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How do you make affordable real estate investments? We answer that question and more in this episode as Shannon Robnett interviews investing coach and property educator Lisa Phillips. Lisa talks about how investing out of state for your first property is easier than you think and understanding new ideas and success stories of making real estate investing work by shifting your mindset.

In this episode, Lisa and Shannon discuss:
• Investing in rental properties in minority neighborhoods
• How to invest in real estate part time
• Finding markets out of state.

If you want to learn more about how to invest out of state, and how to invest using
cryptocurrency, Lisa has all the information you need to get there.  You’re going to want to tune in and hear what Lisa says on this episode of The Real Estate Rundown.
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Watch the episode here:

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Lisa Phillips: Affordable Real Estate Investments

In this episode, we're going to be talking with Lisa Phillips. She's going to talk about how investing out of state with your first property is easier than you think and understanding new ideas and success stories about making real estate investing work for you by shifting your mindset. She's going to talk about how we're going to invest in real estate properties in minority neighborhoods, how to invest in real estate part-time, and finding markets out of state.

Maybe I'm going to get her to talk a little bit about her cryptocurrency and what she's doing there. You're going to want to read this episode and check out what I've got going on here with Lisa as we talk about what's going on in her out-of-state investing portfolio and how she can help you learn the mindset that she's got.
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Thanks for joining in. I have the great pleasure of welcoming Lisa Phillips to the show. Lisa, how are you?

I'm great.
Tenant turnover costs money and eats your profit. Keeping rent low saves money in the long run between the turnover costs every 1-2 years.
Lisa, we know that you are investing in the real estate market and we know that you've been involved in out-of-state real estate investments for a while. Before we get into that, Lisa, why don't you tell us where you came from and what your real estate journey has been that's brought you to this place where you are now all over social media? You've got followers everywhere that are trying to figure out how to do what you're doing. You brought that to our show and we're glad to know that. Tell us how you got to where you are now in July of 2021.

It's such an interesting string of events that look unrelated but it's added up to this one big story. I was born and raised in Las Vegas as the Western part of the United States. Things are expensive out there and you're not aware of different markets that are lower than that. You got to start with your basis. I only knew California, Arizona, and Las Vegas prices. That's what I was indoctrinated with. I bought my first house six months out of college and this is during 2006. Everyone got a loan. It's 0% down. It's an expensive house I should never purchase. If I knew what I knew now, I wouldn't have even touched it with a ten-foot pole. In 2006, there was this mania and all these people from California were moving in. The house prices went from $100,000 to $200,000 to $300,000. At the time, it was $400,000, which was okay because it was going to keep going up forever. That's what you saw.

That's what they kept telling us.

I bought it right out of college. I’m excited because houses are in my blood. It is what it is. As soon as I could qualify, I went for it with 0% down. You just got to pay a balloon payment in ten years, an interest-only loan. They were like, “This is what we do. It's normal. Why wouldn't you? I know people who make less than you who buy more expensive houses.” I’m like, “This seems like a good idea.” What happened between 2006 and late 2009 was the job market was shaky and jobs are being lost.

I finally got a job but I had to move to another state. I had to move to Ohio. In Ohio, I had a job there. About 1.5 to 2 years in, I lost that one and I couldn't find another job. I had to make the decision. I'm far away from home. The house, which, in 2006, was worth a ridiculous amount of $400,000 was now worth $200,000. It completely fell in value. I had to make a choice. I was unemployed and I was in Ohio, and the job market in Ohio wasn't good either. I could not find another job quickly like I had when I was in Vegas. I had to make the choice to let it go and get into foreclosure. That was a time where the stigma wasn't as bad because everyone was going through foreclosure in 2009.

I also remember that.

Everyone was losing their jobs. It's one thing when it's just you, you feel like, “Oh my god.” It’s another thing when it's everyone and jobs are being lost and you can't get another job. I was in my late twenties at the time and my mindset was, “I have to do what I have to do. The house is a liability, not an asset. It's half its value but I'm still paying twice the mortgage. The rent that I can receive from that is 40% less than my mortgage payment.” I didn't have a job. I was like, “I got to let it go.”

Sometimes, you got to sit and look at this. Instead of letting your pride and ego move you, like, “I can't show the world that I didn't make it,” you have to assess every year what you're working with. I had to let it go and my thinking was, “I can't get a mortgage for seven years, that's okay. I will find low-cost properties and invest in those.” Right before I had lost the job in Ohio, I had purchased a $35,000 condo in a nice neighborhood. You call it a B-plus neighborhood. It was right outside of a big city. It’s nice and nice neighbors. That's where I learned about the concept that there are different markets out there.

