Why You Should Consider Triple Net Lease Commercial Investing

Welcome, ladies, to The Real Estate Investor Show, providing inspiration, strategies, and insight to empower women investors to live balanced and financially free lives. Now, here are your co-hosts, Liz and Andresa Guidelli.

So, in today's episode, ladies, we are pleased to share with you this interview we had with Irene Lombaris. We focused on triple net lease commercial investing, which is quite honestly a niche that just does not get any time on the air, if you will. And we really dive deep into her process, how you could set yourself up for success in this strategy, and then how she transitioned to quite honestly investing in various niches and building up passive income that exceeds $20,000. So she's doing something right. I think you're gonna really enjoy today's episode.

Yeah, Irene is 100% full-time real estate investor. And part-time physician. So she's offsetting her high-earning income by investing. And what I like about her is that she has Plan A, B, C, D, and like, oh shit. I love that about her, her mentality and how she deals with the circumstances that might change throughout the process.

Welcome back, ladies.

This is Liz.

And this is Andresa.

Welcome back to the Real Estate InvestHer Show, where our mission is to empower women to live a financially free and balanced life however they wish to do so. Right, Andresa Guidelli?

Yeah, do what the hell you think.

We're so excited to be joined by Irene Lambrias. Thank you so much for being on our show. Thank you for sharing your wisdom with us today, and we're gonna get into some neat stuff around commercial investing, and just some interesting niches that women don't always consider or consider enough. So, thanks for being on our show.

Thank you. It's just a pleasure to be here.

So, before we get into Irene's story, Andresa, we're gonna share, I'm gonna share, excuse me. I always talk in the we, like it's me and my little mouse in my pocket. But anyway, I'm gonna share something that I went through last week, right, Andresa?

Mm-hmm.

So last week, as you know, I went down to Florida. I was speaking at a conference and, you know, something I'm getting better at is really trying to be mindful and intentional with time spent away, right? So if you're gonna be away from the family and the kiddos, how do you make your time well spent? And so one of our meetup leaders and InvestHer eXp leaders is down in Orlando as well. Ginny, if you're listening, Ginny, big shout out to Ginny Atkins. So before we get into your story, Irene, I wanna just share a quick little story. Recently I went down down to Florida, Andresa, as you know.

Yeah.

I was speaking at a conference, and something I'm really being mindful of is being intentional with my time. So if I'm gonna be away, I'm gonna like, how do I maximize this time? And so one of our meetup leaders, as well as one of our investor eXp org leaders, Ginny, is down there in Orlando too. So I said, Ginny, why don't we put an event together? And so we were kind of noodling together what we should talk about, and we wanted to target real estate agents that were, you know, building teams, busy, And something that comes up a lot is that real estate agents are amazing at serving other people, serving their clients, building their wealth, but in reality, they're not building their own wealth. And that's a problem. And that's why Andresa and I so passionately began an arm of our business serving agents through our investor eXp team. So anyway, I wanted to share a quick little snippet of someone that came up to me after the event. There's about 50 women there, beautiful, beautiful place down there in Orlando. And a woman came up to me and said, you know, I've been an agent for 6 years. I built a team. I do very well for me, for myself, you know, financially. She's like, but this really got my eyes open because I'm just done. I'm just done helping all these investors and not putting any sort of passive income or wealth-building strategies in my own portfolio. And she's like, I'm gonna buy property. I'm gonna do it. I'm gonna share it on your Facebook community. I'm really going to see speak to that, um, and get involved in this business in, in this way moving forward. So thank you. You know, we just shared some tips and strategies. I just, I share that because I think so often we're so focused on building, you know, especially as agents, right, building other people's, uh, wealth if you're working with investors or serving the homeowner. Um, but how important is it to keep the end in mind? And what are we doing this all for, right? Not just a paycheck. We're doing it to build our own wealth. So I, I just say that because, um, there's so many amazing agents out there, you know, and just take a step back and go, what do I bring to the table? You bring so much to the table. Just go hone in on that and then start to think about how you can position yourself, potentially partner with investors, not just represent them. So that's my tip for the day. And I was just inspired by this woman, this one particular woman that came up to me.

Yeah, I remember you and I, I think it was about like 3, 4 years ago that we were speaking at a conference for agents, over 500 women. And we were sure that there were a lot of investors there. And when we asked them that, a few hands went up. We're like, "What's going on over here?" I couldn't wrap my head around because my assumption, I was far from right. And then we had different conversations and what they said is that they didn't have confidence. Fast forward 3, 4 years later, I heard another day, Jana Weber, which is our eXp org leader, she's amazing, super rockstar. She's part of a mastermind of top agents in the country. And she was also very surprised when she was in this retreat and everybody, all the top agents that are doing 6, 7, 8 figures, share their goals. And when they share about their portfolio, many of them had a goal of buying their first property within 5 years. That didn't make any sense whatsoever. So I do believe that I want to talk more about it. And I want to express more about what we are up to with the agents and really understand what are they their pains, why there is such a disconnect. Because we do believe you're like the insiders. All the agents are the insiders. You see the properties first, you know the market first. Why we are not building our own portfolio? Liz and I will not stand for that. And a couple of years from now, we want to see more hands up when we go to those conferences. And we want to see women building their own portfolio as well while taking care of their agents.

Yes.

