549: Single Mom Goes From $80K in Debt to Multimillion Real Estate Portfolio

August 30, 2021bmanasseroUncategorizedNo comments

SHOW NOTES FOR EPISODE 549: SINGLE MOM GOES FROM $80K IN DEBT TO MULTIMILLION DOLLAR REAL ESTATE PORTFOLIO

She came out of a bad divorce supporting two children, without child support. She had no money in savings and was $85K in debt. In today’s podcast, you’ll hear the inspiring story of investor/author Farrah Ali who discovered real estate investing not only helped her to overcome adversity but also blessed her children and generated enough wealth and cash flow to last her a lifetime.

What You Will Learn

How real estate investing can really help you, even if you have no money
The advantages of paying off your investment properties early
How to leverage wholesaling and flipping to launch your real estate career
The value of partnering when you either don’t have money or don’t have experience
Why it is better to give than receive when starting out in real estate investing
How to work a full-time job, support two children and still build a multimillion dollar real estate portfolio on the side
Why advanced degrees and even an MBA is no guarantee of financial success

About Our Guest

Farrah Ali

Farrah Ali is a successful author, real estate professional and entrepreneur with more than 18 years of professional experience in business. After overcoming a difficult divorce, Farrah was forced to start all over again. With two kids, she was a single, working mother in the insurance industry. After beginning her career in 2001, she continued to dedicate every waking moment to her career and her two children.

After experiencing massive success in real estate, in 2019 she co-founded WE WIN LLC, an organization that inspires, educates, and motivates women to invest in real estate. Today, Farrah still remains committed to her career as an underwriting executive, while also keeping an eye on her real estate investing firm. In addition, she maintains an active role with the We Win Foundation, a foundation she helped to co-found in 2019 in order to give back to the community.

More About Farrah

Farrah’s parents immigrated to America from India in 1976
Her father was recruited to the U.S. because he was a top engineering student
When he came, he immediately completed his masters degree
She was born and raised in Chicago, IL
Lived in the suburbs of Chicago
Attended college for a couple of years
In 1999, she got married
Had two kids
Eight or nine years after that, although she tried very hard, the marriage was not working out
She had to find a place to live before they officially separated because she was fearful and was not sure of how he would respond
- She rented a house for her and her two kids before she actually moved out
- She was preparing to move quickly, just grab a few essentials, grab the kids and quickly leave
- She couldn’t take any furniture or big items at all
- She had a job but she didn’t make enough for major savings. It it just covered basic essentials
- She basically, moved into an empty house with a few articles of clothing and the kids
- She had to figure out how to furnish the place, build herself up from basically nothing
- And unfortunately, she had a lot of depth because her husband had used her credit cards

Starting Over

She first had to figure out how she was going to generate more income
She thought that maybe she would go back to school (she never really finished)
She thought that if she could get an MBA then she could generate the kind of income to take care of herself and the kids (who were 7 and 9)
So, she went back to school and finished her undergrad degree and then jumped into an MBA program
She graduated in 2018 with an MBA
Her employer (she’s an underwriting manager) was very happy for her and gave her a raise of only 15% – which was not what she was hoping – she barely noticed any additional income boost
She was receiving no child support for her first two years
Her financial problems were not going away as she had hoped

Looking for Income

She immediately started searching on Google for “how to get rich!”
And she kept seeing ads and articles about real estate investing
She then read the book Rich Dad Poor Dad by Robert Kiyosaki
She understood the concept of what an employee mindset is vs. investor/entrepreneur

Networking

Next, she went to a local real estate meet-up groups
She just showed up at a meeting
She didn’t know anyone
She felt kind of intimidated because it was a room filled primarily with men
She was about to join a course there but a man she met there said, “Let’s go to this one but let’s also check out a presentation that is happening next week and compare the two.”
She did that and was blown away by the second seminar (it was a 3-day weekend boot camp)
- The boot camp offered mentorship and she decided to sign-up

Becoming a Real Estate Investor

Shortly after, in 2014, she got her first property under contract – after only one month of mentoring
Now, she still had a full-time job in the insurance industry
She was also told by her mentor that, even though she was generating cash flow from her properties, she had to use her day job income to cover all her monthly expenses
Her full-time job was very demanding, she still was raising her kids and still had no child support
She had a lot on her plate but was still able to scale up her rental portfolio
She would work all day, come home and make dinner for her kids, research real estate and would go to classes on Saturdays
She knew that, if she wanted this bad enough, that she could make it happen
She had to make many sacrifices
Her only “social life” was her real estate group
They also started investing in her deals, to include 100% purchase price and 100% rehab costs
Since she didn’t have much money starting out, she started wholesaling and flipping would generate $10-20,000 per house in profit
Once she started buying rentals, she used the BRRRR method
Her initial goal was buy 25 houses and then do wholesales and flips to pay the properties off and then generate $25,000 a month in net monthly cash flow
But then she had these great bulk property opportunities and she surpassed her goal
She eventually found one contractor who knew exactly what she wanted in her rehabs and that made things go much smoother
Today, she as 37 single family rental properties (one is a small multifamily property) in mainly C and B class areas
She has also done 20 wholesale transactions and six flips
- All wholesale properties were purchased by people in her meet-up group
Today, her kids are 19 and 20

Writing a Book and an Online Course

She would often get lots of questions from people she would meet:
- How did you do all this while working full-time?
- How did you do it as a single parent?
- How did you do it with no money?
She didn’t like giving short 5-10 minute answers to their questions
So, she compiled all their questions and wrote a book to include all the details of how she did what she did
In the book, she also includes:
- How she got started
- Case Studies – detailed break downs of how she purchased and profited on 5 different properties
- Details on the numbers
She also developed an online course for those that want to go deeper – Getting Primed for Real Estate Investing
- Features experts
- Terminology
- Mindset
- Setting yourself up right
- Financing
- Intro to rehabbing

Non-Profit Organization

She formed an LLC and a Non-Profit Foundation
To inspire and motivate women
WE WIN, LLC
- Formed with a good friend of hers
- Formed for woman who want to get started but
  - Had a difficult situation in their life (divorce, etc.)
  - Feel intimidated
  - Are uncertain about how to get started with real estate investing
  - Don’t want to join a group with a lot of strangers
- Features free webinars and meetings
- Guide them in same footsteps Farrah took to get started
- Work with special challenges they have
WE WIN FOUNDATION
- Non-profit
- Formed right after Covid
- She wanted this to meet her “bigger purpose in like” – not just about making money
- People were sick and struggling financially
- They go to the communities where they are investing and they help those communities
- They do:
  - Food drives
  - Turkey Drive during Thanksgiving
  - Toy Drive during Christmas
    - Partnered with other organizations
    - Gave away over 3,000 toys
  - Back to School Drive
- 100% of donations collected go to people in need in these communities

Her Market

The suburbs of Chicago
She doesn’t know the city well enough to invest there
- Real estate investing in the city is a little unique
  - You’ll have three streets that are great and then, right next to those streets, there are three streets that are horrible

New Ground-Up Development Project

She recently expanded her investing into Tampa, Florida area
She is part of a group of 25 people who are building Build-to-Rent duplexes in Florida
- The plan for her is to build 18 duplexes
- She’s already bought some land there
- They will all look the same but will have different owners

Going Part-Time

Farrah is still working with the same insurance company as an underwriting manager for over 20 years
But she went part-time last year
She’s currently working only 2 days a week with the insurance company
She may switch to full-time real estate investing soon
It has been tough for her to leave because she really loves her job and is such a part of her identity

Biggest Mistakes

Fortunately, she hasn’t lost money on any of her properties
She remembers one lady she had to evict
- When she came in to sign the lease, Farrah notices she had a bunch of clothes and items filling her car
- In hindsight, she realized it was because she was just evicted from a place before renting with Farrah
- The eviction didn’t show up on the background check because it was too recent or maybe they did a “Cash-for-Keys” transaction where she was paid to leave with the promise they wouldn’t report the eviction
- Now, she pays more attention to red flags, like all the clothes in the car
Another mistake she made was that she called contractors to do estimates on a rehab without having an inspection first
- She had a couple of houses where this happened and it ended up costing more that she had anticipated
Another mistake is that she wishes she would have gotten started earlier in her real estate investing

Your Biggest Successes

Taking the step to buying her first property
Once she did that, she realized how easy it was and she became more motivated than ever to keep acquiring more
When she was asked to speak on stage at a real estate event after having only one property
- People were really moved with her story
- It didn’t matter that she had only one property
Her attitude has helped her success:
- Bad things can and will happen but if you work through them, there will be life lessons that she will understand and benefit from

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

For those who want to be active investors, it’s never too late
She knows one woman who started later in life, in her 70s, and now has 20 rental properties, and is now in her 80s
Technology has moved some people out of the workforce and real estate is a good replacement
If you don’t have the funds or expertise, that’s not a problem – you can partner up with other people who can fill that gap
If you have an IRA, you can lend at 12% and 2 points to real estate investors and the funds are backed-up with real estate

Current Business

She will be busy with her construction project in Florida for the next 2 to 3 years
She doesn’t have big long term plan
She just kind of goes with the flow
She just wants to be progressing in life:
- Progressing in finances
- Progressing in relationships
- Progressing in giving back
Her hope is to also have all her properties paid off within the next 10 years
- It will give her more piece of mind knowing she has less debt

Leaving a Legacy

She also wants to leave a legacy to her kids – without the debt
- Her kids are already getting into real estate
  - Her 20 year old son bought his first property a few years ago and his second property a week ago
Leaving a legacy is not really about the material assets, it’s about what they remember about what you did and all of the things you learned along the way – that is more impactful!

Rap-It-Up

Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki
Favorite business book: Think and Grow Rich by Napoleon Hill
Most valuable web site for success (other than your own): NationalREInvest.com
Favorite app: Redfin.com
Favorite quote: “It wasn’t until I created passive income that I realized that the most valuable asset I own is my own time.” – Farrah Ali
If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to re-launch your real estate investing business? I would follow the exact same footsteps I did because that is the exact situation I had when I got started. I put in a lot of volunteer time with organizations so I could get in with everyone there. It’s all about giving and not taking in the beginning! Don’t focus on the taking first. Always focus on the giving and things will come your way.

Farrah’s Book

Her Book: Diaries of a Female Real Estate Investor

How to Reach Farrah

Website: FarrahAli.org
- Free gifts:
  - Transaction/Closing List
  - Partner Assessment
  - 25 minute webinar
Email: REI@FarrahAli.org
Facebook: Farrah Ali
Instagram: FarraAli7
LinkedIn:
WE WIN LLC on Facebook
WE WIN FOUNDATION on Facebook

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