Episode 4: From Breakdown to Breakthrough — How Shelly Schilson Turned Adversity into Apartment Success

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Hi, this is Lance Edwards, and welcome to this edition of the Potentializer Podcast. We're always talking about potentializing real estate, potentializing ourselves, just getting the true potential out of everything we're doing. I'm very excited to welcome a special guest today, Ms. Shelley Shielson, who I've known for a number of years and working together. And she's gonna be telling the story of her journey in real estate, both in single family And in multifamily, Shelley, welcome to the Potentializer Podcast.

Thank you for having me, Lance. I'm excited.

And well, I'm excited because I know your story. I'm excited to hear you tell it to our to our listeners and our viewers. And let me give a little quick background on Shelley. She and her husband Tom, we talk about Tom, part important part of the journey here as well. We talking about I've done started the single family route. And then they moved into small apartments with a 13-unit property that presented a number of challenges. I'm sure we're going to be talking about that, that they have— talk about potentializing— they potentialized this asset and transformed it. So I don't want to give away too much of the story there. It's been a journey just like it always is. Of course, mindset has played a big part for Shelley, as it does for everybody. That's why I'm going to be talking to her today. For anybody looking to get started in real estate, look, anybody that's in the middle of your real estate journey, What she's gonna share here is really the whole truth of the process. Shelly, let's get going. I wanna start, there was a defining moment. Take us back. What was a moment that changed everything for you, at least the way you were looking at your life and certainly your financial life? What changed for you?

I was working a job and I had that antsy feeling, like something for me, something for us, Tom and I. So we stepped out and bought a business. At the same time, Tom started a new job. We were doing that simultaneously. The real turning point was when he was diagnosed with cancer. Right after surgery from the cancer, he lost his job, you know, corporate changeover. And that moment when you think you have, you're set, he's been with the company for 10, 11 years, making them lots of money, saving them lots of money, and all of a sudden it's just—

Gone.

Okay, we're reorganizing. Now, granted, we got a decent severance pay, so that kind of played into the complacency syndrome a little bit. But that kind of changed my mindset that it needs to be about working for us and not spending so much time and effort working for someone else.

Talk about a one-two punch, a cancer diagnosis and then you just lose your job. What were your thoughts at the time? Do you recall what you were thinking when you had this one-two combo? directed to you with regards to your family and your finances?

Yeah, I think we were just in survival mode. You know, we were in Tennessee at that time, 7 hours from family, just trying to decide what we were going to do. We were in the Nashville area, expensive living. We made the decision to pack up, sell, and move closer to family. But on top of that, him having that cancer diagnosis, him looking for a job, it just didn't happen. Because of the C word, you know, people didn't want to hire him. You know, he's got all the credentials. You know, he's been a general manager, he's been a VP of operations, but he just couldn't land anything because of that word.

Okay. So we got a triple combo hit at you. Now you got doors shut in your face, things you can't control. What were the options you were considering at that time? What were you guys thinking your plan was going to be?

We were just trying to figure out what we do, but we knew If we went back to Iowa, we had an apartment above our commercial building that our business was in. So it was a place to land. We packed up, sold, and headed back to Iowa, and that's where we landed for a while. He started doing some consulting. So he started a business with consulting and in the process, our business that we had, we were looking, you know, our son was looking to buy it. So we were exiting that one at the same time.

Well, let's talk about that because I know you've run a successful family business for 16 years. Was that already ongoing in the midst of this one-two punch you're getting, or was that a result of, of that?

When we moved to Tennessee, when Tom took the VP of Operations job, we kind of stepped back and let our son run the place. I was still working on the back end, uh, managing the books and helping him through things, but I wasn't in the day-to-day stuff. Evolved into him wanting to create his own legacy for his family and, and stuff. So it was just, and he did, felt it was right to step out, give him the reins and sell it to him.

So what lessons from the family business did you learn that would translate into what would become your apartments business?

Oh, you know, just dealing with people. Whether it would be your customers or your employees.

What lessons from that family business translated to apartment?

It was actually learning to deal in minutes.

All right, Shelley, you ran the successful family business for 16 years. What lessons from that family business world translated into apartments, which we ultimately would get into?

Just learning to deal with people. We had employees, we had customers, and learning that not everything goes the way it's supposed to go. Learning to deal with problems and create solutions for those problems. It was a retail business, so when our customers didn't get the product they wanted, what did we have to do to get them their product? It was an awards business. It could be a major car show, a speech competition, or whatever, but They counted on those awards being there for that final day. And if it was up to us to make sure they get there on delivery or just the whole system, we had to figure something out and get them what they needed.

