Are you looking for a way to build wealth with duplexes while also leaving a legacy around you? On today’s podcast, I talk with Annie Dickerson to find out how she does all this, and more! Join us to learn more!
How to Hack Houses to Build Wealth with Duplexes and Leave a Legacy (with Annie Dickerson)
Today I had a chance to talk with Annie Dickerson, co-owner of GoodEggInvestments.com and the podcast “Investing for Good.” She and her business partner, Julie Lam, know all too well how important it is to just jump in and get going when it comes to real estate investing.
Back in 2008, Annie and her husband lived in Washington, DC when their real estate investing journey began. They were newlywed, fresh out of college 20-somethings looking to buy their first house and do the “adulting” thing.
Thankfully, the realtor they worked with planted a seed that changed their lives forever.
“Have you considered the long term prospects of using this piece of real estate to build wealth? A lot of these row homes have two units. They have a main unit, and then also a basement in-law suite. You could rent that out and then if you play your cards right, you could have somebody else help you pay down your mortgage. Eventually, you could be cash flow positive.”
These ideas were completely new to Annie and her husband, but it was exactly what they ended up doing. During a night of marital frustration, Annie found an awesome duplex deal for the area: a foreclosed, vacant house with a dilapidated basement. This was the perfect duplex to build wealth and create monthly income!
The property had three bedrooms and one and a half baths on the main level with one bedroom and one bath in the basement. They snatched it up for a smooth $470,000.
After putting in some sweat equity on the property, they immediately saw a return on their investment when they received the first month’s rent from their tenant. They were hooked!
It just so happened that they also were able to find another investment property around the corner a year or so later. That meant that they then had even more monthly income coming in.
They found a honey hole!
It was not long after they found out they needed to relocate to Oakland, CA. Instead of selling their properties in DC, they decided to hold onto them and continue to build wealth with monthly income. Cash flow in real estate is the best way to create passive income, and it was exactly what they wanted to do.
Around this time, though, they found out about return on equity. Annie explained it perfectly!
When we bought our house in 2008, we paid $470,000 for it. But, today it would be worth probably close to a million dollars! That’s a few hundred thousand dollars in equity. We were only bringing in about $200 in cash flow a month with the property, though. So, we had to ask ourselves the hard questions…
We had to determine if it would be better for us to sell the property, or pull out the equity in order to make that money work for us better somewhere else. That is exactly what we did.”
Annie and her husband decided to hold onto the first property, but refinanced all of their cash out of it. They then sold their second property and put the equity to work in another investment property. [For more on this, please listen to the podcast here.]
(Annie definitely reminded me that this is something I need to do, too! Looks like it is time to have another sitdown with my bookkeeper. Sorry Lindsey….)
You Have to Play the Long Game to Build Wealth with Real Estate Investing
I know how important it is to get started in real estate investing as early as possible. And, I am SO thrilled that Annie and her husband did! That single investment they made in a duplex to start to build wealth has made them a few hundred thousand dollars, at least!
But, here’s the deal: real estate investing is the long game. You don’t make money overnight.
It is not “sexy” or a “get rich quick scheme.” It takes work and patience, but it will produce a return in time.
Believe it or not, now is a great time to get into real estate investing. The market is taking a hit, and while everyone else might be freaking out, an experienced real estate investor knows better. Warren Buffet once said “Be fearful when others are greedy and greedy when others are fearful.”
Or, to paraphrase, “You got to run in when everybody else is running out, and run out when everybody else is running in…”
This takes guts. It takes courage. So, you have to be willing to lean into that discomfort, instead of away from it!
Don’t Forget to Leave a Legacy While You Build Wealth
Warren Buffet is one of many mentors that Annie and I have both learned so much from along our journeys. They are the giants on whose backs we get to stand and discover what they teach. Now, we both have our chances to pay it forward, too.
I recently hired a young teen in our areas who needs to make some money. The work he does is the “honey do list” kind of tasks around one of our new properties. But, it is important to me to leave a legacy in my life, too. This is why I am in this business in the first place. I want to make an impact.
So, I told this young man that if he reads Warren Buffet’s book, The Snowball Effect, I will pay him $30. You know what he said? “I’ll read it tonight!”
Now, obviously he is not going to be able to read such a big book that fast, but I lit a fire under him.
I have no idea what he will do with that information, but I love that I can work to plant a seed in the next generation so they can learn how to build wealth right away. That is the dream!
Annie had a seed planter in her life, too, when that realtor suggested that they think of real estate differently. His single suggestion changed the course of their whole financial future! THAT is an amazing way to leave a legacy.
Now she gets to teach her own kids the same vision for their future, too! A book that she recently had her oldest son read was Robert Kiyosaki’s book for kids, Escape the Rat Race. The book is written in graphic novel style, so her son was easily able to understand the ideas. Once they finished reading that book, her son grabbed the jar where he keeps his money and said, “I need three separate jars: spend, save, invest.” Then, he took all of his money and put it all into the save jar! THAT is awesome!
Annie and her husband are now able to leave a legacy for their kids in a way so few get to accomplish.
Break Out of the Employee Mindset to Build Wealth
Annie realized that she was not cut out for the typical 9-to-5 mindset early in her twenties. In the first 10 years after graduating from college, she held nine jobs! She wanted to make an impact, but everything felt too shallow and too repetitive. That was when she knew she was built to be an entrepreneur.
She and SO many other people like us know that we are not in the real estate world only to make money. The biggest reason, by far, is the desire to make an impact. The bigger the impact, the bigger the income that follows. That is just how money flows.
Yes, it is risky to become an entrepreneur, but the return comes in so much more than money! In fact, this is how Annie and her business partner, Julie, started GoodEgg Investments back in 2017.
Annie and her husband knew they wanted to continue to grow their investment portfolio. The cost of Oakland, CA, however, was more than what they could afford.
They needed to look somewhere more cost-effective.
They did their research and dug into the market when they found a great investment area in Huntsville, Alabama.
There were so many great investment opportunities in the area that Annie and her husband were quickly able to snatch up several quadplexes and duplexes at great prices. This, of course, got the attention of their friends and family, who also wanted to find out how to make money by investing. Annie tried to teach them how to do what she does, but that was not really what everyone wanted.
Not everyone is ready for the work that goes into real estate investing.
That was when Annie had a great idea! She had recently learned about syndication, which is basically a group investment. Both Annie and Julie had this same kind of experience, so they decided to team up and create a company that could make use of investors at a return for everyone. This is how GoodEgg Investments was born.
Now they get to partner with investors to make a difference in communities all over the place! They get to serve their investors, communities, and themselves. It is a win-win-win for everyone.
You Can Leave a Legacy and Build Wealth with Real Estate Investing
Annie Dickerson has taught me so much about how amazing this real estate journey really is. There is always more to learn and ways to keep growing! You’re never too old to keep learning, and it is never too late to get started.
If you are ready to jump in and learn how to get started fast, check out my free deal for you at GetYourFirstDeal.com!
I know you can do this if you are ready to dig in and get to work. There is nothing in your way but your own fears. It is time to tell them to shut it and get out of the way. Your life is waiting for you to take action! Let’s do this.