“There is value in keeping tenants especially if they are good and if they are willing to pay even if it’s not market, even if it’s not that eleven hundred maybe they wanna pay a thousand, but you know they’re great tenants they’re gonna keep it up and you will have that initial capital outlay having to renovate.”
-Tiffany Alexy

Tiffany is a young entrepreneur with a passion for real estate.  She began investing at age 21 and started her own real estate firm at 27.  She now leads a team of agents and has been a multi-million dollar ‘Top Producer’ in the Raleigh-Durham region of NC since 2016.

In this episode, Trevor and Tiffany discuss:

  • How Tiffany started her journey in Real Estate Investing.
  • House hacking strategies to generate income.
  • The challenges in Real Estate Investing.
  • Where to find great sources of the property list.
  • Sources to find tenants and why keeping the value of your tenants is necessary.

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Full Transcription Of Today’s Episode

Trevor Oldham  00:45

Hey, everybody, welcome back to the real estate investing exposure podcast, I’m super excited to announce today’s guest on the show Tiffany Alexy. With over a decade of experience investing in real estate. Tiffany has done it all, including wholesaling flipping rentals, though her primary strategies are buy and hold and the Berg method. Tiffany also owns and operates a full service real estate brokerage firm servicing the Raleigh Durham, North Carolina metro area. Tiffany, excited to have you here today.

Tiffany Alexy  01:14

Thanks for having me.

Trevor Oldham  01:15

And for our audience. We’ve done quite a lot between the wholesaling, the flipping, and the now you’re going to the buy and hold strategy. And obviously the bur method, what was sort of the thought process of getting into real estate investing, you know, if you could take yourself back to when you first thought about it, and what was that a thought process? And what made you think that you want to start investing in real estate?

Tiffany Alexy  01:34

Yeah, so it really happened by accident. So I was in college and find a bunch of different grad schools. And knowing that I was going to be in the Raleigh area for at least a couple of years. And in grad school, I decided at that point, it was like, well, instead of looking for a place to rent, why don’t I potentially buy a place my family’s in real estate. And so it’s, you know, that bug was kind of planted. So I just literally just browsing Craigslist one day, and I found a condo, it was listed for 112,000. And this was back in 2011 things in the triangle area, we’re still in recovery mode from the Oh, eight recession. So this four bedroom condo was 112,000, it was about 10 minutes to downtown Raleigh 10 minutes to NC State was like, Okay, perfect, I will look at that. So it was literally the first place that I looked at I went and the numbers seem to make sense to me. So I could rent each bedroom for about three to 350. And I only needed a bedroom and a bathroom as a grad student. So I bought it, I ended up negotiating it down to like 102. And then they credited me for some carpet and paint alone. So it ends up being around 100,000. And I moved in and I rented out the other three bedrooms to one friend, and then two other people that I found on Craigslist to other tenants. And yeah, I mean, I did that for the first couple years during grad school.

Trevor Oldham  02:56

And for those of you listening in our audience, this sounds like a you know, a nice house hacking strategy where you buy this condo, and you know, you live in one bedroom and and rent out the other bedrooms. And then you know, you also get the other house hacking strategies or someone you buy a three family a duplex for family and you live in one unit and rent out the other units. But someone that’s may be considering in our audience that is thinking about buying, let’s say, if it’s not a condo, let’s say it’s a single family house, and they want to rent out the bedrooms while also living there. How was that experience like living with these roommates that you had never met before? Is that you know, typical. Okay, are there any challenges or experiences you had with them?

Tiffany Alexy  03:29

Yeah, so one of them was my friends from undergrad. And so I already knew that we got along well, others who I found on Craigslist. And yeah, it was just a matter of you know, getting the background check the credit check, making sure they had no prior evictions, just like you would any other tenant, it does get a little complicated when you actually live with them. Um, but you know, at the time, we were around the same age. So it wasn’t that big of a deal. We we actually ended up becoming friends. And Funny enough, those two, so it was a guy and girl that I found on Craigslist. They are actually married now. Yeah. And I sold my house last.