I let it go and I was like, “Once I get another job, I can save up half my money and buy a new house every year.” That was my thinking at the time. I also bought land in Colorado. I was going to go out and make an earth dome home. You're talking to someone who can be a little eclectic and a little out there. I think outside the box. FYI, I still might make a corn cob home one day. I still have my land. I made that decision but then I discovered this new asset class of different houses and demographics.
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Affordable Real Estate Investments: Some people can only see flip, they cannot see affordability. It's literally impossible for them to see the people in these neighborhoods as people deserving of a nice home.
Where I'd come from in Vegas, I grew up in lower black and Hispanic neighborhoods that were considered horrible and crime-ridden. Living there, I was like, “You guys have bias and stereotypes because it's not that bad.” There are neighborhoods and streets that are but that doesn't mean the entire zip code is bad. When I started looking for new houses, I remember going to real estate forums and there is a demographic shift. Most of the people in the forums are affluent, white, and in a different socio-economic bracket. When I would talk to them about these houses, they couldn't understand that the neighborhoods that I was looking at, that mirror mind, were okay. They're like, “It can't work at all because it didn't work for me.”

There was a realization, like, “I grew up in this. I know this, they don't.” The same things that people thought about neighborhoods that they were completely wrong about are happening here. I had to go away from that and forge my own thing. I heard what they said but it was easy to vet that. I tell them my platform. Most of the people who follow me are black investors or black professionals who want to be investors because when I talk about this, a lot of them share the same story. They're like, “I grew up like this, too. It’s not that big a deal. There are some streets you don't go but not all of them are terribly crime-ridden.”

That's 85% of my audience because we understand that story and we live that story. It's to your advantage if you can go back to a similar neighborhood that's not where you grew up but you understand the culture of the people and you have an understanding of where they're coming from. Also, respect from where they're coming from because you were there twenty years ago. Before college, before the white-collar job, that is where we were. It can be a beautiful thing.

We forge this path going into it and knowing, “You have to be able to be discerning and look underneath the surface.” Spiritually, it's a wonderful thing we're doing because a lot of my investors love the fact that we can go to neighborhoods where people look like us and we're investing but we're not gentrifying. Whereas I do have people outside of that demographic, as soon as they see me, they're like, “Can I flip?” I was like, “You want poor people to not have places to stay?”

We do long-term affordable housing. That's a completely different mindset. In our minds, we're here to serve the people. In their minds, they're trying to get money and move them out. It's a completely different energy. I'm not saying anything is wrong with flipping but we do target lower-income areas where we already know the incomes are depressed.

Let's talk about that. A lot of people take the concept of low-income housing and they put that “responsibility” on the government, which we all know the government can't do anything right and we don't even need to be affiliated to agree on that. When you look at that and you go, “Power to the people, we are going to change this ourselves and we are going to make affordable housing affordable.” What is it that you do to do that? How is it that you make affordable housing affordable? Is it that you put your tenant and your neighborhood before profits or is it that you come in and you bring scale to it?

You put both your profits add tenants together. It is possible and you do scale. Going into these neighborhoods, there are levels to this. A lot of what I do versus other people don't is talk about nuance. There's one thing for me to go into a distressed area, take a house, and do the bare minimum to get it livable. There's another reason to go into the bare minimum to get it livable but add a few touches and upgrades, be responsive up to your tenants, and making sure that if something's broke, you fix it. You're not going to scale too high because we have to be discerning investors.

Granite countertops, Carrera marble bathrooms, and all that kind of stuff.

There are levels. Before my group, we have an ethic of like, “What would you do for yourself if you were in the circumstances?” It has a strong relation to that. I hear stories and I was like, “I would not treat my tenants that way.” “I took the door off the oven and I did this.” I'm like, “No, I don't live that way.” There's a difference and nuance between the bare minimum and getting paid. Also, there's doing the minimum but also strategically and with nuance doing upgrades to make it nice and livable. Different things that are interesting.
It's not just about the house. It's not just about the asset when you include relationships.
Maybe it's my feminine energy that I brought to this but homes are based around the women. Instead of all white, putting a nice tan color on the walls. You would say that it's not revolutionary. A lot of people were like, “Do the minimum. Have the white. Have this and that.” Instead of getting hardwood floors, we can afford luxury vinyl tile or laminate flooring that isn't expensive. Maybe you pay anywhere from $800 to $2,000 depending on the square footage but it gives it a nice upgraded look to what would be an older home. It's a little thing like that.

