What made you decide to enter into the world of real estate?

I purchased my first multi-family home at 24, somewhat serendipitously. I was a recent college graduate working my first “job” and doing what I thought I was supposed to do. You know: wear a suit (albeit restricting), work in a fancy building downtown, and work 9-5.  

I didn’t really have investing in real estate on my mind. But I would attribute my decision to three things. First, Philadelphia is a very owner-friendly city, so many people around me at work owned homes or were in the process of purchasing—they were all young people. The second was my network.  I’m super blessed to be surrounded by some major thoughtful and forward thinking girlfriends who were exposing me to books like Rich Dad, Poor Dad, Think and Grow Rich, and The Secret, so I was beginning to explore money, investing and my word perspective in new ways. Third, I was a renter in the home I purchased; it was actually the first apartment I rented on my own, so there was some attachment there.

The owners were a young black couple who were always around fixing things around the house. I started to pick their brains and ask questions; they were also very gracious and candid with their responses and advice about real estate.  They eventually presented me with the opportunity to buy the place; I think all the pieces were set, it was a no-brainer: live for half the cost, have someone else paying my mortgage, and build wealth.

How many rental properties do you own? (do you own homes, apartment buildings, co-ops, condos, etc)? I own one home and have invested in another home.  

What made you decide to own in Philadelphia while still living in NYC?

I didn’t always live in NYC. I went to undergraduate in Philadelphia (Temple University). That was when I was able to I purchase the duplex I mentioned earlier.

Could you detail the steps you took to find the current properties that you own?

I lucked out and the owners came and asked me if I wanted to buy. But I know this is not the norm. So, in addition to getting support from my former landlords, I have used realtors and online sites such as Zillow. I also spoke with home-buying organizations for advice and classes, as well as friends, family and lots of online research and reading to educate myself on the process. I never went to the bank and never met the mortgage broker in person (we spoke by phone and email). I didn’t have a realtor or lawyer. The closing was managed by the owner who also is a realtor,

Were these properties auctioned, foreclosed, or discounted in some other way?

No, but I did apply for a FHA loan and was able to get lots of first-time homebuyer grants and credits. Out of pocket, I paid $1,600.00—tips I collected from moonlighting as a bartender. 

How did you prepare financially to be a property owner? Do you still have student loans? The bank needed to see a few things to approve the loan. First, I needed to show good credit. My credit was decent, in the high 600 range.  The bank wanted to see consistent and solid income; holding a fulltime job satisfied that. I also needed to change the status of my student loans from “forbearance from economic hardship” to “in school” in order to get my loan approved. This was the hardest part because I wasn’t in school yet. I actually ran around getting recommendations letters, quickly applied for a M.S. program at Drexel University and convinced my job to pay for it. I signed up at least half-time, printed out the enrollment form, and sent it to my mortgage company.

Do you have student loan debt?

I don’t care to share the exact amount, but I do have a high amount of student loan yet, but see what I’ve done with investing in real estate as a smart long-term wealth move. I used to think that I had to have zero debt to be able to move forward with my financial goals. But it’s not true. I have student loan debt and I’m a property owner. I didn’t have to lose out on the financial opportunity.

You recently completed renovations for some of the units in your rental properties. Why did you do this? Do you use property management services for your units or do you do it yourself?

I’ve never used a property manager. I tend to be very DIY where I can.  I did the renovations and upgrades mainly because I wanted to attract higher rents, but also because it was just time; some things were just old and some past tenants had damaged the units.

How do you collect rent or respond to tenant complaints remotely?

I collect rent via Paypal, Cash App, or bank transfer. If I had more units, I would recommend an online rent collection application. As for communication, tenants call and text me. I have a maintenance man that is local and a realtor. I also purchase things on  homedepot.com and let him pick the items up from the Home Depot in the area. I visit every 3 months in general, but during periods of renovations and upgrades, I go every other weekend. 

Where do see yourself in the next five years as a real estate investor?

I really hope to purchase at least two or three more properties, ideally, each of those would be 3-4 family units. I am currently exploring opening a co-working space in Philadelphia. I am also looking into purchasing in Colombia, which has become my second home and have looked into some expat and overseas investing groups for resources. 

What lessons have you learned about money, people, and life as a young landlord?

There are so many lessons. I could probably write a book.  Each chapter would probably follow the following lessons.

Trust your instincts: Even though I was young and had no previous experience about real estate, I trusted my landlords and educated myself about the process. I saw the opportunity and figured out the details later.

Be an active landlord: The “p” in passive income needs to be lower case. You will always to have to be vigilant about your properties if you want to consistently upgrade the value and reap the rewards of better tenants and more rental income. With that said, it’s important you get everything in writing and take photos when it comes to the care and maintenance of your properties. People will shock you, especially your tenants so it’s important you add this layer of protection for both parties. This also holds true for workmen you hire: Make sure you’re there in person and look over the work at every.single.step.of.the.process for all things, but especially when installing things or doing major repairs in your home. I was shocked by how much I learned about the work itself and the behavior of my workers. 

Kara Stevens is a speaker, author, and founder of The Frugal Feminista. Like what you read and want more free financial advice for brown girls? Get immediate access to your free 5-Day Financial Reset Plan. [Tweet “You don’t have to wait until you have grey hair to be a property owner. Learn HOW I BECAME A BROWN GIRL LANDLORD BEFORE 35: PART II”]