of our labor. And we'd done a lot of work on that house. But what I wasn't thinking of back then was that we had lived rent free for five and a half months. Ah. And I had had a renter in the upstairs the whole time. Okay. Which was another $35,000 of value. So I finally put numbers on that.

[00:39:41] And I think I made $80,000 on that deal that I didn't appreciate at the time. Yeah. Yeah. Two books that changed your life. The Go-Giver, one of my all-time favorites. I think it's great for anyone, not just salespeople. I think we should be living our lives thinking more about what we can do for others and not expecting something in return all the time. I think everybody should read it. Second book. Oh, I'm a huge Audible person because I'm so busy I have to listen while I'm doing other stuff.

[00:40:08] But so many favorites. I love Dave Ramsey, even though I don't follow a lot of maybe his particular philosophies. I still think he's got a lot of good advice out there. I really like Robert Kiyosaki, Rich Dad, Poor Dad. I think the quadrant thinking is something that's not being taught like it should be. Right. It reminds me a lot of my dad. Yeah. You know? He just had it innately in him, didn't he? Yes. I think so. Well, he was taught, you know, Rich Dad, Poor Dad.

[00:40:37] He was taught by the guy that took him under his wing that wasn't his dad. Yes, correct. His dad was his own dad. I was representing your father. Oh, my dad. Yeah. He learned it from his dad. Yeah. Now I got to give credit. It's generational knowledge. Generational knowledge that's passed down and I'm trying so hard to teach it to our kids. Yeah. Our kids are in there ripping up carpet in these rentals. That's something we didn't talk about. Rentals can be an avenue to express your values to your kids. Yes.

[00:41:07] And to me, that's one of the best reasons to get out there and start doing this. Even though you're scared you don't have time, even though you might have children, people like me, you're missing a chance to show them hard work. And, you know, these are now this will be on record. My kids will hear this, but we plan to help them with college with these rentals. We plan to maybe help pay for their weddings with this someday. Maybe they'll live in one. You know, this is an avenue of something that helps the whole family. That's right. Generational. Mm hmm.

[00:41:36] If you were cast away at an island for a year, you could only get three pieces of data about your business. Let's call that the rental business. How about that? Three pieces of data about your business each and every month. What three things must you know every month to know how your rental business is running? Oh, so good. Such a good question. Do they pay their rent? All right. Yep. You know, I get things so auto set up for convenience. Right. You know, that's something I love about using the Zillow rental managers. They can pay their payments all through there. Right.

[00:42:06] And we require that in our lease, by the way. Yeah. It can be for us, not them. Yeah. It can be easy to kind of forget to go, look, did they make the payment? That sounds silly, but life gets busy. And then, gosh, you asked for three. Did they make their rental payment? Did the mortgage payments get paid? Again, they're on auto pay. What if something happened? And do we need to reevaluate, you know, how much we're setting aside for capital expenses, things like that? Yeah. Jacqueline, this has been a fantastic conversation. I love this.

[00:42:36] I've asked you lots of questions. What's one question I did not ask that I should have asked? I should have heard that one ahead of time. Did I mention Jason enough? He's a huge part of this working. Okay. So on that note, if you're going to do it, make sure you're on the same page. This isn't the kind of thing you get into if you've got a partner where you're not in agreement. We really approach this as we're a team.

[00:43:03] And he's got his assets and I've got mine that we bring to the table. And if you're not on the same page with that, you're going to be selling that house really quick. That requires an upfront conversation. Yes, very much. For people, they want to find you, they want to follow you, they want to connect with you. Where can they go? What should they do? Sure. Sure. I've got a website, sellingcentraliowa.com. It's on there. And then, of course, you can always text, email, call. All that info is on the website. I'm on Facebook because I'm old school. You'll find me at Jacqueline Duke Realtor.

[00:43:34] And yeah, I'm also, I think, on Instagram and LinkedIn and all those great places. Perfect. Thanks for being here. That's everybody. Jacqueline, thank you for being here. Thank you. Thanks for listening. If you're enjoying the show, may I ask a favor of you. Naturally, subscribe so you never miss an episode. But would you rate and leave an honest written review on Apple Podcasts? Does a lot for us here at the show. And I appreciate reading your thoughts. Great guests make for a great show.

[00:44:01] If you know of another island who would be a great guest or you yourself have interest in being a guest, well, get on our radar. Visit Investing in Iowa to fill out an application or recommend a guest. And if you want to connect with me one-on-one, go LegacyImpactInvestors.com. Click on the Invest With Us button in the top right corner. And there, you can pick a time for the two of us to get on the calendar and connect. Until next time, keep investing in Iowa.