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Show Summary
In this conversation, Hillary Stephens shares her journey in real estate, from her initial entry into property management to becoming an investor and property manager. She discusses her first investment property, the challenges faced, and her transition into tiny home communities. Hillary also delves into the costs associated with tiny home construction, the importance of land use and zoning, and the various investing strategies prevalent in West Texas, particularly in the context of the oil industry and community needs.
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Investor Fuel Show Transcript:
Hillary Stephens (00:00)
This is where I kind of really nerd out because I love just seeing like how it looks like a storage building and now it’s all of sudden a house but the Transformation just it gets me every time ⁓ But no, it’s ⁓ For if you buy a shell if you can get a decent deal on a shell you’re spending about ten grandputting the inside all of it yourself. And that’s cabinets, that’s flooring, that’s sheetrock, that’s tape bed texture, that’s plumbing, that’s throwing up walls, that’s putting in AC, that’s putting in porch. We go all
Dylan Silver (02:10)
Hey folks, welcome back to the show. Today’s guest is an agent and investor based in West Texas focusing on single family and multifamily properties. She’s also involved in a tiny home community project as an investor and runs a property management company as well. Please welcome Hillary Stephens. Hillary, welcome to the show.Hillary Stephens (02:32)
Hi, happy to be here.Dylan Silver (02:34)
I’m grateful to have you on here, Hillary. You’re involved in so much in the real estate space, but how did you get involved initially? What got you started in real estate?Hillary Stephens (02:46)
Well, ⁓ about 2014, 2015, there was a big bust going on in West Texas. So employment was scarce. I actually started working at a tanning salon and ran into an old friend of mine that…was in the property management sector and apartments here. And that $4 raise looked really nice. So I hopped on over there and just kind of climbed up the corporate ladder. It was a very corporate company out of New York. I’ve done the small town real estate all the way up to the very corporate real estate.
Dylan Silver (03:24)
Assomeone who got in really on the ground floor, did you know that you were gonna be an investor? Did you have ⁓ an idea that in the future I’m gonna be an investor myself or was this kind of a progressive journey for you?
Hillary Stephens (03:41)
I guess it may be a little bit of both. I knew that it wasn’t the end. I knew that unlocking apartment doors and, you know, showing an apartment leasing it for $50 a door wasn’t where I wanted to end up. So I knew that there was going to be more ahead for me. ⁓Dylan Silver (03:55)
Walkme into getting into real estate investing or being an agent and which one came first? Was it the investor or was it the agent?
Hillary Stephens (04:02)
They actually kind of came hand in hand. You know, I had so many contacts for maintenance and you know, make readies, paint, including frommy time at the apartment complexes and property management. So it’s almost like it just seemed right to, was, you know, I was doing it anyway. I was laying it out for all these guys to do. Why not do it for myself instead of this company that I worked for? So the same year that I got into real estate, we bought our first investment property.
Dylan Silver (04:33)
Wow,okay, walk me through that. I think there’s a lot of people who hear that and say, that sounds so easy. I can say for me that the journey was not. Walk me through that first deal.
Hillary Stephens (04:44)
Easy is not what I would call it, but ⁓ so if you’re from West Texas You may know of a little town called Big Spring if you’re not it is a little town called Big Spring just right east of Midland heading to Dallas so ⁓That’s where we found our first property that we could afford. We bought it for $15,000 and you stepped in the door and your foot went through the floor and onto the ground right underneath it. So that’s only your finest real estate in Big Spring, Texas. And when I say that we did that all ourselves, I mean everything to putting the sub flooring down, to laying the flooring.
Dylan Silver (06:00)
That’s how it is.Hillary Stephens (06:12)
to pulling out all the cabinets, replacing all the windows, double laying the shingles on top, all ourselves. We didn’t have any money or any help, thank God, from my husband’s dad that does this for a living that came and kind of helped us out of the goodness of his heart. But that was our first rental property and it’s been getting 2 % since 2020. So.Dylan Silver (06:28)
Yeah.coming in clutch with the family connections in the business there. Did you think at that point in time, this ⁓ is a repeatable process, we did effectively our first flip, let’s do a bunch more of these? What was the thought process like after finishing that first deal?
