Sep 21, 2022
Sia Senior began her career as a Mathematics educator at the high school and community college level. She earned her MBA in Economics and Finance and started in real estate as a real estate professional before transitioning to real estate investment. With nearly twenty years of real estate investment experience, Sia has helped build and manage an impressive rental portfolio. Sia is responsible for company operations and asset management.
[00:00 - 06:06] Opening Segment
- Sia Senior, a former math teacher, achieved financial freedom by investing in real estate.
- She empowers others to achieve the same through education and connections.
- Sia how she became a real estate agent and how she transitioned from flipping properties to buying and managing rentals.
- She experienced highs and lows with her flipping business but eventually learned how to pick tenants and manage her properties successfully.
[06:06 - 12:01] Getting the Best Tenants and Scaling UpYour Portfolio with Tthe Help of A Mentoring Group
- Sia shares her love for teaching
- Sia shares her experiences with landlords
- Joining a mentoring group with people who are interested in commercial real estate would help you scale your portfolio.
[12:01 - 18:05] We Got a Handle on Commercial Property Underwriting
- Sia’s company has been doing commercial property underwriting for 10 years and is now educated enough to do multi-unit investments
- They found a 16-unit townhouse community in Tennessee and got seller financing for 24 months
- They are self-managing the property and have been working well with the tenants
[22:31 - 24:34] Closing Segment
- Reach out to Sia Senor!
-
- Links Below
- Final Words
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Tweetable
Quotes:
“We
don't want people moving in and struggling to afford the rent and
so we're pretty conservative with that. And that helps us because
then if something happens in an emergency, it's not choosing
between eating and picking the rent, we don't want those kinds of
struggles for people. We don't want those for our tenants.” - Sia
Senior
Connect with Sia by following her on LinkedIn or you may visit their website at https://arrowheadcap.com/ to know more!
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I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
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Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
[00:00:42] Sam Wilson: Sia Senior is a former math teacher that achieved financial freedom by investing in real estate.
She empowers others to achieve the same through education and connections. Sia. Welcome to the show.
[00:00:51] Sia Senior: Thank you for having me. I'm so happy to be here.
[00:00:53] Sam Wilson: The pleasure is mine. Sia. There are three questions. I ask every guest who comes on this show in 90 seconds or less. Can you tell me, where did you start?
Where are you now? And how did you get there?
[00:01:02] Sia Senior: Ooh in 90 seconds. So I started as a high school math teacher. I worked with my husband. We picked up our first rental transitioning to be real estate agents. I did that, you know, part-time while I was teaching full-time we picked up enough rentals and enough, you know, flips and things like that, that I was able in, you know, 2015, so 10 years later to go full time into real estate.
We continued to build our portfolio until we. Enough that we self-manage a little, almost 30 units along with joining other people in two years last year to pick up a 16 unit you know, joint venture in Tennessee. And so that's kind of where I am and quickly how I got there.
[00:01:38] Sam Wilson: that's awesome. That's that was very, very quick.
That's probably the fastest 96 version I've gotten. Yeah, no, I love that. Sorry. Tell me, tell me this. I mean, it's it. It's one thing to be a high school math teacher, cuz that's what you're trained to do is to teach high school math. And then it's an entirely different thing to say. Not only am I gonna start investing differently than everyone around me, but I'm also gonna get involved in a, in a career in an industry.
I know nothing about. Walk us through that
[00:02:03] Sia Senior: process. Yeah. So, I mean, I think what happened was for us, you know, it happened by chance. So we, you know, working, my husband worked
for the federal government as a contractor. So both of us w two S the regular work every day, you save your money and you'll get there eventually.
Right. And so when we first purchased our, our first home, we were like, wow, that agent made a lot of money. Real quick. And she didn't really do much, you know what I mean? She showed us a couple properties, no offense, but you know, that's really what happened so true. We should do that too. so on the side we became agents.
And so we were doing that, you know, getting income coming in, you know, spurts of it. And, you know, decided for our house that we were living in, we were gonna convert that to our first rental. So we moved out. Of our primary residence made a new primary residence and made that first property a rental.
And we were seeing immediately, oh, wow, look at this cash flow. That's coming from a house that we own, you know, we have a low mortgage on it cuz we had lived in it before. Right. And so the cash flow was doing really well. We're like, wow, this might work. This might work. And so we just started to, you know, build up, buy more properties.