It’s money that you're paying above the bare minimum but it's strategically spending an extra anywhere from $1,000 to $3,000 to upgrade it. It is more moderate and it's nice. That's not enough in the long run to break your bank but it is a conscious choice you're making to provide a house that's a little bit more above bare minimum. Me and my investors survive in the nuance and discernment stage and that's why we've been successful. It's a balance and being wise with your money but also putting a little extra in.

Your goal is to come in, pick off the distressed properties in the neighborhood, put them back into circulation in the neighborhood, and bring the neighborhood up a notch because it now doesn't have a vacancy and it doesn't have squatters in homes.

It’s natural upgrading.

You've eliminated the places where people of ill repute will hang out in any neighborhood regardless of the color because you've now put paying tenants in there who are looking at their own neighborhood going, “We like being here.” You've done what used to be intuitive to people. The people have looked at it and said, “The government should do that. That's not my responsibility.” What I hear you saying, Lisa, is that you guys have accepted social responsibility for your neighborhood.

I have a book, Investing In Rental Properties, and I had to put a foreword, “We're not for gentrification.” It is about long-term housing. We do have conversations where, economically, it's to our benefit for reliable stable tenants to not raise our rates because we can because the cost of ownership, depending on how you fix it up, your mortgage goes down over time. Your taxes might go up and maybe there's maintenance but that depends on how you fix it up in the beginning and if you delay it or not. For the most part, we are pretty much not into raising the rents because we can.

We're understanding that the demographic we're working with are working-class people. They do have jobs and are solid. A $50 rent increase to them can be enough for them to move. We have turnover costs and then we have old people. We talk openly, like, “No, we don't raise our rent.” There's a reason we buy a property with a tenant in it and it's below market by $200 to $300. There's a reason for that because turnover costs money and eats your profit. Getting new tenants that are variable versus a long-term one that pays on time every single month, I kept it lower because I save more in the long run between the turnover cost every 1 to 2 years. It's having that mindset.

It's funny because a lot of people fail to realize that is economically more sound than raising the rents, kicking the tenant out every year, and cleaning the carpets every year. I don't know anybody that is able to use the security deposit to cover all that needs to be fixed. There's always a $500 security deposit and $1,000 with a fix. You're also looking at the fact that you now have 2 weeks to 1 month of vacancy. You've got advertising costs and you've got all these things.

One of the things that I've worked with my asset managers on is that we're not property managers. We don't go into the thought process of, “We're here to manage the property.” We look at it from an asset and that means that we look at it and we go, “Yes, we could raise the rents, have high turnover, and have a lot of these other things happening.”
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Affordable Real Estate Investments: When you target the people in the bottom social-economic ladder, there's resiliency because of all the different items that are there to protect them.  
When does the house get beat up? It gets beat up when people move in and out. You're lugging a couch down two flights of stairs, you're doing this, and you're doing that. If you're not doing those things and you're not getting the rent appreciation, maybe your offset is the same. Maybe your NOI is unaffected because you're able to do that, and then you're able to provide a quality of community that a lot of people miss.

Longtime tenants. You're correct on every single aspect. That's all I can say. You have to be discerning about it. One thing we say is, “If I have these tenants pay on time every single month, I'm not raising the rents on them.” For me, as far as stability in my business, that's a stable as you can get. A twenty-year person paying you every month for twenty years on time regularly. They're the kind of person who keeps my house up and they alert me when things go on.

If they're not this good, you're going to shuffle them out and not feel too bad. When you get a good one, “We're not raising the rents on you.” It would take a lot for me to do that. I do get retirees and working-class people because those are the demographic I touch. They're going to be working the rest of their lives and they're going to have the funding for the rest of their lives. I'm working on one. It’s been over several years of on-time payments.

There’s a lot to be said.

That's amazing. That is stability in your business versus me chasing profits and turnover every 1.5 years.

Let me ask you about COVID and how your collections were during COVID.

It's funny because you start to see how class plays into this. I target working-class, lower-class neighborhoods and some of those have different safety nets that other people don't. Generally, all of our tenants were continuing to work or they got unemployed. They were caught up by these different nets of the working-class have or they were subsidized and they continue to be subsidized. The housing did certain things where if they didn't pay, they're going to pay it all back in full.

It's interesting that when you target the people on the bottom socio-economic ladder, there's resiliency because of all the different items that are there to protect them. That was my experience but then I went to my group. There are about 12,000 in my Facebook group who follow this and I ask them, “How are you guys doing?” I had about 50 to 60 responses. Maybe 2 out of 10 didn't have paying tenants but then the tenants were a problem. Everyone's like, “She was a problem beforehand.”

