Welcome to our first installment of the “Engineers Who Invest” interview series.  Here we meet other engineers who have gotten that real estate bug!

This interview is with Susan Tan, a software developer who got her feet wet first with a turnkey investment and has continued to grow her portfolio from 0 to 7 doors in one year.  She also is building her notes business.

Tell me about your background.  How did you get started with engineering?

I started out in college and come from a STEM (science, technology, engineering and mathematics) background.  Pretty much everyone at my college was in biology or STEM or engineering.  The top two most popular majors were general engineering and computer science.  I did general engineering and I saw a lot of people majoring in computer science who were working at Microsoft, Google etc since they were like all my roommates at the time.

Because I was near a lot of software engineers or software engineer interns at the time, that’s something I also wanted to lean towards – do more programming. Because I know that software is eating the world so right after college I did a two week boot camp that was back in fall 2012 with 16 ladies.  It’s an all woman bootcamp that was their second ever class.

And it goes by really quickly since it was like pretty fast paced and pretty much it was a routine every single day.  We did pair programming and then the last two weeks or so we did our final project on our own. And then afterwards there’s also a job fair where employers can come in and we could interview with employers that are affiliated with the Academy there.

I did a lot of job searching, even after that the job fair was over. In 3 months I got my first job back in spring 2013 at a small company called Rotten Tomatoes which is a movie review website for people who love to watch movies.

And so that’s how my career started.

What got you interested in real estate? How did you find out about it?

So pretty much I was listening to a lot of YouTube channels related to real estate such as Graham Stephen and also from Meet Kevin.

From YouTube I found out that there is that there’s turnkey companies that pretty much split properties to investors.  That’s how I found a turnkey company on YouTube called Ohio Cashflow because like they put out many YouTube videos about how to do real estate investing for beginners.  Their founder Engelo Rumora is pretty intense like on YouTube, but is super knowledgeable and he’s all about being action oriented.  “Let’s get things done.”

I was also in that mindset; I just wanted to get started with one property acquired.  After listening to many of his videos, I really understood his mindset and philosophy.  I scheduled the investor call with him and he answered all my questions about what it’s like to buy property and what it’s like to have a property manager.  In this setup, the tenant and property managers are already in place, so everything is all pretty much set so all I had to do was pick which property I wanted to buy.  And what is particularly interesting about this company is that it’s all cash.  This keeps it super conservative, super safe and avoids bank delays.  Because usually banks get delayed many times over the course of closing time.  My first property was acquired at about $64,000 all in cash.

That was in Cincinnati, OH and I specifically chose a condo because I didn’t want to deal with any roof, structural, or basement problems.  This way it was all contained to that one room, even though I am paying higher HOA fees every month.

What did you learn from your first investment?

Buy and hold is pretty easy as long as you have the right tenant in there and the tenant who is already living there.

She happens to be the right tenant.  She was already prescreened by the property manager.  Even before I purchased a property everything was already in place. It was like it was. The whole process was to be super easy and actually was super easy.  I think because of the pre screening that the property manager did, there have been no problems.  I’m about a year and a month in now and there’s been no problems at all with the tenant paying rent.  I don’t have any tenant horror stories, but it’s only been like a year and a month so far in my journey.

The way I thought about it was that even in the worst case I would have to sell it.  So I was thinking OK well yeah that is the worst case so I can give this a try.  Because otherwise I wouldn’t ever get started.

How does your software engineering background help you with your investing in general?

I haven’t written a program for software for doing real estate yet.  But lately over the past two months I’ve had to design and create my own website from scratch because I’m starting going into the business of flipping notes and buying notes and holding and also flipping notes.  That’s a new business venture for me, so building websites is pretty neat.

I’ve also gone to real estate meetups and say hey I can build websites for you all.  I can be the website person if they need it.

Tell me more about your notes business.

I’m a wholesaler for real estate mortgage notes.  I do a lot of direct mail campaigns.  A lot of postcards, to different people.  I’m just focusing on Texas because it’s the largest state with so many seller financed mortgage notes.  It seems like people that are really open to doing seller carrybacks more so than anywhere else. Yeah, anything for food.

I am targeting individual private sellers who want a lump sum payment for their mortgage note but at a discount.  They’re not gonna get every single payment right now and may be motivated to sell.  All notes are sold at discount, so that’s how the profit is made. I do wholesaling as like a middle person reseller on the note.

I then sell to the end investor and in this case, since I took Donna Bauer’s class, she has her list of investors to sell to directly.  I would be able to source for example, an A or A+ type of note that’s performing in the really good area and good LTV (loan to value) percentage.

Once that’s qualified by me, I send it over to her, and if she qualifies.  Then she would go through the whole process of negotiating with the buyer and going through the whole paperwork together.  Then Donna and I would split the profits 5050.  That way I get to learn the process of buying a note and then flipping it.

With notes, I’m pretty new at this.  It’s been just two months and zero deals so far, but I’ve sent many, many postcards.  I have been reading and listening to marketing podcasts and wholesaling or flipping podcasts. It’s almost entirely marketing.  For example, How do you do the copywriting?  How do you put an attractive logo and get the messaging across on social media and such?  I’m learning a lot about marketing even though I’m in real estate.

What’s your long term goal? For real estate or your business?

I just think I want to keep growing, but I’m also pretty conservative.  I do want to pay off the mortgage pretty quickly, so that means I am sacrificing cash flow because with a 15 year mortgage my margins are pretty slim. That’s by design simply because I want to be all done by the time I’m 45.  That way I have almost all cash flow, after the expenses like insurance, property taxes are subtracted.

I want to continue flipping notes to build up the larger and larger sums of cash for me to be able to buy high yield notes for myself.

Also, over the past year like I went all in on the Cincinnati market.  I went from a condo to a duplex to a fourplex.  So in terms like 0 to 7 doors in less than a year.  The condo and the fourplex are financed with traditional bank financing.  It’s been quite a process, but like overall it’s been like a really positive process simply because the property manager I’m working with.

If someone were in your shoes, let’s say a couple years ago.  Maybe a developer or software engineer?  What kind of advice would you tell them about getting started and with real estate investing?

I think it’s about making good life decisions about saving money.  Personal finance is super important.  I would never have even considered doing an all cash purchase if I weren’t, saving a 50-60% of my post tax income every single month the entire past two to three years before that purchase.

It’s about consistency with your personal finances 1st and start early.  It is always good to start early.

If you would like to learn more from Susan, you can reach out to her via email.