You know, we really worked on buying properties cuz we're in the DC area. So we bought properties that were in the Baltimore DC area. We're distressed. So, you know, we fixed them up a little bit and we're able to put people in them and get great cash flow. And so we just continued to do that. We did some flips in a DC area, you know, it's a high appreciation area, so you can definitely force the app, you know, the value of the property once you fix it up.
So we took that active income and we used it and transitioned it to buy more rentals. So that we can continue to increase the passive income coming our way. So as we worked and my husband actually, you know, after two years of doing , the flips and buying the real estate, he went full time. And so I stayed as a teacher 10 more years while he continued to focus in, on finding the properties and taking out the residents and tenants and, you know, flipping, we did that so that we had a lot of active income coming and converting into passive income, which is why, you know, in 2015, I was able to go, you know, full time into real estate and manage other
[00:03:53] Sam Wilson: rental.
That's awesome. I mean, 10 years is a long time to be slowing those seeds of residual income. I mean, that's what, what allowed you to say all right, we're gonna stay the course on this. Was there, I mean, tell, tell me about that.
[00:04:08] Sia Senior: Well, well I think for me, you know, I could have done it sooner cuz we, you know, we, by that time in 10 years we had probably maybe like 15 properties, so I probably could have done it sooner.
I was, I wasn't necessarily ready to leave the golden handcuffs as they say right. Of, of the w two, the consistent income coming in when you're flipping a property or you're a real estate agent, even with the rentals. Well, the rentals are pretty consistent if you buy it right. Which we did, but with the active income from flips and, you know, being a real estate agent, There's highs and lows.
Sometimes you have a lot of money coming in and then sometimes you don't have any right. Feast and famine. So for me, I was really concerned as we started to grow our family, that we always had something consistent like health insurance, because that could be very expensive, especially if something unforeseen happens, you know?
And so for me, I needed to be comfortable knowing that we had enough foundation that if something happened financially, we will be able to handle it. And so I could have left sooner, but I really just wanted to be confident. That, you know, we would be taken care of. If that makes sense.
[00:05:06] Sam Wilson: Was there any confusion and, or kind of awkward glances from your colleagues, as you told 'em what you were doing and what your plan was?
[00:05:13] Sia Senior: Oh, I mean all the time, they'd be like, , why do you renters? Why do you have renters? Like, why are you doing that? Oh, don't, aren't the tenants annoying. I don't think they call you at night and da, da, da, which, I mean, if you handle it correctly we are really good at communicating with our tenants. We are really good at, you know, Picking them well, right.
So we're very upfront and communicate well about what the expectations are. And we do a good job of screening so that we don't have a lot of that. It took some time to get there, but by the time we had, you know, 10 units, I had gotten enough bumps and bruises to figure out, okay, here's how you pick a tenant.
Here's how you don't pick a tenant. And so. By the time I was ready to leave the last, you know, let's say three years, I was preparing to leave. You know, it was no big deal. I mean, I was able to do it on the side while I was teaching. So I knew that if I left teaching and all of the grading of the papers and dealing with students all the time, I would have more time to be able to even grow, which we did cuz we definitely expanded and increased, you know, our assets after I went full time into real estate.
Sure. But yeah, definitely. There was definitely like, why would you leave this? This is, this is easy. This is there's nothing to do, which it was. Teaching is, you know, well here and there it's really, you know, a, a great job to do. It's easy. It's one and it's fun, especially if you enjoy it. But just being able to control my time was much more important to me and spending time with my kids, you know, so that was much more important.
[00:06:25] Sam Wilson: Fantastic. .
[00:06:25] Sia Senior: I've
[00:06:26] Sam Wilson: got a question for you on the picking your tenant's. Well topic, you mentioned that I want to hear what it is. You feel like your secret sauce is that helps you do that.
[00:06:37] Sia Senior: Wow. Yeah. Well, I think we've learned, you know, when we first started out, we were definitely like, okay, we need the warm bodies.
so, you know, we were just so desperate to get people, especially when you have one or two units, the goal is to get somebody in there, get them paying. But when we become the realize, is that like, okay, just because they're a warm body and they might have. What looks like a decent income coming in. If you're not really qualifying them overall, it really, you, you can't guarantee that, especially in some places that are not landlord friendly like Baltimore, which is in Maryland, isn't as landlord friendly as maybe some of the, you know, locations in the south.
And so it, it sometimes is a struggle to get them out. And so what we learned is that we really needed to one, make sure we met with. Prospective tenant that met our qualifications, that we communicated clearly what the expectations were that we were consistent. So, you know, we have a minimum credit score.