So, so important. And, uh, you know, and again, just keep, keep that in mind as you're navigating, whether you're working with agents or you're working with yourself. Agents are just an amazing resource, more than just being your agent. Yeah. Uh, so without further ado, Irene, thanks so much for being on our show. Thank you for, you know, uh, being here with us. I— we'd like to kind of kick things off with this question: what, what lesson has taken you the longest to learn? As a real estate investor. Okay.

And also just to bounce off with the agents, I have a lot of friends who are agents and I'm a real estate investor but not an agent. And they get the commission representing themselves too. So that's a little bit of an extra advantage. And looking back on all those single-family homes that I purchased, that's one of the lessons I'm like, wow, I should have got my real estate license. I would've saved so much money with commissions, which I was glad to pay, but could have done that myself. No, I mean, I think one of the lessons I've learned was, yeah, not to be afraid and really to start doing my due diligence and educating myself as much as possible. Sometimes you get comfortable. I'm a physician, I'm still a part-time physician, so it's really, you know, comfortable to work and get your paycheck and kind of not think about investing. But I transitioned after, you know, during 2020, like so many of us had to, and I started to really get aggressive about things. And that's when like everything exploded. I was taking my time the first 10 years I was investing. And then in 2020, just that's when I started pivoting and realizing I could do bigger, I could do more. I just needed to get the right team. So—

That's awesome. And in this episode, we're going to talk about commercial real estate and I'm very excited about it because we don't talk too much about it. And there's so much— I've worked with a developer here for a couple of years and I'm so grateful for him and for all the knowledge that I just gained, like osmosis, by doing the construction and managing commercial buildings. And I loved it. I loved it. So based on your experience, Irene, many women that are listening right now, when they hear commercial, they're like, oh, they get a little, uh, on their stomach. So based on your experience, is there a path, meaning, "Oh, you should start with residential and then you go to multifamily and then you go to commercial," or there's not such a thing? You would encourage based on what you have seen in your current experience with commercial that it's a possibility that people are not considering right now and they don't need to follow specific path?

I think that just depends on the person, right? How much liquidity they have, meaning how much cash they have available, what their, you know, credit is like. I think the biggest difference between residential and commercial is that in commercial, the banks look at the person that is renting the building from you. They're looking at that person or that company's financials. But in residential, when you're buying single-family homes or fourplexes or, you know, you know, 6 bucks is, they're really looking at your financials. So there might be actually a lower barrier of entry in commercial if you're doing like what I was doing, which was triple net investing, which I'm sure we'll talk about in a bit. But I started, and I have to say, you know, I started with single-family homes. My parents were Greek immigrants, and, you know, my inspiration, they started with like duplexes, they mother-daughters, and then small apartment buildings. We never really lived in a home that we didn't— that was in either a duplex or in an apartment building or something like that. So all of— so, you know, so I think for people who are just starting, who maybe have limited resources, instead of buying a single-family home, buy a duplex, you know, rent part of it, have your family live in the other part of it. And then after 2 years, like, you know, start buying another one the next year and plan on leaving that property after 2 years. I call it the slow flip. You leave that property 2 years, you live in your other duplex or fourplex or whatever you buy. And then rent out the entire duplex. And then within 5 years, you can sell that original investment and you don't pay any capital gains on that because you lived in it for 2 years. It's a, it's a tax law currently. It's still a viable tax law. It's something that will help propel you to get enough liquidity. So maybe in 5, 6 years, if you don't have it starting, you'll have enough to buy maybe your first commercial property. And at the end of the day, it's really whatever makes the most economic sense. So if you're cash flowing, if your return on investment with your single-family homes is double digits, you know, 10, 15, 20, 30, 40%, because the bank's like, hey, zero money down, interest rate's 2%, you know, you got to go for it. But if the net, you know, commercial property is making like 7, 8, 9, 10, 11%, and you have really no responsibility and you have the liquidity, it might be better because there's a lot less headaches with triple net investing in some commercial assets, you know, instead of the single-family homes. So I hope that helps answer the question.

Yeah, let's, let's talk about your first commercial investment. So you did this strategy where, you know, the—

what was the term again?

Not live and flip.

I called it the slow flip.

The slow flip.

I'm like, that's clever.

I've never heard that before.

I like that.

I was gonna say live and flip, but slow flip totally makes sense. So you did that, and then how much liquidity did you have to purchase your first commercial building, and what was that building?

