Susan has followed her passion for the outdoors and exploring rivers to find her engineering niche–designing better habitats and river systems for sustainable and accessible water resources.  In fact, she found her dream job doing this.

But sometimes doing your dream job doesn’t give you the flexibility you want.  Susan moved into real estate to build long-term wealth for herself and her family.  She still loves the engineering she is doing, but real estate is another passion that allows for her to make a difference in people’s lives while building financial security that isn’t tied to her 9-5 job.

If you enjoy this interview and want to connect with the engineer real estate investor herself, check out her company Flow State Investing or you can reach out to Susan via email, LinkedIn, Instagram (@sheseeksflow), Facebook.

Tell us about your engineering background. What do you do?

I am a water resource engineer and I work specifically in open channel flow. Engineers would be familiar with that term.  I work with river systems.

It’s a combination of civil engineering and environmental engineering, but specific to rivers. I design projects that create a better habitat for fish and wildlife; that take out outdated infrastructure, like old dams that don’t function anymore; or make it easier for humans to access the rivers.

Sometimes that involves infrastructure in a more urbanized setting.  But a lot of times I get to work in settings that are in the middle of nowhere.  Then, I have a lot of flexibility and freedom in terms of creating new channels and new systems. And it’s overall really nice because I can get to help improve environmental conditions in a lot of places that have been degraded by overuse of land resources and that sort of thing.

I also get to do a lot of survey work, which is really fun to go outside and tromp around out there, but yeah, that’s my engineering background.

How did you get into it? How did you find out about this engineering discipline?

Good question. I was a whitewater kayak instructor and a raft guide for about 10 years.

My entire twenties were spent traveling all over the world guiding and teaching kayaking. I fell in love with the rivers and I saw rivers all over the world.

My entire twenties were spent traveling all over the world guiding and teaching kayaking.  I fell in love with the rivers and I saw rivers all over the world.

I got to help people experience the rivers and saw the light bulb go off to as far as: “Oh, my goodness. This is a healthy functioning river system, but if we put a bunch of trash in the river, or if we harvest all of the trees along the side and all the mud sloughs into the river, then it changes the character of that river” And it changes everything downstream too.

As I was starting to think about, wow, I need to get a little bit more financial security in my life. Raft guiding and river guiding is not only hard on the body, but it’s hard on your pocketbook.

I saw these projects happening as I was floating past.  I saw big log jams be put in the side of the rivers to help direct flow onto the floodplains.  And I just thought: wow, if I can continue to work on rivers, but do it at a really high technical capacity, that would be a dream job.

I went back to grad school and focused on river restoration engineering and found a job doing that and only that, which is really nice.  I feel very privileged that I didn’t have to go through a really big engineering firm. I went straight to the goods.

How did you get started in real estate or what piqued your interest in real estate?

It was a huge pivot for me because I got my dream job. I get to go tromp around rivers and I get to design them at a really high level of science and engineering.  But I still have to work 40 plus hours every week for another company.  And I saw my salary, trajectory increase, certainly, it’s a decent salary.  But I still can barely afford the town that I live in.  And I saw that wasn’t gonna change very much.

Suddenly, the realization of the idea that a job will not solve my financial problems really hit me hard. And I found real estate investing at the same time because we were buying our first house at that time. And I decided that we would buy our house and put an apartment on the top floor of it.

We house hacked our first investment property. And I just started learning more and more about real estate investing. I realized that I could create a business in real estate investing that would allow me to quit my job if I want to, but more likely I can work whatever number of hours I want, because I’m not dependent upon that paycheck anymore.

I realized that through real estate investing, I can replace my W2 income a lot quicker and have that sort of like financial ease and stability that allowed me to do work that I want to do when I want to do it, how I want to do it. And be a little bit more in control of my time.

So you wanted to decouple your income from climbing a ladder at work?

Yeah.  I saw the ladder and the ladder felt too flat. I was like, I want to leap up that ladder. Maybe I picked the wrong type of engineering.

But that’s also where my ethics come into play there too in that I want to be doing. I want to be improving the world.  I want to leave the environment in a better condition. And another element that real estate gave to me was the social side of that equation.

I’m choosing to focus on note investing right now. And I am excited to use all different kinds of real estate investing to have monthly cash flow. I can generate big chunks of income through note investing to be able to deploy in other investments.

The real estate investing that I do right now is able to help keep people in their homes. We buy notes that are non-performing and we help those borrowers get performing again. We help them make their payments in terms of creative refinancing.  We create payment plans that they can actually afford.

We restructure their loan to be able to keep them in their house. I feel like that and in other forms of real estate investing you’re inevitably trying to add value to people’s homes and where they live. And that element of it is something I was missing from my heavy environmental engineering work as well.

We restructure their loan to be able to keep them in their house. I feel like that and in other forms of real estate investing you’re inevitably trying to add value to people’s homes and where they live. And that element of it is something I was missing from my heavy environmental engineering work as well.

You were saying that your first investment was a house hack. Can you tell me a bit more about that?

I learned that I actually don’t like being a landlord.  My husband is an architect and has built houses in the past and he doesn’t want to do that anymore. So we learned that.

We took a house that was zoned for multi-family and we basically created a duplex out of a single-family home and put two apartments in there.  That allowed us to cash flow in an area that is quickly appreciating, but it’s hard to cash flow in this market. We chose to invest locally.