So you had to make it happen.

Had to make it happen.

And you took it, you know, I can imagine if you're hosting an event and you're handing out these awards and you have, you're at an empty table at the event ceremony with nothing to hand out, that's gonna be kind of an awkward moment for that customer, correct? Yeah.

Not good.

So, all right. So you had to step up in a lot of situations.

Yeah.

I had to wear many hats, did the books, just learned to grind through everything.

Did you find that translated over into real estate and small apartments?

I did. 'Cause you're still kind of dealing with people and delivering the product, right? Making sure that the unit's ready to go and everything's working the way it's supposed to be working or take care of it when it's not working.

All right. That's opened some doors here for me. I know mindset's a big part of your journey. You say mindset drives everything. Mindset's been part of your real estate journey. So explain how mindset has shown up in your personal real estate journey.

It's become a hindrance sometimes. It's that mindset of, I am just a— that's one of my biggest caveats. I'm just a bookkeeper. It's that mentality, getting over that and owning where I need to be, that I belong here. Just reminding myself on a daily basis that I'm capable of this.

Coaching for over 15 years, that so many people think, well, I'm just a this, I'm just a that. It took a lifetime to become that, and we devalue ourselves. Here's an example in your family business. It would've been easy to say, well, it's UPS's fault. Sorry, I couldn't get your ribbons or trophies to you on time. No, you showed up, you took ownership, and you made it happen. That's definitely a mindset I've seen you do over and over. So a follow-up question to that, still in the context of real estate, what role does faith play in how you do your business today?

It actually is a big part. Just know that I am working for something bigger than me, and that's my ultimate goal.

And so you mentioned the self-doubt that so many people have. What tools or methods have helped you shake that off when you get back to business and be confident in doing it?

I have a saying that I repeat to myself, you know, it's kind of looking at me or giving myself a high five, say, you go, you got this, you own it. Just knowing I own it, keep reminding myself that I belong here and, and talking through the chatter, trying to get rid of the chatter and talk through it. I can find multiple distractions to keep me from Picking up that phone call and talking to that broker. For whatever reason, we always have that fear of brokers. We got them put up here on this high pedestal, and they're really just people trying to make a living like the rest of us.

Let's jump into the 13-unit property that you and Tom own. When you acquired it, what was the situation? What was the condition of this 13-unit property?

This 13-unit was in really— it was bad. The way it was cobbled together, The rents were super low, so you can imagine what kind of tenants we had. The branding of it, you know, it come from an old motel years and years ago known in the city as the By Hour. So it had never, it's been a struggle getting past what people think about it, but we've gotten more compliments from the cops, from the city. You know, you guys have done great. It looks great. So that's always nice to know.

So you had this no-tell motel building that was a mess. Going forward, what is it now? If I walk on property with you right now, what do I see today?

You see a lot, just a 13-unit that majority of all the apartments have been rehabbed. We're finishing up one now. We put hot water heaters in all the units. It's just a better place to live. Um, for our residents, a couple are saying, we're not leaving. This is where we're gonna land and lay. It's been a journey. Somebody once told me to pull the bandaid off and do it all at once, and I didn't listen to 'em.

Let's talk about that journey. How big a role was mindset in that journey? Because I think you were in the midst of this transformation. That was pretty much your baby, wasn't it?

It was. And in our conversations before, it comes out that I'm a people pleaser. Being a people pleaser. It's not always a good thing because it can cost you a lot of money. You don't wanna upset the apple cart. And that's kind of where I was at. I didn't wanna evict some tenants because they were paying, but they weren't great tenants. Or we had contractors that weren't, eh, but didn't wanna, you know, oh my gosh, what's gonna happen if they leave? Where am I gonna find somebody else? And it was the same in our business. We had an employee or employees that had a specific skill, but they were kind of cancer to the environment, but you're scared to get rid of them. How am I gonna find somebody to fill that? It's kind of the same with the apartment buildings. If I evict this person, how am I gonna find someone? We got a property manager and she does an excellent job and dealt with all the riffraff. I gotta give credit to her for dealing with all that.

All right.

Where were the rents when you took it over and where are the rents The rents when we took it over were about $300 a month and we've doubled them except for one unit. We've got one that still isn't rehabbed and we've left him alone. But outside of that, everything's been rehabbed and all the rents have went up almost double.

So what's your plans for this unit?

