116: Investing Secrets from an Aerospace Engineer Turned Real Estate Hipster with Ali Boone

Show Notes

Ali’s background is in Aerospace engineering and she spent over 5 years in the space as a top secret flight test engineer.  She has what people perceive to be a “dream job.”  She had a great salary, etc., but something was missing.  When stepped foot in her cubicle each day, she knew that she was destined for something more.

From the time she was a kid, she had always wanted to be her own boss and lead her own life.  She was always very independent and even during her time as an engineer, she was exploring and looking for her way out.

She looked at all kinds of mediums, but found she could invest in real estate while she worked and grew it to a point where she could leave and go on her own.

Now, she lives the life she wants on her terms.

How did you know when it time to make the leap and leave your job?

Don’t just follow your passion – some things are better left as hobbies

Find the thing that works and organically happens

Start building your income on the side

Make sure that your “thing” is somewhat established

Save money and build a nest egg if you can – but run things like you don’t have it.

No matter what, there will be some element of missing security

How did you start into real estate?

It was going to be either a business or real estate for Ali

She originally decided to start a business

She came across a webinar for real estate and attended

This sparked things for her and she even able to network with the people who put on the webinar and still works with them today

She followed them during the 2008 crash and started investing in “turn-key” rental properties

She found a niche in turn key rentals

She has found how to outsource much of the aspects of the business around managing properties

Tell us about Hipster…How do you do what you do?

Turn keys can sound to good be true

Ali works with “Turn key” companies that work in specific markets that have good inventory, but also support a healthy expense to rent ratio so they can truly cash flow.

These companies go out and buy properties in bulk and get the lowest price possible.

They do all the rehab, if needed, source and find tenants, and rent the property

Investors can then buy the properties from companies like Hipster

No, they are not totally “hands off.”  You can still have tenants that don’t work out and have to manage your property manager around things.  You still need your head attached.  But as far as real estate investing goes, turn key managed property takes the bulk of the issues off your plate.

At it’s core, Hipster is a boutique referral company for these types of investments, but holds clients hands through the whole buying process and supports them as client-owners.

At the 22 min mark, Ali talks about what makes a great real estate investment…

It’s all about the numbers

About 80% of properties make terrible investments

You really have to understand where you are going to make the money

Are you investing for cash flow or for appreciation through flipping?

Find the thing that works best for you in your life situation.

Make sure to understand the expenses – Mortgage, taxes, maintenance, repairs, property management.  Don’t estimate – get actuals

Make sure to get a realistic rental income number for your market and area

Focus on positive cash flow as appreciation is not guaranteed – it’s a bonus

Most properties don’t cash flow which is why the numbers are so important.

What are your thoughts of the current market in 2018-2019?

We are close to peak pricing.  It’s not as easy right now.  You are looking for things to go on-sale and that is hard right now, but deals do still exist.

Wherever the market is, you need to find out how to make it work.

Right now, the markets Ali says are most appealing are Baltimore, Philadelphia, St. Louis, Kansas City, Cleveland.  A lot of Midwest.

But, Hipster only works in growth markets.  For example, Detroit is in the Midwest, but not currently a growth market in their model.

What have you learned from buying real estate that translates to business and life?

The idea of control is tougher as an entrepreneur or property owner

You cannot always control what is going to happen or plan for it

You have the best you can do at what you can each day

We don’t have control over much, except for our attitude and our effort

Be present and ready for what comes at you

Top 3 things entrepreneurs need to succeed in today’s world?

You have to realize that it is a rollercoaster ride and be ok with it.

Self-awareness.  Keep learning about yourself and what is best for how you operate.

At the 45 min mark, Ali challenges Tim Ferris to a “lifestyle design” duel…