So I started, as you know, after med school. Like, I put myself through school, you know, I paid for my own university, college, and all that. So I started with maybe like a net worth of zero, maybe a little less than zero, I guess, if you're talking about the med school loans. Um, um, but I, you know, because I was doing this, like, you know, living in a place, renting it, duplexes, all that stuff, I— within, you know, 5 years, I had amassed probably over $1 million in liquidity. And my net worth was probably around a little, maybe $2 million or something like that. I don't remember the net worth, but I had like $1 million in cash. And I went to just like a stockbroker or like a UBS broker. And I'm like, hey, I made it. I'm a millionaire. I don't have any school loan anymore. Let's do this. Make me $10,000 a month with stocks. And the man's like, maybe in 10 years, you don't have enough or what it takes. I'm like, wow. I was shocked because I thought I made it. I have $1 million. That's the goal, right? So I said, well, that's 10 years. I'm not going to take that. That's not the answer I want. I'm going to look for another way. And that's when I started looking at triple net properties. And during the time in 2020 and 2021 with the million dollars, you can purchase like properties like between, you know, 1.2, maybe 2, you know, depending on the property. I, I— so I got connected with an amazing broker, uh, his name is Mike Coker. And, you know, I'm not trying to plug him or anything, but he's just been my right hand for this whole thing. He's with Westwood Net Leasing, and all they do is triple net investments. And I actually brought him another investment that another broker was suggesting, which was like a KFC or something like, uh, it's called like a quick, uh, like quick QSR. It's just, it basically means retail food like McDonald's, KFC, Taco Bell. Those are also like double net, triple nets. And I didn't know anything about those, but I'm like, you know, hey, who doesn't eat, love Taco Bell? Like, let's look at this, you know. And then Mike looked through it and said, this is not a good deal. And he kind of, uh, pushed me towards Dollar Generals and Family Dollars. And I'm glad he did because as soon as, you know, COVID hit, like, all of those got hit hard— the Taco Bells and the McDonald's. So So I just got, you know, I'm not gonna say lucky. I was at a John Legend concert like the other night with my husband and some friends, and John Legend said something really inspirational. He said, "Luck is just when opportunity meets preparation." And I thought, "Wow, that is so insightful." And then he shook my hand, so I was really happy after the concert. But so, you know, I had the opportunity and I was prepared with the liquidity and I had the right team, which was my broker, pointed me in the right direction, and then the numbers made sense. So I brought my ability to, you know, look at the numbers and see if they make sense. And then I had my team look at what asset I should purchase, and then if it made sense, I purchased it. So I took my million dollars and I bought like 2 Dollar Generals in 2020. And at the time, I just want you guys to really realize the environment was no one was buying anything. All of these people were telling me, wait, wait, there's going to be a crash, crash, crash. Well, I took money, I purchased the triple nets. Banks were a little bit difficult with the first one, but by the second one, they were low interest rates, cash flow was really high. I didn't really have any sort of responsibility because in a triple net commercial asset, you have, you know, the property taxes are paid by the tenant, the repairs are paid by the tenant, and you have between like a 14 and a 25-year lease with incremental increases every year to kind of go with inflation. So for me, I couldn't even go into the multifamily space at the time because it's just a little bit of fear. And then when finally the multifamilies were doing better, it was so difficult to get in price-wise. So I got more for my money buying these 2 commercial assets. So they do require a little bit more money down than 20%. So most commercial assets are requiring like 30%, and you have to find a bank that lends. So you want to go for like a big bank. And if you can't find a big bank that lends, like Wells Fargo or Chase, or, you know, then you look at credit unions. So it just really depends on the bank as well.

Well, I have a lot of questions.

Okay. Love it.

I love that. But let me take a step back, right? Let's break it down. What a triple net is for the women that are hearing it for the first time. They're like, wait a minute, what are you talking about? Right? So break it down for us. What is triple net? And then we can go from there for my next questions, 'cause I'm very curious to see if you bought the building with the tenant already or the building was vacant and then you had to find it. That's a different story, but let's break down what is a triple net so everybody starts with that understanding.

So it's a great question. So, 'cause you can buy triple net or double net. So, so there is a distinction there. In a triple net, the person who purchases the property, which is the building and the land, is not responsible for finding the tenant, is not responsible for paying the property taxes, is not responsible for paying repairs or improvements, is not responsible for the insurance. You're basically not responsible financially for anything. The only thing you're responsible for is, is buying the land and the actual building of that property. The tenant is usually already there. The lease agreement is usually already in place and it's usually over 10 years. Some lease agreements are under 10 years and we could talk about that. That's a little— it still can be triple net, but these are secondary market triple net sales. But so that's the biggest advantage is you just buy it almost and then you just get cash flow from it. It's called mailbox money, is like some people refer to it, because you have no responsibility in a like single-family home or multi-family. You have the responsibility to pay the property taxes. You have the responsibility to fix the landscaping, the parking lot. You have the responsibility to pay the insurance on it. Sometimes you even have the responsibility to pay some of the utilities, and that kind of, you know, and that you have to kind of, it reduces your cash flow. So if you reduce your cash flow, you know, with multifamily, what looked like you would've been making a 30% return after you pay your property manager, your landscaper, painting the building, improving all that, you know, it might reduce that cash flow. It's still a great investment. You still can have equity in the property, still will be able to appreciate the property, but you can also appreciate a commercial property. And the bonus depreciation is amazing and was amazing in 2020, 2021, and 2022. Now with the new political structure, that might be reduced a little bit and they're trying to take that away. But bonus depreciation is also amazing if you are— you're— if you're not an employee, I mean, you have your own business or you do real estate full-time, it can offset your income.

So yeah, so it sounds that the broker that you work with, yeah, he looked at the real estate itself and the business altogether, and then you guys purchased from another, another owner that already— and then it came with the tenant.

So is that what happened for Dollar Generals? Um, so Dollar General is like a billion-dollar corporation. They've been around for almost like over 30 years. Um, they're, they're publicly traded company. They do not buy real estate, right? They do not buy real estate. They do not want to buy real estate, but they want to open up stores. So my broker works specifically with triple-net type of businesses. So Family Dollars, Dollar Generals, certain like gas stations. The business is already there. I'm not buying the business. I do not own the Dollar General. I do not put the manager in the Dollar General. The Dollar General owns the Dollar General. So the bank looks at this loan, they're looking at just the Dollar General. So that's already in place. Uh, what my broker does is he finds the appropriate property in the appropriate state. I invest in all across the United States, uh, and that's when, like, I go in and say, this looks good, this is the cash flow I want, this is the building I want. Most of these buildings are brand new. They're constructed brand new, and then the Dollar General and the construction company sells it to an investor like us.