Trevor Oldham  04:05

That’s very nice. And it seems like you know, you got started in real estate and integrates strategy. I know, when I was reading your bio that you’d mentioned that you also done some wholesaling, and flipping, and now you don’t really do more than the buy and hold strategy with trying to use the bur method. Along with that, what was your process of going over more towards a single family, your let’s say the buy and hold as instead of doing the wholesaling and flipping,

Tiffany Alexy  04:27

so I’ve always had the mindset of wanting passive income or at least as passive as possible through real estate. It’s not truly ever passive, but with the rentals, it’s more semi passive. That’s it’s just about cash flow for me because I do have the real estate brokerage that I’m working on more than full time really. So that was kind of the push behind it. But I was finding here and there opportunities of being able to add value with a burn method. And so in a couple of my deals, I guess you would say I’ve combined the bur method with a house hack. And that actually works really well, and actually, you can do it in commercial as well, which not many people think about, they just kind of think immediately about residential. But yeah, the bur method is my favorite just because you can pull the same amount of cash out, and you’re literally recycling your money. And over time, you’re building up this portfolio with equity that you’ve created, and that you may not necessarily have had to start with. And you’re just using the same pot of money over and over again.

Trevor Oldham  05:27

And let’s say there’s someone audience that they’ve heard of the verb at the bar, I’d love for us to talk about how you look at properties and make sure that you’re going to be able to add that value. Are you looking to buy a two bedroom and add an extra bedroom? We’ll finish up, I guess, what does that look like when you’re going through the bird bath and just make sure that lose money, or make sure that the property gets appraised down the road at a good value?

Tiffany Alexy  05:44

Yeah, so none of mine had to add a bedroom or a bathroom. I’m definitely not opposed to that if the numbers make sense. But with mine, I essentially I buy something, it’s an ugly duckling. A lot of people are looking past it, because it’s just you look at pictures and you just cringe. That’s when you know you’ve hit something good. And then it’s just a matter of running the numbers, looking at the comps, seeing Okay, if I put 20 to 30,000 into this into this property and improving it, what could I sell it for? Or what kind of devalue the that I can refinance later.

Trevor Oldham  06:16

So it’s just a matter of knowing the numbers and being able to run comps, well in for, you know, when you’re going into there and adding the value you mentioned, you know, maybe needs 20 or $30,000 worth of work? are you investing your own capital? Or you’re taking a two or 3k loan from the bank or using a private lender? Was that sort of like,

Tiffany Alexy  06:32

yeah, so it’s usually my own capital. And it’s really, you know, as soon as I put it in, I get the work done, I rent it, and then I do a cash out refi. So I’m pulling that same, hopefully 20 to 30 grand back out, ideally, you’d be pulling out more, but minimum pulling that same amount of money out back out, and then using that money again, on the next project.

Trevor Oldham  06:53

That’s excellent. As you’ve been building up your portfolio, you know, you mentioned you’ve been in the real estate investing space for for quite a while now. What do you think some of the challenges that you’ve experienced as an investor I’ve come up?

Tiffany Alexy  07:02

Well, I mean, the most obvious one right now is the market that we’re in. It’s an extremely, extremely competitive seller’s market. Now, I’m especially here in Raleigh, because we just got news of Apple coming to the area in 2023. And so it was already a very competitive seller’s market. But now it’s even more so. So I mean, that’s really the the biggest challenge is finding deals now. And it’s meaning that most people are going further out. So instead of looking in Raleigh, and Cary, they’re looking in Garner, windows, that’d be Lin knightdale, even Greensboro, Burlington, really anything within about an hour’s drive of Raleigh, you’re just having to go further out and travel a little bit further to find the properties that are a little bit better on the numbers,

Trevor Oldham  07:40

I can definitely attest to that. I know I’m in Massachusetts, I’m trying to buy my first two, three or four family and the numbers just don’t make sense. But looking where my fiance is in upstate New York, which is about a two hour drive from where I am, I’m towing your property, actually tomorrow, and the numbers just make so much more sense. So I could definitely, I can definitely attest to looking at having to look a little further outside the typical area. Yeah,

Tiffany Alexy  08:01

I mean, there’s still I’m still in a bunch of wholesaler lists. So that’s pretty much key wholesalers are great to work with because they are the ones sourcing the properties. So I found some that way. But even now, the wholesaler, they have their buyers lists, and the buyers on those lists know how competitive the market is.

