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Show Summary
In this episode of the Real Estate Pros podcast, host Erika chats with Allana Lippman, who shares her journey in the real estate world, starting from her first property purchase to expanding her portfolio with multi-family and mixed-use properties. Allana discusses the lessons learned from her initial investments, the importance of tenant screening, and the challenges faced in managing different types of properties. She also highlights the significance of mentorship and continuous learning in real estate, as well as her future aspirations, including writing a book and refining her investment goals.
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Allana (00:00)
Yeah, it’s so I absolutely Love that property. I still own it today. I would say I probably wouldn’t have honestly paid as much for it as I did But I didn’t really know any different. It was my first house I was ever buying and ⁓ I definitely don’t regret it because your first deal might not make you the most money But it’s always your most important deal is kind of what I like to say because that’s what gets you startedI would say that, yeah, I probably wouldn’t have offered so much for the house, but I still have never paid a mortgage on it either because the rent has always paid the mortgage for four years.
Erika (02:15)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Erika. Today I’m excited to be chatting with Allana Lippman. She’s been making serious moves in the multi-family and mixed use space. Allana, I’m glad to have you here.Allana (02:31)
Yeah, thanks for having me. Glad to be here.Erika (02:34)
I think our listeners are really going to be fascinated with your story and how you’re scaling. So let’s jump on in. First off for our listeners here who aren’t familiar with what you do, can you give us the rundown and share how you got started in the real estate world?Allana (02:53)
Sure. Yeah. So I bought my first property back in September of 2021. So just over four years ago, I got started. I was just looking to buy a house to get out of my apartment situation. I was trying to adopt my little, I’m a big and big brother, big sister, and my little was going through trouble at home. So I was ⁓ trying to get custody of her and I thought I can’t be in a small apartment. So I went to look at this house on the market that I just thought was really beautiful.And when I got there, was actually, it was a duplex. They were marketing it as a single family home because single family homes are worth, they can sell them for more. But it was definitely a duplex. yeah, so my wheels started turning and I thought, this is awesome. I can live in one side ⁓ and then Airbnb out the other side is what I originally started doing.
Erika (03:49)
Yeah, what was that first deal like? Were there lessons from that that you still carry with you today?Allana (03:58)
Yeah, it’s so I absolutely Love that property. I still own it today. I would say I probably wouldn’t have honestly paid as much for it as I did But I didn’t really know any different. It was my first house I was ever buying and ⁓ I definitely don’t regret it because your first deal might not make you the most money But it’s always your most important deal is kind of what I like to say because that’s what gets you startedI would say that, yeah, I probably wouldn’t have offered so much for the house, but I still have never paid a mortgage on it either because the rent has always paid the mortgage for four years.
So no regrets. But now that I see other houses and like, now that I know the market in my town really well, I think that I probably paid a little bit too much for that one.
Erika (05:39)
And speaking of the market that you’re in, can you share more about that and what kind of opportunities you see there?Allana (05:47)
Yeah, so I’m in southern Minnesota. I’m about an hour south of Minneapolis. So the Minneapolis, St. Paul, like the Twin Cities area is very, very expensive, but you go an hour south and it’s a lot, ⁓ it’s a lot more reasonable down here. And I just see a lot of, opportunity for, ⁓ I don’t know this is your specific question, but like, it’s like, it’s no secret that the market is kind of, ⁓scary right now, it’s uncertain, people aren’t sure whether or not they should invest. But what I’m just seeing is more opportunities to invest because there’s less people willing to invest. And so the competition is better. I can negotiate better prices on houses that I’m buying now. And it’s just a really…
⁓ The area has some headquarters of like big insurance companies and stuff down here. And so whether you’re doing like a short-term rental because they just need housing for six months or a couple of months, Airbnb or long-term rental, I’ve never had trouble filling a rental. So yeah, a lot of opportunity down here, I think.
Erika (06:56)
That’s great that you haven’t had much trouble filling your spaces with tenants now. Sometimes it’s not always about getting it filled, it’s the quality, because you don’t want to have a headache later. Can you share more about your experience with that?Allana (07:14)
Absolutely. So, two things I mentioned. So at the beginning, when I mentioned that I wanted to get custody of my little, I did get custody of her for a few different times for months at a time. But the reason I got into it was with a heart of compassion. Like I was literally, I always tell her that’s her house because I bought it because of her, basically for her. ⁓ but that compassion kind of carries over into likeother tenants as well. ⁓ And I said when I got into real estate and I started realizing this was going to be my journey that I don’t want to lose my compassion, but like I also need to have a business mind. And so I’ve had two specific tenants. ⁓ So because I did like short term Airbnb rentals, I also thought to myself, hey, this would be a really cool niche for like, if anyone, if any woman is in like a domestic abuse type situation and wants to leave.
but she can’t because she doesn’t have any of her own stuff. My short-term rentals are already set up like an Airbnb. So they have a couch, they have a bed, they have dishes, TV. Like I left it set up like that. And then through word of mouth, I had ⁓ some different domestic abuse survivors come and stay. And so that was really, really awesome. One of the gals ⁓ started paying rent, like, and I was very reasonable with rent too for those tenants.
started paying rent like three to four weeks late every single month. And then her fiance, who she had actually fled from, had died three weeks after she moved in. So he wasn’t like a threat anymore or anything like that. However, when I said I don’t want to continue like our contract because I’m missing rent, she threatened to sue for me for discriminating against her age and like.
