Janet Krebs: Landlord Lessons, Tenant Nightmares & Cash-Flow Wins

Janet Krebs (00:00)
Yeah, lessons learned from that. Great tenants always make your life very easy.

Then you’re like, why doesn’t everybody do this? This is so simple, we don’t have to do anything. Until the day that we realized that this last round of tenants in this house, which was our first house, big mistake, because emotional ties, first house, like you’re like, it’s our first house. Like you gotta walk away from the emotion of that. ⁓ It was crack. And I… can only tell you the condition of the home by pictures because I was pregnant and I wasn’t allowed in because apparently the appliances had been destroyed. Meals or food, probably not really a meal, food was cooked in the fireplace. Animals were allowed to leave their droppings within the house and that house got gutted to the studs. But a really good lesson there was don’t use your address, get a PO box for rent because the day that that tenant totally loaded on whatever came to the door to give me rent was terrifying. So that was the last time we ever did that. It was

Erika Proctor (03:05)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Janet Krebs, who’s been making serious moves in the investing space. Janet, I’m so glad to have you on the show today.

Janet Krebs (03:19)
Thank you so much. Pleasure is mine.

Erika Proctor (03:22)
So let’s jump on in, Janet, for those who may not be familiar with your world, give us the rundown. How did you get started in the investing world?

Janet Krebs (03:32)
By accident, which isn’t usually the case, but we actually as young married kids couldn’t sell a house, had a realtor that said or suggested that we rent it and we just kind of looked at each other like, that’s a thing. And honestly, we were in our twenties and became landlords ⁓ easily and successfully until…

The last tenant we had got involved in drugs and absolutely trashed the place. So even with that one property, learned a ton about being a landlord. Tons.

Erika Proctor (04:17)
Wow, wow. Can you share that experience a little bit? Because that’s actually something we kind of love to focus on the show, believe it or not, because going through that stuff separates people who are the real deal and people who just dabble in real estate.

Janet Krebs (05:21)
Yeah, lessons learned from that. Great tenants always make your life very easy.

then you’re like, why doesn’t everybody do this? This is so simple, we don’t have to do anything. Until the day that we realized that this last round of tenants in this house, which was our first house, big mistake, because emotional ties, first house, like you’re like, it’s our first house. Like you gotta walk away from the emotion of that. ⁓ It was crack. And I…

can only tell you the condition of the home by pictures because I was pregnant and I wasn’t allowed in because apparently the appliances had been destroyed.

meals or food, probably not really a meal, food was cooked in the fireplace. Animals were allowed to leave their droppings within the house and that house got gutted to the studs. But a really good lesson there was don’t use your address, get a PO box for rent because the day that that tenant

totally loaded on whatever came to the door to give me rent was terrifying. So that was the last time we ever did that. It was

terrifying.

Erika Proctor (06:55)
my goodness. with that, ⁓ what was like the biggest takeaway that you got from that experience?

Janet Krebs (07:05)
I…

Again, don’t get emotionally attached to a property. It’s literally an asset when you no longer live there. ⁓ And actually, you know what, Erika, in all fairness, I mean, even the home that I’m living in currently is in our portfolio and it’s listed and it has its own trust in all of that. And so technically I’m a tenant and it’s a lovely home. Don’t get me wrong, but I have zero emotional ties to

I think the longer we’re in this industry, a home is a home while you’re in it and then you can make a home anywhere. So don’t get emotionally tied to the structure that you live in and

Again, follow up, just look for excuses to get into your properties on a more regular basis, i.e. what that looks like now is even though my home state is not where I have more properties, I mean, we do business here in Indiana and in Florida, but my husband will go down to change AC filters and blow the lines.

Wink, wink, right? And especially in Florida in the summer, just coming in to change your filter for you because we want you to be comfortable and we’re protecting our asset, which is the AC unit at 6K a pop and…

it’s just a great way to put eyes on a house. You can’t really do anything about it, but it really does minimize or mitigate the surprise when that tenant moves out and things are trashed.

Erika Proctor (08:50)
Yeah, yeah, wow.

Janet Krebs (08:51)
So follow

up and just keeping closer, closer eyes on your assets.

Erika Proctor (08:58)
Yeah, that’s solid advice. So Janet, talk us through more your journey over the years. What was it like when you first got started? Walk us through how you ended up where you are today.

Janet Krebs (09:13)
I’m gonna say something that we may not, you might not be expecting, and that is, I probably, we talked a little bit earlier about mindset. This was not my gig at all. Like, I wanted nothing to do with it. But I also was, you know, like starting a family and busy and otherwise occupied. And in all fairness, we did take a break.

when we were busy raising kids. That first house, the drug house, and that was in California. Then we moved to Indiana and it took us a while to get properties here.

It’s the mindset that anything is possible and that there is money to be made doing this. So I would say one of the biggest takeaways is keep an open mind. ⁓ And in all fairness, like you’re young.

and beautiful and so you guys are conditioned to be more thoughtful and flexible about how to make money. I’m of the industry where of the age rather where it was you know get an education, get a good job, 401, retire. Like that’s so old school that’s not how it is so I would say just keeping an open mind because there are opportunities everywhere.

everywhere. of the current property that we own right now, a little condo, was found on Craigslist. Craigslist! Who knew? I didn’t find it. My husband found it. We went and looked at it. It was a FISBO, for Sale by Owner, for those listeners that don’t know. And we did the entire thing with the title company. No lawyers, title handled everything.

Talk about saving money. I won’t even tell you what we got that unit for, and so now it’s a cash cow. Like, who knew? I don’t wake up and look through Craigslist for properties, but they are everywhere. So just keep an open mind, because you never know when the opportunity is going to drop.

Erika Proctor (12:01)
Yeah, absolutely. Let’s talk about that a little bit more. So what is your process of finding those properties? Like what do you do? What are you looking for with whether it’s a good fit or not?

Janet Krebs (12:14)
Again, we are out of state in a market. And so that obviously is other people looking for deals as well as us with feet on the ground. It’s a great question because I’m going to answer it with it’s changing now. The way in which we looked at properties or looked for properties before, it’s changing.

I believe wholeheartedly that if you, me, if we’re all still relying on the MLS or active listings, we’re missing the boat. We are competing in a very strange market right now where there are a ton of investors throwing some heavy dollars around and however they’re getting in there before us, little small guys, I mean, I only have 13 doors.

I’m gonna put that out there right now. I’m not some big shark that’s got 50 doors. ⁓ But the timing is very interesting with some of these bigger hitters that are coming in and just gobbling up some of these big properties. So as for strategy, it’s changing. I’m looking for people that are in a market that I want to be in that will actually be boots on the ground for me and then take

part of the commission ⁓ or I will just pay them a gift to identify the property. So it’s changing, which again, great lesson, be flexible. You gotta be flexible in your approach and be attuned to a shifting market, which we are all in right now, as you know.

Erika Proctor (14:08)
Yeah, absolutely. And then when it comes to having someone work for you and find those properties, how do you determine if that person is a good fit and that you can trust working with them?

Janet Krebs (14:21)
Trust, character, intuition. I have been a studier of humans for my entire life, personally and professionally. I’m not 100%, but I’ve got a pretty good barometer to people that are in alignment with my goals. And my favorite thing to do right now is, you can imagine, I get lots of calls. I’ve got one property in particular that I get calls on all the time. Are you interested in selling it?

And I love that because these are people that are hungry and hustling. So I’m like, I’m not really interested in selling, but let me tell you what I’m interested in buying.

And oftentimes, Erika, that turns into a conversation of, I’m really glad we talked today. I might be able to help you.

Costs nothing to have the conversation, right? So you don’t ever know for sure. I have kissed, I always say this, with contractors, it’s the same thing. How do you know? Well, for those of us who’ve been doing this for a long time, I can’t even tell you how many frogs I’ve kissed to find the right ones. And in all fairness, even my right frogs often disappoint. They don’t let me down, but they disappoint.

It’s an imperfect industry, just as every industry is imperfect.

Erika Proctor (16:29)
Yeah, absolutely. And knowing how important those relationships are that they can make or break people in the industry. What kind of advice do you have for people that are looking the network, looking to level up through finding good partnerships?

Janet Krebs (16:49)
That’s a great question. I don’t know that I systemize it. Right or wrong, I like trust my gut. I have a really great ick barometer. you can tell, you can tell when somebody is coming from sincerity and integrity. You can tell when somebody is seasoned and they have the right rhetoric and they know, and you can discern.

Well, I can discern, I hope people are learning to discern that sometimes even when they have the right words, it’s not always with sincerity and integrity. It’s just interesting. know, people will show you their colors. You just have to listen. But I don’t know that there’s, I don’t know that there is a formula for that. Do you have, if you have a formula for that, do share.

Erika Proctor (17:49)
Ha ha ha ha!

Janet Krebs (17:49)
I don’t know.

In any business that I’ve ever been in, I don’t know that there’s a formula for that.

Erika Proctor (17:57)
Yeah, yeah, I would. Yeah, I don’t know if there’s a formula so much for trust, but you know, I would say maybe getting in the right circle like a like a networking group like was there something like that for you that you found to be very beneficial that you made a lot of good connections from?

Janet Krebs (18:13)
No, and I am a huge advocate for that. That is new for us. We did just do all of that like within the last three months. So I am still playing ⁓ with that concept and staying very peeled to the groups just to see who’s a good fit, who’s a good match.

Erika Proctor (18:37)
Yeah, what have you tried so far?

Janet Krebs (18:40)
What do mean?

Erika Proctor (18:41)
Well, you said it was new. So was there a networking group that you had recently joined?

Janet Krebs (18:47)
Well,

joined, well, so in all fairness, ⁓ that was a terrible way to preface that. Our first mentor was the famed Robert Kiyosaki. That was a big, scary, audacious investment for us at the time because we didn’t know of that. We had been doing it on our own and…

That’s slow, you can do it, but you make a lot of mistakes and stuff like that. And we joined Robert Kiyosaki’s group. I don’t remember what the investment was, but it felt like a lot. And I would say that that was the best, let’s say it was 10K. That was the best 10K we ever spent. And for people that don’t think that paid mentorships,

paid groups, paid communities are worth it, think again. Because when you’ve got skin in the game and you are paying to play, if you will, that’s where quality people hang out and absolutely invaluable. So I would say give up the I can do it myself and lean in and look for groups that are in alignment with your goals.

Erika Proctor (20:12)
Yeah, yeah, absolutely. And being in that that room with no no ego, what advice would you give to someone who is considering joining a mastermind?

Janet Krebs (20:23)
Could you actually just say people with no ego? I just was talking about that with somebody. That is brilliant. Cause honestly that is, that’s the name of the game for life, Erika. You’re awfully young to be able to even communicate that. So congratulations. Again, it goes back to transactional versus relational. there is, mean, I was in conversation. Here’s a great example. I was in conversation with somebody.

about joining in that group and there was a questionnaire and it was how many deals have one of the questions how many deals have you done in the last year and I said one and so I was not accepted into the group and I was so thankful because my one deal was a syndicated investment which now added a community of over

400 doors to my portfolio. So shame on them for judging my one because that one really was big and it was a big investment and I am sitting at the table with some wonderful people. ⁓ But isn’t that funny how the one, like who cares if it’s one? You could one transaction

could be a 500 door community. Anyway, I guess they didn’t think I was a serious player and that’s okay. I don’t want to play with people who measure the number of transactions per year as my success. That’s not the metric that I’m looking for. Passive income in the bank account, that’s a great metric. That would have been a better question.

Erika Proctor (22:19)
Yeah, absolutely. And, you know, with the deals, it’s, you know, it can often be quality over quantity, but really it kind of goes with people too. So I don’t think you were missing out there.

Janet Krebs (22:30)
I wasn’t

because somebody will always say, many buildings do you own? Well, the number of buildings for a person who buys multi-unit is gonna be way smaller than the actual reflection of the number of doors. I don’t need to impress you. I don’t really care what you think. ⁓ I’m responsible for my own portfolio, but it’s just really funny. The question that people ask, what are you really asking?

What information are you really trying to get? to your question initially about ego, there is, I mean, I guess there’s a place for ego in the business, but just not in my business. Although I will say there is a little disclaimer. And this is just a little bit about Janet and it’s funny, but one of my properties in Florida, I had rented one of these big trailer things and

It was summer in Florida, so you know that it’s hot. And the guy comes and he brings this big trailer dumpster thing with the big semi, and he’s sitting in my parking lot and he’s kind of leaning back and he’s smoking a cigarette and he’s got his feet up out of the truck window and he’s scantily dressed, but so am I. So I am five foot two, all of nothing. And so I’m in like my hair’s up in a

hair tie and I’ve got a tank top on, sneakers and workout shorts. And I walk up and he says, can I help you? And I said, and he flicks the cigarette on the asphalt. And I said, yeah, I think you’re about to drop off my dumpster. And he goes, this is your place? I’m like, yeah. And it’s also the place where you just dumped that cigarette onto my asphalt. So I’ll be real curious how fast it is.

that you pick it up. He jumps to attention so fast. So I share that story because I did enjoy that moment maybe a little too much, but it wasn’t because of my power in the moment. It was just the fun and the play of I’m not what you were expecting as the owner of this building, but you should never judge.

by appearance, because it was bloody 96 degrees, and I was just as half naked as he was.

So was that ego? No. To me it was just a little disruptive of like, dude, you should just always be on your best behavior because you never know when the boss is on site.

Erika Proctor (25:12)
Right on. Well, Janet, tell us next what’s on the horizon. What vision do you have? Are you looking to scale? What do you see for the future?

Janet Krebs (25:24)
My future will be ⁓ two-fold. I just took a beautiful trip to North Carolina to visit family and friends for eight days. So I covered all of North Carolina and I’ve always wanted to live there and I don’t even know why. was kind of, it’s a calling. So now that I’ve been there for eight days and I’ve traveled North to South, I can honestly say that I see that. So I’m looking for a multifamily in…

somewhere in North Carolina. I don’t even know that I’m that particular at this point. So I’m currently researching that for myself. ⁓ But it’ll be a three or fourplex where I live in one and you know, my rent gets subsidized. So we all we have to love that. And and then the next big deal, I’m looking to roll some dollars into a bigger community. ⁓ 15.

and above. And again, I, my mission has always been just to provide good safe housing in a market that needs it. ⁓ So I like the BC. I like to be on the fringe. We’re just, people are just trying to make a life and a living for themselves. That’s, that’s my heart. It always has been those kind of like, those just feel like my client people.

⁓ And every time I break that mold I get burnt. So that’s what’s on the horizon. Hopefully North Carolina within the next six to eight months and then the bigger deal will probably be a little bit harder to find ⁓ based on what I’m looking at now but we’re all watching the market crash. So I’m thinking that it’ll come up within the next 12 months.

for the big community.

Erika Proctor (27:20)
That’s exciting stuff, Janet. Before we let you go, if someone wants to connect with you, reach out to you, maybe they want to collaborate on a project, what’s the best way for them to contact you?

Janet Krebs (27:30)
Yeah,

thank you for that. Great question. ⁓ We have, yeah, because we’re always looking for people to do deals with, to collaborate with, share Rolodexes and resources, because you and I both know that’s really the name of the game. Quality, as we just discussed, quality referrals so that people can kiss fewer frogs. So my email, that’s probably the best, is second stages.

⁓ [email protected]. And I answer on my own emails. I don’t have a big gigantic team. ⁓ I just like to keep it personal. I walk my talk, I guess, right?

Erika Proctor (28:16)
Yeah, absolutely. Janet, it was so awesome having you on the show today. Thanks for sharing your insights, your advice, ⁓ your passion, your adventure for real estate. It’s awesome to see.

Janet Krebs (28:20)
Thank you.

Thank you, you too. It’s been a real joy to start my day this way, thanks.

Erika Proctor (28:33)
Awesome. And for our listeners, if you got value from the Real Estate Pro Show, make sure that you’re subscribed. We got more conversations coming up with people like Janet, who are awesome examples in the real estate, transforming everything around us. We’ll see you on the next episode.