Gotcha. So I understand you're not inheriting any— you're not inheriting the— buying the property and inheriting the tenant. You're not taking over a lease. You got the building and you are working with a broker that is going to be putting for the first time the dollar store the tenant is going there for the first time?

Yeah, the tenant is a corporate tenant, so I am their landlord. In all purposes, I am the landlord. I own the lease, they lease from me, but the tenant is the, the corporate store.

Yeah, so the, the experience that I had before was with AAA and, uh, wine and spirits, and with that, that we— the, the, the, the thickness of the, of the, of the contract, it's out of this world, right?

Oh yeah.

It is great because it's like, Jesus, you got to know all of this. What I was curious if you are inheriting from another company, because we consider selling it and the negotiations, what takes place or not. But let's talk about the tenant itself, right? For the ladies that are listening here, you mentioned that your broker said that let's not focus on those types of, of corporations or franchises.

The quick— yeah, the quick service industry, like, I think it's just the, the fast food. Now he kind of, uh, and it was a good timing at that time because it was like 2019, 2020 when I was looking at that. So, um, and they, they, they didn't do so well, some of them. Some of them was shut down, as you know. So, so we focus on recession-proof assets like gas stations and dollar stores and things like that. And if the numbers make sense, right, the numbers have to make sense for me or else I just don't do it. So that's like my hard, you know, it doesn't matter what anyone says or how pretty the building is or whatever it is, you know, it's just do the numbers make sense for single-family homes or residential? It's a little bit different. I always say if I'm going to live in it, then I'd buy it. If I wouldn't live in it, I wouldn't buy it. That's just what I do. That's how I, you know, and then the numbers have to make sense as well. But I have to— there's like a two-step process for that. And it's important to know, like, I didn't start getting commercial property because it is quite an amount of liquidity and not a lot of people have like $1 million cash to do it. And so, but it's a little bit easier barrier of entry if you do have the liquidity or if you do partner up because multifamilies are just, it's a different animal, right? You can't be a full-time, you can't have a full-time job and own a multifamily. You need an appropriate team. And despite a great property manager, you still need to be there. Unlike the triple net properties, which Honestly, I don't go to every physical property. You know, I don't physically go there to check out the property. It's all done through the internet and, you know, through like the lawyers and through the brokers. Like, I don't even see the property.

Yeah, I love what you're saying too, because I think we're always talking about, you know, observing the masses and doing the opposite. Not that there's no investors out there investing in what, you know, you know, triple net lease buildings. But it certainly doesn't get talked about as much as multifamily. And multifamily is swarming, right, with people, especially after COVID. It's overcrowded, right? Beyond just the people that were involved before COVID now you have all types of institutional money that's throwing money at multifamily. So, question for you. So, your first deal in terms of liquidity, let's talk about what the numbers look like. I'd love to drill down like specifics. So the, the new, you know, the building comes up for sale, your broker presents you with the building.

What was that?

What did that look like in terms of, um, yes, sale of the building, what you put down, all the, all the pieces?

So, um, so it's a brand new building that Dollar General constructed on, like, usually it's on 2 acres of land, so it's like between 1.5 to 2 acres of land, and then the building itself is like around between 2,000 and 4,000 square feet. And most of the dollar stores are in underserved areas, so they don't compete with Walmart, right? They want to be where Walmart wouldn't— won't go. Walmart goes to certain population, just like Starbucks. Dollar Generals and dollar stores go to lesser populated areas, smaller towns like rural towns. And it's there for all intents and purposes, their general store right there. And they do accept, you know, WIC, they accept Medicaid, they accept a lot of food stamps. So it's open for that type of population and for people who, you know, I've used dollar stores. I'm sure you guys have too. That's where I get my cards. Yeah, exactly. You throw parties, you get, you know. So that's where it is. So the building is already constructed, either brand new or an older building was renovated, and Dollar General has already put the management in there. So the construction company that Dollar General hires is the owner, and then I buy it from that construction company. So my first deal was in New Baden, Texas. I love New Baden. I was so sad to sell it. I knew the governor. I knew the real estate. I mean, they all knew me because it was such a small town and they loved the Dollar General store there. But I sold it because that's another strategy we can talk about later, is knowing when to sell to catapult your equity to buy another property that earns you more cash flow. So even though I'm a buy and hold investor, if I see that my property made enough equity, which it did between 2020 and 2023, or 2022, then I will leverage that and 1031 exchange it into something that makes me more cash flow. It was sad. It's always sad to sell property, but, you know, so New Baden, Texas, it was about $1.2 million. I put 30% down and my interest rate on that was about 3.6%. And it's a— so it was a great interest rate at the time. And it was a credit union, Randolph Brooks, that gave me the loan on that property. Property because I was going to be working with, um, Wells Fargo. But it was just when 2020 happened. We had the deal set. It was an amazing, uh, amortization was 20 years. There was no, um, uh, penalty if I sold it early. It wasn't— it's usually these things are ARMs. So even though it's like a 10-year ARM, it's a 20-year amortization. So your monthly mortgage is low. Um, and I'm not afraid of ARMs, not in single-family homes and not in commercial properties, if they're long enough. So any ARM, I like it between 7 and 10 years because by that time you're either selling the property or you have enough equity to refinance it or whatever you want to do. So 20-year amort, 10-year ARM around 3.5% interest rate, 30% down. And I purchased the $1.2 million property and it was cash flowing like just shy of $3,000 a month. So my return on investment for that property was a little lower. It was like around 8% cash-on-cash return. Uh, but I use the bonus depreciation, and I, like, 75% of what I put down, 75% of that 30%, uh, was, was applied as a tax deduction for my income for that year. So because I'm a professional real estate investor full-time and just a physician part-time, I was able to offset my entire income with that bonus depreciation. So I didn't really count that in the return on investment for my first one. But if you do count that, then your return on investment is much higher because it's a, it's a huge tax deduction. So, uh, the bonus depreciation is used by, um, accountants, uh, and it's part of the tax law. You use an actuary and it's a cost segregation analysis, and they analyze the property itself and the land. The land is not really used for the depreciation, but the property itself and everything inside the property is used. And for commercial properties, it's a lot more than single-family homes or smaller multifamilies.

And just to follow up on that particular sale, when you sold the property, what did it sell for?

So I bought it for about $1.2. I sold it for $1.6, and I cash flowed throughout.

And you didn't make any improvements really, because you bought a building that was brand new.

Right.

And you didn't have to put anything, you know, even just from— I'm just thinking like comparing it to multifamily, it's interesting.

And didn't have to deal with toilets. Yeah.

And it was sad because the actual governor of New Baden, and like they all like emailed me and said, we're gonna miss you. And I'm like, well, someone else is purchasing it. You know, it was just such a— if it made me more cash on cash, I probably would've kept it. But it was my very first deal and all my other deals were making me 11% cash on cash return or 10% cash on cash return. And it went up so much in value because no one wanted to buy these assets before COVID right? Most people who buy properties are big insurance companies, people who need the steady cash flow, like, because multifamilies were making so much more money, right? The cash flow on multifamilies, you can buy a building or even the mobile home parks, you can buy those relatively inexpensively and you're making 30%, 40% returns. You're making money on the sale. That didn't happen in 2020, right? Everything was kind of frozen and these were the only assets that still needed to be sold and, you know, still were a good, good cash on cash.

So you mentioned you sold that, you did a 1031 exchange.

Yes.

So, so tell me about the— this looks like a great, great deal, right? But you found a better deal than this. So tell me about that deal.

Yes, I'll tell you that. So let me just— so I saw about 2 Dollar Generals my first year, and then I— since then I owned 6 triple net properties. I try and stay away from double net properties. You still have to kind of fix parking things. And so my lesson is just stick with triple nets, make sure that the cash-on-cash return is there. It's a little harder now because the entire environment is harder, right? The environment has changed. So, you know, people are going to be, oh, I'm going to buy triple net and make 11%. That's just like, again, Luck was when opportunity meets preparation. I had the liquidity, I had the team, I had the banker, and I was aggressively looking for properties, you know. And so, um, so now the next deal was harder. So it— so I had this $1.6 million. I have to buy assets every year, otherwise I pay a very large tax bill, right? So my first thing is reduce my taxes. Thank you, WealthAbility, Tom Wheelwright. That's a shame, you know. I don't know the man, but he really And then my second thing is cash flow, right? So I want to eventually not have to work if I don't want to because I make enough money where I can just invest full time, right? So basically I had to buy something and I had 3 or 4 different properties I was going to purchase. All of them fell through. And this happens, right? All of them fell through. Either the numbers didn't make sense something was missing. The triple nets, you know, if you have a good team, they will vet the property for you. So I was going to buy a gas station, which I did buy gas stations, you know, before that. So I was looking at another gas station. These are amazing triple net investments. Again, you're looking at Chevron, you're looking at all these things that are owned by billion-dollar companies, and they were doing really well because gas prices were so high. So I was like, oh, I'm gonna buy a gas station. Everyone else was like, don't buy one, you know, Everyone's going electric. My husband, you know, was going electric. I said, you know what, we're always going to need gas stations in these rural areas as well. So I bought something in, um, in Arkansas, Little Rock, Arkansas. Uh, so I was looking for another gas station, and that— and then with gas stations, you have to really— it's environmental, so you have to really look into that. And that didn't— you know, that fell through because the environmental wasn't what I wanted. Uh, and then I was looking at, uh, like another triple net, but the cap rates were not there, so the cash flow is not there. So I actually 1031 exchanged into a syndication. Syndications are also amazing, and for me, it's very hard to syndicate, but if you have $1 million, you can pretty much do whatever you want to do. So with a 1031, I had enough liquidity to put $1 million into a syndication, and that earns me 9% cash on cash, and that also earns me a bonus depreciation And I went from something that was earning me like an 8% cash on cash to something that's earning me 9% cash on cash. But because it's a million-dollar investment, I'm getting a lot more money per month than what I was getting from the New Baden Dollar General.

Irene, just to clarify, you invested as a limited partner or you syndicated a deal as a general partner?

No, I have not syndicated a deal as a general partner yet. That might be my next goal because I really love doing this, but I purchased as a tenant in common limited partner. So it's a little bit different when it's a 1031, and it's a lot of legality, and we're still working on the legality. But I worked with LifeBridge Capital. His name is Whitney. He's an amazing guy, and his team's amazing. I also work with Passive Investing. I was just published in this newsletter, and I like passiveinvesting.com, who referred me to Whitney because they didn't have an asset. So I was going through my syndicators, going through these triple nets. I was like, oh my gosh, I have this 1031, like, time's running out. Like, you know, it's, it's like the whole pressure. Of course, you know, it happens. So it happens, especially with 1031s. And I actually found, uh, another, uh, strategy if I didn't— if that didn't work out. I had another strategy. So a good investor has a plan A, a plan B, a plan C, a plan D, and then, uh, oh shit, what's gonna happen?