Hillary Stephens (06:44)
gotta use what you have.Well, after finishing that first one, we looked across the street and saw that the house across the street had caught on fire and we were like, you’re next, buddy. We’re going to buy the whole block.
Dylan Silver (07:10)
Youbought a second one shortly shortly thereafter. At this point in time, you’re now a flipper. You’re a property manager and you’re a real estate agent. Were you thinking I’m going to to scale all of these different verticals or were you thinking let me really dig my heels into flipping, for instance?
Hillary Stephens (07:35)
that was a choice in my head at all. was just like seeing the green lights and I just kept going. Okay, there’s more, there’s more, there’s more. And then, you know, that was right about the time the interest rates tanked, which was great for people like us that were trying to pick up properties. So ⁓we ended up picking up the house that we’re in now and it’s on the edge of the country, which is where the magic kind of all happened. We moved out here permanently, then we started our first Airbnb, which was the first tiny home where it all began and ran that for a year and figured out how well it was gonna do and then that’s when we were like, we’ve gotta make, we’ve gotta make more of these. We’ve got four acres back here, why don’t we just?
And that’s, you know, kind of how it all started.
Dylan Silver (08:24)
So these wereground up construction, ⁓ smaller size homes.
Hillary Stephens (08:30)
If you want to call it that. So around here, the living situation, people coming in to work in the oil field get a little bit tricky and you have to get a little bit creative. So this tiny house, it’s right behind me in the window right now. It used to be just a storage building, you know, 12 by 40, but somebody had already put a bathroom in and put some cabinets in for a kitchen. They were living in it.Dylan Silver (08:50)
Yeah.Hillary Stephens (08:58)
while their house was being built. So we bought that one pretty much furnished. And then that’s what got us the idea for the simple, small, kind of modular situation that then from the inside we could make our own.Dylan Silver (09:14)
I’m a big fan of modular. want to get a little bit granular, Hillary, maybe give away some of the gold, but not all of the gold here. When we’re talking about these tiny home builds, West Texas, how much is it costing to put up a tiny home? And I’m imagining in some of these situations you mentioned modular, it’s not like an onsite ground up construction. You may have, I’ve seen ADUs that really look like, know, sheds get transformed into livable situations.But then modular is a whole other beautiful space where you’ve got offsite stick built modular homes that are really higher quality even than an on-site construction. So what’s the general scope of work and how much would one of these cost an investor?
Hillary Stephens (10:31)
This is where I kind of really nerd out because I love just seeing like how it looks like a storage building and now it’s all of sudden a house but the Transformation just it gets me every time ⁓ But no, it’s ⁓ For if you buy a shell if you can get a decent deal on a shell you’re spending about ten grandputting the inside all of it yourself. And that’s cabinets, that’s flooring, that’s sheetrock, that’s tape bed texture, that’s plumbing, that’s throwing up walls, that’s putting in AC, that’s putting in porch. We go all
We cement the whole thing. We add a porch and a patio and a hot tub because why not? So if you buy one, they used
be
a lot cheaper. if you get one pretty much already done you could spend about 25 but completely redone you’re looking at about 40. turnkey.
Dylan Silver (11:29)
I want to askyou about the exit strategies for these. I’m imagining you can do a couple things with them. You can rent them out. I’m imagining they’ll actually get pretty high rents considering all things considered. You mentioned also the oil field community, correct? Which is out there. So you have the potential to rent them out. You also have the ability to turn them into Airbnb short term housing, which is incredible, right?
And then you also have the ability to effectively ⁓ build and flip them or build and sell them. Do you have one preferred strategy at the moment?