We've got, you know, how much we think you should be making in terms of income. We don't want people moving in and struggling to afford the rent. And so we're pretty conservative with that. And that helps us because then if something happens emergency, it's not choosing between eating. Picking the rent, right?
Like we want, we don't want those kind of struggles for people. We don't want those for our tenants. And so, you know, clarifying that and making sure that we do a thorough background in credit check, which we didn't necessarily do in the beginning again, but we do a, a quality thing that, and what I also do, I think that really it's helpful is that when we pre-qualify them so that we're not spending a lot of time showing everybody at the property we make sure that they're, you know, they've met the household income.
We go meet them at the property, show it to them, or someone will show it to them, not necessarily us. Then we let them know, okay. Before you. Because now you like the property. That's great. Here are the qualifications that we're looking for. And so when you tell them that front, they disqualify themselves, you know what I mean?
Because it's like, oh, I definitely don't meet that. Oh, I don't meet that. You know? And we don't have to worry about that. So we get left over people who are pretty much right there. They wanna be in the property, they've seen it. And we've, we've met them. So we have a, a good idea about like are they the type of tenant that we could work with and, and them for us as well.
Right. And so that, by that whole, doing all of that upfront and making it clear, it really. Eliminates the people that would be difficult to work with and that couldn't afford it and might run into something. So that's pretty much what we do. We also do a home visit. So visit mm-hmm . So we visit their current place of where they live.
And I think that is the trigger too, because some people don't want us to come to their house, but think about it. Like, it's not like we're going to yay or nail you from the house. Right. But in terms of like on the home visit, but. If you're concerned about, you know, someone coming into your home to look at it, to see how you live, you may not be the right tenant for us, because what we're looking for is not necessarily, if you were coming from a slum, slum landlord, we would know that, right?
Like the mold and things like that, the ceiling not being repaired, that has nothing to do with the tenant. That's what the landlord but you keeping a place that has like, you know, there's crayons all over the wall. You know, it's not being kept up. There's holes punch in the wall. That was clearly by someone's fist.
And not necessarily by, you know, like some, those are things that we would notice. And so we're not gonna be having someone that is gonna treat the property live in like that in our rental. And so we, they disqualify themselves on that because if you're not comfortable showing us your home, there's probably a reason why.
And so we do that for everyone and people who don't have a problem with it, it's no big deal. And they end up coming in, you know, How do you, I think that that's our secret sauce.
[00:09:46] Sam Wilson: No, I that's. The first time I've heard that. I love that. How do you do that objectively so that you're not violating any fair housing law.
And, and again, I don't even know what, I don't even know what law there would be out there that would say, Hey, you just didn't like your cuz your house was right. Like how, yeah. So you do that with a, with a consistent score card that you can then put in the file and say, Hey, I reviewed Sam's. And yes, he has crayon on his wall and like, whatever it is, I don't know.
[00:10:14] Sia Senior: Tell. Right. Well, I'll tell you, like, because as I said, because we give that upfront to let people know everyone, every home that we've visited we've no one's ever been as qualified on their home. so. It's worked out, right? So the ones who have done those things, right? Like if you're some, a tenant that has destroyed your rental place, where you live, you wouldn't let us in because you've destroyed it.
If, if it has mold because of the landlord, you're not, you have a problem letting me in because it's not, you it's a landlord. And we would know that from seeing it. So we've never disqualified anyone on, on moving into the home.
[00:10:50] Sam Wilson: That's brilliant. I love that. I love that. Cuz they've disqualified themselves.
When you say that they
[00:10:55] Sia Senior: disqualified themselves. Yeah. And we tell 'em upfront. So then we don't have to worry about that because. You know, I'm a tenant. I'm proud of my home. I have no problem with it. Come and see, right. The ones that have destroyed it, they don't wanna see their house. They never they're like, no, we don't want, we don't want a home visit.
Okay. Well, that's part of the that's. Everyone has this. It's the it's everyone, everyone, every one of our tenants we've had a home visit before. So it's, we're being consistent. It's not like we're choosing whose house we go to. Everybody's house gets visited.
[00:11:19] Sam Wilson: Right. Oh, that's really smart. If you're listening to this and you're wondering how to find a good tenant, there's a great screening feature that you know, I haven't quite heard before.
I think that's really cool. Let's talk about scaling up your portfolio. I know you guys are working on some larger projects now and tell me how you're doing that.