2 out of 10 wasn't paying but then it was like, “We were going to evict them anyways because it was always a variable.” Eight out of ten either still work and they still have subsidized housing or they got unemployment or they knew all the community resources. Everybody in the group, the house came together, and they were like, “Free food here. Rent assistance here.” They knew every single one. It was interesting how that demographic had some ups and downs and they had some bumps but they also had safety nets.
When you make things about money, relationships, and community, you're off the charts. That's the part no one talks about.
The other thing, too, that I was thinking about was if I was a tenant and I was in there, I knew that market rent was maybe $1,000. I knew that maybe I was paying $800. I knew that relationship with you, I would be one of those tenants to pick up my phone and go, “Lisa, you're not going to believe this but I got COVID and I got two weeks without pay. I got this. I got that.” I would be communicating with you because it would matter. Whereas if I was in a complex market rent and nobody cared, I never got ahold of the landlord, I knew that I was a number, and I didn’t matter to the people that own my property, I would be like, “You guys will figure it out with or without me.”

I know that we've we experienced that in our communities as well. Our property managers went out into the community, we set up a table outside their door, and we got their information because sometimes, community resources aren't that easy to find. Once you found them once, you bookmark them on this fancy little thing called the Google bar and then you go back to them. We sat down with everybody and we made sure that they had access to all of those resources because they were communicating with us. It was because there was a relationship there.

It's not just about the house or the asset. When you include relationships and if you want to be even more powerful, you include community, get buy-in, and it's both and it's mutual. That is something that can be missed where it's all about the asset and the investment. In rental properties and multifamilies, the community and relationship, even if you do relationship without the community, you're still doing good. You add the community. Meaning, “We're going to sit here and provide resources to all of you guys, make sure you guys all see that we're trying to help, make sure you understand we're in this together.” That can withstand you through so much turmoil.

Once you have a buy-in commitment that we're all on the same page and doing this together, not just me trying to get money from you, it is the most powerful thing in the world. A lot of the investing we do reflects that relationship and community aspect because it does pay for itself. I didn't see as many issues. The people who know they are valued know that they were in a house that's a little bit nicer than the other houses for the same neighborhood. They understand where they're at because they can see the value we put into it and that buy-in helps.

They also felt a responsibility to you because you've shown them their value. They're not a number. They're not just 23 Jump Street but they are Tom and Sarah in this house and they've been there for years. The unfortunate thing is, so often we make that an issue of color. “This is our neighborhood. That's their neighborhood,” when the reality is it's a human issue. It's a factor that needs to happen in the human element that says, “I'm a white guy from Idaho. Lisa, you're in Ohio but we are a community of investors and landlords. We can do the right thing in any neighborhood because we choose to and we want to be responsible to our fellow man.”

It doesn't matter who you are. You're going to have the yayhoos. They're going to be white, brown, green, yellow, orange. You're going to have yo-yos that don't pay, are going to game the system, and are not going to take care of it. Yet you still have the opportunity to be the landlord or the investor that says, “I'm still going to believe in humanity.”

This has been my experience. I built this platform. It's not just me now. It's everyone else who followed this and got the same result. If it's about money, you're here. If you make about money and relationships, you're here. If you make about money, relationships, and community, you're off the charts. That's the part no one talks about.

Let's talk about it. If you think about it, if it's about money, I want to call it intestinal fortitude, but you don't have the spirit inside of you that cares about anything but money. When that's all you're out for, all you see is the Ferrari, the big yacht, and all this stuff, you don't see the people behind it. When you start to see the depth and the people behind life, your life starts to take on color. First, it starts to have some muted grays in it, maybe some mauve, and some other colors.

When you go all in and you say, “I'm here for the experience. I got one life going around this planet and I have the opportunity to be effective. I’m not going to be that good of a person, but I can make a difference.” All of a sudden, you go to high definition. You are technicolored because of the way you choose to live, and that comes from the inside.
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Affordable Real Estate Investments: Once you have buy-in and commitment that we're all on the same page and doing this together, it is the most powerful thing in the world.
Core values. You’re the energy you put into that house. You don't understand it and you may not believe it, but everyone, when they walk in, can feel the energy in what you put in there. They can tell if you did the bare minimum or if you tried a little extra hard. That energy is what they read regardless of what you say and you're going to get it back. Don't get me wrong, if you guys think I'm a bleeding heart, no, we're still profitable. What you did is you gave yourself the best abundance of people who can recognize the work you put into it.

