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Show Summary
In this episode of the Investor Fuel Podcast, host Michelle Kesil speaks with Ebony Lucas, a real estate attorney and investor based in Chicago. Ebony shares her journey into real estate investing, focusing on the buy and hold strategy, the importance of tenant screening, and the challenges of managing properties. She discusses her expansion into short-term rentals and the necessity of pivoting in the ever-changing real estate market. Ebony also offers valuable advice for new investors, emphasizing the importance of understanding numbers and having a clear strategy.
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Investor Fuel Show Transcript:
Ebony Lucas (00:00)
So buy and hold allows me to have a continuous income. I set a goal of having $100,000 a month in income.with the knowledge that eventually we’ll pay off all the mortgages and the $100,000 will actually be coming to us every month. And so that’s the trajectory that we’re on. We’ve exceeded that goal, which is amazing. And it put us in a position where when my husband who worked for the railroad was ready to retire, he said, hey, I don’t wanna do this anymore. He stopped doing it.
Michelle Kesil (02:01)
Hey everyone, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil and today I’m joined by someone that I’m looking forward to chatting with, Ebony Lucas, who has been making serious moves as a real estate attorney and investor in the Chicago area. So excited to have you here on the show today, Ebony.Ebony Lucas (02:21)
Thank you for having me, Michelle.Michelle Kesil (02:23)
I think our listeners are really going to take something away from how you’re approaching your investing business and scaling throughout the Chicago area. let’s dive in. First off, for those not yet familiar with you and your world, can you give the short version of what your main focus is?Ebony Lucas (02:46)
Yeah, so as an investor, my main focus is buy and hold. I occasionally, I probably do maybe one or two fix and flips a year, but primarily buy and hold.Michelle Kesil (02:57)
and what got you started as an investor?Ebony Lucas (03:01)
⁓ well my younger brother was investing and he’s an investor in Detroit and he was always calling me and asking me for advice and I was like, hey, if he can do this and ask me for advice, maybe I can do it as well. ⁓ so I think like many real estate investors, I got into the business, not understanding this as a whole industry. It’s a business. It’s, ⁓ there’s a lot involved. ⁓ and so, you know, I initially started buying and holdingCondominiums because I didn’t know a lot about making repairs and those types of things So I was like, hey if I buy condos then the condo Association is responsible And I went very well for a long time but then just dealing with the condo Associations and the HOA’s and the people living there was just got a little crazy So I started selling some of the condos and buying small to mid-size buildings
Michelle Kesil (03:55)
Awesome. And what are some of the keys that have allowed your business to grow and to run smoothly?Ebony Lucas (04:03)
I would say the number one thing is tenant screening and understanding that tenant screening process, making sure that we maintain a solid process that we’re applying to every tenant. It helps us to get tenants that fit within our profile, which our goal is to have long-term tenants, which reduces our cost of turnover. And that’s been our biggest strength in…The entire 18 years I’ve had to evict three tenants and two left on their own. Only one, we had to wait for the actual sheriff to come out. So we do really great with making sure we get good people, good families. Usually our tenants stay between six and eight years and when they leave, they’re buying a home.
Michelle Kesil (04:53)
Absolutely, that makes a lot of sense. Yeah, there’s so many different ways to invest and you just mentioned that you prefer the buy and hold method. Can you expand more on why this method is one that you prefer and yeah, kind of like what you’re gaining from it?Ebony Lucas (05:10)
So what I love about buying and holding is that I’m an entrepreneur as well. I’m a real estate attorney and I have my own law firm. And so when I did start buying very intentionally, I decided that this was going to be my path to financial freedom and also my retirement.So buy and hold allows me to have a continuous income. I set a goal of having $100,000 a month in income.
with the knowledge that eventually we’ll pay off all the mortgages and the $100,000 will actually be coming to us every month. And so that’s the trajectory that we’re on. We’ve exceeded that goal, which is amazing. And it put us in a position where when my husband who worked for the railroad was ready to retire, he said, hey, I don’t wanna do this anymore. He stopped doing it.
And…
So really, I love the strategy of buy and hold because it does provide an additional source of income ⁓ so that we can enjoy our careers that we’re in and if we don’t enjoy them, we don’t have to do them.
Michelle Kesil (07:02)
Yeah, that makes a lot of sense. I love that you are really thinking of that long term game in terms of investing and yeah, having that for your future.Awesome. What are you most focused on solving or scaling next in your business?
Ebony Lucas (07:19)
So the main thing that I’ve been focused on over the last year has been to get some deferred maintenance done. So any type of those small little knickknacky projects that grow into bigger things, whether it’s a roof leak or just making appliance repairs, doing…furnace clean outs, those types of things. And one of our biggest challenges has been having a consistent set of contractors that we have that can do our work on a consistent basis. It’s difficult because we don’t have any like maintenance staff that we have hired. use contractors and so sometimes they’re available, sometimes they’re not. So that can be a challenge for us. ⁓
But we built out a pretty good system of getting these repairs done, understanding that some things are higher priorities than others. ⁓ And then just making sure that ⁓ we’re maintaining relationships with our contractors so that when we don’t have work to do, we can have like a referral-based system where we send them to other people so that we’re keeping them working even though we’re not paying them.