We're gonna finish up this last renovation. We've got a few units vacant right now because of evictions, try to get it more filled. And then run it that way. I think sell it so we can scale up.

Okay. So let's— that's a great segue. So what type of deals you're looking to sell this one so you can move up larger, you know, and what type of deals are you pursuing right now and why small apartments specifically? Because at one point you guys were, I know you have single-family rentals. Why small apartments? There's 2 questions there. What type of deals you're pursuing now and why small apartments?

I'm looking for that 24 to 36 range right now. It's just kind of that stepping stone, the next step up. I would like to have more. Of course, we all get in this and we think, oh, I want 100 doors. Let's take it one bite at a time. So 24 to 36 to me is a good range, the next step to get into. As far as small apartments versus single family, single family is okay and we've had great tenants in our single family, but we're sitting down now where we We got one of our tenants that's moving out, so they move out. We don't have any income in that until we get it filled. By the time you get it cleaned up, fixed up, you're probably 60 days at best down the road to get somebody in it.

All right. So basically what you're gonna double the building size, at least double, if not triple the building size on the next. And going back to the journey, it's a people business, you know, and you gotta work with brokers and you gotta work with lenders. You gotta work with sometimes the owners directly. How did you learn to navigate this process? And on top of that, what's been easier or harder than you expected in hindsight when you look at the journey?

I think it's just being thrown into it. 'Cause the more I sit back and try to think about it, the more my mind talks me out of it. In the business, you didn't have a choice. You had to deal with it. You couldn't just sweep it underneath the rug and move on. It's just forcing, 'cause I'm, I don't know if I'm quite an introvert. I'm getting better, but I'm quiet most of the time. And so it's been a challenge for me to be that people person, to put myself in that situation. I like being comfortable, so it's pushing myself out of being comfortable and complacent. I say I have complacent syndrome big time. Those have been challenges. It's just pushing through, putting myself in the situation where I have to do it and just do it. What's the worst thing that's gonna happen to me? Pick up a phone and somebody doesn't answer. Somebody says no. It's that negativity or that rejection, I guess. We always have a fear of rejection or screwing up, saying the wrong thing.

Yeah. Most people are too comfortable. That's why they can't get changed. Now, this scary time that you and Tom had together, the one-two combo, I would dare say if that hadn't happened, a lot of things you're doing right now wouldn't have occurred, right?

Probably not. Probably not. No.

Not that I want anybody to go through this to make a change, but we get comfortable and it's the fear of losing that comfort that holds us back from if we do try something different. So I would add to that for you. I was thinking as you were speaking, Shelley, you're gonna start a swim school, the Shelley Shilson Swim School, which is this, throw in the deep end and there you go.

Absolutely.

Because it sounds like that's what you've been doing for yourself is throw yourself in the deep end or just throw yourself into the project to get past the comfort zone. Is that a true statement?

Yep. That is a true statement. It becomes a survival mechanism for me. I have to do it, so let's just do it.

Well, I think it's a very powerful one. All right. So I wanna shift on a little bit, part of your journey. I know one of the things that's important to you, I heard you say this, is build wealth, build people, build community. So share with everyone, what does that mean to you in real estate terms? Please expound upon that.

Oh, I just want to give back. So if it's buying something and providing a decent home for someone, you know, workforce, community safety, you know, and in turn, I think once you can give back, then it comes back in return. That's creating that legacy for our family to give them opportunities or give other people opportunities. And make choices where they can grow. It's being able to provide a service and safety and growth for other people. I wanna be able to have the opportunity for our legacy, whether it's our family or other people.

So does it, does the 13 units fit into that vision that you have, that role of build wealth, build people, build community?

Yeah, cuz that's what we did. And when you got cops showing up every night and constant traffic, it's better now. The cops aren't out there like they were.

For everybody listening, if you had to do it all over again, would you have started on this one or would you have done something different? A challenging project like this?

The price was so good on this. It was $6,000 a door. It was crazy not to at that point. So probably yes, but I would do it all different. I would, I would've done, ripped the bandaid off and Got rid of everyone, did all the rehab, and then rebranded it at that point. Instead of trying to rebrand it, rip, you know, try to get rid of bad people, bring in new people, which is hard, very hard to do. It's hard to bring in good people when you still have bad people.