[00:11:39] Sia Senior: Yeah. So we, you know, 20, 20 we, before 2020, we were trying to figure out how to scale because buying one or two or four units, you know, at some point you're gonna run outta either money or time or something like that.
And so we knew the best way to do that would be to com connect with other people. And so we joined a mentoring group that had people who were interested in scaling and doing commercial real estate. We networked for a while. We really got a handle on the underwriting for commercial properties, because we could do obviously the underwriting for single family, four units, and two units, small ties in our sleep.
We had been doing it for 10 years plus so we really wanted to be as Educated as possible. Particularly because when you're doing larger assets and we know we were gonna be bringing in family, friends and other investors, you know, the last thing we wanna do is lose our money and theirs. You know what I mean?
So we took our time really just, you know, networking with people and getting a good feel for what it meant to have a profitable multi-unit. That was bigger than what we had been used to dealing. And so we networked enough that we connect with some people particularly through an underwriting group that I had been joining, you know, for over a year and networked with some of the people there.
And someone in the group found the 16 unit in Tennessee. And, you know, we connected, we looked at underwriting and it looked like a great investment. So 16 unit, a townhouse community, it was. Built by the seller who was selling it, it's about 20 so years old and he was starting to offload all of his units.
So he had a whole bunch and he was just letting them go. And so we were able to pick up that one, we got seller financing for yeah, for 24 months, which is good, you know, so we'll, we'll see how things go. I know the market's a little crazy now, but we've got some time, you know, the were grossly on the market particularly because, you know, he was on his way out, so he wasn't necessarily pushing rent and that kind of stuff.
And so we've been able to really do a good job of. You know, communicating with the tenants, first of all, and, you know, making sure that no one was afraid of like new land, you know, new owners coming in and rent are going up, even though they were under market by like almost $400. So we've been working with them, the, the units ever opened, we were able to bring that up right away, doing a, you know, minor details and minor upgrading to it.
The other residents who were there because of the type of people that we connected with that have the same value. We were able to work with them and slowly work on building. The, the rent increase. And so we were communicating with them. And so we didn't jump those rents up right away. But the goal is to do that and they we've communicated with them.
And so they know what's coming. They also knew that they were dealing with a great asset where they had, you know, undermarket rents cuz when you looked around, they, they were sitting pretty. And so they recognize, you know, what was happening and we were communicating with them, which made it a much easier to deal with, you know, besides doing some upgrades to the outside of the property and making sure that, you know, the issues they had were taken care of.
So it's been really good. So. Now,
[00:14:14] Sam Wilson: I mean, you may have said this and I may have missed it. Are you self-managing this property
[00:14:18] Sia Senior: as well? No it's in Tennessee. And so, you know, we self-manage in a DC area. So this one, cuz it's a joint venture. This is our first time doing a third party property manager. And we picked one of the top ones in the area.
And so it's been great for me to be able to just, you know, see, I guess as an asset manage side where I see someone else running the rentals and taking care of it as opposed to, you know, us doing ourselves. And so it's been a great experience. So. What
[00:14:40] Sam Wilson: have been some things as you interviewed your potential property management companies, what were some qualifiers and or disqualifiers that you used?
[00:14:50] Sia Senior: So I wasn't actually on the team that picked that group. But when we met , as a team to discuss it, we definitely talked about making sure that we had someone that was really familiar in the area because of where it's located in Johnson city. It wasn't like, you know, the DC area, Baltimore big cities where you have lots of property managers.
Right.
[00:15:06] Sam Wilson: You mean John city, Tennessee is not DC.
[00:15:10] Sia Senior: right, right. So we've really had I know. Right. I know. So. We had to really hone in on like, you know, who were the top players in that area. And we went on referrals as well. We also looked at a national company that was gonna be . Maybe putting an asset manager or a property manager close by that would add on to our units, you know?
But we ultimately went with one of the top two. That have been there for a while that know that area, because you know, they're familiar with what the rents could be. When you come from the outside, there's not a lot of like Zillow and things like that, to give you a good feel for what the rents are in the area.
And so they had a good handle on it. And so for us, it was more important that we picked someone local that was really educated and been in the community and could do a good job. And so that was pretty much what we, we chose, even though we had a couple other options to go. That's really
[00:15:56] Sam Wilson: cool. I love that.
Rewind your journey over the last, gosh, I don't even know how long it's been 15. Call it years that you've been in real estate. What's one that you would do differently if you could.