Yes.

So I was actually talking to my accountant, and so I'm like, how much would I have to pay taxes if I can't send it, you know, 1031. She's like, oh, well, so it was, you know, didn't want to go that route. So, you know, end of story, I would have just had money and I would have paid a lot of taxes. But so I syndicated. It's a Fort Worth property in Texas. It's called the Borough. I think it's in Fort Worth, but it's definitely in Texas. And it's like a 300-unit. It's a beautiful building. I think it was like a $28 million purchase price. And, you know, my million dollars gets me the 9% and it's a 5-year hold. And then hopefully I could 1031 exchange that into another property or something else at that time, which is what I'm planning to do. So the good news is I found a property with syndications, which are also amazing. Finding the right syndicator. I have two that I really trust that I love. And then I think that's amazing. And if you're doing the 1031, don't have syndicators as your plan B or plan C, because if you can't find a property, then they're a great resource. Um, and I am, you know, 9% was like fine for me because it made more than the dollar store.

Let's play the scenario if you have not found the syndicators. How much would that hurt?

Oh my gosh, Andresa, you're hurting me now. I would have had a lot of, a lot in taxes, and I would have been a big lesson. Um, you know, but I, you could have, I could have found another triple net, to tell you the truth, but it was earning less than the property that I sold, right? So we were also looking at that. We were looking at other, like, dollar stores or gas stations and things that would make sense financially. But, you know, I'm a numbers girl, so I'm going to try and find something that makes me more money. But ultimately, it would have been possibly another triple net that maybe would not have made me 8% cash-on-cash return, but it would have given me a bonus appreciation. My money would have been parked safely. The other route that if I didn't find a building, which is, it's called Blue Hat, I forget the full name. It's a, you could 1031 exchange it into a trust. It's a sales deferred trust and it's a particular trust. And it's, let me see, it's Blue Hat. I met the man through passive investing and I just want to get their name of the, it would have cost about— it's called Blue Hat Installment Sales Trust. It would have cost $20,000 for the actual trust, but I could have 1031 exchanged the rest of the million dollars into that trust, and that would have been safe from taxes. That would have been safe. It would have given me more time to find another property, and it's just one cost, $20,000. This person, his name is Todd, who created this, was— he actually started as a real estate developer, and he owned like 80 single-family homes, multi-families. Like, he owned 80 properties, he and his wife. He's just, he's just lovely. They're wonderful people. Um, he basically sold his— all of his real estate, or most of his real estate, and his construction business and his real estate business, and needed to, um, put the money into a trust because you can't put all of that liquidity and 1031 exchanger, right? He went through so many lawyers, it was so expensive for him that he created his own company, and this is the company that he created. So that would have been an option, uh, for the million dollars as well.

Yeah, I think what you're saying is interesting, right? Because as soon as you talked about triple net lease investing, like, what popped up in my head is it sounds like almost like a passive investment. It's not passive In a legal sense, but passive from a return perspective. Yeah. And from that, then you spoke about how you became a limited partner. So just, that was my original thought process too. And I think the big thing here too is like to step back and go, you know, what can I get? And also what do I need to be invested in right now to yield the returns I need to today as well as in my future? And that's the thing that most people don't talk about, right? They see like the, you know, they see short-term rentals, they see vacation rentals, they see all these different niches. Is that going to yield you the results that you need to now and in 5 years? And, and what do you need to be mindful of as you navigate? What was important to me now is so different than what when I was in my 20s. I don't invest the same way.

You look like you're 20.

I'd rather do less.

Liz, you look like you're 20.

Oh my goodness, you're so sweet. All right, you can come back on the show. But, um, no, but it's true, right? It's so true. And, and so what I, I think the key here for women to hear is that 8%, 9% to me as a passive investor, because we're passively investing in some deals, sounds great. To other people, they're like, I don't want— I want a higher return. Okay, well, that also takes a different time, amount of time and energy. And, and so you're weighing all these pieces. And as you're building generational wealth, right, which we're so committed to, which is our theme, by the way, for InvestorCon 2023, It is all about what do I need to do today? What do I need to do so I can plan 5 years from now? And so, I also love, just a sidebar, I love the triple net lease strategy because there's less people doing it.

Yes.

And it all comes back to supply and demand. You know, you and everyone else is still interested in buying multifamily. Look at things that are different than what everyone else is looking at. People, stop doing what everyone else is doing. Just for that reason, I'd rather take a percent less. you know, than, than 10% of, of— so you have to, you have to weigh it all out. I just wanted to mention that people need to stop doing what everyone else is doing.

Yeah, I'm definitely a contrarian thinker. I think it's, you know, because I was raised by immigrants.

I was gonna ask that. That was like a top tip of my toe.

Yeah, tip of that tongue.

So, I mean, I said tip of the toe.

That's—

you totally said tip of the toe, but that's okay.

I feel Fran dressed up because first of all, my first language is not English. I speak 3 languages and my husband sometimes does not understand me. You know, he's like, what language are you speaking in now? I'm like, oh my God. Um, so no, but like, just for people who also want to make returns, like I'm saying 8 to 11%, right? That's like the range between these syndicators and all of this. And yes, 10 years ago you could syndicate and make 15 and you can buy a property. So times are changing. But the tax advantages, if you are an independent contractor, 1099, like a business owner, or you're doing real estate, like your real estate agents that you were talking about earlier, oh my God, like all of the money they make through their real estate company, they can definitely offset from this bonus depreciation. So if you're looking at that, then it's way more than 8%. You're putting a lot more money in your pocket. But if you do want cash flow, Andresa mentioned something earlier about how she's doing stuff with contractors and developers, and you can hard money loan to these contractors who are building these buildings.