Yeah. And so everybody listening, what she's referring to, we had this conversation a while back. My recommendation has been just empty the place. Start from scratch, rip the bandaid off. But there's this mindset thing, oh, I can't give up that cash flow. This is exactly what happens on the journey. All right, let's look forward now. Go ahead, 3 years from now, and you're looking backwards over those 3 years. What would need to have happened over the 3 years for you to feel successful? Where would you want to be 3 years from today?

I definitely like to have In excess of 100 units, but I like the workflows where you can just duplicate it. I kind of learned that from you, creating your team within the team and helping others along their journey too, especially being a woman and doing this. I think sometimes it gets a little more difficult cuz the brokers, I don't know if they always take you quite as serious. A lot of people are very successful. I just wanna be able to help others. Realize that it can be done even when you're that quiet person that don't like to people pleaser. You can move past it.

Now I've seen you work with our clients, for example, at a buying tour, helping them get the offers out, built in your DNA, right? How to take someone to the next level. So I've seen that with you. I'm not surprised to hear you say that as part of your mission, cuz I see that in you all the time. Well, speaking of which, here's an opportunity to help some people that are listening here. In addition to what you've already shared, Shelley, what's one mindset shift that you wish every person new to real estate could make?

Don't let the chatter get in the way of your own self. Just push through no matter what. I know it's not easy. It's a constant battle. I mean, it's never— it's not one that's going to go away and stay away. It's always gonna come back. You may think you have a grip on it, but it will find its way, especially when you've got problems or the broker's not calling you back, or you think you got a great deal and it's not, or a broker kind of screws you over a little bit, I guess, per se. You know, those are, those are mindsets are easy to let that negative stuff come in and you just gotta fight through it and keep pushing.

So it's not quite like the infomercials they used to sell the get rich in real estate programs at midnight. You sit in your underwear at the kitchen table, put your home study course under your pillow and the money just comes flowing in. You're saying it hasn't quite been like that. There's been a challenge or two along the way.

It's, it's, it's not easy. It's work. It really is work. Once you get there, I don't wanna say it's gonna become easier, but pushing through it and getting through the motions helps. It's not always easy. It really isn't.

So I'm gonna ask you to finish this sentence for me. I want my legacy to be blank.

I want my legacy to be that I was a person with integrity. I was fair. I made it happen. And now I can allow others to follow in that path and create their own success.

Excellent. I've seen all that in you. Integrity, make it happen fair, and help people behind me, you know, make it simpler for them. That's excellent.

Not always about me. It's about bringing others along.

Yeah, that's good. I see that in you. That's excellent. All right. So let's say we go back to this timeframe, 3 years from, well, let's say you're talking to someone who's where you were 3 years ago. What would you say to them? Someone listening right now, they're not as far along, they're behind you. What kind of guidance could you give them to help them avert some pitfalls or get to where they want to get faster?

Just be confident in yourself when you're talking to a broker or to an owner. Don't have the fear of perfectionism or what happens if I screw up, because we're all going to screw up. But it, you know, and most of the time people don't even realize it. That you've said something that you shouldn't have said or said something outta line. So just keep in mind that, just keep pushing forward. Don't let the negative mindset get in the way of where you wanna be. Create those goals and visions and the plan helps keep the distractions from getting in the way.

100%. Because they will, otherwise you'll be down a rabbit hole if you don't have something to anchor you. What am I doing this for? What are we trying to get? I think that's what you're saying, correct?

That is what I'm saying.

So as we come towards the end of the podcast, first of all, thank you. Great. Thank you. And is there one thing that comes to mind, or is there a question that I didn't ask that I should have asked? Anything you want to share, or insights into the journey? You know, the whole truth of it, whole truth of the matter. I don't know.

It'll be worth it. I'm looking forward to keep pushing forward. But again, it's just a journey and that's what it is. It's just a journey. Tom's whole trajectory took us on a different turn. We were going to do some traveling and that's kind of changed. Now we're back around family and that's rewarding in itself too.

All right. Very good. Shelley Shielsen, thank you so much for sharing your journey.

Thank you for inviting me.

Yeah, and for sharing it. That's huge. We discount ourselves. All of us have our own journey, and just sharing that for some other people who think they're the only ones in this journey, this is a huge help. So I want to thank you for that, and I look forward to continuing working with you on your journey to the next level. This was Ms. Shelley Shilson sharing her story, her journey, about how mindset drives everything, certainly in her real estate journey. And so I'm gonna welcome you for joining us today. Thank you for being one of our viewers and listeners. And until next time, go out and potentialize your life, and I'll see you next time on the Potentializer Podcast. Thank you so much. Bye-bye.

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