Hillary Stephens (12:10)
So for now, they’re gonna stay where they are and get rented, whether it be short-term rentals or long-term furnished rentals. There’s several industries in West Texas besides oil-filled where people need housing out here. We see a lot of traveling nurses. We see a lot of the volunteer firefighters that come in from out of town and they live in their RV or they have a home.family in another town that they just have to come and stay for a few days at a time and so they’ll rent consistently so nobody’s in their space when they’re gone. But then we also have you know people that want staycations and something cool to do that’s nearby that they don’t have to leave their kids two hours away. So a little bit of everybody.
Dylan Silver (12:58)
It’s an interesting ⁓ niche to be in, which brings me to this new project that you’re involved in, a tiny home community really of these these homes. ⁓ Walk me through this. This is pretty novel. How’d you get involved in this space?Hillary Stephens (13:16)
So actually, I sort of peeled off the idea from people that were smarter than me. But I was driving down, we had a ton of construction around my house the last couple of years. And I took this segue down this weird country road, had no idea where I was and I’ve lived here my whole life. And I saw this little like batch of just houses, little tiny houses, container houses, they were all different, but they all just like meshed.together and I was like, what is that? So I did some more research and the city actually put it in to rehab the homeless. So they don’t stay there for free, but you have to have a driver’s license and willful employment and they’ll come pick you up and take you to your job and whatnot. You pay $300 a month and I was like, that is cool. Because it was somebody else’s property. They have little animals in there, donkeys running around, little.
Dylan Silver (14:09)
Yeah.Hillary Stephens (14:15)
because it was just, all of it was cool. And so was like, I’ve got to do something like that. And then that’s kind of when the Alice in Wonderland thing popped into my head where like, in this store you could be at the beach, in this store you could be, you know. So I was like, I have to do that. I have to, I have to.Dylan Silver (14:33)
So you then had, I’m imagining you have to find some land for this deal.Hillary Stephens (14:38)
Luckily, we already had another spare two acres at the back of our property that just hadn’t been getting used, so.Dylan Silver (14:45)
What’s the processof that like? So you have the spare land. Do you have to rezone it? Is there a maximum number of parcels that can be broken up? Do you even need to go in that deep? What’s the process like of putting tiny homes on existing land?
Hillary Stephens (15:02)
So we get to skip through a lot of the red tape being out in the county. But normally, yes, in the city you would have to make sure that you’re in line with your deed restrictions if it’s zoned for that kind of multifamily situation. But we kind of got lucky out here. We’ve got four unrestricted acres that we can pretty much do anything with.Dylan Silver (15:29)
Sothe real ticket to success out there is to buy land in the county.
Hillary Stephens (16:18)
It’ll do it. It definitely saves you a lot of time and paperwork.Dylan Silver (16:23)
Do you know,I’m a Texas agent as well, do you know if in other areas throughout Texas, you’re in West Texas, but if you buy land in the county, not the city, if similar rules may apply? For instance, if you’re in the greater San Antonio area outside, or let’s call it outside of Austin, and you’ve got ⁓ vacant land, same thing with DFW, will these similar rules apply?
Hillary Stephens (16:48)
They could, you know, that’s when you need to find a good agent whenever you do your title work. If you’re buying the land, then you need to really pay close attention to your deed restrictions and if there’s any other restrictions that they’ve put on that land as far as zoning, that’s important before you sign on the dotted line.Dylan Silver (17:06)
That’s a critical thing to look into. I also think that it’s worth noting that not every agent is going to be knowledgeable on this. You hey, I’m looking at putting tiny homes on this vacant land. I want to make sure that I can put a bunch on there and it’s not going to be a bunch of extra work. It’s why it’s important to work with, you know, investor agents. ⁓ I want to pivot to that element of it. You’re an investor agent yourself and you’re also active asBoth really both as an agent and as an investor and then also involved in property management When you have other investors coming to you asking about deals Your experience must color a lot of the feedback that you’re able to give them versus someone who’s not personally active themselves
Hillary Stephens (17:50)
certainly and I’ve got a lot of good insight because I’ve done it myself and I feel like that’s really important whenever you’re looking for guidance for somebody in a you know an area that you’re not a hundred percent sure in. I hope that you seek the help of somebody that does have plenty of experience in the industry that you’re trying to flourish in.Dylan Silver (18:12)
You mentioned, ⁓ and let me know if we can discuss, you mentioned a deal with a popular restaurant chain out there in West Texas. Can we talk about that deal?Hillary Stephens (18:21)
The restaurant, are you talking about my metal, my metal building guy?Dylan Silver (18:25)
You mentioned, can I say it, the fast food chain?Hillary Stephens (18:31)
Okay. Yeah. yes, of course.Dylan Silver (18:32)
the Wendy’s deal, yeah? I didn’t know if I could mention it. I didn’t know if could mention it. It’s very interestingbecause they bought the land as well, which I’ve heard many different strategies involved, but they actually bought the land because in Texas you potentially want to have the mineral rights as well.
