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Old 02-25-2006, 01:11 PM
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Post Meet Nina Smith

How long have you been involved in real estate investing?

I bought my first rental property (a single-family home in Las Vegas) just over three years ago. In the last two years, I purchased two more single-family homes in the Phoenix area. Since 1999, I have owned and lived in four homes from varied eras (three of which I upgraded and sold for tidy profits, one I occupy now). Additionally, I just bought a fixer with my partner and two friends in Palm Springs. The house is now for sale. More on this effort below.

What strategies do you use and why?

I buy properties that generate positive cash flow and intend to hold on to these properties for the long term. My goal is to have ten rental properties in the next five years and own them free and clear by the age of 65. This would result in $10,000 -$12,000 a month from rent checks (this number is based on today’s rents… rents will increase over the next 25 years). Not a bad way to enjoy retirement.

Much of the discussion on my blog, Sitting Pretty is about passive income. Passive income is based on a formula… buy income producing properties that generate positive cash flow. Execute on this formula and you will achieve financial independence.

What types of financing do you regularly utilize?

Since the Las Vegas and Phoenix markets were both experiencing solid appreciation, I initially used an interest only loan to buy the property with as little money down as possible. After six months, I refinanced and got locked into a 30-year fixed. I’ve been able to do that with two properties to date and hope to do it with the third soon.

How did you go about finding properties?

Generally, I have relied on the assistance of a real estate agent. If I do any more fixers, then I think I need to learn how to buy properties in the pre-foreclosure stage. This will take more legwork on my part but I think it’s the only way to make money in the fix & flip scenario. I have learned from the Palm Springs experience that you make your money when you buy the house not when you sell it.

What is your average purchase price?


What is your average net profit per deal?

I buy and hold for long-term investment. I have made a paper gain with appreciation but that really is irrelevant at this stage.

Describe your first deal and how much you made on it?

Palm Springs is my first fix & flip investment. I need to sell it before I can report back on any profit.

Describe your biggest deal (purchase price) and how much you made on it?

So far, I have made the most money on my primary residences by fixing them up and selling them just after the two-year mark to avoid capital gains. Long-term though, the rental properties will pay for themselves.

What was your worst deal and did you lose any money on it?

No bad deals yet. There is always that risk though. Real estate is an investment and just like any investment tool there are risks alongside the rewards. All in all though, real estate and being a landlord has been a positive experience for me.

Any favorite real estate web sites, books, software, mentors etc?

I had three good role models… two sisters and a brother and the healthy fear that I was going to be the one in the litter that retired poor. Each owned their own home and multiple rental properties. I was the late bloomer, but I finally bought a house of my own at age 30. Soon after, I started to educate myself on how to buy a rental property. I went to a Marshall Reddick seminar and it gave me the confidence and all the rah-rah empowerment that I needed to make my first investment purchase. Was it scary? Heck, yes. Did I have much margin for error? No. Meaning, I hardly had enough money to cover the mortgage if I did not get it rented within a couple of months. But luck prevailed and it has been worry-free ever since and now producing $150 a month in positive cash flow.
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