[00:16:08] Sia Senior: Wow. I think probably we would start sooner with joining with other people. I think you know, it's been a great experience and I think that, you know, because we were focused on just doing ourselves and having our own portfolio that we're building, which we still are doing on the side, there's just a lot more fun with other people, you know?
And being able to scale quickly, you know, could we buy some of the smaller. 10 units by ourselves. We could, but it's much more fun when you do with other people, you get different perspectives. And I think that's what I've enjoyed most about coming into this space where I get to hang out with other investors.
Right. And like-minded people. So I don't get the word looks like I did from my former coworkers, you know?
[00:16:43] Sam Wilson: There there is that. Yeah. I mean, yeah, absolutely. So you'd go bigger bigger, sooner, and really partner up with other people. Yeah. Which is a great, a great way to scale. I mean, and for those of us who aren't looking to build out our own in internal teams, Joint venturing with other people with similar goals and objectives is a great, I mean, that's a great way to take down projects and really expand your portfolio.
That's absolutely awesome. What is one thing you feel like you've done really well that other people should emulate?
[00:17:12] Sia Senior: Hmm. I think for me, what I've done really well is really worked well with the residents and tenants in the community. I think that that has made a big difference on why we were able to, when the pandemic hit, we had.
All of our residents were taken care of. We worked with them because of our communication style with them and communicating with them. And so if they needed a couple months or, well, a couple weeks or a month or two of, you know, working with them for the rents, we were able to do that with no problem. We lost only one tenant, meaning like during the entire.
You know, when there was lockdown, we had, everyone were communicating with them except for one tenant who I didn't actually qualify the correct way. When I went back and looked at my stuff, I was like, oh man, I miss this. And so she was the only one that we ended up having to, you know, evict from the property.
But everyone else. You know, was perfect. And I think that's because of the way that we connected with people and qualifying them in the beginning and then keeping the communication lines open. I wouldn't say they're family, but they're really, really close, you know, friends and I know what happens.
They're when they have kids, when someone passes away, the kids are married or going college. And I think that has really helped us to work with, you know, Keeping our residents, we have a 95% renewal rate and that's just because yeah, because of our connections with them and communicating our expectations up front.
And I think that helps us wow.
[00:18:27] Sam Wilson: A 95% renewal rate. That's you know, there's always things to learn. What was the one thing you missed in that tenant that you had to evict?
[00:18:36] Sia Senior: So for me, I think what we missed was I didn't look thoroughly at her background. Right. And so, well, I mean, I looked through it, but I think I gave a little bit too much leeway and it can go either way. So sometimes you listen to the stories and you think so, for example, when you're looking at credit and the credit history, there are things that might happen that cause you to get a lower score, some things impact more than others.
So not paying your student loans. Yeah. That hits you really hard. But I mean, , these college loans are a hundred thousand dollars. I mean, a hundred, th that's a lot of money, you know, I can understand why that would be a medical issue hits your scores really low, but you're. Trying to live, you know, so those are things that we gave a little bit of benefit to and didn't look necessary at the other historical things that would give us an idea about her.
So , even though my gut said, no, I wanted to give her a little bit of grace and I think. I gave her a little too much grace, and that's fine cuz you know, sometimes you hit, sometimes you miss right. More of the time, more often than that, we, we hit, you know, and we provide second chances to those that need it because of life's craziness that happens.
And I think that's why we're able to, you know, keep them so long for sure,
[00:19:38] Sam Wilson: for sure. And I love, I, I love that. I mean, , nobody gets it right every time, but you know, you guys are getting it right again at. Well, again, 95% of the time your, your tenants are coming back and you want them to come back. So that's a, that's, that's a pretty pretty heroic effort there.
Absolutely love it. See it. Thank you for taking the time to come on the show today and share with us your experience, how you've gone from a high school math teacher to being financially independent, to owning a large portfolio of your own. And now how you're growing by joint vendoring with other people in the industry.
Certainly love it and appreciate you sharing. Whether it's your insights today. If our listeners wanna get in touch with you and learn more about you, what is the best way to do that?
[00:20:17] Sia Senior: Well, I think they can reach out to me at our website Arrowhead cap.com. We have lots of information there, resources, and I'm also on LinkedIn.
So I enjoy, you know, biding back and forth and talking to people there as well.
[00:20:28] Sam Wilson: Fantastic. Sia. Thank you so much. Appreciate it.
[00:20:31] Sia Senior: Thank you for having me. I appreciate it.