Michelle Kesil (08:27)
Yeah, that’s such a smart strategy. Does that look more like referring them to other investors that could use their support and just having them like under your team?Ebony Lucas (08:38)
Exactly. So referring them to other investors is what we’re doing. We’re not referring them to like, you know, homeowners necessarily. Sometimes a homeowner here and there. But for the most part, it’s referring them to other investors who have multiple properties so that if we have a time period where we don’t have anything, they can still keep working. And then when we’re ready to call them back, they come back to us because they appreciate. And not only that, they come back to us and they prioritize us. So.Michelle Kesil (09:07)
I think that’s some really good advice for people to keep in mind, yeah.Ebony Lucas (09:09)
this guy. ⁓Yeah, it’s a challenge though. I think everybody has this issue of finding good, reliable contractors. So it’s not a perfect system, but it’s something that works for some people, works for the good guys. And we still have some turnover in contractors and that remains a challenge for us. But we keep continuing to work through it and cycle people out and try to keep the good ones.
Michelle Kesil (10:12)
Of course. Yeah, I know we chatted a little bit before and you were mentioning where your investment properties were, but for the audience, am. Yeah, I know you’re based in Chicago, but you have some properties elsewhere. Would you want to share like why you wanted to expand outside of where you’re from and what that looks like for you?Ebony Lucas (10:32)
Absolutely. So we decided during a pandemic that we wanted to buy in some other areas. So we, my son was in school in Florida. So we bought one property in Florida for him to, it’s close to campus where he could have roommates and we had the students paying for it. That one’s actually on the market right now. And thenfour in New Orleans and those are short-term rentals. So we decided to try out a different model with the short-term rental and it’s been going great. We’re happy with it. We’re continuing that model. It’s very different from New Orleans is great because the weather is nice all year long. There’s ⁓
something always going on in New Orleans. So we never have any shortage of ⁓ short-term rental guests. They did change the law there, which presents a challenge, I think, for anybody who’s doing short-term rentals. So now we can only do 30 days or more. And I thought I was like in a panic when that happened. But it actually hasn’t been an issue at all whatsoever. We have people that are staying there. right now we have
guests that’s extended their stay. And ultimately with short term rental, they end up paying more than what you could rent the property for if you were just renting it on a monthly basis.
Michelle Kesil (11:51)
Wow, that’s so cool. I love that. Yeah, even through the unexpected news, it was able to be a success for you.Ebony Lucas (12:01)
Yeah, yeah. I mean, that’s the one thing about real estate is that you have to know how to pivot. And when things go, don’t go the way that you plan for them to go, whether it’s you plan to fix and flip and now you need to rent it or you plan to rent and now you need to sell it. Those things happen. And the more you know about your options and the more you continue to have relationships with. So even though we have properties there, we don’t live there. We still maintain relationships with real estate agents there, both in Florida and in New Orleans.so that when we do need to pivot and do other things, have people that are like boots on the ground that can help us figure out a solution.
Michelle Kesil (12:41)
Yeah, absolutely, that makes sense to have your team in those places. And I totally agree with what you mentioned about having to pivot fast. Would you mind sharing another story of a moment where you had to make a fast pivot and how you overcame it?Ebony Lucas (12:59)
Well, I think in real estate you’re making fast pivots all the time. A big one obviously like I said is that short-term rent. ⁓ But there have been times when we have been, there’s a building that I plan to sell andMichelle Kesil (13:03)
Right.Ebony Lucas (13:18)
didn’t appraise out of where we would have wanted it to appraise out. So we decided to rent it and hold on to it, try to recoup some of our investment before selling it. ⁓ And now we don’t want to sell it because we’re giving great rent for it and it’s worth it to continue doing that.⁓ you know, I’ve had buildings where I bought them to hold and you know, the rehab was way too much. ⁓ and it was, you know, once we got behind the walls, it just ended up just one problem after another. And that happens. mean, you can have an inspector come out, you can do all of them, all of the good work upfront and still have surprises once you get into a project. ⁓ and so I’ve had projects like that where we’ve had to sell, ⁓ end up selling a building that we
plan to hold but we were able to sell at a profit so it was fine. ⁓ Same thing actually last just last year I had a vacant lot that I purchased that I planned to build on but the cost to build went up and when the cost to build went up it just didn’t make sense to build on it just then and I got an offer on the property that was actually for more than what ⁓ I would have gotten if I had built on it so it just made sense to sell it.
let them build on it. And right now they’re sitting on it as well. I think it’s great land to hold on to. But if your goal is not to hold on to vacant land, then it just doesn’t fit within our model to hold on to vacant land. ⁓ And even though we know it is going to appreciate at some point, it wasn’t appreciating fast enough for us and the amount.
from now. That pivoting is something that we’re doing all the time.
Michelle Kesil (14:56)
Yeah.Yeah, absolutely. so important, especially when you’re doing this for that long-term game and not just like that short, quick result because that’s going to be a challenge in this industry.