Whole other strategy.

I hard money loan and I'm making— and I have an amazing person and we're going to be investing together. I'm hard money lending on Colorado for these homes he's building for Daryl Horton. And in the next 18 months, he's going to be paying me between 12% and 18%, right? So the more—

for you. Yeah.

So I'm like, for you, you want cash flow and you want to be aggressive and you don't mind risk, then you hard money lend to these. And this, this guy's amazing. And I just have so many resources. So, and, you know, I know in the end you guys can email me and I can share these, but these are guys that I trust, guys that I vet. And I think what women have to also realize, how we're different than men, is that we have this spidey sense. I don't know if Andresa, you get that terminology because Spider-Man had this. We have this women's intuition, and sometimes we're like, yeah, the guy seems great, but I don't— for some reason I don't trust it, or I don't like the deal. Like, I, I have not sold properties. Like, I, like, I have a beautiful cabin I'm in right now, and I haven't sold it. I was supposed to sell it because I didn't have a good feeling. That's it. The money was there, the prices, everything was there. I just felt like, you know what, I didn't— you know, I wasn't I didn't have a good feeling, and so I didn't. And, you know, who knows why, but I always also go with my gut, you know, and the numbers, you know. So having a good team that you have a good relationship with, that you trust, whether it's because you like their values, you, you know, like you spoke with them for an hour and you get along with them, that you have the same sort of like, you know, you feel like you could be a partner with them, that also is, uh, is very important. That— so having the right team is super important.

I want to just highlight one thing here, right? Because you said Plan A, Plan B, Plan C, or shit. Or in your vocabulary, there was no freaking possibility that you're going to pay taxes on— Yeah, well, legally, yes, yes, not happening.

Yes, legally. Well, because, you know, my tax bill is really high, right? So my tax bill could be someone's annual salary. I remember the first time, and I have paid taxes. I'm not like never paid taxes, but I remember the first time I became an independent contractor as a doctor. And a lot of like doctors, lawyers can share my pain. I was an independent contractor. I was not a W-2 employee anymore. And I realized like, first of all, 50% of your paycheck as a physician, as a W-2 goes to the government. So to me, I don't even look at annual salaries anymore or 401(k)s. I don't own a 401(k). I don't have a 401(k). I cashed that out during COVID without penalty, thank God. And I, you know, this is just my strategy. I rather use that money and invest it now and then develop my own retirement plan without the 401(k). I don't give myself that safety net. And I think sometimes people use it as a safety net and they kind of get like comfortable and they don't realize, you know, that that's not the way. I'm lucky enough I had parents who didn't really speak English very well, came from different countries, were very brave, and they bought buildings when the interest rate was 13% to the bank. People are complaining at 5%. I'm like, my parents made it work at 13%. Maybe they had to cover the cost initially, but they owned a building and that was their retirement plan. That's what's causing— that's what's their retirement plan. So ultimately, I'm not afraid of any interest rates. I'm not afraid of anything. I just, if I can avoid paying $80,000 or $100,000 in taxes, and that's what I'm gonna do.

And just, you know, in terms of your own experience, you know, having gone through a number of these triple net lease, you know, opportunities, what are a few like beginning steps? We always like to kind of break things down, you know, especially for women who are investors, right? They're savvy investors. They just never maybe delved into this particular niche. To the level you have, what are a few next steps that they can take? And this is something that they're like, you know, what are some, you know, just your first few steps? How'd you do it? If you had to do it again, these would've been your first literally 3 steps to kind of cut through the noise and not stumble through the process, right? Okay.

So the first step was, I, it was a BiggerPockets article and it was an author who just dealt with triple nets. So do your research, educate yourself on triple nets, you know, Don't take my word for it, but, you know, listening to podcasts is great. It opens up your eyes. It's, you know, listen to podcasts. BiggerPockets has an amazing, uh, triple net section. You can look at that article and then really figure out how to work the financials for triple net investing. Uh, cap rates is different than cash-on-cash returns, is different than bonus depreciation, cost segregation analyses, you know, and find out, okay, so it's $10,000, you maybe $5,000 you pay for cost segregation analysis. The cap rates are now maybe 6%. What's your cash on cash? What is the bank requiring? You know, and figure out where you want to go. Now, I don't really do the— I think it's QSR, quick service restaurants, because I avoid food, uh, you know, just in general. Um, and so figure out what you want to do. And then the second step is hire the right broker. Do not go on LoopNet. Because there's so many on LoopNet and like think that you'll have the experience and the knowledge to really figure out which one is good and which one isn't because you really need an educated broker. And I'm, I'm lucky with mine and I can share that resource who acts on your behalf, protects you, and kind of goes through the deal and goes through why it would be good versus the 100 other triple nets that are out there. So there's a lot out there to pick from. There are lower in returns now But if you have the liquidity and you want to park your money safely, it's still a good investment. And then the third step is, you know, look, work with banks and get your goals in order, right? What is, you know, you have to be prepared. So make sure you have the liquidity, make sure you have your financial documents ready, make sure you maybe have some relationship with banks. My broker actually introduces me to different bank bankers that he works with, so he kind of does all the legwork for me, and I just kind of give him the money, and then we buy the building. Like, I buy the building, and then he helps me. Um, so having like, doing your due diligence, getting educated, getting the right team, and then being prepared with the liquidity and the financing is really important. And in general, you know, I'm a planner. I don't know how you guys are, but I feel like, you know, plan A, plan B, plan C, oh shit plan. That's just me. I plan the first year, third year, fifth year, tenth year. I have a 20-year, like, where I'm gonna be, how much money I'm gonna be making, where I'm gonna be retired. Like, I can visually see it. I have like, you know, and so every And I do my own financial budgeting. I think it's very important. I have an amazing spreadsheet that I use that's savable, that's changeable. So every few months I, I look into what I'm doing, how much money I'm making, what I need to cash flow. And then, you know, and then I know my net worth now. I know, you know, and I didn't know that starting in 2020. Like, I know every— I know what my net worth will be in 5 years. I know what my net worth will be in 20 years. And so it's kind of motivating and you make the right decisions that way as well. So maybe the lower triple net investing is not going to work for someone who does not pay a lot of taxes, but maybe the hard money lending to a real estate developer for the next 18 months is going to be something that they want because all they want is cash flow, right? So there's different investments you can do for that. Or they want to buy single-family homes because they're thinking about generational wealth and they want to have, you know, 10 homes and they want to sell it and then buy a big multifamily, you know. So, it just depends on the person, the woman, where she's at and what she wants to do, or man, or what they want to do.