When we put houses on the market because of those upgrades we did, that little extra money, we get the best of the best for that demographic. We get the people with a slightly higher-end job for that working-class neighborhood. We get the people who like nicer things for that paycheck and want to put into it. It's funny because you can't convince people that the energy you put into it gets read immediately by everyone who walks in.

I tell my investors, “What you put in, you're going to get out. They're going to match it.” That's also part of spirit, community, and things that are stronger than money. Money is great. That's why we're here, but I have found when your core values align with something a little bit bigger than that, there's a reason we talked about mission statements. When you have them, it's not just about you. You're building something bigger and better. It pays for itself.

The reality is, when you've got it a little bit nicer and you're right there on the market, now you're getting the guy that's working at the plant that's the shift supervisor, not the tenants for thirteen years and he still can't figure out why he's not gotten a raise. You've got several people that want to rent your place.

That is what you attract.

You're able to pick and go, “This guy doesn’t feel right. I checked his references because I can. He's not the only guy that's come around to look at this place in 30 days because it's bare-bones and maybe the toilet should have been replaced about a century ago. He dropped through the house for 1.5 hours because it's so torn up and everything.” When you do those kinds of things, then you have a better clientele that is able to show you the appreciation by being the better clientele.

What you put in, you're going to attract. Your pictures, price points, and how you present your yard are going to attract certain people. You don't have to spend a lot of money on a nice landscape, but it's extra effort to do it. All of that is going to attract the people who can appreciate it and you're going to have ten of those people apply within 30. My houses are not on the market for longer than six weeks because of that extra discerning work.

They come right in and now you have ten people. You're going to get the gamut. You're going to get people who are lower to higher, so you can make your decision based off that, but you're going to get a wider variety. You're naturally elevating the neighborhood and this is what I saw over the years. You didn't do it necessarily specifically, but because of your actions, energy, and investment, you naturally shifted the people who are here. You can stabilize an entire neighborhood with one nice family who keeps their yard up, and then everyone else sees them keep their yard up, so they keep their yard up. It's so subtle, but I've seen it.

I'm sensitive to that as well. I've been in my hometown for more than 40 years. Every dollar I've ever made is out of my community, but I can honestly look at it and say I've made a better community out of making my money. There's nothing better that says, “Not that I built that shiny glass tower, but that I built these things and I built affordable housing.” We look at things and we go, “We can put in the nicer countertops.” We always justify that we can put in granite countertops for $40 a square foot versus $5 a square foot for laminate. One hot pan doesn't toast the whole kitchen.
Sometimes people can be wired to look to the government for a solution. It's literally programming, social conditioning and wiring.
We're able to justify where we can put those kinds of things in, what other people call entry-level, which helps our occupancy tremendously and it also helps our maintenance. It does wonders because now you're not seeing laminate come up or you're not seeing hot pans destroy stuff. You didn't put in the cheapest cabinet. Your maintenance guy is in there every week trying to fix a drawer and put a knob back on. Is that some of the same things that you guys are doing as well when you talk about adding that little bit extra?

Yeah. We're on the lower price scale, so we're not talking granite but we will take the laminate and make sure it's fixed up and shored up, and maybe put epoxy. That's common in the group. “Do you guys know anyone who does epoxy countertops?” “$200 to $400 to get that done for you.” Epoxy offers a nice little resin that protects it or this type of countertop or maybe even contact paper. There's a level. We're not as high as you but with both, it's discernment.

You're not going to give them everything for the price point threat because it doesn't make profitable sense for what you can get out of it. You get to a point and you're stuck there. Being creative about ways to bring more value in a posh modern look is part of it. For instance, a lot of these houses can be old. I did this for my own house, let alone the rental properties. One of the things is either you can do it yourself or pay an electrician. They’ll be anywhere from $400 to $600 to change all of the outlets to a modern nice look. They were older from 1960. They're blackened and they're a little octagon. You slit all of them to the nice little flat switches and dimmers and the new ones with USB cords.

You paid $600 for that, but what it did was when you walk inside this old home with the paint job, the floor job, and that, it gave it a modern look. It didn't feel old. It didn't feel like a 1925 home anymore. It felt like a modernized one. You did not necessarily spend a lot of money to do that, but it gave it a certain look and passion. Maybe you put some peel and stick backsplash. In the high-end area, it's like real tile. At ours, it's like, “No, we can do peel and stick or even contact paper in the backsplash.”

You gave it a little bit of a modern edge and touch that is appreciated and it's relatively easy to fix. We put it on again, but they appreciate those little extras. These costs are minimal because of how much money you make in the long run. It's so little but it's strategic for being in a working-class demographic. Giving them a little bit more of a feel and look like they're living a nice life that wants them to stay on your property.