Ebony Lucas (15:52)
Exactly, yes,yes. I exactly, yeah, I think with real estate, slow and steady wins the game as opposed to trying to look for the get rich quick scheme, ⁓ knowing that if you hold on to buying and holding.
long term is just something that, as I mentioned to you, it leads to financial freedom, it builds long term wealth. And so when you’re doing that as opposed to looking for a quick scheme or a quick buck, ⁓ I think you’re able to think through problems a little bit better when you’re not in a
Michelle Kesil (16:28)
Yeah, definitely that’s important. So what are some of your goals for where you want your investing business to take off to?Ebony Lucas (16:38)
⁓ So I mentioned to you the short-term rental ⁓ in New Orleans and what I realized is I actually love short-term rentals and so I’m really looking forward to doing some more vacation homes. I want to look at Martha’s Vineyard.in some places in Florida, some places in Mexico, ⁓ and do more short-term rentals. I think the amount that you can get on the short-term rentals, and I think that that’s an industry that’s gonna continue. ⁓ It fits. I happen to have five children, and so I know what it’s like to travel with a family that’s that large and always have to get two or three hotel rooms to fit everybody. So, you know, we can have a short-term rental where the entire family ⁓
able to stay there that’s just a model that I think it doesn’t get old so I look forward to doing more of that.
Michelle Kesil (17:31)
Yeah,yeah, absolutely. It sounds like you found what works for you and what you enjoy and that’s what’s important.
Ebony Lucas (17:38)
Absolutely, because then it doesn’t feel like work.Michelle Kesil (17:41)
Yeah, totally. That’s the goal. Awesome. So maybe what are some tips that you have for people that are maybe earlier in their investing journey and are trying to scope out what the right properties would be for them? Are there any big criteria that you always look for?Ebony Lucas (18:05)
Yeah, I think you have to make sure that the numbers work and I think you know people go to a property they fall in love with the property they assume in their head that you know the rehab is not going to cost that much or you know or they try to back out of the numbers meaning that they know that the rehab is going to be 400,000 but they try to make they say oh I can figure out how to make it 250,000 and that doesn’t work so I think numbers don’t lie and Anytime you’re sitting down looking at a deal the first thing you should bedoing is creating a spreadsheet with your numbers, thinking about those things that you made, you know, those costs that you don’t always necessarily think about like utilities and dumpsters and those types of things that add up.
tax property taxes because you know even if you’re doing a fix and flip you have to pay the property taxes while you’re holding on to the property. So really figuring out the numbers understanding what the expenses are behind it and then being realistic about your budget and what your possible profit can be that would be my number one piece of advice. Like I said I think you know real estate is not a get rich quick scheme it is slow and steady wins the race so understand that you know your
first deal you may not make $200,000 but you know maybe you do a fix and flip and you make 20 or maybe you make 15 the fact that you made something is great and you probably got a pretty good return on your money related to what your down payment is so understanding those numbers I mean I can’t express any you know that is the most important thing.
⁓ I think also ⁓ being clear about what your strategy is. For me, it was buy and hold. My brother’s strategy is fix and flip. And he does have some properties that he holds, but because he does fix and flip, he has contractors on staff. So if you know that you want to do fix and flip, understand what you’re going to need in order to make that. ⁓
make that strategy successful. And whether or not it fits in your lifestyle, like for me, I’m a lawyer, so it doesn’t fit in my lifestyle to do a lot of fix and flips because you have to actually go to those projects and manage those projects. And I think where people fail is when they kind of say, okay, well, the contractors don’t handle it and they don’t go check on the project. And next thing they know, it’s, know, costs are out of control. The project isn’t quite what they thought it would be.
So those would be probably my two biggest pieces of advice is, you know, know the numbers and know your strategy.
Michelle Kesil (20:33)
Absolutely, I think that is really good advice that can apply to any type of investing journey because, yeah, ultimately you don’t want to lose money and, yeah, not have the right strategy for what you’re, yeah, putting effort into.Ebony Lucas (20:51)
Absolutely.Michelle Kesil (20:52)
Awesome. So before we wrap up here, if someone wants to reach out, connect, learn more from you, where can people find you and connect with you?Ebony Lucas (21:02)
On social media, I am Lucas the Closer and I absolutely teach people how to build wealth through real estate. So I’m on there giving information, advice, like what we’ve been talking about today. I share my ups and my downs and give all of the information in between.Michelle Kesil (21:20)
Amazing. I love that you’re sharing your journey. What are your social media channels? you just mentioned one of them,Ebony Lucas (21:25)
Yes.So I’m on Instagram, YouTube, and ⁓ TikTok, and Facebook, and it’s Lucas the Closer across all channels.
Michelle Kesil (21:31)
Thank you.Okay.
Perfect. You’re on all of them. Amazing. Yes. That’s the best. Perfect. Well, listen, I appreciate your time, your story and your perspective. Thank you for being here.
Ebony Lucas (21:39)
Keep it easy.Yes.
Thank you so much.
Michelle Kesil (21:51)
Of course. And for those listeners tuning in, you got value from this, make sure you’ve subscribed. We’ve got more conversations with operators just like Ebony who are building real businesses. We’ll see you on the next episode.