Trevor Oldham  08:19

So even though it’s not getting full market exposure, they’re still more than likely going over asking price or over whatever the wholesaler is asking. And on these wholesale, it’s because out of curiosity, I’ve been on one for in Massachusetts, and a property came up who has a four family for 499. And the rents were seem to be pretty good for the area. And the issue that I had just run into is I wouldn’t be able to see the inside of the property pictures, you know, I can I can get the address. And I could do a drive by of the property. So let’s say if you’re going out there, and you’re on this wholesale list and a property comes out, that’s a great deal. The rents make sense, the comps everything looks good. But you can’t see the inside of the property has come up for you or is that something that you know, the property is just such a good deal that you don’t necessarily care too much about what it looks like. On the inside,

Tiffany Alexy  09:02

though, it really depends. Most of the wholesalers, the list that I’m on, they at least have a video walkthrough of the inside or photos. So that makes it a little bit better. I wouldn’t necessarily exclude something that doesn’t have interior photos, especially if it’s rented it could be a little bit more difficult to get access. But I’ll definitely do a drive by walk around look at the condition from the outside. And typically if I can have like a floor plan and I can pull comps rental comps to see to make sure the tenants are paying market rent or if they’re not how much I can bump them up. It’s not something that I would 100% exclude automatically but it is it would take a little bit more thought and a little bit more research to make me feel comfortable with it

Trevor Oldham  09:42

and going along with x. This is also another question that I had because I’ve been personally for the property that I’m looking at tomorrow the rents that might be a little bit more below market value. So let’s say you find a property and it’s being rented out at $800 per unit in the market in the area is 11 $100 a month per unit same sort of style. Say it’s a two bedroom, one bathroom, when you You come in and you purchase the property, how do you go about rent, you know, increasing those rents to say 200 $100 a month without, I guess not like angering the tenant just like having a good relationship with them.

Tiffany Alexy  10:09

Yeah, I mean, it really depends on the current rents and what they’re at what the lease terms are. And if they’re month to month, or if they’re a year long, and it also depends on the tenant, you know, if they’re paying on time, if they’re a good tenant, oftentimes, it’s better to just slowly increase the rent of the market, because you want to keep that tenant in there, you know, because if they do move out, you have those turnover costs, especially if they’re going to go in and renovate the unit, you can maybe do one at a time. So keep you know, if it’s a four unit, keep three in there, and then have one unit that you’re renovating, and then potentially move one of the other tenants or get that one filled up and, and just go around versus doing all four at the same time than having it be completely vacant. So it really just depends on the tenants that you already have, and the lease term. But definitely, there’s value in keeping tenants, especially if they’re good. And if they’re willing to pay, even if it’s not market, even if it’s not that 1100 maybe they’re willing to pay 1000. But you know, they’re great tenants, they’re gonna keep it up. And you know, you won’t have that initial capital outlay of having to renovate it.

Trevor Oldham  11:09

I think that’s excellent advice. I know, our audience will find value. And I want to hop over to the brokerage side of your business. And I know, a lot of the times as a real estate investor people to talk about, you know, should they be a real estate agent? Should they go out there and get your license? But you know, you took that a step further, and owning your own brokerage. So how has that process been? Like? What was the decision making behind that to just a love for real estate and helping out people? Yeah,

Tiffany Alexy  11:30

I mean, that’s really that was it. So I started as an investor, I really had no intention of being a real estate agent, I had that first house, tap that investment property for about two years. And then I was in between careers and trying to figure out what I wanted to do long term. So I was like, You know what, at the time, I was just working a couple of retail jobs, and I was like, I need to do something that uses my brain. Now,

Trevor Oldham  11:51

Tiffany, I want to hop into the brokerage side of your business. And just talk a little bit about why you decided to go into owning your own brokerage, especially from the real estate investor side. And I’d love for you just to share with our audience what that looks like.