All this crazy stuff that I dealt with for like two months and she never did sue me. But I was like, okay, maybe I should be more careful and screen a little bit better for my tenants in the future. And then I had one other tenant that was, ⁓ when he came to me, he was like a 21 year old kid. And I just had compassion. Like he’s like, I just want to, it was set up like a short term rental. He didn’t have any of his own stuff. And he called me and left me a super endearing voicemail like,
Hey, I saw your place. Like, this is so perfect for me and my girlfriend, blah, blah, blah. And he moved in. And while I really liked him as a person, he had trouble paying rent. There was even one month where my compassion like carried so far as I said, okay, like this month you don’t have to pay rent because he had lost his job through a company shutdown. And I knew that was true. So I forgave a month of rent, but then the following two months, he also like…
said he couldn’t come up with the money. So like I called transitional housing, which is a program we have in the town I’m in where they covered the rent that he couldn’t cover.
But I just started to think to myself, like, why am I calling transitional housing? Like, why isn’t he like motivated to pay his rent when I’ve like been doing so much for him? ⁓ And so then I finally evicted him when this like kept being a recurring issue and he left the place with a broken window.
Erika (10:55)
Mm-hmm.Allana (11:05)
infested with fleas. ⁓ It was just gross and left me out like $3,000 total. ⁓ So changed his phone number or blocked me. don’t know. ⁓ Regardless, I just kind of learned my lesson on ⁓ screening tenants better. Like you can still be compassionate and screen your tenants better. And that’s kind of a big lesson that I’ve learned. And so now I have all amazing, great tenants thatyou know, pay on time and take care of my spaces. So, yeah.
Erika (11:38)
Yeah, yeah, that’s awesome. And I think the other thing that sometimes gets ⁓ overlooked too is if those tenants have issues sometimes, maybe not specifically with the ones that you were having, but sometimes that can affect your other tenants as well. So it’s really a win, win, win situation when you do have those tenants that you can count on and aren’t doing anything crazy.Allana (11:54)
I’m not.Yeah,
thanks for bringing that up because yes, both of those tenants were actually at different times in the same duplex. ⁓ So yeah, they weren’t there at the same time, thank goodness. Otherwise, that would have been really terrible for me because duplexes are great because they’re a lot less risky. If one tenant leaves or isn’t paying, at least you have the rent from the other one. So imagine if I had had both of them in that same house at the same time.
then I wouldn’t be able to say my mortgage has been paid for four years. I’ve never paid my own mortgage on that house. So yeah, that’s a good point. I have definitely implemented background checks and stuff like that now going forward. So advice to new investors, definitely do your research on your tenants.
Erika (12:51)
Yeah, you were talking about the duplex. Now you also have a triplex too. Is there, you know, is it more complicated having a triplex versus a duplex? What are you thinking as ⁓ you’vechanging your multifamily portfolio?
Allana (13:08)
Sure. I, yeah, so my triplex is actually, it’s in the same town as that other duplex and it’s 1700 square feet of office space. So it’s like commercial, but then upstairs is an apartment and downstairs is an apartment. And so that’s been, you know, a little bit more complicated. Commercial spaces are just a different animal. But when I do things, I like to jump, jump in like head first and just like learn as I go. And I’ve learned some stuff about like,how different the laws are, the county laws and the city laws with commercial spaces versus residential. ⁓ But it is the least risky investment I have at the same time because the upstairs apartment pays the entire mortgage. So from the business, from the multi-tenant facility, which is now all renovated and almost completely filled, there’s seven offices and I have five tenants in there all paying rent. And then the downstairs apartment, that cash flows really well.
And so like, love my Triplex. I’m buying another one right now that I haven’t closed on yet, but it’s already full of tenants. ⁓ So I’m really, really excited about that. Just diversifying the income and mitigating the risk as much as possible has been really helpful.
Erika (14:22)
That’s really great. with, you know, we were talking a little bit that commercial sometimes has its challenges and it’s very different. So when it comes to a mixed use space, how are you determining if that’s a good fit for you if it’s a quality deal?Allana (14:41)
Sure, so this deal was really, really great. I will never regret it. I got it off market for probably, so the sellers wanted to put it on the market for like 425.And I went and looked at it and I offered 300 and they took it. So I was like, okay, this like, that’s awesome. ⁓ Some of the challenges I’ve had in this mixed use space is like zoning a little bit.
because the inspector came and looked and they always like turned kind of a blind eye to the person that had the building for 40 years before me because he lived upstairs and he operated his business and his daughter lived downstairs. So it like a family affair. Whereas I’m coming in there and I’m taking so far five different businesses that are all renting, ⁓ one family upstairs, one single guy downstairs. And so it’s all different. And so when the inspector came in,
⁓ a while back, he started questioning how it was zoned. And he knew the building very well. He knew that like it was residential and commercial. ⁓ But he’s very, very like particular. And so that was something that like I would have looked into before, because now it’s kind of an ongoing something to figure out with the city inspector. But ⁓ otherwise, I don’t see too many challenges with the mix space.