When the time comes for me to screen tenants and deal with problems, I don’t always get super excited.  I quickly realized that I didn’t want to continue to build out a small single-family rental portfolio.

Then, I went down the path of starting to build out some business systems to be able to manage, but around short-term rentals. That’s another wonderful engineering thing about this is that I know how to build out these.  Now, I have a couple of short-term rentals in my portfolio as well.

I really like that because it’s a little bit higher cash flow. It’s a little bit more maintenance and property management stuff, but again, if you set up systems and automation, you can actually manage a lot without a lot of your time.

But now, I really honed in on notes because I can do them from anywhere. I just need a wifi connection, my computer, my phone, and I can also help other people do that through partnerships. My partners and I have created all of the operational systems and we have relationships with the sellers of the notes to be able to get discounts on those notes. We manage them and work them through all the way to their exit strategy.

We can also help other people invest in notes with our systems. We’re helping people realize that they don’t have to be a landlord in order to invest in real estate.

We’re helping people realize that they don’t have to be a landlord in order to invest in real estate.

So what you’re doing is “flipping” notes?

Exactly. It’s like flipping houses, except we rehab the paper. There are no contractors. It’s really nice. These notes are in default because these are non-performing, the big institution and hedge funds that own these massive pools of notes don’t want to deal with them. This is a non-performing note for them. They don’t have the systems in place to be able to go back to the borrower or in say: “Hey, if we were able to restructure your terms, for example, change the interest rate, change the length of the term, essentially refinance, would you be able to pay this lower monthly payment?”

They don’t have the time or desire to do any of that.  We can purchase those notes at a huge discount.  And then through our legal debt collector partners, we actually communicate with that borrower to be able to work out new terms. What’s nice about it is that’s our primary goal because that’s the highest return and it also helps keeps the borrower in their homes.

The backup strategy is that we always do our due diligence based on if we had to foreclose. This is what the banks will have t0 inevitably do anyway. But there’s a lot of other things we can do in between. Maybe that borrower just can’t get back on track. We can go to a short sale or a deed in lieu of these other types of exit strategies that help preserve their credit a little bit more.

That helps speed up the process so that they could get into their next home. We try a lot of different things before we move to foreclosure. We can do all of our financial analysis based on that sort of worst-case foreclosure scenario and create an offer price based on that baseline. Our offers are based on a 12% return on investment and that’s, again, that’s the worst-case scenario.

But the better case scenario is within 12 to 18 months, we can get that note to re-perform. And then you have a performing note.  And like you just said, you can sell that as a performing note for much higher.

How has your engineering background helped you with investing in real estate?

Engineering has helped with developing systems and doing financial analysis. I am not intimidated to look at a proforma.  I’m not intimidated to build systems out, for example, building spreadsheet models out to be able to do things at a better scale, and do things more efficiently.

All of that technical stuff comes really easy to me.

In my specific field of engineering, I’m behind my computer a lot. I don’t get to talk to a lot of people. What I didn’t expect was that real estate investing also complemented my engineering because I am able to work a lot in relationship-building.  I’ve been meeting and creating a network of people and partnerships and helping people invest.

It was as if my engineering self was starved for meeting people and in real estate, I can actually get it. It’s like a wonderful, happy medium of the technical side of things that my engineering brain loves. I love a system. But the kayak instructor and raft guide is happy because I get to help people.

How many deals have you invested in so far?

We have five rental properties. And as far as notes I have three partners.  Our company is flow state investing and has about 75 to 85 assets under management.  And that changes pretty frequently with notes.

What’s your long-term goal for your business?

I hope with my business, I can essentially retire myself out of my engineering job if I want. And mostly that just means going back down to the flex hours, part-time hours, so that if I find a really cool project, I want to work on, I can take it on.

But if I want to take two months off and travel with my family, around Europe, I can do that as well. And be able to run flow state investing from anywhere in the world. That’s a 10-year goal for me. I think that I’ll be able to, I think I can actually attain it in about five years. I love to be active and I don’t ever see myself as retiring out of all of my businesses and being fully passive.

What kind of advice would you give engineers that are thinking about real estate or just getting started?

First, start putting your money into real estate now. People always say fund your 401k to the max, always fund it to your employer match. But what I would say is stop there and put the rest of your investing money into real estate.  Start researching different asset classes in real estate.  You’re going to find that your lifestyle goals can match different types of real estate investing.

Then you can very quickly in terms of a short number of years, you’ll suddenly have cash flow coming in that’s not connected to your engineering job. Once you don’t have to have the engineering job, you either enjoy it more, or you find some other way to use your skillset for the good of this world.

Start looking into different real estate asset classes. There’s a lot of different styles of investing. One of them is going to resonate with you. Multifamily syndications are a great way to be passive and have monthly cash flow. And still benefit from appreciation and upsides with value-add.  Notes are great ways to generate large chunks of cash to deploy elsewhere or live off of.

Start looking into different real estate asset classes. There’s a lot of different styles of investing. One of them is going to resonate with you. Multifamily syndications are a great way to be passive and have monthly cashflow. And still benefit from appreciation and upsides with value-add.  Notes are great ways to generate large chunks of cash to deploy elsewhere or live off of.

And then there’s a bunch of different ones in between. Find something and then just start doing it now.

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