That's great. That's great, Irene. It's speaking our love language in that there's no one way, right? It's multiple ways. And I think what you've opened our eyes to is that, you know, to find a niche that's less crowded, and to, you know, put those first few steps in place and navigate it with people smarter than you. Yeah. And women are good at that. They are. If they just— we just get out of our own way and stop being solopreneurs, which, you know, Andresa and I are so committed to. We can't figure it out all ourselves. So Irene, this has been so great. Where can the ladies listening learn more about you?

You guys can email me at healthandwealthmd@gmail.com. It's health and wealthmd@gmail.com. I have an Instagram, that same, same tag. So, you know, please feel free to email me if you guys have any questions. I'd be more than happy to answer.

Awesome. And all this information is going to be on our show notes. Now we're going to transition to our fabulous 3 questions, and we're going to change things, Liz. We're gonna change things.

I love change.

I love change.

What's the most transformational book you ever heard. We're gonna change to Irene. What are the resources, any books, podcasts, or anything related to the theme of this podcast you would recommend?

Um, I mean, I'm a podcast junkie. I'm like addicted to podcasts and I listen to them on 1.5 speed. I don't know if anyone else does that.

Yeah.

Cause I just, I can't like, you know, yes. So, um, Rich Dad, I, I mean, I love Kiyosaki. You, you guys had Mrs. Kiyosaki on, which she's like one of my, if I can meet her, we'll play golf. We'll just hang out. I mean, she's so amazing.

She plays, uh, pickleball.

We should do it. Oh yes, we'll do it. Yeah. Um, so yeah, so Rich Dad Podcast is great. Um, I listen to you guys, obviously. I listen to The White Coat Investor, which he does a little bit more stocks. Uh, I listen to Passive MD Podcast, who does a little bit more real estate. I just was on Buck Joffrey's podcast. Um, he's got The Wealth Formula, and he's amazing. He was a former, like, brain surgeon and then became a real estate investor. So talk about smart. Um, so, you know, these are a few of the podcasts that I listen to, uh, and just so much more, you know. And so, you know, that's basically what I listen to.

Awesome. And now we're gonna talk about your, your— what the stuff that you do behind the scenes, right? What's the most powerful routine that you do to create a financially free and balanced Oh my gosh, balance is hard. Whatever balance means to you, by the way.

So I think for me, it's— I'm big into— so my ritual is basically writing down my goals. I'm a big journaler. I'm a big— I read a lot and I journal. I've journaled since I was 12 years old. So for me, it's part of my— I guess it's hard for me to just meditate, but I come to my cabin, I have beautiful 2 acres. I'm looking at lakes and trees, and I, I journal. So I have a— you could journal on your phone. There's a— there's so many apps you can do. Um, and I kind of just start planning and like writing down, like, if I could have this and want this, what would it be? What would it look like? And surprisingly enough, that really helps kind of ease my mind and, you know, gives me some sort of sense of control of my future. Uh, and that, that helps a lot. And achieving those goals are always like a Great.

Last question is, which woman, famous or not, has inspired you the most?

This is tough, uh, and this is a question I was thinking about when I started listening to you guys. I'm like, what woman would I put? I mean, I would just say, um, there's been so many women, right, in my life that acted as mentors, whether they thought so or not. I mean, you know, I know everyone says mom, very true, of course, but there's just so many, like, physician mentors, teachers, like any woman who is giving it her all and teaching and shaping lives, whether they're physician, like my attendings or my mom or the moms out there, or people writing books or people on podcasts or people on Instagram who are sharing their wisdom. That's the woman that shapes me the most because I'm always learning. I am a forever student. I don't— I'm always changing with my environment, and I need people who've done it before to show me. And hopefully your listeners got that from me today.

Absolutely. Irene, thank you so much for being on our show. We appreciate your time and appreciate you sharing all your nuggets of wisdom and support for the women listening. So thank you.

Thank you so much.

Thank you, Irene. If you enjoyed this podcast and want to receive updates on our next interviews, go to our website, therealestateinvestor.com. There you can subscribe to our show, become part of our investor community, and get updates on upcoming episodes.

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