All of us dream of having complete financial freedom. And what that looks like is being completely free of debt, student loans and all. It’s being in the craft that you love and not just settling for a regular paycheck at a place you hate. It could also be being able to spend time with your kids and taking them on trips to Saint Thomas, Bora Bora, or to Las Vegas’ Children’s Museum.
Well, for 26-year-old Jamisa McIvor-Bennett, it simply looks like a 3.2 million-dollar real estate portfolio with 21 properties, entirely paid for in cash except for one home.
Her success started with an accidental inquiry that would turn out to be a life-changing opportunity. When McIvor-Bennett was just 19, who was then a cashier at a supermarket in Philadelphia, she was approached by her grandmother. “She said, ‘I just wanted to know what would happen to the house if something was to happen to me?’” Jamisa then told her grandmother that at the time, she had no idea, but was willing to find it out for her. “She was like, ‘No, I was just asking because, if something was to happen, I want you to take full responsibility for it. You’re the most responsible one.'”
With the persistent demands of her grandmother, they did a quitclaim deed transfer. That enabled her grandmother to transfer the house to her for $400 total after everything was settled. A little bit over a year after, her grandmother unexpectedly passed away, and everything hit the fan as the entire family tried to lay their claim in the home, oblivious of the settled agreement between Jamisa and her grandmother.
Fortunately, Jamisa and her grandmother were able to secure footage of their agreement, so they were secured in both terms of legal and moral obligations.
Without prior knowledge about the real estate industry, Jamisa worked on learning about all the industry tricks.
Over time, Jamisa was able to buy 21 properties in the Philadelphia area worth $3.2 million. This enabled her to have a lifestyle that can seem unimaginable for an average mother.
Seems impossible? Well, Jamisa was generous enough to let us in on some of her tips on getting profitable deals and building wealth through real estate.
- Learning from other people’s mistakes.
Jamisa said that she learned a lot from her mentor’s mistakes. “[The mentor] gave me a lot of information, but he showed me a lot of stuff just because I was paying attention.” Jamisa said that her mentor ended up selling her properties out of desperation because he was locked into some deal but ran out of money to finish and close it. The second time her mentor did that, Jamisa was down to her last 50 grand. Her mentor then asked her for a loan and Jamisa agreed so long as he returns it with interest. And he did. She got 25% interest upon return.
This taught her not to get into high ticket deals without having a contingency fund. It took her quite a while to finish her mortgages because she was cautious, but it all paid off in the end.
2. Don’t look past ugly houses.
The second house Jamisa bought looks like a scary movie. She calls it the Treehouse because literally, there was a tree inside the house. “But I bought it because it was $6,500, and my mentor had purchased it for $2,500.” despite being an ugly house, it was structurally good. So at the end of the day, it wasn’t a property where you have to drastically change anything. They installed a new roof, boarded it up for winter, and made sure it’s ready to be lived in. She had to buy a vacant property permit for it, without even knowing what equity was. She was just buying time until she started getting into markets and by year three, the house which was smaller and directly up the street from her “Treehouse” sold for almost $200,000. She couldn’t have known that that would happen, but now she knows that buying a house for $6,500 is okay.
3. Look at comps.
When you’re in real estate, you have to do comparable property analysis, or comps. So to know what your property is worth, you have look for properties that are comparable to it. Look at the work that was done, and obviously, if you put a pool and a tennis court in your house, and the comparable properties only have a small patio and sliding doors, your property is going to be worth more.
This is basically how you compare the numbers. Look at the last three properties that were sold, get the average, and you’ll know the value/dollar consistency in your area.
4. Get properties with good cash flow.
Look for positive cash flow. Jamisa is an urban investor so focuses on that. She sticks to urban properties and the cost is drastically less. Because you only have about 1,200 to 1,600 square feet, depending on if the property is on a corner or not, there’s only so much work that needs to be done to houses of that size.
5. It’s still better with cash.
You get more of a return when you leverage, but every time you get a mortgage, you start owing somebody else. We all know that the market can go up and down, and if one day, the market crashes, the value of your property would decrease, so it’s always good to be an owner. Let’s say you bought a house for $100,000. Banks will give you up to 80% of what your property is worth. So with $100,000, they will give you $80,000 to work with. Now if the market crashes, your $100,000 property would end up only being worth only $60,000 because you borrowed $80,000. Basically, you will owe $20,000 more than what it’s even worth.
Jamisa’s final advice is to ignore people who are trying to put you down. People criticize her for not putting hard work for her success, but she did. Her grandmother didn’t give her 20 properties, her grandma gave her an opportunity and she just happened to make the right decision. Jamisa said that she’s read comments about her saying, “Oh she sold her family’s legacy for money.” And Jamisa’s response is, “No, I’ve created a legacy. There was none.”
Enjoy this podcast from a few years ago: