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Show Summary
In this conversation, Ashlee Edwards, a corporate attorney and real estate investor, shares her journey into real estate investing and private money lending. She discusses how the COVID-19 pandemic became a turning point in her career, prompting her to explore real estate as a path to financial freedom. Ashlee walks through her early experiences investing in single-family homes, her transition into private money lending, and the advantages of leveraging a legal background in the real estate investment space. She also offers insights into risk management, the ideal profile of private money lenders, and her upcoming expansion plans.
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Investor Fuel Show Transcript:
Ashlee (00:00)
I had friends and family who were just getting laid off left and right. People were struggling and it dawned on me like soyou know, they gave me mercy, right? So I didn’t lose my job, but they could have easily gone the other way. And I just didn’t like the idea that just in the blink of a moment, anyone could just affect my life that intensely. And so
I started listening to podcasts and audiobooks and I heard about this guy called himself the nine to five millionaire. And I was like, what’s going on over here? Like, what’s he talking about?
Dylan Silver (02:04)
Hey folks, welcome back to the show. Today’s guest, Ashlee Edwards is a corporate attorney, real estate investor, private money lender educator based out of Los Angeles, California. She helps busy professionals build freedom without quitting their day jobs. By day she serves as a corporate counsel. By night she scales cash flowing rentals and private loans while also teaching others how to do the same. She also co-founded Lenders and Friends, a collective of private money lenders and industry friends. You can find them atlndrsnfrnds.com, that’s L-N-D-R-S and FRNDS.com. You can also find her on YouTube, youtube.com/ashealways. Ashlee, thank you for taking the time today.
Ashlee (02:47)
Yeah, thank you for having me. I’m super excited.Dylan Silver (02:50)
Now, when we talk about single family home investing, when we talk about lending, but also, you know, when we we talk about being an attorney, right, these are in many ways three separate but but overlapping spheres of skill sets. Of course, maybe in an attorney, I’m imagining you had some interest in real estate and then you could also see, hey, being an attorney can facilitate a lot of this. I might have a leg up. But how did you get started in real estate investing?Ashlee (03:20)
Yeah, that’s a good question. So I kind of stumbled upon Real Estate Investing. So I was an active attorney working at a big law firm and COVID happened. And the law firm had the choice, of course, to let people go to save money. But what they chose to do was to reduce everyone’s pay and not lay anyone off. Meanwhile,I had friends and family who were just getting laid off left and right. People were struggling and it dawned on me like so
you know, they gave me mercy, right? So I didn’t lose my job, but they could have easily gone the other way. And I just didn’t like the idea that just in the blink of a moment, anyone could just affect my life that intensely. And so
I started listening to podcasts and audiobooks and I heard about this guy called himself the nine to five millionaire. And I was like, what’s going on over here? Like, what’s he talking about?
And he was talking about how he built a million dollar real estate portfolio while working his nine to five.
And I was like, okay, this might be a way to hedge against the risk that my employer at any moment could just fire me or lay me off or decide I’m no longer needed for their operations. Around the same time, my mom ⁓ told me that she didn’t have any retirement because she used it to pay for her cancer treatment. And so it was kind of a convergence of two things happening, like one, the pandemic, and then two, me finding out that, ⁓ you know,
I’m now responsible for making sure that she has what she needs. And I was like, that’s a lot of pressure. And so when I started hearing about real estate investing, I was like, I got to make this happen. I got to figure out how to do this.
Dylan Silver (05:02)
Did you have a certain feeling like almost like back against the wall I gotta make something happen?Ashlee (05:55)
Yeah, I felt just really stressed. I mean, I was already burnt out from work and then it was also like, okay, and now I have to provide for a whole human. I was like, this is kind of a lot. ⁓ But I feel like sometimes that feeling is what allows you to do extraordinary things because you can take that and redirect that energy towards learning what you need to learn and taking action quickly.Dylan Silver (06:21)
Yeah, Imean, when we talk about what gets people into real estate investing, some of the biggest things are, you know, hate my job. ⁓ Unfortunately, you know, death, divorce, something like this, losing your home. I’ve heard a lot of people talk about going from foreclosure to becoming a foreclosure specialist. Really, I’ve heard even like tax strategist talk about that. I want a bunch of taxes and then helping real estate investors with their taxes. And so when you’ve got, you know, that additional urgency, they’re like, hey, I didn’t
I wasn’t planning, you I’m an attorney and now I’ve got these reduced, you know, pay and now I’ve got an extra person to take care of, you know, that’ll do it. I remember when I was getting into real estate, I did it from a Google search and maybe you can relate to this. was, ⁓ you know, how do I build wealth? And I was just so burnt out from my job at the time I was working for Nissan. one of the interesting things I think is, you know, there’s so many ways to get into the real estate space. ⁓ And so for me that that was wholesale.
⁓ But you’ve now done quite a number of things. the ⁓ single family home acquisition come first? Did you look at ⁓ private money lending first? What came first for you?
Ashlee (07:29)
Yeah, I had never heard of private money lending when I started. And the course that I took, I bought the guy, the nine to five millionaire, I bought his real estate investing course, and he covered wholesaling, ⁓ the BRRRR method, and fix and flips. So those are the only things that I knew. And then I read a book called Invest in Real Estate. And I was like, okay, I think the BRRRR method might be the method for me.And so my initial investment was a two unit building in Chicago. And then after that, I did a single family home in North Carolina. And so kind of using what I learned in the course, and I was just using, was buying properties off the MLS. So the course didn’t really talk about, you know, auctions and things like that. So I didn’t know about those things yet. So I was just using the information I had, and I started there, but I didn’t know about private lending. I had just
about hard money lending so I was very new. It was Fayetteville, North Carolina.
Dylan Silver (08:27)
Chicago and what was the other city?I love the Carolinas, great place for real estate. So Chicago and Fayetteville, North Carolina, how did you manage these properties being in LA?
Ashlee (08:40)
Yeah, so funny you ask. So I initially decided to manage them myself. So with the Chicago one, ⁓ I started off being the property manager and I quickly realized that that was not the right move. ⁓ think there’s something about being too close to the property. ⁓ It just wasn’t working for me. Like the tenants texting me and things like that. just couldn’t.I couldn’t handle the demands and the emotional side of that plus my job. So I hired a property management company for that one. And also dealing with the Section 8 department was such a headache. And I was like, I’d rather delegate this to someone else, especially since I’m not there. I can’t schedule inspections with the tenants and do my job. And then in Fayetteville, I managed it myself because it was just one…
Dylan Silver (09:10)
Yeah, I hear you.Ashlee (09:33)
person and it wasn’t section eight and it was just more straightforward. So I could just hire people on Yelp, you know, to go out and do things for me. And it was much more simple than the building in Chicago.Dylan Silver (09:47)
So you’ve got these two deals and you’re a corporate attorney and you’re like, you know what? Private money lender. I need to add that to the repertoire. I’m not doing enough.Ashlee (09:56)
No, so I ended up leaving that job because I was burnt out, honestly. It was a lot ⁓ of work, a lot of pressure, very good money. They actually did end up paying us the back pay after the pandemic. So they reduced our pay, but then made it up to us. But it was just, it was too much for me. And I needed something more like nine to five, actually. It was more like nine to 10, you know? And I was like, this isn’t really working. And so I left that job.Dylan Silver (10:23)
Yeah.Ashlee (10:24)
and I had an old ⁓ 401k and I heard on a podcast that you can do this thing called a self-directed IRA. And I was like, ooh, like I can use this to do fix and flips. And so I went to a law firm called KKOS lawyers and they set up my self-directed IRA with directed trust company. And it came with like a consultation with an attorney. And so I told the attorney what I wanted to do. I was like, I’m going to use this to do fix and flips. I want to do it in Texas. And he was like,Can I give you some advice? And I was like, okay. And he was like, I don’t think you should do fix and flips because that’s not what my billionaire clients are doing. And I was like, well, I’m not a billionaire. And I only have, you know, a certain amount of money. And he was like, well, I think you should consider a different strategy. Like, have you thought about private money lending?
And I was like, I don’t even know what you’re talking about. And so then he explained to me like how it works and what it is. And he was like, you’re you’ve never done a flip before. You don’t even know what you’re doing. You’re going to go out there and you might mess up. And what if you lose all this money? He’s like, instead of doing all that, why don’t you just hire the pros, let them do what they do and you fund their projects. And I was like, I didn’t know I could do that. And he was like, yeah, like why scratch yourself out? You could just be the bank. And I was like.
Dylan Silver (12:00)
Yeah.Ashlee (12:14)
That sounds great. Like, how do I do that? And so he told me how to do it. He told me what I needed to set up and I did it. And I was like, you’re right. This is so much better. So yeah.Dylan Silver (12:26)
Soyou get into the private money side. ⁓ These are typically I mean there’s so many different ways private money can go down but you have you know hard money construction loans you’ve also got I’ve seen commercial and then you’ve got you know bridge debt and so forth. Did you specialize in one of these segments?
Ashlee (12:43)
Yeah, and that’s what he said. He was saying like, since you’re very new to this, you need to pick one area, one state, like don’t make it too complicated. And so I was like, okay, I’ll do fix and flips since that’s what I initially wanted to do anyway. So I initially started just doing fix and flip loans, but only the rehab portion. the…Fix and Flipper had to already own the property pretty much. Or they had to be in the process of acquiring it. And then I would provide the funds just for the rehab portion of the Fix and Flip.
Dylan Silver (13:15)
Have you ever had any of those go south?Ashlee (13:18)
Um, I had one that I had to modify once actually. So you know how these flippers will be like, Oh, you know, it’s I’m gonna be done in four months or whatever, you know, and no, not at all. Yeah. So there was one time where the borrower, um, we did an agreement for six months and the project was supposed to be done. And around the fifth month they reached out and they were like,Dylan Silver (13:28)
yeah, a year later.Ashlee (13:46)
Yeah, so I’ve had the property listed for ⁓ a bit now and it’s not really working. Is there any way we can extend the terms or like modify it? And I was like, well, how much time do you think you’ll need? And they’re like, ⁓ you know, just like a few more months. And so I was like, okay, I can make that work. And so I did an amendment to our agreement. A couple of months later, property still doesn’t sell.I was like, ⁓ gosh. And so they’re like, can we extend it again? And I’m like, do you want to just modify the entire agreement? Like, because it seems like it’s a lot of pressure. Let’s just change the terms and you can start making payments now instead of, you know, waiting until you sell. And they were like, yeah, let’s do that. And so that was the one time that had to modify it to accommodate the borrower. But other than that, I haven’t had any issues.
Dylan Silver (14:34)
Now, when we talk specifically about getting into the game as a private money lender, I think one of the reasons why people don’t think about this immediately is like, okay, I haven’t done fix and flip. So what business do I have lending to flippers? But in actuality, you know, if you can have that rapport with with a experienced flipper and you can underwrite these deals very well, reallyIt’s a win-win because the flipper gets to utilize your capital and you get to utilize the experience of the flipper without swinging a hammer to participate in these deals. But on the flip side, too, there is, of course, the risk that, hey, if something happens and this flipper leaves, basically I’m going to have this property that I’m sitting on. Now, in the case where ⁓ they own the property, right? So they own the property. I’m imagining you took that as collateral. You put some type of lien against the property.
Ashlee (16:12)
Yeah, so these are secured loans and usually only to businesses. So I don’t usually tell people to do any consumer loans. So when you’re loaning to the business in a fix and flip, then you’re securing it against the property that they’re flipping.Dylan Silver (16:27)
Yes, I mean in the worst case scenario, if they own the property, then you possess the property because they don’t pay you and then you could sell that. I mean, that’s really a great strategy. Who have you seen as been like the ideal avatar of someone who gets into the private money space? Is there one type of person or is it really across the board, all walks of life?Ashlee (16:50)
I think there is a particular type of person, which is what I’m learning based on who’s coming to me.I’m seeing people who on the retirement side, their retirement funds are not growing as fast as they need them to. So I’ve had several clients who are, you know, five to 10 years away from retirement and they’re noticing that they’re not hitting the number that they think they need to reach to retire when they want. And they’re like, I need something more aggressive. So I see those people. And then I see people who are interested in real estate, but they’re like, that sounds like a lot of work, you know, like, I don’t
if I want to deal with all that and they’ve heard horror stories and you know they don’t want to be a landlord or they’re not sure they want to learn the business of flipping but they want to be involved. ⁓ So I get those people too, they’re like I want to be real estate adjacent right like I want to be close but not totally in it. So I get some of those people.
And then there’s people who do loans that are not even real estate based. So in our community, we have people who do equipment loans. So that’s our equipment financing side. So they may be loaning to like vending machine operators. They may be loaning to hair salons, doctor’s offices, anywhere where there’s equipment involved. And it could just be that they want something more passive, right? So real estate is not, unless you’re doing syndications, like we talked about before, like real estate is not as passive as people make it seem. ⁓
even with a property manager, right? So they may want to have a steady stream of income, but not be slinging the hammer or getting these calls from tenants.
Dylan Silver (18:28)
Yeah, no, no question. I mean, and then another thing that popped into my mind too is like, well, what’s the worst thing that could happen if things go wrong, you got to find an attorney. That’s right. You are one, right? So it’s like, you know, you have the leg up on everybody. They the thing that I’m always told in real estate as a wholesaler and even as a realtor, honestly, less so as a realtor because people are so concerned, but as a wholesaler, as someone who’s worked with a lot of investors, it’s not a matter of if you know, you face some type ofAshlee (18:39)
What?Dylan Silver (18:56)
civil litigation, but really when when you’re scaling, it’s just bound to happen at some point if you’re in this game for, you know, decades, right? And so, you know, you are an attorney, you understand that side of the game. So of course, that doesn’t scare you. And so when you’re underwriting these deals, you really have an idea, the full scope of hey, this is a worst case scenario, and I got to, you know, take this to court.I know exactly what that’s gonna look like. I know how painful this is gonna be for me potentially, but I also know the process. So none of this scares you. Like that’s a huge leg up you have on everybody.
Ashlee (19:30)
Yeah, and I use attorneys myself. So I’m not going to be the one that thinks that hiring an attorney is not worth what you’re paying, right? So I always tell my students you have to get a licensed attorney in your state who understands this business or just use a private lending law firm who understands all 50 states, you know. ⁓because it’s better to know what the risks are ahead of time and already have a team in place for that instead of waiting until something happens and now you’re scrambling trying to figure out what to do.
Dylan Silver (20:01)
trying tofigure out what to do and you’re like, I’m backpedaling and trying to throw down field. ⁓ We are coming up on time here though, Ashlee. Any new projects that you’re working on and also too, what’s the best way for our audience to reach out to you or your team?
Ashlee (20:17)
Yeah, I think the best way is to find us on Instagram. So it’s LNDRSN, the letter N.FRNDS, Lndrsnfrnds. Some projects I have coming up. So personally, like for me as a private money lender, I’m expanding into Georgia. So I’m excited about that. Currently, I’m only in Texas, but I’ve heard some good things about Georgia. So I’m interested in seeing what they got going there. And then as far as education, I have an accelerator coming up in May. It’s four weeks. It is intense. There’s homework. It is not self paced. I have to make sure people understand that.
at the pace of four weeks, but by the end of it, you’re ready to do your first loans.
Dylan Silver (20:59)
Ashlee, thank you so much for coming on the show. Thank you for taking the time today.Ashlee (21:03)
Yeah, thanks for having me.