I love the way that you're doing what you're doing because too many people, and I’ve got to throw myself on that pile, too. Sometimes, we look at and go, “That's the government's job. They're supposed to take care of that. They'll deal with the low income.” We know that part of the reason we have the tax problems that we have now, the problem we have with the income disparity, comes from the way that we're taxed and the way that things happen there. Without getting into the politics of it all, we know that there's so much that we can do. You're reminding me constantly with this that I should be doing more to be a part of my own community and to be the solution that I expect that to be.

You are reading everything I'm putting out there. I do target minority neighborhoods and that minorities are mostly the people who work with me, we should have been doing this the whole time because sometimes people can be wired to look to the government to a solution. It's programming, social conditioning, and wiring. What I love about it is that I am wiring people like, “No, this is us. Not only can we afford these properties because they are undervalued. There’s a lot of reasons. We know all about mortgage and appraisal discriminate. We know all about why the value is lower.”

With all of that, we can afford it, and not just that, we do show folks that not only can we line our own pockets with passive income and assets. Whereas before, we're one generation removed from not having anything. Not only can we do that, but we also are the solution. One individual investor at the time, but we are committed and have the same core values and mission statements. We’re not for gentrification. We're specifically going into depressed neighborhoods, understanding that they can't make more money, and a $50 to $100 raise does matter to them. Having core values and missions, we are the solution to the problem the whole time.

The internet made it easy to talk to different people and get all these insights and data points, so you can feel more confident moving on your own. I love the fact that we are the solution and we've always been the solution. My mission is to get as many of us as possible to go into these communities and fix them up with this core statement, “We offer long term affordable housing. We don't necessarily raise the rents just because we can, because it's not necessarily economically profitable. You put into the house what you want to get out.”
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Affordable Real Estate Investments: Because of your actions, energy and investment, you naturally shifted the people who are here and you can stabilize an entire neighborhood with one nice family who keeps their yard up.
 
We have a few core missions or values of how we conduct ourselves and what our mindset is. It's always been us. I want this to get bigger because then you have a solution to the problem. It's in our hands, not the government’s. I am apolitical. I don't like the government at all. Just so you know who you're talking about. I'm not on either side. I buy all of it because I see how it's used for control in many ways. Get rid of them, and then put them in our hands one house at a time.

If I have 12,000 investors and they each have five houses, that's a huge impact. My goal is to get 100,000 investors, like, “Let's do this.” The reason I do stress the core values of we're not gentrifying it as long term, we're being discerning about our upgrades though. I always have the caveat that because some people can only see flip, they cannot see affordability. It's impossible for them to see the people in these neighborhoods and someone deserving of a nice home. They're like, “No, they need to make more money and leave,” versus for us, we're like, “No, we completely understand that you work. This is your place and we want to provide for you, you provide for me, and have this mutually beneficial.”

Have you ever taken someone that's just looking at it from a flip standpoint?

I get them off the phone.

Run the calculation. Let's say you flipped this house and you make $50,000. You walk home with $30,000 of that by the time you get done being taxed. What if you could make the same amount of money because you received passive income, depreciation that you would normally get, this, and that, instead of putting that in your pocket as profit today to eat tomorrow? You have to kill something tomorrow to eat because you don't have any long-term income. Instead of doing that, you did this for years. This is what your portfolio would like. Have you ever sat down and done that? I'm a numbers guy, so I'm already doing that in my head.

A little bit because some of these flips are that profitable. I could have made more. Sometimes they come out even because it is that part of the speculative nature. We can get this in the market after the resale value.

If you want to exercise, go to jazzercise, go to the gym. Don't go flipping houses because there's too much work. You open the wall up, now all of a sudden, you’ve got this problem and you got mold here. You didn't realize that the part of the foundation over there was cracked. The appraiser won't give that. Now you’ve got to fix that and all this stuff. I look at it and I go, “What is the easiest way to turn this into cashflow?” That's what you're looking for. You're looking for the fact that after 25 of or 50 of these. If you did 50 flips, you still got to do 51 because you have nothing left.

Whereas if you did ten rental properties, you’re good to go. You don't even need 50. I have a blog post about that. It depends on where you're from and your value system, but I'm here for the long haul. You'd go on ten-plus years, you have the same house, it’s still in great condition, you still got paying tenants, they pay on time every month, there has been no problem, and no issues except slight maintenance, you're like, “This is the easiest thing I've ever done in my life. It is extremely easy. Hopefully, another twenty more years of this continuing.”