Hillary Stephens (18:51)
Sure, and that’s not exactly everywhere in Texas, in the Permian Basin specifically. You’re so close to the oil and the directional drilling, you could be in the middle of town and…still be drilling under your property so yeah there’s several areas in Texas where they still continue to lease the land it’s profitable for their area places like Sweetwater, Sinangelo, with lakes that properties are I mean that but no in Midland you want to buy the land
Dylan Silver (19:17)
Yeah.You could be sitting
on some oil. I want to ask you about the investing strategies that you see most commonly out there. think, you know, not being in one of the four major metros, you probably see, would imagine, more land deals than you might see in some other areas. Are you seeing a lot of people who are looking at, you know, storage facilities, RV parks, industrial?
Hillary Stephens (19:43)
you care.Dylan Silver (19:49)
⁓ You mentioned and we’re talking about this deal where Wendy’s bought the land beneath it. Is there one type of investing or investing strategy that you see more popular out there?Hillary Stephens (20:04)
Definitely. ⁓ So there still is a ton of land. They’re building all over the place. I’ve lived in Mithina Odessa since I was born and raised here. So I’ve seen it grow from a little bitty tiny town and remember when…young that they were telling us that we were the next Dallas Wirtworth and I was like okay but truly Midland and Odessa has grown together like crazy and there’s still so much land there’s it’s not fruitful to farm out here in very many areas so instead of
Planting crops we drill oil and so what I’m seeing a lot of especially recently with the newer subdivisions is you know, they take the land they Get all the oil they can out of it then when they plug the wells and they’re done and then they start building Houses or they start building industrial parks right here down the street from my office was 444 acres that they had drilled on the last 10 12 years and now they’re finished now they’re building a lot of
know, industrial parks and 7-elevens, coffee shops, all the things that start popping up on the corners of everywhere when stuff starts commercializing. So it’s pretty neat.
Dylan Silver (21:21)
I’m seeing a lot of, ⁓I guess you would call it flex use commercial, where it looks like ground level will have ⁓ some type of ⁓ retail or ⁓ public facing establishment and then the higher levels will be ⁓ commercial residential and you might have even like really a layout of a small town really. When I was living in San Antonio, there was so much of that. ⁓
Hillary Stephens (21:26)
Sure.Dylan Silver (21:49)
And it’s interesting to see, think we’re seeing more and more of that across the country as people really want to be able to stick into, especially if you’re renting and paying a lot of money to rent, you want to be able to stick close to where you’re staying and really have all of your needs met from groceries to ⁓ restaurants to fitness to entertainment, you know, and everything in between. Hillary, we are coming up on time here, though.Where can folks go to reach out to you or if maybe they have a deal that they’d like your feedback on?
Hillary Stephens (22:20)
Awesome. Well, you can always find me at my ⁓ brokerage website www.ssrealestatebrokerage.com on TikTok, Facebook, Hillary Stephens broker and then Instagram at SS real estate brokerage.Dylan Silver (22:34)
Hillary, thank you so much for coming on the show here today.Hillary Stephens (22:38)
Thank you for having me.
