Building Wealth in Real Estate with Sara Aviles
By: Aimee Malgapo
Sara Aviles began investing in real estate more than a decade ago when she bought her first home at the age of 21. Since purchasing her first home, she has invested in multiple properties in California, Ohio, and Indiana. On Monday August 28, 2023, Sara shared her experience with real estate investing in a live Q&A hosted by 50/50 Leadership.
Here are some questions she answered and covered in the session.
1. What inspired you to invest in real estate?
When Sara was in college she took a class called How to Manage a Household. The class taught an individual how to run a household and manage finances with a budget. The professor advised the students to read Rich Dad, Poor Dad by Robert Kiyosaki. This book discussed the different mindsets people have associated with money and inspired Sara to begin investing as soon as possible.
2. What would be your advice for someone who is interested in beginning to invest?
There are a few ways you can begin investing. One option is to buy a primary residence with a 3%-5% down payment that has multiple rooms. Then you can house-hack, which is where you rent out the multiple rooms to tenants. This allows you to save the money you would have paid towards the mortgage towards your next investment. Another option is to purchase a duplex or a triplex. This type of investment usually has a downpayment less than 20% if you live in one of the units. A third option is to convert a garage to an ADU (Accessory Dwelling Unit). If you have an asset that is separate from your residence, you can put it into an LLC.
3. Do you need to be a licensed real estate agent to invest?
No, you do not need to be a licensed real estate agent to invest.
4. How do you manage/weigh your risks and returns on your investments? How do you know when to cash in on your investment? Do you have an investment strategy?
Sara said it is important to mitigate risks as an investor. She highly recommends getting insurance as a landlord versus as a homeowner if it's strictly an investment property. Also make sure to put your properties in an LLC to keep your personal assets safe. The main regret she has had as a real estate investor is selling properties. She sold a single family home at $350,000 which is now worth $750,000. Investing in 2-4 unit properties helps diversify, and mitigate losses when units are vacated. While single family homes don’t have the diversification, they do often have tenants that stay longer.
5. Do you recommend investing in another state?
Yes, Sara said often the prices are lower than in CA, with higher returns. However it is great to start learning close to where you live when you're first starting out. Indiana is known for being the number one landlord friendly state, and where Sara has moved all her investments to.
6. How do you find a good property manager?
In a new area, you can research property managers on Bigger Pockets. Be sure to have the property manager share a copy of their monthly owner statements so you can see how they do their accounting, as well as their contract so you understand all the fees. On top of the monthly management fees property managers will charge you for items like inspection of the property, leasing out the units, project management fees and more. Sometimes the monthly management fee can be low however pay close attention to the rest of the fees as they could cost you more than you realize.
7. What is the most challenging experience you have come across in your investing journey?
The most challenging experience Sara has come across was managing the 12 unit apartment complex, in one of the most dangerous cities in the US, during covid. It was six hours away from where she lived and the property managers refused to go into the building during covid. She dealt with squatters, drug lords, and tenants setting up swimming pools in their units while managing the building. Sara wrote a book about her experience called “Confessions of a Section 8 Landlord”.
Sara Aviles was well received by the members of 50/50 Leadership and everyone was grateful to learn about her inspirational story as a real estate investor. If you would like to learn more about real estate and contact Sara for more information, please contact her at Sara.Aviles@exprealty.com