Let's switch gears as we wind down because I gave everybody the teaser that I wanted to talk with you a little bit about crypto, too. You have this vision of the harsh reality of what to do to create affordable housing without gentrification. You then flip the switch and you go to this other world where you're dealing with cryptocurrency, which isn't tangible like our dollars are. How do you do that? What do you see in crypto that entices you and makes you want that?
Sometimes you just have to sit and look at things instead of letting your pride and ego move you.
Sometimes, it's obvious that digital's better. Going to Blockbuster versus streaming and I can download it on my tablet. It's one of those things where it's like, “This is better.” I can move in in minutes, can do this, and it appreciates in value. You can bet and understand what currencies you're doing it in. From a technological standpoint, it was global and decentralized. It's a better product. It's Netflix to Blockbuster. Even if you don't believe in it, you can at least understand technologically that it is the best and it is supreme. That made me go, “Let's see how far this goes.”

I heard about it in 2014 when it was $172 for Bitcoin. I was like, “I don't know about this,” so I let it go. I didn't think the community can get it through, but in 2017, all of a sudden, people were on crypto and I was like, “Okay.” That for me was like, “The community has what it takes to keep pushing this forward.” I got into it. It's a better asset and quite frankly, I want it to do better because honestly, now that I'm still in the crypto world, I try to move money from one thing to another. I have to go through PayPal and get it withdrawn, and then I’ve got to pay fees. It takes forever.

I go from crypto exchange to exchange because maybe I have money here and I want to buy something that's over here. It takes anywhere from 1 minute to 20 minutes. It’s there. It's in my pocket. It's on my phone. It's a better technology. Rental property investing, if you do it right, gives you a lot of wealth strategies. I've read a lot of books on wealth strategies as well. I have a different mind when I look at crypto that if you're not a real estate investor, you might not see. I look at the long-term, trends, and cycles. I look at, “The fact that it goes up and down is the same way a downtown might be completely drug and crime-ridden. After 80 years, they gentrify it, and then it goes back up.”

It's funny because some of the cryptos I look at in the cycle and I go, “It's on the low point. It's low and it's easy to do this. If this and this happens, it'll come right up.” It's funny that you see parallels in the cycles. I added passive income to it, so I went heavy in looking at how to make residual monthly income. FYI, if I sold one of my properties and I put it in in crypto at 6% or 10%, depending on if there are details that I want to go into, depending on which crypto and how much money you can get safely with relatively low risk, you would make just as much or maybe $100 less per month in cashflow. You don't have a house that you have to maintain.

I'm telling a lot of real estate investors. The reason I'm struggling both is that it is more lucrative and less overhead to have cryptos and make the same passive income. I'm talking $200, $300, $400 a month without any tenant calls or any HVAC maintenance or turnover costs. I don't know if it's hard for real estate investors to understand it. I've been in the crypto world for over four years and I saw the huge returns, and then I've been in my real estate world. In four years, my returns on crypto equal my ten years in real estate because of the exponential growth and how we're still early adopters. That's a funny place to be having a whole platform of real estate being like, “I want you to consider crypto because when it comes to how much money, equity, appreciation, and passive income, you can still do well.”

They are similar. What's funny that a lot of people fail to realize is that the money in your wallet isn't really money. It's just paper that we've assigned a value to. When people look at cryptocurrency, what they fail to realize is that there's an underlying technology there. It does something. When you look at Ethereum, it does something. Polkadot does something. Solana does something. Cardano does something. There are all these things that it does what your money doesn't because it's backed by a government that doesn’t do anything.

Money like crazy. They do corruption well.

They've got that nailed.

I'm like, “We are a third world country level when it comes to corruption.” That being so high and mighty about us.
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Affordable Real Estate Investments: It is more lucrative and less overhead to have cryptos and make the same passive income, without any tenant calls or any HVAC maintenance or turnover costs.
I can see where people get confused. It's funny to me because I look at it as a hard asset. Microsoft doesn't own anything. Until they started making the surface, they didn't make anything. They own technology and everybody was okay with that. Netflix owns the rights to things. They don't own anything. They don't have a Netflix machine that comes to your house and drops off the video. They got away from that. They don't even own the discs anymore, but yet there's still value in what Netflix is because of the technology.

Yet when people come to crypto, they go, “I don't get it. I can't wrap my head around it.” For me, it's easy, so I'm glad to see that you do that and then you combine it. I love the analogy you make between crypto and real estate and how those are similar. Lisa, that wraps up our time. I truly appreciate you coming on the show and dropping some knowledge on us. This has been great. I’m super appreciative of you. Lisa, where can people find you in the great wide world?

