{"id":43554,"date":"2025-01-23T19:49:01","date_gmt":"2025-01-23T19:49:01","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/how-becky-did-it-modern-frugality\/"},"modified":"2025-01-23T19:49:01","modified_gmt":"2025-01-23T19:49:01","slug":"how-becky-did-it-modern-frugality","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=43554","title":{"rendered":"How Becky Did It \u2013 Modern Frugality"},"content":{"rendered":"


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Three years ago, Becky Nova had no interest in even owning a home, much less becoming a real estate investor.<\/p>\n

Today she owns ten units and teaches women\u00a0how to invest in real estate<\/a>\u00a0and build passive income from rental properties.<\/p>\n

\u201cI\u2019m a traveler, the free spirit type \u2013 I never saw myself settling down.\u00a0Plus I grew up poor and never thought I would be in the position to own a home.\u201d But after her first property, she caught the real estate bug and never looked back.<\/p>\n

If you\u2019ve ever dreamed about building passive income and reaching financial independence with real estate, or mistakenly assumed women can\u2019t build real estate empires, you\u2019re going to want to hear Becky\u2019s story.<\/p>\n

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Becky\u2019s First Property: A Duplex House Hack<\/h2>\n

\u201cI\u2019ve lived in three countries and owned businesses in all of them, so I never planned on owning a home. But my husband is an immigrant to the United States and it was his dream to be a homeowner. Since it was his goal, I agreed to go through with it, but I wanted to find a way to make money off of it. So I always say I came up with the great idea of buying a duplex to rent out one half \u2013 I never knew that it was called\u00a0house hacking<\/a>\u00a0until months after we closed!<\/p>\n

\u201cOnce we bought that one, I was hooked.\u201d<\/p>\n

It\u2019s a classic model,\u00a0house hacking a duplex<\/a>: you score free housing by renting out the other unit(s) in a multifamily, so the rents cover your mortgage payment. It lets you supercharge your\u00a0savings rate<\/a>\u00a0while taking advantage of cheap, low-down-payment financing.<\/p>\n

The Property Details<\/h3>\n

\u201cWe paid $465,000 and\u00a0financed the duplex with a conventional loan<\/a>, putting down 5%. It\u2019s in a Class C neighborhood (which is my sweet spot) in Yonkers, New York. It\u2019s just outside of New York City, and the fourth largest city in the state.<\/p>\n

\u201cWe got in our bid just in time. Apparently, the seller\u2019s real estate agent had told the other buyers that there were no other offers so they went in low and thought they had the place in the bag. We came in and created a best and final offer, which we won.\u201d<\/p>\n

Sound simple? A fairy tale first-time homebuyer\u2019s story?<\/p>\n

It wasn\u2019t.<\/p>\n

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Sabotage & Vandalism<\/h3>\n

\u201cWe went for the home inspection only to find it had been vandalized with racial epithets in bright orange spray paint.<\/p>\n

\u201cThe fire department came to try to power wash it off, the police questioned us, all the neighbors came out and apologized to us. The story was on the local news and everything!<\/p>\n

\u201cEveryone was freaking out but my hubby and I decided to go through with the purchase anyway. It actually ended up being great because we got to meet all the neighbors before we even moved there!\u201d<\/p>\n

So who ended up being the culprit?<\/p>\n

\u201cIt turns out a couple who had also made an offer and lost their bid to us were trying to scare us away. They graffitied the place hoping to scare us away so the sellers would have to go back to them.\u201d<\/p>\n

But Becky and her husband\u2019s troubles were just beginning.<\/p>\n

Shoddy Repairs, Settlement Snafus<\/h3>\n

The duplex had just been renovated by a flipper, so Becky and her husband thought it was turnkey.<\/p>\n

\u201cAt the final property walkthrough before settlement we noticed\u00a0some leaks and told our attorney. She \u00a0talked to the sellers, who agreed to do the work after the closing.\u00a0No mention of escrowing the funds, and we didn\u2019t know any better at the time.<\/p>\n

\u201cThe day after closing, the sellers sent a handyman, who reported that the leaks required a licensed plumber. The seller refused to pay for a plumber, and the handyman refused to do the repairs \u2013 it turned out the seller already owed him thousands of dollars.<\/p>\n

\u201cSo we hired a plumber ourselves, as it\u2019s a rental property in addition to being our home, and we needed to get moving.\u00a0He had to open up pipes and covered our entire basement with poop as well as another leak coming from roof, which the seller also refused to fix.<\/p>\n

\u201cWe ended up spending about $7,000 that we were not expecting.\u00a0Also because of the leak, there was a $7,000 water bill that the title company missed that became a lien on our property a few days before closing (which they also missed).\u00a0The title\u00a0company agreed to foot the bill that they\u00a0missed.\u201d<\/p>\n

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Word to the wise: buy title insurance when you buy real estate.<\/p>\n