Tiffany Alexy  12:03

Sure. So I actually had no intention of becoming a broker. When I got my license. I really just got my license as an investor, because I want to see myself the Commission on deals. And also just to learn more about the industry, the ins and outs, the legal aspects and everything, just to make sure I was best prepared. When I was representing myself, I had no intention of being an agent, I’ve got my license. And friend started finding out that I had my license, but I was in real estate. So I had a couple of friends from grad school reach out, and they’re like, hey, Tony, you have your license, can you help me buy a house, like I’m looking for my first house. And at the time, I was kind of in between jobs, and not really sure where my career was going to go? I had a couple of corporate jobs and just didn’t like working for other people. And so it’s kind of exploring, you know, the idea of entrepreneurship, but not really sure what I was going to do. So at the time was like, yeah, sure, I’ll help you buy a house. You know, I’ve done it a couple times already. For myself. Yeah. It just grew from there. So I started helping a couple friends. And then you know, word got out. And yeah, now I have a team of seven agents that I work with, and we’ve been in business. So my four year anniversary is coming up of my firm. And yeah, it’s been Go Go ever since that’s excellent. If I saw correctly, are you opening up another office space somewhere? We are. So we just expand to Greensboro. We’re primarily based in the Raleigh Durham area. But I have a broker on the team who actually grew up in Greensboro. So she’s very, very familiar with the area. And it’s only about an hour outside of Raleigh, maybe an hour, 15 minutes. And so it made sense, you know, because I to capitalize on

Trevor Oldham  13:36

her experience, as well as perfect. But Tiffany, I want to be respectful of your time. And there’s just a couple of few final questions I want to ask you before we end the show today. And something that I’m asking every real estate investor that hops onto the show is on your opinion, where do you think the real estate market is going in 2021? And beyond?

Tiffany Alexy  13:53

Oh, that’s a good question. I get asked that pretty much every day. I wish I knew I wish I had a crystal ball. You know, a couple years ago, I was thinking there’s no way this can keep going. But the seller’s market has just continued the with a foreclosure, or with the eviction bans being lifted soon, I think in June, and mortgage forbearance programs ending from COVID theaetetus. The thought is that there will be more foreclosures on the market granted, who knows how many will actually come up. And with this market, I don’t even know if that’ll if the foreclosures will affect anything, they may just be quickly absorbed by investors. We’re kind of sitting waiting on the sidelines, and we may still continue to have a seller’s market. So I really hopefully supply issues will get better because right now, some of the price increases especially in new construction are due to supply and demand and just having very, very little supply and actually like short material shortages. So lumber and all that. I’m hoping things will balance out a little bit because I’ve got so many buyers who are just wanting to get into a home and they can’t But yeah, I don’t know what it’s going to look No, I

Trevor Oldham  15:00

think that’s a good answer for anyone that’s listening. We can never predict predicted we would have Pahlavi as rich as Warren Buffett. In fact, and as a real estate investor for our audience that’s listening. Do you happen to have a favorite real estate investing or business book that you’d recommend?

Tiffany Alexy  15:16

Gosh, any buy bigger pockets publishing is great. My favorite is the book on rental property investing over the Turner. And of course, I would be remiss if I didn’t mention my own book, I have a little it’s an introductory little book, it’s supposed to be easily digestible. For anyone who’s interested in getting into real estate. It’s called How to invest in real estate like a home girl. That’s perfect. And

Trevor Oldham  15:36

the last question I have for you today is where can our audience find you

Tiffany Alexy  15:39

Instagram is probably the best platform. My handle is just my first name Tiffany period Alexi.

Trevor Oldham  15:45

Awesome, I’ll make sure to include that in the show notes today. I know our audience will find a lot of value out of this interview and I want to thank you for your time today.

Tiffany Alexy  15:53

Yeah, thank you again for having me.