You can go to my website, AffordableRealEstateInvestments.com. If you put in the Google search, Lisa Phillips and Affordable Real Estate, I'll come right up. I cornered the market on that. From there, you can go see my YouTube channel if you want to hear the three videos I have on the strategy, what's going on. Also, if you're interested in working together, maybe you've never invested long distance, maybe you’ve never invested in a lower-price neighborhood, I offer strategy sessions that you can sign up for a week. I'll assess where you are and what it would look like for you to get started on this.

Also, if you're in a cryptocurrency, I'm trying to get as many six-figure cryptocurrency investors out there. I'm a six-figure cryptocurrency investor and it was $200 a month. I have a series of workshops where I go through this and by the end of it, you will be an expert. My people go on to help other people in crypto, which is great, then they get their family members on, and then they get their family members on. I'm creating this ripple. You can do that as well.

The last thing is I have a book, Investing In Rental Properties For Beginners. You can get that from the book as well. That is a bestseller I was proud of. That is up there on Amazon. It's still a bestseller since it launched in 2018 because people appreciate that I'm straightforward and blunt. I don't know if you've noticed. They get the value and they understand what I'm talking about. They can just get it and go. That's the feedback I get.

The last thing, I started a course. It’s a five-week program called Ancestral Alchemy. It's geared towards the community where we're reclaiming our land and our wealth back. It's a five-week boot camp where we go over finding markets that other people aren't talking about. There are so many markets no one else is talking about, how to start betting houses, how to manage your real estate agents, contractors especially if you're a long-distance. That starts on August 10th, 2021, and that's for five weeks.

The alchemy part is that I'm a true believer and my life reflects the power of spirit and energy, energetics, and manifesting. Before each of the live group session, we will do a Law of Attraction exercise, group visualization, affirmations, and all those other things to get our energy and hold it for the group in addition to welcoming and honoring our ancestors to come in.

I say reclaiming our wealth is part of it because a lot of our ancestors did a lot of work in this country and they were never paid. I call it reclaiming what they did and us going into these communities and doing the work because we can now. We can get what they could not. It's our responsibility to, once we're aware, do the work and get it done.

Thank you, Lisa, for being with us. Thank you guys for reading. Don't forget to like, share, and subscribe to the show on Podchaser, Spotify, iTunes, or wherever else you get your podcasts. You get automatic updates like this one and catch people like Lisa on our show. You'll find this on Instagram and YouTube. Leave a review. I love to hear your feedback. Thanks, guys.

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About Lisa Phillips

Lisa phillips
Lisa Phillips helps African American Professionals build profitable rental property portfolios. Her clients are generally first-generation college, first generation white collar, and this is the best way to wealth investing in minority neighborhoods.

After a foreclosure in the bloated Las Vegas, NV real estate market, and her second lay off, Lisa Phillips found herself alone, with no job, halfway across the United States from friends and family. She was left with a 35k condo and only enough money to renovate the place doing the work herself to stretch her unemployment check.

It was the bottom for this electrical engineer with no job, however, it not only gave her a solid foundation of repair maintenance and costs, but also a taste of how owning real estate can be affordable (35k or less), and keep a shelter over your head during the hard times. And how to make money from it. These were hard won lessons are the ones that shapes Lisa’s vision of the future today, and the legacy she is trying to leave behind.

After purchasing 4 rental properties around or under 30k in OH, MD, and VA, Lisa Phillips has learned the hard and easy ways of real estate investing in rural, inner-city, and midsized cities properties, all-in working-class neighborhoods. She is now focused on doing one thing she loves to do: Showing how EVERYONE can affordably start real estate investing for high profits and cash flow, and that its open to everyone with a little ingenuity. Every month there is another story of Lisa helping another investor realize monthly income, who was too scared before.

You will find her approach different, refreshing, out of the box, but extremely practical. Which is why the video blog is growing DAILY! So, join the club of her 7000+ youtube subscribers, 7300+ twitter followers, 700+ facebook fanatics and 100 group Sub30k Mastermind Group.

This isn’t a gimmick; Lisa can go to most cities and find houses under 30k within 80 miles. Living in Washington DC, Lisa has purchased 2 within 35 miles and 1 within 90 miles. Lisa also goes into the intricacies of investing in a region long distance, because sometimes the numbers just don’t make sense where you actually live for any positive rental income. (Always practical).

More specifically, Lisa shares this through personal stories of awkward moments, and using the input and advice in consultation and interviews with other real estate investors, lawyers, and CPAs. All of this to give the public the tools to get start investing in the properties that will earn them significant profits, all without them having to go through the trial and errors.