As for the incompetent attorney who failed to recommend that the seller escrow the repair costs, Becky and her husband ended up suing her to recover those costs. Unfortunately it wasn\u2019t the last time they had to take people to court over their real estate investments \u2013 but we\u2019re getting ahead of ourselves.<\/p>\n

The story comes with a happy ending though: \u201cThe rent from the other unit covered the mortgage, so we were living for free at this point.\u201d House hack successful!<\/p>\n

Property #2: A Fourplex Across the Street<\/h2>\n

In the wake of all these battles, Becky discovered a role reversal had taken place. \u201cMy husband got very depressed when our first property had so many issues. But I was energized: I think I would have gotten rid of him before I got rid of the property!\u201d<\/p>\n

And it turned out they didn\u2019t have long to wait before opportunity for a second property came knocking. Quite literally: \u201cWhile our real estate agent was inspecting the property, a little old lady from across the street went over to see who he was.\u00a0It\u2019s a typical neighborhood where everyone knows each other, and our realtor stood out as a stranger.\u00a0She mentioned to him that she might want to sell, so they stayed in touch for a few months.\u201d<\/p>\n

The old woman and her husband had owned the property, a fourplex, for 30 years. They decided they were ready to sell, so they called up Becky\u2019s real estate agent. \u201cWhen he got the listing, he called me.\u201d<\/p>\n

But as so often happens, this elderly couple had let the property fall into disrepair. \u201cThey never did any work and were legitimate\u00a0hoarders.\u00a0Every inch of the property inside and out was covered with what we called garbage but they called valuables.\u00a0We have no idea how the renters walked down the hallways to get to their apartments.\u201d<\/p>\n

They put the property under contract for $650,000 without it ever hitting the MLS. But the hassles were just beginning.<\/p>\n

Renovation & Cleanout Battles<\/h3>\n

This time, the contract of sale included an escrow clause, requiring the sellers to put money into escrow for the cleanout. But yet again, the seller failed to deliver. \u201cThey cleaned it up for the most part before closing but didn\u2019t\u00a0finish. We took them to court to deduct our cleanout costs from the escrowed funds and won, but they appealed. We are still in court for the money in escrow.\u201d<\/p>\n

In fact, the sellers proved difficult to work with across the board. \u201cThe owners were so confused when we bought the building.\u00a0They failed to\u00a0bring keys to the closing, and afterward when I painted the front door firetruck red to distract from the garbage and cleanout work that still wasn\u2019t\u00a0finished, the little old lady called our realtor (as he was dual agent) and complained I painted\u00a0her<\/em>\u00a0door!<\/p>\n

\u201cWe renovated one entire apartment right after we closed. My hubby and I were actually on our honeymoon on the other side of the world talking to our contractor at 2am do get this done, which was new to us as we had done all the\u00a0other work ourselves. Since then we have had to do major upgrades but the units were functional so we just do one renovation at a time.\u00a0It will probably take us another ten years to restore it to its former beauty.\u201d<\/p>\n

As for the rental cash flow?<\/p>\n

\u201cGross rent for the four units comes to $6,200 per month, plus we rent out the parking separately for another $1,200 for $7,400 in gross rental income.\u201d It always pays to get creative to find\u00a0ways to earn more from your rental properties<\/a>!<\/p>\n

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Changing Tactics & Strategic Buying<\/h2>\n

\u201cI learned to always keep my ears open for opportunities, but to have a goal and to stick to it.\u201d<\/p>\n

In other words, have a clear destination in mind \u2013 but stay flexible in how to get there.<\/p>\n

After picking up a third property (an apartment in the Bronx), Becky and Emilio set their sights on buying a vacation rental. \u201cI was going to buy a short-term rental in the Dominican Republic before COVID hit. It was tough because a beach rental is my life goal and I was so close. But it didn\u2019t make financial sense, so I pulled out.\u201d<\/p>\n

Instead, Becky looked at the rapidly shifting housing trends in the US and noticed the\u00a0de-urbanization<\/a>\u00a0trend taking place in New York City. So she turned her sights to easily-accessible areas outside New York City, and bought a duplex an hour out of the city.<\/p>\n

\u201cI think people need to watch for trends and think with numbers over their emotions.\u201d Which novice real estate investors all too often do, getting excited about one property or area in particular and then bending logic to support it, rather than using the numbers to find the right areas and properties to invest in.<\/p>\n

Investing Overseas<\/h2>\n

Becky and Emilio may have changed course on buying a beach vacation rental in the Dominican Republic, but that didn\u2019t mean they abandoned the notion of investing there entirely.<\/p>\n

Being quite familiar with the Dominican Republic \u2013 Emilio was born there \u2013 they found a long-term rental property to buy there instead. \u201cEmilio picked the property, a long-term rental in the capital rather than the typical beach rental I\u2019d been exploring. It cost $70,000, we put down 50% and financed the rest (which we could do because Emilio is from there).<\/p>\n

\u201cWe bought it as brand-new construction, so it didn\u2019t require much work. But there are things considered standard there that the construction company doesn\u2019t\u00a0do, such as installing bars on the windows and doors, so my husband did that himself.\u201d<\/p>\n