I like the ⁓ variety that that building offers as far as like, you know, like I could technically have a tenant in the office space that also wanted to rent the apartment upstairs. And so I could be like dealing with less tenants, but getting the same amount of rent someday. So yeah.
Erika (17:10)
Right, that’s a nice opportunity there. Whether it’s the portfolio that you’ve built, dealing with tenants and learning all of that, have there been any groups or masterminds or a mentor that’s been instrumental with your own growth?Allana (17:29)
So ⁓ my former brother-in-law was into real estate a couple years before me. that’s why when I, that’s actually the reason why when I saw that how my first house hack and it was, showed up as a single family, but it was a duplex, I thought, like Matthew does real estate. I can ask him. And so he actually was nobody famous or anything like that, but just someone who had like two more years experience than me.I was able to ask those questions for a couple of years. And then a few weeks ago, I attended ⁓ BPcon, so the Bigger Pockets Conference in Las Vegas. ⁓ And that was really, really helpful. I bought seven books and I told myself I’m reading them all before the end of the year is my goal and I’m on book three in a couple of weeks. ⁓ But no, I’ve thought about getting a real estate coach, a one-on-one type of mentorship, but I haven’t done that yet.
Erika (18:30)
So if you picked up that many books, chances are you’ve read a lot of other books about real estate or investing. Are there any that you’ve read before that you wanna recommend to our listeners here?Allana (18:44)
Rich Dad Poor Dad. First book I read. I actually read that and then like was like I have to buy a house. I just totally didn’t realize that the first one I looked at would be that perfect opportunity. So that definitely ⁓ never split the difference by Chris Voss. That’s an amazing book. Whoever hasn’t heard of that book. So Chris Voss is like the number one ⁓ hostage negotiator in like the world I think. At least in the US. ⁓just amazing, like he takes his hostage negotiating, but he like, ⁓ compares it to the sales world and like negotiating deals on houses and stuff like that. And then he, I read that book a few years ago. I read it again a few months ago, but he was actually the keynote speaker at that conference I went to as well. So that was really, really cool to hear from him. Yeah, there’s a lot, there’s a lot of books. I think any books on real estate or on.
on like Habits, like Atomic Habits was another one. And I’m sorry, I’m forgetting the author of that one right now, but very popular book.
Erika (19:46)
Yes, yes, I’ve read that one. Of course, I can’t think of the author there either. All right, so you went to an awesome conference. You’re building a great portfolio. What’s that next on the horizon for you?Allana (20:02)
Yeah, so a couple things. I am actually writing my own book right now called Aspiring Slumlord. It’s just kind of like my story on how I got into real estate ⁓ because I’ve done a little bit of everything. I’ve done a full house flip. I’ve done a camper flip to help fund the down payment for another house, long-term, short-term, everything like that. ⁓And then I am buying a triplex right now, which I like briefly mentioned in Austin, Minnesota. And so that will bring me up to 15 doors. So I’m at 12 right now. It will be at 15. And so that’s kind of a big project. ⁓ I’m really, really excited about that. And then I’ve just started to like rethink my goals after the conference. Another book I’m reading now is called The Small and Mighty Investor by Chad Carson.
I saw him speak at the conference, and he talks a lot about, why did you get into real estate? And, like, you know, in my head, I’m like, well, financial freedom. Like, that’s my number one. Like, I want to own my time. If I have a family someday, I want to be able to spend as much time with them as I want to. I want to travel. I just want to own my time. And the book talks about, for the small and mighty investor, like, if you just keep growing and growing and growing, like, you’re not going to own your time, or you’re going to be paying a lot more money for someone else to manage everything for you.
And so I’ve started to rethink my goals on just picking a number, like how much do I want to make per month and how many properties will it take for me to get there? And then that will be like, you know, that’ll be best for me. And everyone’s different on what that number looks like. So I’m kind of in the process of rethinking those goals. And I think in my book, I’m going to go kind of like take my readers along on that journey too.
Erika (21:51)
It’s really, really exciting. Well, Allana, this has been great. If someone listening today wants to reach out, connect, maybe they want to collaborate on a deal, what’s the best way for them to reach you?Allana (22:05)
Yeah, so my Instagram handle is aspiring slumlord. So you can, yeah, you can find me on Instagram right now. that’s honestly the best way. Very responsive on my Instagram. I don’t have Facebook. I got rid of it back in 2019 and I’ve really loved not having it. And so I’m trying not to go onto too much social media. And a friend of mine are starting.are starting a new podcast that will be out eventually, which I’ll be posting on my Instagram called Homies in Houses. And so that will be, ⁓ we’ll have new ways to connect once that comes out too.
Erika (22:43)
Love it. Well, thanks again for being here, Allana.Allana (22:46)
Thank you so much, I appreciate you having me.Erika (22:50)
for our listeners today. If you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with experts like Allana who are out there building fantastic real estate businesses. We’ll see you on the next episode.