As for how they manage it long distance, Becky put it like this: \u201cThe DR is like anywhere else, where one guy knows a guy who knows a guy. So it\u2019s the same process to build a team as anywhere else!\u201d<\/p>\n

Find a few good people, and you\u2019ll find more. It\u2019s that simple.<\/p>\n

And Becky hasn\u2019t abandoned plans to buy an Airbnb rental in a beach town in the Dominican Republic. She\u2019ll\u00a0become an Airbnb landlord<\/a>\u00a0yet: \u201cOur next purchase will be in the DR again for a beach property in Spring 2021.\u201d<\/p>\n

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Savings Rate, FIRE & Buying in Cash<\/h2>\n

\u201cI\u2019m the risk taker for sure, and my husband is the realist so he keeps my plans and goals in check.\u201d<\/p>\n

Even so, Becky and Emilio tend to pay in cash rather than leaning on\u00a0real estate leverage<\/a>.<\/p>\n

\u201cMy husband and I work hard, save a lot and spend very little. I work days as a cancer researcher and have two businesses besides my day job, while Emilio works nights as a bartender.\u00a0Many people make a lot more than we do but we live off of less than $1,000 a month now that we\u2019re not\u00a0paying rent.\u00a0We sacrifice now so we can retire early to enjoy life and have a family.<\/p>\n

\u201cSo, I save a lot and when I hit a number in my bank account, I buy a property!\u201d<\/p>\n

They did buy their house hacked duplex with conventional financing, and the $650,000 fourplex. Initially, they also took out a 50%\u00a0rental property loan<\/a>\u00a0for the property in the Dominican Republic. But they ended up paying that loan off in the same year \u2013 they originally took out the loan to stay more liquid during the coronavirus pandemic, but since decided it wasn\u2019t worth keeping.<\/p>\n

With thousands of dollars in passive income already accrued, and a frugal lifestyle keeping their expenses low, Becky and Emilio have already reached financial independence with real estate. Becky plans to\u00a0retire by 40<\/a>, a few years from now.<\/p>\n

But for the moment, she\u2019s just having too much fun with real estate investing to give up her regular paycheck as a source of investing capital.<\/p>\n

Legal Battles<\/h2>\n

Becky has not shied away from taking people who cross her to court.<\/p>\n

\u201cWe\u2019ve been to small claims four times in the two years or so we\u2019ve been investing in real estate. And we\u2019ve won every time, even against our first lawyer that we had to sue.\u201d You remember that story \u2013 the seller repair escrow fiasco.<\/p>\n

The second lawsuit involved a neighbor who shares a roof with their duplex house hack. The neighbor\u2019s roof leaked into their building, causing damage. When he refused to repair the roof and leak damage, Becky took him to court as well.<\/p>\n

Then came the older couple who sold them the fourplex without cleaning out the hoarder furniture. The couple sued them to get back the escrowed cleanout funds, and Becky countersued to keep them. Once again, Becky won.<\/p>\n

Finally, a tenant broke their\u00a0lease agreement<\/a>\u00a0early and failed to pay the early lease termination fee.<\/p>\n

While many real estate investors go years or even decades without legal battles, Becky\u2019s story illustrates a simple point: with assets worth hundreds of thousands of dollars, disputes happen. Be prepared to fight for what you agreed to with other parties and defend your boundaries if you want to build passive income from real estate!<\/p>\n

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Lady Landlords: A Pandemic-Spawned Side Business<\/h2>\n

Becky doesn\u2019t just research cancer treatments and invest in real estate on the side. She also teaches women real estate investing and property management, a field she fell into almost by accident.<\/p>\n

\u201cI am much more involved in our real estate investments than my husband is, so back at the start of the coronavirus pandemic when we were stuck at home he was tired of me talking about it all the time. So, I started a real estate Facebook group for female investors to ask my own questions and I clearly hit something!<\/p>\n

\u201cWe grew to over 4,000 women in under six months. I started creating courses for beginners and those looking to grow their portfolios, and worksheets for strategic planning. I vetted select partners to refer, and host local events for women in real estate to learn and connect.\u201d<\/p>\n

Check out her website\u00a0Lady Landlords<\/a>\u00a0to learn more about her events, courses, and networking opportunities for women in real estate.<\/p>\n

Becky\u2019s Final Words of Advice<\/h2>\n

\u201cDo it! Now! Stop procrastinating!<\/p>\n

\u201cMost people never become real estate investors because of fear. For someone wanting to grow, I would say it\u2019s really not as hard as people think.<\/p>\n

\u201cFigure out what is scaring you and move forward with what you want. There are thousands of ways to be involved in REI, so pick a path and move forward.<\/p>\n

\u201cLife is too short.\u201d<\/p>\n

Amen.<\/p>\n

This article originally appeared on SparkRental.com<\/a> and was published with permission.<\/p>\n\n

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Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She\u2019s passionate about helping people gain control of their spending.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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